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: Six months ended June 30, 2026
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 reporting period includes the execution of multiple share buyback tranches and the agreement to sell Garanti BBVA's Romanian subsidiaries.
Key Financial Metrics
| Metric | Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | Change (%) |
|---|---|---|---|
| Net Interest Income | €15,164 million | €12,607 million | +20.3% |
| Gross Income | €21,159 million | €18,034 million | +17.3% |
| Operating Profit Before Tax | €9,581 million | €8,424 million | +13.7% |
| Profit Attributable to Parent Company | €6,051 million | €5,447 million | +11.1% |
| Basic Earnings Per Share | €1.04 | €0.91 | +14.3% |
| Total Assets | €965,426 million | €859,576 million (Dec 31, 2025) | +12.3% |
| CET1 Capital Ratio | 12.90% | 12.70% (Dec 31, 2025) | +20 bps |
| Total Capital Ratio | 17.42% | 17.21% (Dec 31, 2025) | +21 bps |
| Liquidity Coverage Ratio (LCR) | 145% | N/A | N/A |
Material Changes vs. Prior Period
- Profitability Growth: Profit attributable to the parent company increased by 11.1% to €6.05 billion, driven by higher net interest income (+20.3%) and fee income (+16.8%).
- Segment Performance:
- Mexico: Remained the largest profit contributor (€2.98 billion, +15.8% YoY), benefiting from loan volume growth and peso appreciation.
- Turkey: Reported a 29.1% profit increase to €532 million, despite lira depreciation, due to higher yields on Turkish lira-denominated loans.
- Rest of Business: Profit surged 62.0% to €508 million, driven by trading gains and wholesale loan growth in the US and Asia.
- Spain: Profit remained stable at €2.17 billion (+2.3%), with net interest income growth offset by lower asset yields following ECB rate cuts.
- Impairment Costs: Impairment on financial assets increased 26.6% to €3.50 billion, primarily due to higher expected losses in retail portfolios (consumer/credit cards) in Turkey, Mexico, and Argentina.
- Shareholder Returns: BBVA executed three tranches of a share buyback program totaling €3.96 billion in the first half of 2026, reducing share capital. A new €2.0 billion buyback framework was announced in July 2026.
Guidance, Outlook, Risks, and Unusual Items
Outlook and Management Commentary
Management projects global GDP growth of 3.1% in 2026. While the global economy remains resilient, BBVA Research forecasts moderate growth in key markets: Spain (2.4%), Mexico (1.2%), Turkey (3.0%), and Argentina (3.0%). Inflation is expected to remain elevated in the Eurozone and emerging markets, potentially constraining central bank policy flexibility.
Risks and Contingencies
- Geopolitical & Macroeconomic: Significant exposure to geopolitical tensions (Middle East, Ukraine), U.S. tariff policies, and energy price volatility. High inflation and stagflation risks persist in Turkey and Argentina.
- Legal Proceedings: BBVA is an investigated party in a criminal proceeding in Spain regarding alleged bribery and revelation of secrets related to "Cenyt." Oral proceedings were ordered in July 2026; management states potential fines would not be material but reputational risk exists.
- Hyperinflation: Operations in Turkey, Argentina, and Venezuela are subject to hyperinflation accounting (IAS 29), resulting in significant monetary losses on net monetary positions (€279 million in Argentina, €522 million in Turkey).
- Divestiture: Garanti BBVA agreed to sell its Romanian subsidiaries to Raiffeisen Bank. Assets are classified as "held for sale," with closing expected in Q4 2026.
Key Facts for Investor Verification
- Capital Adequacy: Verify the sustainability of the CET1 ratio (12.90%) against the ECB requirement of 8.98% and the Group's target range (11.5% - 12.0%).
- Credit Quality in Emerging Markets: Monitor the non-performing loan (NPL) ratios in Turkey (4.1%) and South America (4.0%), which have increased due to retail loan stress.
- Share Buyback Execution: Confirm the completion of the new €2.0 billion buyback framework announced in July 2026 and its impact on earnings per share.
- Legal Exposure: Track the scheduling and potential outcomes of the "Cenyt" criminal proceedings in Spain.
- Exchange Rate Sensitivity: Assess the impact of the Turkish lira and Argentine peso depreciation on consolidated results, as these currencies significantly affect reported earnings.