BBVA Q1 2026 Earnings Call Summary

1Key Financial Results and Metrics

Net Profit: BBVA reported a net attributable profit of nearly EUR 3 billion, up 10.8% year-over-year and 18% quarter-over-quarter.

Earnings Per Share (EPS): Increased to EUR 0.51, a 12.5% rise year-over-year.

Return on Tangible Equity (RoTE): Reached an industry-leading 21.7%, with Return on Equity (RoE) at 20.7%.

Capital Position: Common Equity Tier 1 (CET1) capital ratio improved to 12.83%, above the target range of 11.5% to 12%.

Gross Income Growth: Increased by 18.3% year-over-year, driven by a 20.2% rise in net interest income and a 15.5% increase in net fees and commissions.

Cost of Risk: Stood at 154 basis points, reflecting stability despite geopolitical uncertainties.

2Strategic Updates and Business Highlights

Share Buyback Program: BBVA is executing a nearly EUR 4 billion share buyback program, with EUR 2.5 billion completed in two tranches.

AI Initiatives: The bank is focusing on AI as a transformative technology, with eight key initiatives aimed at enhancing customer service and operational efficiency.

Geographic Performance:

Spain: Net profit exceeded EUR 1 billion, with gross income up 5.4% year-over-year.

Mexico: Net profit reached EUR 1.45 billion, up 4.5% year-over-year, supported by strong loan growth and resilient margins.

Turkey: Net profit of EUR 263 million, with a cautious outlook due to macroeconomic uncertainties.

South America: Net profit close to EUR 250 million, up 16% year-over-year, driven by robust core revenue growth.

3Forward Guidance and Outlook

Loan Growth: BBVA expects continued loan growth, particularly in Mexico, with an upward bias on guidance.

Cost of Risk: Guidance remains stable, with expectations for underlying cost of risk to converge to 200 basis points in Turkey.

NII Outlook: While NII growth is expected to be slightly below loan growth due to customer spread dynamics, the bank remains optimistic about maintaining positive jaws between income and costs.

4Bad News, Challenges, or Points of Concern

Geopolitical Risks: The ongoing geopolitical tensions, particularly related to the Middle East, pose risks to asset quality and economic stability in Turkey.

Cost Growth: Operating expenses increased by 17.5%, influenced by a one-off restructuring charge related to voluntary redundancies. This is a concern as it may impact future profitability if not managed effectively.

Market Competition: In Spain, BBVA is losing market share in the mortgage segment, which could impact future growth in that area.

5Notable Q&A Insights

Mexico's Asset Quality: Despite concerns raised by competitors regarding credit cards, BBVA reported no deterioration in asset quality and maintained confidence in its cost of risk guidance for Mexico.

Turkey's Economic Environment: The bank remains cautious about Turkey's outlook, adjusting its guidance due to changing macroeconomic parameters, particularly inflation and interest rates.

Cost Management: The bank emphasized its commitment to maintaining efficiency ratios and managing costs effectively, despite current high growth rates in expenses.

USMCA Agreement: BBVA expressed optimism regarding the USMCA agreement, expecting either an extension or continuation of the current terms, which would benefit Mexican exports. Overall, BBVA's Q1 2026 results reflect strong financial performance and strategic initiatives, although challenges remain in certain markets and geopolitical contexts. The bank is focused on maintaining growth while managing costs and risks effectively.