Business Context and Reporting Period
Company: BANCO BILBAO VIZCAYA ARGENTARIA, S.A. (BBVA)
Filing Type: Form 6-K (Report of Foreign Issuer)
Reporting Period: First Quarter 2025 (January 1 – March 31, 2025)
Filing Date: April 29, 2025
BBVA reported solid first-quarter results driven by increased lending activity across its core markets of Spain, Mexico, Turkey, and South America. The Group highlighted a diversified business model and strong profitability metrics, maintaining a Return on Tangable Equity (ROTE) above 20 percent.
Key Financial Metrics
| Metric | 1Q 2025 Value | YoY Change (Constant €) | YoY Change (Current €) |
|---|---|---|---|
| Net Attributable Profit | €2.7 billion | +46% | +23% |
| Gross Income | €9.3 billion | +28% | N/A |
| Net Interest Income (NII) | €6.4 billion | +8% | N/A |
| Net Fees and Commissions | €2.1 billion | +19% | N/A |
| Operating Income | €5.8 billion | +39% | N/A |
| Operating Expenses | €3.6 billion | +14% | N/A |
| Efficiency Ratio | 38.2% | -469 bps | N/A |
| ROTE | 20.2% | N/A | N/A |
| ROE | 19.3% | N/A | N/A |
| CET1 Ratio | 13.09% | +21 bps (vs 4Q24) | N/A |
| Cost of Risk | 1.30% | -12 bps (vs 4Q24) | N/A |
| NPL Ratio | 2.9% | Improved | N/A |
| NPL Coverage Ratio | 82% | Improved | N/A |
Material Changes vs. Prior Period
- Profitability Surge: Net attributable profit rose 46% in constant euros, driven by a 39% increase in operating income and a 28% jump in gross income.
- Lending Growth: The loan portfolio expanded by 15% year-over-year in constant euros. Mexico saw a 17% increase in lending, while Spain grew by nearly 7%.
- Fee Income Expansion: Net fees and commissions grew 19%, fueled by payments and asset management activity, particularly in Turkey and Spain.
- Expense Control: Operating expenses grew 14%, significantly lower than the 17% average inflation rate in BBVA's footprint, improving the efficiency ratio by 469 basis points.
- Risk Profile Improvement: The cost of risk decreased to 1.30%, and the NPL ratio improved to 2.9%, outperforming expectations.
- One-Time Items: The prior year (1Q24) included a €285 million extraordinary tax on banking institutions in Spain. In 1Q25, a quarterly accrual of approximately €85 million for a new tax on NII and fees was recorded under income tax.
Guidance, Outlook, and Management Commentary
Management Commentary: CEO Onur Genç stated that BBVA got off to a strong start in 2025 with outstanding profitability and a solid increase in tangible book value per share plus dividends. The Group emphasized its diversified model and leadership in high-growth markets.
Guidance: Management maintains its forecast to achieve profitability levels (ROTE) similar to those of 2024.
Strategic Initiatives:
- Digital Growth: Added 2.9 million new customers in 1Q25, with 66% acquired through digital channels.
- Sustainability: Channeled €29 billion in sustainable business in 1Q25 (up 55% YoY), launching a new goal of €700 billion for the 2025-2029 period.
- Capital Position: CET1 ratio stands at 13.09%, well above the target range of 11.5%–12.0%.
Risks and Contingencies: The filing notes an "uncertain environment" but highlights that risk indicators performed better than expected. Specific regional risks include hyperinflation adjustments in Argentina and Turkey, which had a lower negative impact in 1Q25 compared to the prior year.
Key Facts for Investor Verification
- Constant vs. Current Euro Performance: Verify the distinction between constant euro growth (46% profit increase) and current euro growth (23% profit increase) to understand the impact of currency fluctuations.
- Tax Accruals: Confirm the impact of the new Spanish tax on NII and fees (€85 million accrual in 1Q25) versus the extraordinary tax in 1Q24 (€285 million) on net income comparability.
- Regional Risk Metrics: Review the specific cost of risk and NPL ratios for Mexico (3.05% cost of risk) and South America (2.30% cost of risk) given their higher exposure compared to Spain (0.30% cost of risk).
- Capital Adequacy: Validate the CET1 ratio of 13.09% against regulatory requirements and the bank's internal target range.
- Shareholder Returns: Verify the 14% year-over-year increase in tangible book value per share plus dividends.