Business Context and Reporting Period
Company: BANCO BILBAO VIZCAYA ARGENTARIA, S.A. (BBVA)
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Reporting Period: Nine months ended September 30, 2025
Business Overview: BBVA is a global financial services group with operations primarily in Spain, Mexico, Turkey, and South America. The Group focuses on retail banking, asset management, and wholesale banking, with a strategic emphasis on digital transformation and sustainability. The financial statements are prepared in accordance with EU-IFRS.
Key Financial Metrics
| Metric (Millions of Euros) | 9 Months Ended Sep 30, 2025 | 9 Months Ended Sep 30, 2024 |
|---|---|---|
| Net Interest Income | 19,246 | 18,861 |
| Gross Income | 27,136 | 26,161 |
| Operating Profit Before Tax | 12,292 | 11,647 |
| Profit Attributable to Parent Company | 7,978 | 7,622 |
| Basic Earnings Per Share | €1.33 | €1.27 |
| Total Assets | 813,063 | 772,402 |
| CET1 Capital Ratio | 13.42% | 12.88% |
| Total Capital Ratio | 17.75% | 16.90% |
Cash Flow: Net cash provided by operating activities was €10,961 million. Net cash used in investing activities was €925 million, and net cash used in financing activities was €1,881 million.
Material Changes vs. Prior Period
- Profitability: Profit attributable to the parent company increased by 4.7% to €7,978 million, driven by higher operating profit before tax (up 5.5%).
- Revenue Drivers: Net interest income rose 2.0%, supported by higher loan volumes in Turkey and Mexico. Fee and commission income increased 8.2% due to higher payment systems fees and asset management activity.
- Expense Management: Other operating expenses decreased significantly by 37.4% to €1,907 million, primarily due to a reduction in hyperinflation-related monetary losses in Argentina and Turkey compared to the prior year.
- Impairments: Credit impairment charges increased slightly by 1.1% to €4,328 million, reflecting higher expected losses in retail portfolios in Turkey and Mexico.
- Capital Position: The CET1 ratio improved by 54 basis points to 13.42%, exceeding the regulatory requirement of 9.13%.
Guidance, Outlook, Risks, and Unusual Items
Management Commentary and Outlook
Management highlights a resilient performance despite a challenging macroeconomic environment. The Group continues to invest in growth opportunities, supported by strong capital generation. A share buyback program of €993 million is expected to commence on October 31, 2025.
Dividends
- 2024 Final Dividend: €0.41 per share (paid April 2025).
- 2025 Interim Dividend: €0.32 per share approved, payable November 7, 2025.
Risks and Contingencies
- Geopolitical and Macroeconomic: Significant exposure to U.S. administration policies, tariffs, and geopolitical tensions (Ukraine, Middle East). High uncertainty regarding global growth and inflation.
- Currency Volatility: Depreciation of the Turkish lira (24.8% vs. Euro), Argentine peso (31.9% vs. Euro), and U.S. dollar (11.5% vs. Euro) negatively impacted reported results in local currency terms.
- Regulatory: Ongoing constitutional and institutional reforms in Mexico (Judiciary, Antitrust) and regulatory changes in Turkey regarding loan reserve requirements and "liraization" strategies.
- Hyperinflation: Continued application of IAS 29 for Turkey, Argentina, and Venezuela, creating volatility in financial reporting.
Unusual Items
- Spain Tax: Accrual of approximately €224 million for the "Interest Margin and Commission Tax" (IMIC) for the nine months ended September 30, 2025. A payment of €295 million for the 2024 tax year was recorded as an asset as it was considered undue under the current legal framework.
- Exchange Offer: The exchange offer for Banco Sabadell ceased to be effective on October 16, 2025, as the minimum acceptance condition was not met.
Investor Verification Checklist
- Currency Impact: Verify the extent to which reported profit growth is driven by operational performance versus currency translation effects, particularly in Turkey and Argentina.
- Spain Tax Liability: Confirm the final status and deductibility of the "Interest Margin and Commission Tax" (IMIC) and the recoverability of the €295 million asset recorded for the 2024 payment.
- Credit Quality in Emerging Markets: Monitor the non-performing loan (NPL) ratios in Turkey (3.7%) and Mexico (2.8%) given the macroeconomic headwinds and increased impairment provisions.
- Regulatory Compliance in Mexico: Assess the operational impact of the new National Antitrust Commission (CNA) and constitutional reforms on BBVA Mexico's business model.
- Capital Adequacy: Review the impact of the new Capital Requirements Regulation (CRR III) on future capital buffers and dividend capacity.