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01/10 02:40
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary highlights strong financial performance across regions, improved efficiency, and strategic growth in corporate loans. Net profit increases in key markets and disciplined cost management are positive indicators. The Q&A section reveals robust growth ambitions and a commitment to shareholder returns, despite some uncertainties in Mexico and Turkey. Management's proactive strategies and optimistic guidance, along with planned share buybacks, suggest a positive outlook for the stock price.
Tangible Book Value Per Share Plus Dividends Increased by 17% year-over-year and 4.5% in the quarter, attributed to strong value creation.
Return on Tangible Equity (ROTE) 19.7% for the first 9 months of 2025, sustained at high levels, showcasing industry-leading profitability.
Net Attributable Profit Exceeded EUR 2.5 billion for the quarter but decreased compared to the previous quarter due to higher inflation in Turkey and one-off positive impacts in Q2. Slightly below last year's figure due to Mexican peso appreciation affecting FX hedges.
CET1 Capital Ratio Improved by 8 basis points during the quarter, reaching 13.42%, reflecting a solid capital position.
Cumulative Profits (First 9 Months) Reached almost EUR 8 billion, a 4.7% increase year-over-year in current euros, driven by strong gross income growth and positive core revenue evolution.
Net Interest Income (NII) and Fees NII grew 18% year-over-year and 7% quarter-over-quarter, while fees grew 15% year-over-year and 6% quarter-over-quarter, attributed to strong core revenue performance.
Loan Growth 16% year-over-year globally, with Spain at 7.8% and Mexico at 9.8% (10.9% excluding U.S. dollar currency impact), driven by proactive price management and market share gains.
Operating Expenses Increased by 11% year-over-year, below average inflation across the footprint, showcasing cost discipline.
Efficiency Ratio Improved to 38.2%, better than last year's level, reflecting operational efficiency.
Cost of Risk 135 basis points, slightly above last quarter but better than guidance, incorporating annual risk model calibration and macro adjustments.
Net Profit (Spain) EUR 3.1 billion for the first 9 months, driven by strong NII, fee income, and cost discipline.
Net Profit (Mexico) EUR 3.8 billion for the first 9 months, a 4.5% increase in constant euros, supported by robust lending activity and fee income growth.
Net Profit (Turkey) EUR 648 million for the first 9 months, a 50% increase year-over-year, driven by higher core revenues and lower hyperinflationary adjustments.
Net Profit (South America) EUR 585 million for the first 9 months, a 24% increase year-over-year, supported by healthy loan growth and customer spread expansion.
Net Profit (Rest of Business) EUR 480 million for the first 9 months, driven by strong NII and fee income growth, reflecting robust business momentum.
New customer acquisition: BBVA acquired a record 8.7 million new customers in the first 9 months of 2025, with 66% joining through digital channels.
Sustainability initiatives: Channeled a record EUR 97 billion in sustainable business in the first 9 months of 2025, exceeding expectations.
Loan growth: Loan growth reached 16% year-over-year, with Spain at 7.8% and Mexico at 9.8% (10.9% excluding USD impact).
Market share gains: Achieved market share gains in every country due to unmatched loan growth and proactive price management.
Core revenue growth: Net interest income (NII) and fees grew 18% and 15% year-over-year, respectively, with quarterly growth of 7% and 6%.
Efficiency ratio: Improved to 38.2%, supported by gross income growth of 16.2% year-over-year and operating expenses increasing by 11%.
Shareholder remuneration: Announced a EUR 1 billion share buyback program and a record interim dividend of EUR 0.32 per share.
Strategic business focus: Increased focus on CIB and commercial banking outside core geographies, delivering EUR 480 million in profits.
Higher inflation in Turkey: Impacts other income line item and operating expenses, creating financial strain.
Mexican peso appreciation: Negatively affects FX hedges of net trading income, though it may benefit in future quarters.
Declining interest rates in Spain and Mexico: Reduces profitability as banks are rate-sensitive, though proactive management has mitigated some impacts.
Cost of risk in Turkey: Provisioning needs remain high in retail, and impairments increased due to big-ticket exposures.
Argentina's economic volatility: Sharp compression in spreads and currency volatility ahead of elections, impacting financial performance.
High provisioning needs in retail (Turkey): Stabilization in NPL inflows is observed, but provisioning remains a challenge.
Argentina's deteriorating asset quality: Deterioration in NPLs due to strong loan growth and high real rates.
Regulatory impacts on CET1 ratio: Positive regulatory impacts expected, but reliance on regulatory changes could pose risks.
Revenue and Profit Growth: The company expects revenues and profits to strengthen in core markets in the coming quarters and years, driven by stable customer spreads, continued dynamism in activity, and loan growth.
Interest Rate Projections: Interest rates in Europe and Mexico are expected to be at or near terminal rates, with limited room for further rate cuts. This is expected to bring relative stability in customer spreads.
Loan Growth: Loan growth is expected to continue in a profitable manner, with Spain showing an acceleration to 7.8% year-over-year and Mexico in line with ambitious guidance at 9.8% year-over-year. Excluding U.S. dollar currency impact, Mexico's loan growth would be 10.9%.
Cost of Risk: The cost of risk in Mexico is expected to remain below 340 basis points for the full year, an improvement from previous guidance. In Turkey, the cost of risk is expected to remain stable at 176 basis points.
Capital Position: A positive regulatory impact in the range of 40 to 50 basis points is expected in the fourth quarter, reinforcing the already strong capital position.
Shareholder Remuneration: The company plans to resume shareholder remuneration programs, including a EUR 1 billion share buyback program starting immediately and a record interim dividend of EUR 0.32 per share on November 7. Another significant share buyback is planned, pending ECB authorization.
Strategic Growth Plans: The company is investing in IT and other capabilities to enable future growth, particularly in Mexico and other strategic geographies.
Sustainability Goals: The company has channeled EUR 97 billion in sustainable business in the first 9 months of 2025, exceeding expectations.
Dividend per share: A record interim dividend of EUR 0.32 per share will be distributed on November 7.
Share buyback program: A nearly EUR 1 billion share buyback program will begin starting tomorrow.
Future share buyback: Another significant share buyback program will commence upon receiving ECB authorization, with details to be announced later.
The earnings call summary highlights strong financial performance across regions, improved efficiency, and strategic growth in corporate loans. Net profit increases in key markets and disciplined cost management are positive indicators. The Q&A section reveals robust growth ambitions and a commitment to shareholder returns, despite some uncertainties in Mexico and Turkey. Management's proactive strategies and optimistic guidance, along with planned share buybacks, suggest a positive outlook for the stock price.
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