# Banco Bilbao Vizcaya Argentaria, S.A. (BBVA): Narrative, FY26Q3 BBVA reports in euros. Every money amount below has been converted to US dollars. Flows use the average exchange rate for their period: the rates printed in the filings for full-year and nine-month figures, and the market average for single quarters. Balances use the period-end rate. Per-share amounts are shown per American Depositary Share. Each BBVA ADS represents one ordinary share. Percentage changes are in euros, as the company reports them, unless they are labelled as US-dollar changes. Ratios such as ROTE, CET1 and NPL are as reported. ## Business *From the annual report on Form 20-F for fiscal year 2025 (year ended December 31, 2025), accession 0001628280-26-010001.* BBVA is a Spanish banking group that serves individuals, small and mid-sized businesses, large corporates and public institutions. It does this through retail banking, wholesale and investment banking, asset management and insurance. Most of its revenue is net interest income on loans funded largely by customer deposits. In 2025, net interest income was $29.70 billion out of $41.74 billion of gross income, and fees and commissions made up most of the rest. BBVA has a leading position in Spain and is the largest financial institution in Mexico by assets. It also owns 85.97% of Garanti BBVA, which is Turkey's largest bank by market capitalisation, and has leading franchises in South America. Its corporate and investment banking business is growing in the United States, Europe and Asia. Total assets were $1.01 trillion at December 31, 2025. The group had 127,174 employees, and about 66% of new clients begin their relationship with BBVA through digital channels. BBVA manages the business in five operating segments plus a Corporate Center: - **Spain.** Retail network (individuals, private banking, small businesses), Corporate and Business Banking (SMEs, companies, public institutions), Corporate and Investment Banking, insurance (BBVA Seguros) and asset management. In 2025, Spain earned attributable profit of $4.72 billion, 36% of the operating segments' total. - **Mexico.** The banking, insurance and asset-management business of BBVA Mexico, plus its Houston agency. This is the largest profit contributor: $5.95 billion, or 45% of segment profit, in 2025. - **Turkey.** Garanti BBVA's banking, insurance, pensions, leasing, factoring and asset-management businesses, plus subsidiaries in Romania and the Netherlands. The segment earned $909.81 million (7%) in 2025. - **South America.** Banks in Argentina, Chile, Colombia, Peru, Uruguay and Venezuela (Brazil is also listed in 2026 reporting), and insurance in Argentina, Colombia and Venezuela. The segment earned $820.53 million (6%) in 2025. - **Rest of Business.** Wholesale activity in Europe outside Spain, the United States and Asia (through branches), plus the digital retail banks in Italy and Germany. The segment earned $708.64 million (5%) in 2025. The Corporate Center holds central costs, structural currency hedging, certain portfolios, goodwill and the venture-capital stake in Propel Venture Partners. It lost $1.23 billion in 2025. By assets, Spain, Mexico and Turkey made up 53.1%, 21.2% and 10.6% of the group at the end of 2025. Three of BBVA's markets are treated as hyperinflationary under IAS 29: Turkey (since 2022), Argentina (since 2018) and Venezuela (since 2008). Results there are translated at period-end exchange rates. A loss on the net monetary position runs through the income statement, so currency and inflation in these markets drive reported results heavily. In 2025, BBVA bid for Banco de Sabadell, S.A. through a voluntary tender offer announced on May 9, 2024. The offer lapsed on October 16, 2025 because the minimum acceptance condition was not met. The 20-F reports no significant corporate transactions completed in 2023, 2024 or 2025. ## Risk factors *From the 2025 Form 20-F, accession 0001628280-26-010001.* The main risks come from concentration in three countries, interest-rate sensitivity, emerging-market exposure, and an active legal and regulatory caseload in Spain. - **Concentration in Spain, Mexico and Turkey.** Credit exposure to these three countries was 32.5%, 21.0% and 8.8% of the group's total risk in financial assets. They also held 55.3%, 21.3% and 11.8% of gross loans to customers at December 31, 2025. The filing cites several country risks: political and fiscal uncertainty in Spain; Mexico's constitutional reforms, U.S. policy and the USMCA review; and Turkey's high inflation (30.9% in 2025), lira depreciation (27.2% against the euro in 2025) and thin reserves. - **Credit quality and collateral.** The maximum credit risk exposure was $1.30 trillion. The residential mortgage book was $117.11 billion, 69.8% of it in Spain, so a fall in real-estate prices or a rise in defaults would directly increase impairments. BBVA also flags direct and indirect exposure to private-equity and private-credit funds. - **Interest rates.** Results depend heavily on net interest income. About 45% of customer loans with maturities beyond one year carry floating rates. Lower rates compress margins. Persistently high rates weigh on loan demand and asset quality. - **Emerging markets and currencies.** Mexico, Turkey and South America expose BBVA to political risk, capital and dividend controls, inflation and currency swings. Dividends from the Venezuelan, Argentine and Turkish subsidiaries are subject to repatriation restrictions. Because BBVA's ability to pay its own dividends depends partly on subsidiary dividends, these restrictions matter to shareholders. - **Competition and technology.** BBVA faces neobanks, fintechs and big-tech platforms, which the filing says already erode results in payments. Lighter regulation of non-bank rivals adds to the pressure. Adapting may require costly branch restructuring. - **Liquidity and ratings.** Customer deposits are 76.3% of financial liabilities at amortised cost, and most of them can be withdrawn on demand. A downgrade of BBVA, Spain or Mexico would raise funding costs. Exposure to sovereign debt is large: $69.04 billion of Spanish public debt and $36.45 billion of Mexican public debt. - **Litigation and the Cenyt case.** BBVA held provisions of $945.88 million for legal proceedings at the end of 2025. Spanish consumer claims over mortgages and revolving credit cards are rising. A U.S. class action alleging collusion in Mexican government bonds is still ongoing after the Second Circuit revived it. In the Cenyt case, BBVA is an investigated party in a Spanish criminal case over alleged bribery and revelation of secrets linked to its use of the Cenyt agency. In June 2024 a judge ordered abbreviated criminal proceedings against the bank and certain current and former employees and executives. - **Capital, MREL and resolution.** BBVA must meet Pillar 1, Pillar 2 and combined-buffer requirements. A breach would restrict dividends, buybacks, variable pay and AT1 coupons. Basel III ("Basel IV") implementation could raise risk-weighted assets. Under the Spanish resolution regime, unsecured debt can be written down or converted. - **Tax.** Spain imposes an 18% minimum tax on credit institutions. It also levies a tax on banks' net interest income and commissions (IMIC), at 1% to 7% on activity in Spain above an exemption, applicable for three tax periods from 2024. - **Operational and cyber risk.** Cyber-attacks are becoming more sophisticated, partly through AI. Concentration among technology providers is increasing. The filing also flags a longer-term "harvest now, decrypt later" risk from quantum computing. - **Acquisitions and divestitures.** Deals carry integration risk, hidden liabilities and possible additional capital or MREL requirements from regulators. A failed deal can also hurt the share price and BBVA's reputation. ## Management's discussion of 2025 *From the 2025 Form 20-F, Item 5, accession 0001628280-26-010001.* In 2025, attributable profit rose 4.5% in euros to $11.88 billion (up 9.2% in US dollar terms). Pre-tax profit was $18.34 billion, up 5.3%. Currency moves weighed on the reported figures: the Mexican peso, Turkish lira, Argentine peso and US dollar all weakened on average against the euro. - **Net interest income** rose 4.0% to $29.70 billion, and 13.9% at constant exchange rates. Interest expense fell faster than interest income as rates declined. Growth also came from more Turkish-lira lending after the central bank eased loan reserve requirements, wider customer spreads in Turkey, and a larger contribution from the securities and ALCO portfolios in Spain. - **Fee and commission income** rose 5.4% to $15.53 billion. The drivers were underwriting fees at BBVA Securities Inc. in the U.S., payment-systems fees (helped by higher credit-card fee caps in Turkey) and asset-management volumes. - **Hyperinflation drag eased.** The loss on the net monetary position fell to $402.35 million in Argentina, from $1.54 billion in 2024. In Turkey it fell to $992.32 million, from $1.64 billion. Gains on Turkish inflation-linked bonds were lower, at $761.75 million versus $1.26 billion. Venezuela's monetary loss increased. - **Costs** rose 1.2% to $14.48 billion of administration costs. Salary inflation, advertising in Spain, and technology costs in Turkey and Mexico were the main factors. - **Impairments** rose 5.7% to $6.86 billion. Most of the increase came from Turkish consumer and credit-card loans, plus higher requirements in Mexico as the macroeconomic scenario worsened. - **Tax** included about $359.40 million accrued for Spain's IMIC on 2025 activity. BBVA also paid $333.41 million of IMIC for 2024 but recorded it as a receivable, because the payment was considered undue under the legal framework at year-end. This was partly offset by a one-off recognition of previously unrecorded deferred tax assets in Spain. Segment results for 2025: - **Spain:** attributable profit rose 11.3% to $4.72 billion. Net interest income was up 3.2%, lifted by ALCO and securities portfolios despite ECB rate cuts. The NPL ratio fell to 3.0% from 3.7%. - **Mexico:** profit fell 3.4% in euros to $5.95 billion but rose 5.7% at constant rates. Net interest income was up 8.1% at constant rates on mortgage and consumer lending. Higher retail impairments offset part of that growth. - **Turkey:** profit rose 31.8% to $909.81 million. Net interest income roughly doubled on lira loan growth and wider spreads. Impairments rose 90.1%, the NPL ratio rose to 3.9% from 3.1%, and coverage fell to 76% from 96%. - **South America:** profit rose 14.3% to $820.53 million, and 71.5% at constant rates, as Argentina's hyperinflation loss shrank. - **Rest of Business:** profit rose 22.9% to $708.64 million. The drivers were wholesale lending growth in New York, Europe and Asia, and a 51.3% jump in net fees. The trend section expects continued competition from digital non-bank providers, rising regulatory and tax burdens (including the Spanish IMIC), and rates that are falling from their 2024 peak but remain relatively high. High rates support interest income but can increase non-performing loans. ## Current quarter: third quarter and first nine months of 2026 *Three-month figures are from the January–September 2026 Quarterly Report (Form 6-K, accession 0001628280-26-068042). Nine-month IFRS figures are from the unaudited condensed interim consolidated financial statements for the nine months ended September 30, 2026 (Form 6-K, accession 0001628280-26-068117). Commentary on the period is from the results press release (Form 6-K, accession 0001193125-26-437079) and the earnings presentation (Form 6-K, accession 0001193125-26-437088).* **Third quarter.** Net attributable profit was $3.47 billion, up 19.1% in euros from the third quarter of 2025 (up 17.3% in US dollar terms). On the press release's constant-currency basis, the increase was 14.4%. Profit was slightly below the second quarter's $3.56 billion, because operating expenses and loan-loss provisions grew faster than revenue. Revenue was still strong: - net interest income of $9.30 billion, up 21.7% year on year in euros - net fees and commissions of $2.69 billion, up 13.4% - gross income of $12.56 billion, up 19.9% - operating income of $7.76 billion, up 22.0% Against this, operating expenses were $4.80 billion (up 16.6%) and impairments on financial assets were $2.24 billion (up 24.3%). Earnings per ADS were $0.60, against $0.49 a year earlier. **Nine months.** Attributable profit was $10.53 billion, up 13.6% in euros (17.9% in US dollar terms; 11.4% at constant exchange rates). Earnings per ADS were $1.82, and the company reports 17.5% EPS growth in euros, helped by buybacks. ROE was 20.8%, ROTE 22.0% and the efficiency ratio 37.9%. The quarterly report breaks the result down as follows: - **Recurring revenue.** Net interest income rose 20.8% to $26.99 billion, and 17.8% at constant rates, with growth in every business area and Turkey strongest. Net fees and commissions rose 13.8% to $8.02 billion, led by payment fees and asset-management fees. - **Costs.** Operating expenses rose 17.4% to $14.13 billion, slightly slower than gross income. Two non-recurring items affected costs: Value Added Tax (VAT) pro-rata adjustments in both years, and voluntary staff departures in the first quarter of 2026. Excluding them, the efficiency ratio would have improved by 81 basis points. - **Credit.** Impairments rose 25.8% to $6.32 billion, mostly in Turkey and to a lesser extent South America and Mexico, as lending grew. Cost of risk was 1.44%, the NPL ratio 2.6% and coverage 84%. - **Spanish banking tax.** Income tax includes about $261.25 million accrued for the Spanish IMIC, roughly the same as a year earlier. **Business areas, nine months.** Growth rates are the company's, at constant exchange rates unless noted. - **Spain:** profit of $3.61 billion, in line with 2025. Lending grew 7.3% year on year and net interest income 3.4%. NPL ratio 2.9%. - **Mexico:** profit of $5.25 billion, up 8.4%. Lending grew 12% and net interest income 8.5%. Efficiency ratio 30.7%, cost of risk 3.19%. - **Turkey:** profit of $916.11 million, up 21.8% at current rates. Lira lending grew 40.1%. Cost of risk was 2.55% for the nine months, and management expects about 220 basis points for the full year. - **South America:** profit of $953.26 million, up 42.1% at current rates. - **Rest of Business:** profit of $930.04 million, up 58.5%. Lending grew 68.6% year on year on U.S., European and Asian corporate demand. - **Corporate Center:** loss of $1.13 billion, wider than a year earlier because of higher personnel costs. - **Corporate & Investment Banking**, which BBVA also reports across all areas, earned $3.58 billion, up 19.0%. **Balance sheet and capital.** At September 30, 2026, total assets were $1.12 trillion, gross customer loans $614.04 billion (up 14.6% since December) and customer deposits $612.67 billion. Tangible book value per ADS was $11.30. The CET1 ratio was 12.21%, down from 12.90% in June. The second share buyback framework cost 49 basis points. Quarterly earnings added 71 basis points, against 38 for dividend and AT1 coupon accruals and 44 for growth in risk-weighted assets. CET1 is still above the 11.5%–12.0% target range and well above the 8.97% requirement. Shares outstanding fell 4.4% year on year to 5,511 million. **Shareholder returns.** In 2026, BBVA completed its first extraordinary buyback framework of $4.64 billion, in three tranches between December 2025 and August 3, 2026. The repurchased shares were cancelled. On July 30, 2026 it launched a second framework of up to EUR 2,000 million ($2.27 billion at the September 30, 2026 exchange rate) in two equal tranches. A final 2025 dividend of $0.70 per ADS was paid in April 2026. **Strategy and outlook.** BBVA is executing its 2025–2029 Strategic Plan and its financial targets for 2025–2028. The plan centres on AI: "The Eight" is the AI transformation agenda, and "The Frame" is a common operating model for deploying AI agents at scale. BBVA also channelled about $139.33 billion of sustainable business in the first nine months, toward its sustainable-business goal for 2025–2029. Its research unit says the Federal Reserve and the ECB raised rates in 2026 and expects further hikes before year-end. The Turkish central bank cut its policy rate to 36% from 37% on October 22, 2026. **Romanian divestiture (pending).** On March 28, 2026, Garanti BBVA agreed to sell 100% of its Romanian subsidiaries to Raiffeisen Bank SA, the Romanian unit of Raiffeisen Bank International AG. The subsidiaries are Garanti Bank SA, Motoractive IFN SA and Motoractive Multiservices SRL. They are classified as held for sale at September 30, 2026. BBVA expects completion in November 2026, after regulatory approvals. The filings do not disclose a price; they say only that the consideration is subject to adjustments between signing and closing. ## Subsequent events *From Note 41 of the interim financial statements (accession 0001628280-26-068117), and the post-quarter Form 6-K notices cited below.* The interim statements report no subsequent events that significantly affect earnings or equity, apart from the dividend, the share buybacks and the SREP decision described here. - **Interim dividend.** On October 1, 2026, the board approved an interim cash dividend for 2026 of $0.41 per ADS (gross). It was paid on October 15, 2026, and totalled $2.27 billion. The press release says the per-share amount is nearly 16% above the prior year's interim dividend in euros (accessions 0001193125-26-409738, 0001628280-26-068117 and 0001193125-26-437079). - **Buyback tranche completed.** On October 2, 2026, BBVA said it had completed the first tranche of its second framework, of EUR 1,000 million ($1.14 billion). It bought back 40,204,840 shares, about 0.73% of share capital, between August 5 and October 1, 2026 (accession 0001104659-26-112990). - **New buyback tranche.** On October 13, 2026, BBVA announced the second tranche, of up to EUR 1,000 million ($1.14 billion), to reduce share capital by cancelling the shares bought. J.P. Morgan SE began executing it on October 14, 2026. By the October 26, 2026 progress notice, about 15.10% of the maximum amount had been spent (accessions 0001104659-26-115394 and 0001104659-26-118606). - **Credit rating upgrade.** On October 20, 2026, Morningstar DBRS raised BBVA's long-term senior issuer rating one notch, to AA (low) from A (high), with a stable outlook. It also raised the senior debt, subordinated debt, deposit and senior non-preferred ratings by one notch (accession 0001104659-26-117314). - **2027 capital requirements.** On October 26, 2026, the ECB's Supervisory Review and Evaluation Process (SREP) set BBVA's consolidated requirements from January 1, 2027 at 9.36% CET1 and 13.60% total capital. Pillar 2 rises to 1.70% from 1.50%, of which at least 0.96% must be CET1. The extra 0.12% add-on for the ECB's prudential provisioning expectations no longer applies (accession 0001193125-26-432578 and Note 41, accession 0001628280-26-068117). The 2025 Form 20-F (accession 0001628280-26-010001, Note 56) reported two subsequent events after the 2025 year-end. On January 15, 2026, BBVA redeemed a $1.16 billion issue of green contingent convertible preferred securities that had been issued in July 2020. On February 5, 2026, it announced the proposed final 2025 dividend, which was later paid in April 2026 at $0.70 per ADS.