BBVA

Business Context and Reporting Period

This Form 6-K summarizes the consolidated financial results of Banco Bilbao Vizcaya Argentaria, S.A. (BBVA) for the fiscal year ended December 31, 2025. The report covers the Group's performance across its primary business areas: Spain, Mexico, Turkey, South America, and Rest of Business, alongside the Corporate Center. The filing highlights the execution of the 2025-2029 Strategic Plan, focusing on customer-centric differentiation and growth.

Key Financial Metrics

Note: At constant exchange rates, Net Attributable Profit grew by 19.2% and Gross Income by 16.3%.

Material Changes vs. Prior Period

• Profitability Growth: Net attributable profit increased by 4.5% at current exchange rates, driven by strong recurring revenues. Excluding currency fluctuations, profit growth was 19.2%, primarily impacted by the depreciation of the Mexican peso and Turkish lira.
• Revenue Mix: Net interest income rose 4.0% (13.9% at constant rates), supported by Turkey and Mexico. Net fees and commissions grew 2.8% (14.6% at constant rates). Conversely, Net Trading Income (NTI) declined 32.1% due to lower results in Turkey and the Corporate Center.
• Expense Management: Operating expenses increased 1.0% (10.5% at constant rates), driven by inflation and technology investments. However, the efficiency ratio improved by 206 basis points to 38.8% due to faster revenue growth.
• Balance Sheet Expansion: Loans to customers grew 11.5%, led by the wholesale segment (+14.2%). Customer funds expanded 13.5%, with deposits rising 12.3% and mutual funds/portfolios growing 17.2%.
• Asset Quality: The NPL ratio improved to 2.7% from 3.0%, and the NPL coverage ratio increased to 85% from 80%. Provisions for impairment rose 15.5% at constant rates, remaining below the growth rate of lending.

Guidance, Outlook, and Risks

• Strategic Plan: The Group is executing its 2025-2029 Strategic Plan, with financial objectives for 2025-2028 presented in July 2025. The focus remains on innovation, AI integration, and sustainable business channeling.
• Dividends: A final dividend of €0.60 per share is proposed for 2025, bringing the total distribution to €0.92 per share (50% of attributable profit), following an interim dividend of €0.32 paid in November 2025.
• Capital Management: The CET1 ratio stands at 12.70%, above the target range of 11.5%-12.0%. The minimum regulatory requirement is set to decrease to 8.97% effective January 1, 2026, per the ECB SREP. A share buyback program of up to €3.96 billion was announced in December 2025.
• Macroeconomic Risks: Risks include geopolitical tensions, US tariff policies, and inflation volatility. The Turkish lira (-27.2%) and Argentine peso (-37.4%) depreciated significantly against the euro, impacting reported results.
• Regional Performance:
  • Spain: Profit up 11.3% to €4,175m.
  • Mexico: Profit up 5.7% (constant rates) to €5,264m.
  • Turkey: Profit up 31.8% to €805m, aided by reduced hyperinflation impact.
  • South America: Profit up 14.3% to €726m, driven by Peru and Colombia.

Investor Verification Checklist

• Currency Impact: Verify the distinction between reported growth (4.5%) and constant exchange rate growth (19.2%) to understand the true operational performance versus FX translation effects.
• Hyperinflation Adjustments: Review the specific impact of hyperinflation accounting in Argentina and Turkey on the "Other operating income and expenses" line item.
• Share Buyback Execution: Monitor the execution of the new €3.96 billion share buyback program announced in December 2025 and its impact on EPS and capital ratios.
• Regulatory Capital: Confirm the application of the new minimum CET1 requirement of 8.97% effective January 1, 2026, and its effect on capital buffers.
• Net Trading Income Volatility: Assess the sustainability of the 32.1% decline in NTI and its drivers in Turkey and the Corporate Center.