Introduction & Market Context
Banco Bilbao Vizcaya Argentaria (NYSE:BBVA) reported strong first-quarter 2025 results on April 29, with significant growth across key metrics. The Spanish banking giant posted a net attributable profit of €2.7 billion, showcasing the strength of its diversified business model across Spain, Mexico, Turkey, and South America.
The results come amid a backdrop of varying economic conditions across BBVA (BME:BBVA)’s markets, with emerging economies like Mexico showing particularly robust growth potential. The bank’s stock closed at $14.37 on April 28, near its 52-week high of $14.84, reflecting investor confidence in its performance.
Quarterly Performance Highlights
BBVA delivered exceptional financial results in Q1 2025, with net attributable profit reaching €2,698 million, representing a 22.7% year-over-year increase and a 10.9% rise from the previous quarter. Earnings per share grew to €0.45, up from €0.36 in the same period last year.
As shown in the following slide highlighting key quarterly metrics:
The bank’s profitability metrics also showed significant improvement, with Return on Tangible Equity (ROTE) reaching 20.2% in Q1 2025, up from 17.7% in Q1 2024. Return on Equity (ROE) similarly improved to 19.3% from 16.9% a year earlier.
BBVA’s presentation emphasized six key messages that summarize the quarter’s performance:
Revenue and Profitability Analysis
Core revenues showed remarkable growth, with net interest income increasing by 8.5% year-over-year to €6,398 million at constant exchange rates. Fee income performed even better, growing 19% compared to Q1 2024. This strong revenue performance, combined with controlled operating expenses, led to an improved efficiency ratio of 38.2%, down from 42.9% a year earlier.
The following chart illustrates the consistent upward trend in core revenues across recent quarters:
BBVA’s efficiency improvements were driven by positive jaws, with gross income growing at 28.2% while operating expenses increased by only 14.2%, despite an average inflation rate of 16.7% across its footprint:
Asset quality metrics also showed positive evolution, with the cost of risk improving to 1.30% in Q1 2025 from 1.39% in the same period last year. The non-performing loan (NPL) ratio decreased to 2.9% from 3.4% a year ago, while the coverage ratio improved to 82% from 76%:
Geographic Performance
BBVA’s geographic diversification proved advantageous, with particularly strong performance in Mexico and improving trends in Spain. Total loan growth for the group reached 15.1% year-over-year, with Spain showing 6.6% growth and Mexico an impressive 17.2%.
The following slide details the acceleration in loan growth across key markets:
Mexico continues to be a significant growth driver for BBVA, with net attributable profit reaching €1,332 million. The country shows substantial room for growth, with domestic credit to private sector representing only 33% of GDP compared to 78% in Spain and higher percentages in most developed markets.
Core revenues in both Spain and Mexico showed positive evolution, with Spain up 2.7% year-over-year to €2,196 million and Mexico up 7.3% to €3,349 million:
Digital and Sustainability Initiatives
BBVA’s digital transformation continues to drive customer acquisition, with 2.9 million new customers added in Q1 2025. Notably, 66% of these new customers were acquired through digital channels, up from just 24% in Q1 2020:
Sustainability remains a strategic focus for BBVA, with the bank channeling €29 billion toward sustainable business in Q1 2025. The bank has set an ambitious target of €700 billion in sustainable business and has already reached €304 billion:
Capital Position and Outlook
BBVA maintained a robust capital position, with its CET1 ratio reaching 13.09% as of March 2025, an increase of 21 basis points from December 2024. This level is well above both the bank’s target range of 11.5-12.0% and the regulatory SREP requirement of 9.13%:
Looking ahead, BBVA highlighted six key takeaways that underscore its positive outlook:
The bank’s strong capital generation, improving efficiency, and continued franchise growth position it well for sustained performance throughout 2025. BBVA’s diversified model, with leading franchises in attractive markets, provides resilience against potential economic headwinds while offering significant growth opportunities, particularly in emerging markets.
Full presentation:
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