Banco Bilbao Vizcaya Argentaria, S.A. — FY 2022 Form 20-F
Business context and reporting period. BBVA is a Spain-based international banking group with major businesses in Spain, Mexico, Turkey, and South America. This audited annual report covers the year ended December 31, 2022, and presents comparative FY 2021 and FY 2020 results under IFRS as issued by the IASB. It does not provide a standalone Q4 income statement.
Key financial metrics
| Metric | FY 2022 / year-end | Comparison |
|---|---|---|
| Total assets | €713.1 billion | €662.9 billion at year-end 2021 |
| Gross income | €24.9 billion | Up 18.2% |
| Net interest income | €19.2 billion | Up 30.4% |
| Net margin before provisions | €14.1 billion | Up 22.5% |
| Operating profit before tax | €10.4 billion | Up 42.9% |
| Profit attributable to parent | €6.42 billion; €0.99 basic EPS | Up 38.0%; EPS was €0.67 |
| Net interest margin | 2.73% | 2.16% in 2021 |
| Return on average equity / assets | 14.1% / 1.0% | 10.4% / 0.8% in 2021 |
| Customer loans | €384.6 billion gross; €373.4 billion net of allowances | Net loans were €335.0 billion in 2021 |
| Customer deposits | €405.9 billion | Up 10.5% from €367.4 billion |
| Credit quality | Impaired loans €13.5 billion; 3.46% of amortized-cost loans | Ratio was 4.20% in 2021; allowance coverage was €11.3 billion |
| Cash flows | Operating +€23.7 billion; investing −€3.9 billion; financing −€7.6 billion | Cash and cash equivalents increased €12.0 billion to €79.8 billion |
| Capital and liquidity | CET1 12.61% fully loaded (12.68% phased-in); LCR 159%; NSFR 135% | LCR was 165% and NSFR 135% in 2021 |
Material changes versus prior period
- Higher interest rates and loan growth lifted net interest income; interest expense also rose 47.4%, reflecting higher funding costs.
- Fee and commission income increased 18.1%, while impairment expense on financial assets rose 11.4% to €3.38 billion. Administration costs increased 13.7% to €9.43 billion.
- BBVA acquired an additional 36.12% of Garanti BBVA in May 2022 for approximately €1.39 billion, raising its stake to 85.97%. The transaction generated an approximately €924 million capital gain and reduced non-controlling interests.
- Year-end assets grew, including loan growth in Mexico and other international businesses. Currency movements and Turkey’s new hyperinflation accounting materially affected comparability.
Outlook, commentary, risks, and unusual items
- Unusual accounting effects: Applying IAS 29 and IAS 21 in Turkey produced a net loss of €2.71 billion for 2022, including a €2.32 billion gross loss on the net monetary position, partly offset by €1.49 billion from revaluation of inflation-linked bonds. The corresponding net loss in Argentina was €1.03 billion.
- Other significant items: The 2022 purchase of Tree Inversiones Inmobiliarias resulted in a €201 million after-tax loss. The 2021 comparison included €994 million of pre-tax costs for Spain’s workforce and branch restructuring and €280 million of profit from discontinued U.S. operations and the sale of BBVA USA.
- Management outlook: BBVA Research expected slower 2023 growth, forecasting global GDP growth of 2.3%, Spain 1.4%, Mexico 0.6%, and Turkey 3.0%. These are economic forecasts, not company earnings guidance. Management noted that higher rates may support margins but could also reduce credit demand and increase defaults and funding costs.
- Shareholder distributions: BBVA’s policy targets annual distributions of 40%–50% of consolidated ordinary profit, subject to approvals and regulatory constraints. A €0.31-per-share final dividend for 2022 and a €422 million buyback were proposed after year-end; both remained subject to applicable approvals and authorizations.
- Principal risks: Exposure to Spain, Mexico, and Turkey; Turkish inflation, lira depreciation, regulation, and political uncertainty; credit deterioration, interest-rate and foreign-exchange volatility; funding and sovereign risk; litigation and regulatory change; and cyber, operational, climate, and compliance risks. The filing describes a Spanish criminal investigation involving BBVA; no formal accusation against the Bank had been made as of the report date. Legal and tax contingency provisions totaled €685 million at year-end.
- The auditor issued an unqualified opinion on the IFRS financial statements and internal control over financial reporting. Expected credit losses and fair values of certain Level 2 and Level 3 instruments were identified as critical audit matters.
Important facts for investors to verify
- Reconcile reported profit growth with Turkey and Argentina hyperinflation accounting, the Garanti BBVA acquisition, and other one-off items.
- Check the sensitivity of earnings, credit losses, and capital to further rate changes, inflation, currency movements, and weaker economic conditions—especially in Turkey.
- Review the movement in loan-loss allowances, stage 2 and stage 3 exposures, and the assumptions used in expected-credit-loss models.
- Confirm capital and MREL headroom against current requirements, and monitor liquidity, deposit mix, and the repayment or replacement of ECB funding.
- Verify approvals and execution of the proposed final dividend and €422 million buyback, as well as the expected 2023 Spanish banking levy of approximately €225 million.