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 2026 (ended March 31, 2026)
Filing Date: April 30, 2026
BBVA reported strong financial performance for 1Q26, characterized by excellent value creation, profitability, and capital generation. The bank highlighted robust activity growth across key geographies, effective price management, and continued execution of its AI transformation strategy.
Key Financial Metrics
| Metric | 1Q26 Value | YoY Change (vs 1Q25) | QoQ Change (vs 4Q25) |
|---|---|---|---|
| Net Attributable Profit | €2,989 million | +14.1% | +18.0% |
| Earnings Per Share (EPS) | €0.51 | +13.0% | +21.4% |
| Gross Income | €10,652 million | +18.3% | +8.8% |
| Net Interest Income (NII) | €7,537 million | +20.2% | +7.2% |
| Net Fees and Commissions | €2,256 million | +15.5% | +5.2% |
| Operating Expenses | €4,049 million | +17.5% | +1.9% |
| Efficiency Ratio (Cost-to-Income) | 38.0% | -30 bps | -30 bps |
| Cost of Risk (CoR) | 1.54% | +2 bps | +2 bps |
| CET1 Ratio | 12.83% | +13 bps | +13 bps |
| Return on Tangible Equity (ROTE) | 20.2% | +1.8 pts | +0.9 pts |
| Total Loan Growth | +17.0% | (Constant vs 1Q25) | N/A |
Material Changes vs. Prior Period
- Revenue Growth: Gross income rose 18.3% year-over-year, driven by a 20.2% increase in Net Interest Income (NII) and a 15.5% rise in Net Fees. NII growth was supported by strong loan activity (+17.0% YoY) and effective price management despite declining interest rates in key markets.
- Profitability: Net Attributable Profit increased 14.1% YoY to €2.99 billion. Operating income grew 18.7% YoY.
- Expense Management: Operating expenses increased 17.5% YoY, partially due to one-off costs from voluntary redundancies. Excluding these, expenses grew 13.7% YoY. The Efficiency Ratio improved to 38.0% (down 30 bps YoY), demonstrating "positive jaws" where revenue growth outpaced cost growth.
- Asset Quality: Impairments on financial assets increased 35.0% YoY to €1.82 billion, leading to a slight uptick in the Cost of Risk to 1.54%. However, NPL coverage ratios improved to 86%, and the NPL ratio remained stable at 2.6%.
- Capital Position: The CET1 ratio strengthened to 12.83%, well above the SREP requirement of 8.98% and the bank's target range of 11.5%-12.0%.
Guidance, Outlook, and Management Commentary
- Strategic Execution: Management emphasized the "excellent trajectory" of Net Attributable Profit and confirmed the bank is on track to achieve its 2025-2028 strategic goals, including a target ROTE of >20% and a Cost-to-Income ratio in the mid-teens (current €) by 2028.
- AI Transformation: BBVA highlighted early positive impacts from its AI strategy, including 70% monthly active user engagement with AI tools, 2-3 hours of weekly time savings per employee, and significant reductions in claims resolution time in Mexico.
- Capital Distribution: The bank completed two tranches of a Share Buyback (SBB) program approved in December 2025 and announced a third tranche of approximately €2.5 billion to commence shortly. Dividends per share increased to €0.60 in April 2026.
- Geographic Outlook:
- Spain: Solid loan growth (+6.3% YoY) and best-in-class efficiency.
- Mexico: Robust loan growth (+10.4% YoY ex-FX) and outstanding efficiency (30.8%).
- Turkey: Strong NII growth driven by spread expansion, though inflation remains a factor (10.0% in 1Q26).
- South America: Strong performance in Colombia and Peru; Argentina remains impacted by hyperinflation adjustments.
- Risks and Contingencies: Forward-looking statements are subject to risks including market conditions, regulatory changes, creditworthiness of clients, IT performance, and geopolitical factors. Specific mention was made of the dependency of ESG targets on third-party actions.
Investor Verification Checklist
- Expense Quality: Verify the magnitude of "voluntary redundancies" included in 1Q26 operating expenses to assess the run-rate of future costs.
- Asset Quality Trends: Monitor the Cost of Risk (1.54%) and NPL coverage ratios, particularly in South America and Turkey, given the increase in impairments YoY.
- Hyperinflation Adjustments: Review the specific impact of hyperinflation adjustments on reported results for Turkey and Argentina (detailed in Annexes) to understand underlying organic performance.
- Capital Deployment: Confirm the execution timeline and regulatory approval for the third tranche of the €2.5 billion Share Buyback program.
- FX Sensitivity: Assess the impact of currency fluctuations (specifically MXN and TRY) on consolidated earnings, as noted in the sensitivity analysis.