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1. Company Snapshot

1.a. Company Description

Banco Bilbao Vizcaya Argentaria, S.A., together with its subsidiaries, provides retail banking, wholesale banking, and asset management services.It offers current accounts; and demand, savings, overnight, time, term, and subordinated deposits.The company also provides loan products; deals in securities; and manages pension and investment funds.


In addition, it offers credit cards; corporate and investment banking services; insurance products and services; and real estate services.The company provides its products through online and mobile channels.As of December 31, 2021, it operated through a network of 6,083 branches and 29,148 ATMs. It operates in Spain, Mexico, South America, the United States, Turkey, Asia, and rest of Europe.


Banco Bilbao Vizcaya Argentaria, S.A. was founded in 1857 and is headquartered in Bilbao, Spain.

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1.b. Last Insights on BBVA

Banco Bilbao Vizcaya Argentaria's recent performance was driven by strong Q3 2025 earnings, with net profit and customer acquisition increasing significantly, fueled by digital banking advancements and strategic growth in key markets. The company's net interest income rose to €6.64 billion, and a share buyback program was announced, demonstrating its commitment to shareholder returns. Morgan Stanley's equal weight rating and €19 price target also contributed to the positive momentum. Additionally, BBVA's expansion in Latin America and focus on digital transformation are key growth drivers.

1.c. Company Highlights

2. BBVA's Q3 Results: Strong Profitability and Capital Position

BBVA reported a net attributable profit of EUR 2.5 billion, despite a decrease compared to the previous quarter due to higher inflation in Turkey and one-off positive impacts in the second quarter. The bank's core revenues continued to grow, with net interest income and fees increasing 18% and 15% year-over-year, respectively. The earnings per share (EPS) came in at 0.4244, slightly below estimates of 0.4423. The bank's profitability ratios remain strong, with a return on tangible equity of 19.7% and ROE of 18.8% in the first 9 months of 2025.

Publication Date: Nov -01

📋 Highlights
  • Strong Profitability Metrics: 19.7% ROE and 18.8% ROE for first 9 months of 2025, with EUR 2.5 billion net attributable profit despite inflationary pressures.
  • Capital Strength and Shareholder Returns: CET1 ratio at 13.42%, EUR 1 billion share buyback program, and EUR 0.32 record interim dividend announced.
  • Revenue Growth and Efficiency: 16.2% gross income growth YoY, 11% operating expenses increase, and efficiency ratio improved to 38.2%.
  • Geographic Performance Highlights: Spain (EUR 3.1 billion net profit 9M), Mexico (EUR 1.3 billion Q3), Turkey (50% YoY profit rise), and South America (24% YoY growth).
  • Customer and Digital Growth: 8.7 million new customers (66% via digital), EUR 97 billion sustainable business channeled, and 44% market share in Mexico’s payrolls.

Financial Performance

The bank's gross income grew 16.2% year-over-year, while operating expenses increased by 11%, resulting in a positive jaws at the group level. The efficiency ratio improved to 38.2%, and asset quality metrics performed better than expectations. The cost of risk stands at 135 basis points, with NPL and coverage ratios continuing to improve.

Business Update

BBVA's business areas delivered strong results, with Spain, Mexico, and Turkey posting significant profits. The bank acquired a record 8.7 million new customers in the first 9 months, with 66% joining through digital channels. The bank channeled a record EUR 97 billion in sustainable business, with a significant increase in all segments.

Capital Position and Shareholder Remuneration

The CET1 capital ratio improved by 8 basis points to 13.42%, providing capacity to increase shareholder remuneration. The bank announced a EUR 1 billion share buyback program and a record interim dividend of EUR 0.32 per share. The management expects to distribute excess capital to shareholders, with a target capital ratio of 11.5-12%.

Valuation

BBVA's current Price-to-Tangible Book Value (P/TBV) ratio is around 1.85, which is reasonable considering the bank's strong profitability and capital position. The Dividend Yield is 4.01%, which is attractive for income investors. The Net Interest Margin (NIM) is expected to stabilize around current levels, supporting the bank's revenue growth.

Outlook

The bank is committed to its 20% ROE target for 2025, despite excess capital. The management expects to maintain its position in Mexico, despite increasing competition, and is confident in its ability to compete in the digital banking space. Analysts estimate next year's revenue growth at 5.0%, which is a reasonable expectation given the bank's strong performance in the first 9 months.

3. NewsRoom

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Is BBVA Still a Bargain After Its 101.8% Rally in 2025?

Dec -01

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European Equities Traded in the US as American Depositary Receipts Rise in Monday Trading

Dec -01

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Wallbox Announces an Agreement With Core Banking Partners and Major Shareholders, Advancing Into Its Next Phase With a Renewed Capital Structure

Dec -01

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BBVA Argentina Announces Third Quarter 2025 Financial Results

Nov -25

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Standard Chartered Becomes Digital Asset Custodian for 21Shares Crypto ETPs

Nov -25

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Atlas secures $475m funding for Chilean solar-battery project

Nov -19

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Is BBVA’s (BME:BBVA) Share Buyback Activity a Sign of Strategic Confidence or Conservatism?

Nov -14

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BBVA (BBVA) Issues €1B AT1 Bonds, Reports 18% NII Growth in Q3

Nov -14

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.40%)

6. Segments

Mexico

Expected Growth: 1.6%

The rationale behind a slightly higher growth rate than the global hypothesis is Mexico's economic resilience and the bank's strategic investments in the region, which could lead to increased market share and revenue.

Spain (Incl. Non Core Real Estate)

Expected Growth: 1.4%

The growth is aligned with the global hypothesis due to the stable economic environment in Spain and the bank's efforts to manage its non-core assets efficiently, potentially leading to a steady revenue stream.

South America

Expected Growth: 1.7%

The higher growth rate is justified by the potential for economic recovery and growth in certain South American countries, coupled with the bank's diversified portfolio and strategic investments in the region.

Turkey

Expected Growth: 1.5%

The rationale for a slightly higher growth rate than the global average is based on the bank's established presence in Turkey and the potential for economic stabilization and growth, despite the current volatility.

Rest of Business

Expected Growth: 1.4%

The growth rate is aligned with the global hypothesis, reflecting the diversified nature of this segment and its contribution to the bank's overall stability.

Corporate Center

Expected Growth: 1.0%

The rationale for a lower growth rate is the same as for 'Corporate Center and Adjustments,' reflecting the segment's nature and its limited direct exposure to external economic growth drivers.

7. Detailed Products

Retail Banking

Provides personal banking services to individuals and small businesses, including current and savings accounts, credit cards, personal loans, mortgages, and investment products.

Wholesale Banking

Offers corporate banking services to large corporations, including cash management, trade finance, and risk management solutions.

Asset Management

Provides investment management services to individuals, companies, and institutions, including mutual funds, pension plans, and wealth management.

Markets and Treasury

Offers market-making, sales, and trading services in fixed income, currencies, commodities, and equities, as well as treasury services.

BBVA Compass

Provides retail and commercial banking services in the United States, including consumer and business banking, credit cards, and wealth management.

Digital Banking

Offers online and mobile banking services, including digital wallets, payment systems, and fintech partnerships.

8. Banco Bilbao Vizcaya Argentaria, S.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Banco Bilbao Vizcaya Argentaria, S.A. is medium due to the presence of alternative financial institutions and digital payment systems.

Bargaining Power Of Customers

The bargaining power of customers is low due to the lack of negotiating power of individual customers and the high switching costs.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium due to the presence of multiple suppliers and the bank's ability to negotiate prices.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry, including regulatory requirements and capital requirements.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of multiple competitors in the banking industry and the need to differentiate through innovative products and services.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 76.23%
Debt Cost 11.40%
Equity Weight 23.77%
Equity Cost 11.40%
WACC 11.40%
Leverage 320.72%

11. Quality Control: Banco Bilbao Vizcaya Argentaria, S.A. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
HSBC

A-Score: 8.0/10

Value: 7.7

Growth: 7.3

Quality: 6.3

Yield: 8.8

Momentum: 9.5

Volatility: 8.7

1-Year Total Return ->

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BBVA

A-Score: 7.8/10

Value: 7.1

Growth: 9.2

Quality: 7.0

Yield: 8.1

Momentum: 9.5

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
NatWest

A-Score: 7.3/10

Value: 8.0

Growth: 5.6

Quality: 6.8

Yield: 8.1

Momentum: 9.0

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
ING

A-Score: 7.2/10

Value: 6.4

Growth: 5.7

Quality: 5.0

Yield: 9.4

Momentum: 8.5

Volatility: 8.0

1-Year Total Return ->

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Stock-Card
Barclays

A-Score: 7.1/10

Value: 9.0

Growth: 7.2

Quality: 5.8

Yield: 5.0

Momentum: 9.5

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
UBS

A-Score: 5.2/10

Value: 4.2

Growth: 4.0

Quality: 3.9

Yield: 5.6

Momentum: 7.0

Volatility: 6.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

19.17$

Current Price

19.17$

Potential

-0.00%

Expected Cash-Flows