Banco Bilbao Vizcaya Argentaria, S.A. (BBVA) Q3 FY25 earnings call: guidance and Q&A

How quickly can BBVA move to its 11.5-12% CET1 target, given skepticism about running with that buffer, plus takeaways from the failed Sabadell bid?

Sabadell chapter is closed; management sees it as a missed opportunity but is moving on to focus on organic growth. On capital, the right lens is the buffer versus the ECB requirement (9.13%), not the absolute ratio: at the 12% upper end that is 287 bps, above the ~240 bps EU peer average, so BBVA is comfortable operating there and will distribute excess capital to reach it.

“our requirement is 9.13%. If you take the upper end of our capital target range, 12%, it's 287 basis points difference... our buffer is actually one of the best and clearly above the average of our peers.”

asked by Antonio Reale (Bank of America) · answered by Onur Genç

Where do Spain and Mexico customer spreads trough, and how much of the Spanish loan-yield fall (-21 bps QoQ) is mix versus repricing?

The rate-cut cycle is near its end, so current customer spreads (Spain ~2.88%, Sept 2.83%; Mexico ~11%) approximate forward levels. Spain's lending-yield decline is more repricing than mix (corporate resets 1-3 months, mortgages effectively ~8 months), but Spain NIM was roughly flat thanks to a >EUR 50B ALCO book yielding ~3%, and front-book yields now exceed back-book. Mexico's slight increase reflects retail-vs-corporate mix; double-digit margins are resilient.

“the NIM in basically in Spain was basically flat in the quarter because we do have this more than EUR 50 billion ALCO book... the average yield of that book is at 3%”

asked by Francisco Riquel (Alantra) · answered by Onur Genç

Are there additional cost levers for 2026 given ~11% cost growth, and how fast can global CIB grow over three years?

Costs are governed by positive jaws and growth below inflation; the ~11% headline reflects hyperinflationary-country mix. The cost-to-income target is 35% by 2028, with low-30s ratios in Spain, Mexico and Turkey. For CIB, the aspiration is ~20% revenue growth to double the business in four years and lift RoRWA above 2%, driven by cross-border transaction banking and institutional business.

“in the 4-year period that we are looking into, we are going to double this business, that's the aspiration.”

asked by Benjamin Toms (RBC) · answered by Onur Genç

How is the competitive landscape in Mexico (Revolut, Nubank) evolving, and would BBVA consider M&A outside Spain given its capital strength?

BBVA is now purely focused on organic growth after the Sabadell experience, though it will always look. Mexico is described as an amazing, hard-to-replicate franchise (44% payroll share) where BBVA is gaining card market share even against neobanks. The Italy/Germany digital banks (EUR 10B deposits) are running ahead of plan, Germany better than Italy.

“We are purely focused on organic growth from now on.”

asked by Sofie Peterzens (Goldman Sachs) · answered by Onur Genç

Is there a market-share level at which challengers become scale competitors, and how many more quarters will Turkey/Argentina NPLs rise?

BBVA expects to keep gaining share (49 bps in Mexican lending last year); Nubank is a credible competitor but its Mexico card share (~3.5%) is flattening. The time-deposit mix shift was a deliberate return to the deposit market as rates fell, not competitive pressure. Turkey retail cost of risk is stabilizing (~180 bps guidance), while Argentina keeps deteriorating on ~60% real rates, prompting curtailed card/consumer origination (loan production -9% QoQ).

“Argentina is worse than what we expected because the real rates in... Argentina, sorry, is so high now that it is creating a load on the Argentinian lending book.”

asked by Alvaro Serrano / de Tejada (Morgan Stanley) · answered by Onur Genç

When can the ECB-pending buyback be announced, and how far is Turkey from a normalized customer spread?

The buyback amount cannot be disclosed until ECB approval; the legal maximum is four months but management expects it sooner and can announce mid-quarter once approved. Turkey's normalization depends on the rate path (policy rate 39.5% vs 31% expected); the customer-spread/NIM gap is unusually wide because repo/swap funding at the central-bank rate is cheaper than regulation-driven TL deposits, so NIM (+65-67 bps QoQ) improves faster than spread.

“Once we receive the approval, it can be tomorrow, it can be 2 months, it can be less. Once we receive the approval, we will announce it, yes.”

asked by Ignacio Cerezo (UBS) · answered by Onur Genç

Is the Turkey repo-funding NII benefit sticky, what was the underlying cost of risk excluding IFRS 9 recalibration/macro, and what Q4 operational-RWA impact to expect?

The repo-funding NII/NIM benefit is expected to persist while rate declines aren't fully passed to customer spreads. BBVA does not disclose the isolated macro/recalibration split but says underlying (business-as-usual) cost of risk would have been slightly better. Operational RWAs were partly adjusted in Q3 and no significant Q4 impact is expected; the significant new buyback needs only ECB approval (plus Board sign-off).

“the customer spread didn't improve too much in Turkey, but NIM has increased by 67 basis points... because we tapped into a cheaper funding resource, which is the repo market”

asked by Britta Schmidt (Autonomous Research) · answered by Onur Genç

What is driving Spanish corporate loan demand (and why lag mortgages), and why does improved Mexico CoR guidance imply a Q4 pickup?

Spanish corporate demand is broad-based (mid-companies +11%, corporate/CIB +18%), driven by a strong economy (GDP upgraded to 3% 2025), immigration, tourism, NextGen EU funds, energy/renewables and a housing supply-demand mismatch. Mortgages are deliberately deprioritized on pricing. Mexico CoR guidance was upgraded to below 340 bps; the slight Q3 uptick reflected the annual IFRS 9 recalibration outweighing a positive macro adjustment.

“Why loan growth is not so good in mortgages? You know the answer. The pricing, we just don't see value in growing the mortgage book at these prices.”

asked by Maksym Mishyn (JB Capital) · answered by Onur Genç

Details on Q4 SRTs and upside to distributable capital, plus Spain market-share dynamics.

SRTs contributed 5 bps in Q3 (~EUR 8.2B RWA of transactions), 28 bps over 9M, with a 30-40 bps annual target and Q4 above 30 bps. BBVA is gaining share almost everywhere (Spain total loans +21 bps, companies +58 bps, +200 bps over five years) except mortgages (-30 bps) and Peruvian large corporates, both on pricing discipline.

“in the past 5 years, by the way, in the company segment, we gained 200 basis points. We will do what we know well, and you'll continue to gain market share.”

asked by Borja Ramirez (Citi) · answered by Onur Genç