BBVA — Banco Bilbao Vizcaya Argentaria, S.A.

BBVA Q3 2025 Earnings Call Summary

1. Key Financial Results and Metrics

• Net Attributable Profit: Exceeded EUR 2.5 billion for the quarter, with cumulative profits for the first nine months reaching nearly EUR 8 billion, up 4.7% year-over-year.
• Return on Tangible Equity (RoTE): Industry-leading RoTE of 19.7% and Return on Equity (RoE) of 18.8% for the first nine months.
• Capital Position: CET1 capital ratio improved by 8 basis points to 13.42%. Anticipated regulatory impact in Q4 could add 40 to 50 basis points.
• Core Revenues: Net interest income (NII) and fees grew 18% and 15% year-over-year, respectively. Gross income increased by 16% in constant euros.
• Loan Growth: Overall loan growth at 16% year-over-year, with Spain at 7.8% and Mexico at 9.8%.

2. Strategic Updates and Business Highlights

• Customer Acquisition: BBVA acquired 8.7 million new customers in the first nine months, with 66% through digital channels.
• Sustainability Initiatives: EUR 97 billion channeled into sustainable business in the first nine months.
• Shareholder Remuneration: Initiating a EUR 1 billion share buyback program and a record interim dividend of EUR 0.32 per share.
• Digital Banking Growth: Strong performance in digital banking operations in Italy and Germany, with deposits reaching EUR 10 billion.

3. Forward Guidance and Outlook

• Profitability Expectations: BBVA maintains its 20% RoTE target for 2025, supported by share buybacks that will reduce the equity base.
• Interest Rates: Anticipation of stability in customer spreads as interest rates in Europe and Mexico are nearing terminal levels.
• Cost Management: Focus on maintaining a cost-to-income ratio of 35% by 2028, with ongoing efforts to control costs across geographies.

4. Challenges and Points of Concern

• Profit Decline: Net attributable profit decreased compared to the previous quarter due to higher inflation in Turkey and one-off impacts from the prior quarter.
• Competitive Pressures: Increased competition from neobanks in Mexico, particularly in credit cards and deposits, though BBVA remains confident in its market position.
• Asset Quality Risks: Concerns about rising NPLs in Turkey and Argentina, with expectations of continued pressure in these markets.
• Cost Growth: Group costs increased by 11% year-over-year, raising questions about future cost management strategies.

5. Notable Q&A Insights

• Loan Growth in Spain: Corporate loan growth is strong, driven by investment in sectors like energy and housing, while mortgage growth is being curtailed due to pricing concerns.
• Cost of Risk in Mexico: Guidance improved to below 340 basis points, with slight increases attributed to annual IFRS recalibrations.
• Sabadell Bid Reflection: Management views the failed bid as a missed opportunity but emphasizes a focus on organic growth moving forward.
• Turkey's NPL Trends: The cost of risk in Turkey is expected to stabilize, but the current levels are not normalized, with expectations of continued pressure in the retail portfolio.
• Hedging Strategy in Argentina: BBVA is not hedging in Argentina due to high costs and the small size of the exposure.

This summary encapsulates BBVA's financial performance, strategic initiatives, outlook, and challenges while highlighting key insights from the Q&A session.