Business Context and Reporting Period
This Form 6-K filing by Banco Bilbao Vizcaya Argentaria, S.A. (BBVA) covers the first half of 2025 (ending June 30, 2025), with the report dated July 31, 2025. The bank operates across Spain, Mexico, Turkey, and South America, reporting financial results in euros adjusted for constant exchange rates where noted.
Key Financial Metrics
| Metric | Value (1H25) | Change (YoY) |
|---|---|---|
| Net Attributable Profit | €5.45 billion | +31% (Constant EUR) |
| Gross Income | €18.0 billion | +20% |
| Net Interest Income (NII) | €12.6 billion | +10% |
| Net Fees and Commissions | €4.0 billion | +18% |
| Operating Expenses | €6.79 billion | +10% |
| Operating Income | €11.25 billion | +26% |
| Efficiency Ratio | 37.6% | -322 bps |
| Cost of Risk | 1.32% | Stable |
| NPL Ratio | 2.9% | Stable |
| CET1 Ratio | 13.34% | +25 bps |
| ROTE | 20.4% | Above peers |
| ROE | 19.5% | Above peers |
Material Changes vs. Prior Period
- Revenue Growth: Core revenues (NII + Fees) rose 12% to €16.6 billion, driven by strong activity in Spain and Mexico and growth in payments and asset management.
- Expense Control: Operating expenses grew 10%, significantly below the 13.4% average inflation in the Group's footprint, improving the efficiency ratio by 322 basis points.
- Profitability: Net attributable profit reached a record €5.45 billion, up 31% year-over-year in constant euros. Second-quarter profit alone was €2.75 billion (+18% YoY).
- Asset Quality: Impairments increased 10% due to loan growth in profitable segments, but the cost of risk remained stable at 1.32%. The NPL ratio held at 2.9% with an 81% coverage ratio.
- Capital Strength: The CET1 ratio increased to 13.34%, well above the regulatory requirement of 9.12% and the internal target range of 11.5-12%.
Guidance, Outlook, and Risks
Strategic Goals (2025-2028)
- Profitability: Target average ROTE of ~22% and efficiency ratio around 35%.
- Accumulated Profit: Expectation of €48 billion in net attributable profit over the four-year period.
- Shareholder Value: Target 15% CAGR increase in tangible book value per share plus dividends.
- Capital Generation: Plan to generate €39 billion organically and €5 billion via securitizations, totaling €49 billion in CET1 capital.
Regional Outlook
- Spain: Lending growth expected above 5%; NII and fees to increase; cost of risk and expenses below initial estimates.
- Mexico: Lending growth of 10%; cost of risk expected below 350 bps.
- South America: Cost of risk expected below 250 bps.
Shareholder Distribution
BBVA expects approximately €13 billion available for distribution to shareholders in the short term. Over the 2025-2028 period, roughly €36 billion of excess capital is available for distribution, split between €24 billion in ordinary distributions and €12 billion in excess capital above the 12% CET1 target, via dividends or buybacks.
Risks and Contingencies
- Hyperinflation: Improved performance in Turkey and Argentina due to lower hyperinflation impacts, though these regions remain sensitive to macroeconomic volatility.
- Macroeconomic Scenarios: Loan-loss provisions in Mexico increased due to a more adverse macroeconomic scenario, though performance remained better than expected.
Key Facts for Investor Verification
- Verify the sustainability of the 31% profit growth in constant euros against the backdrop of lower interest rates in Spain.
- Confirm the execution of the "Next Gen" technology and AI productivity programs to achieve the 35% efficiency ratio target.
- Monitor the cost of risk in Mexico and South America to ensure it remains below the 350 bps and 250 bps guidance, respectively.
- Assess the timeline and execution of the €13 billion short-term shareholder distribution plan.
- Track the progress of the strategic plan to improve franchises in hyperinflationary economies (Turkey and Argentina) in the latter half of the 2025-2028 period.