BANCO BILBAO VIZCAYA ARGENTARIA, S.A. current report, Q4 FY2025

Business Context and Reporting Period

Banco Bilbao Vizcaya Argentaria, S.A. (BBVA) reported its financial results for the third quarter and nine months ended September 30, 2025, in a Form 6-K filing dated October 30, 2025. The bank operates across Spain, Mexico, Turkey, and South America, emphasizing digital transformation and sustainable finance. The reporting period reflects a lower interest rate environment in major markets, which the bank managed through strong activity growth and effective rate lock-in strategies.

Key Financial Metrics

Metric3Q25 (Current €M)9M25 (Current €M)Change vs Prior Period
Net Attributable Profit2,5317,978-3.7% QoQ; +4.7% YoY (9M)
Earnings Per Share (EPS)€0.42N/A-8.0% QoQ
Net Interest Income (NII)6,64019,246+18.3% YoY (3Q); +12.6% YoY (9M)
Net Fees and Commissions2,0606,071+15.3% YoY (3Q); +16.6% YoY (9M)
Operating Income5,52816,776+7.9% YoY (3Q); +19.7% YoY (9M)
Cost of Risk (YTD)1.35%1.35%Below expectations
Efficiency Ratio (YTD)38.2%38.2%-178 bps YoY
CET1 Ratio13.42%13.42%+8 bps QoQ
Return on Tangible Equity (ROTE)19.7%19.7%Stable vs 9M24

Liquidity and Capital: The Liquidity Coverage Ratio (LCR) stood at 174% and the Net Stable Funding Ratio (NSFR) at 128% for the Group, both significantly above regulatory requirements. The bank announced a share buyback program of approximately €1 billion and a record interim dividend of €0.32 per share payable in November 2025.

Material Changes vs. Prior Period

  • Profitability: Net attributable profit for 3Q25 decreased 3.7% quarter-over-quarter to €2,531 million, primarily due to a one-off Spanish banking tax accrual of €75 million and lower trading income. However, on a year-over-year basis for the nine-month period, profit grew 4.7% to €7,978 million.
  • Revenue Growth: Net Interest Income grew 18.3% year-over-year in 3Q25, driven by strong loan growth (+16.0% YoY) and effective rate management. Net fees and commissions increased 15.3% YoY, supported by payments and asset management.
  • Trading Income: Net trading income fell 46.1% YoY to €531 million in 3Q25. This decline is attributed to the absence of strong gains from P&L hedges linked to Mexican Peso depreciation that occurred in 3Q24.
  • Asset Quality: Non-Performing Loans (NPL) ratio decreased to 2.8% (from 2.9% in 2Q25), and the Cost of Risk remained low at 1.35% YTD, described as better than expectations.

Guidance, Outlook, and Risks

Outlook and Guidance: Management expects interest rates to be around their terminal levels, leading to relative spread stability. The bank maintains a 2025 guidance for core revenue growth of around 10% and loan growth in the mid-single digits (actuals are exceeding this with 16.0% loan growth). The CET1 ratio target range remains 11.5%-12.0%, with the current ratio at 13.42% providing a significant buffer.

Management Commentary: The bank highlighted "excellent value creation" with a Total Book Value (TBV) plus dividends per share increase of 17.0% over the last year. Digital channels drove record customer acquisition, with 8.7 million new customers in 9M25. Sustainable finance channeling reached €97 billion in 9M25, a 48% increase YoY.

Risks and Contingencies:

  • Macroeconomic Factors: Risks include market conditions, inflation, interest rate volatility, and exchange rate fluctuations, particularly in emerging markets like Turkey and Argentina.
  • Hyperinflation Adjustments: Results in Turkey and Argentina are subject to significant hyperinflation adjustments. For example, Turkey's reported profit includes a Net Monetary Position (NMP) loss, while Argentina's results are impacted by FX depreciation.
  • Regulatory and ESG: The bank faces evolving regulatory requirements (SREP, MREL) and ESG targets, the achievement of which depends partly on third-party actions.

Investor Verification Checklist

  • Spanish Banking Tax Impact: Verify the specific quarterly accruals (€75M in 3Q25, €65M in 2Q25) and their impact on net profit versus underlying operational performance.
  • Trading Income Volatility: Confirm the sustainability of trading income given the 46.1% YoY drop, which was driven by the absence of specific hedge gains from the prior year.
  • Hyperinflation Adjustments: Review the "Ex-Hyperinflation" adjusted figures for Turkey and Argentina to understand the core operational performance versus FX and inflationary distortions.
  • Capital Deployment: Monitor the execution of the announced €1 billion share buyback and the timing of the new SBB (Senior Non-Preferred) program approval.
  • Loan Growth Sustainability: Assess whether the 16.0% YoY loan growth can be maintained as interest rates stabilize and competition intensifies.