Banco Bilbao Viscaya Argentaria Q1 Earnings Call Highlights

Banco Bilbao Viscaya Argentaria NYSE: BBVA reported what CEO Onur Genç described as an “excellent” first quarter of 2026, driven by strong growth in core revenues, improved profitability ratios, and continued capital generation as the bank advanced a multi-tranche share buyback program.

Group results: profit near EUR 3 billion and improved capital

Genç said BBVA’s tangible book value per share plus dividends rose 5% in the quarter and 14.7% year-over-year, noting that excluding the impact of share buybacks, the year-over-year growth would have been 18.1%. He highlighted that BBVA executed a EUR 993 million buyback in the fourth quarter of 2025 and is currently executing the nearly EUR 4 billion program announced in December 2025, with EUR 2.5 billion already completed across two tranches. Genç said the buybacks were carried out “at a premium to book value,” which he said “clearly create value for our shareholders,” while also reducing reported tangible book value per share.

Net attributable profit was “almost EUR 3 billion,” Genç said, up 10.8% year-over-year and 18% versus the previous quarter. Earnings per share rose to EUR 0.51, up 12.5% year-over-year, which Genç attributed to the share buyback programs.

BBVA’s CET1 capital ratio increased 13 basis points during the quarter to 12.83%, which management said was above the bank’s 11.5% to 12% target range. Genç said the quarter reflected “strong capital generation.”

Revenue growth, costs, and asset quality

Genç said net interest income increased 20.2% year-over-year, supported by “very strong business activity” and 17% loan growth. Net fees and commissions rose 15.5%, while the group efficiency ratio improved to 38%. The bank reported a cost of risk of 154 basis points, which Genç described as showing “relative stability in the current geopolitical context.”

On expenses, Genç said operating costs rose 17.5% year-over-year, reflecting investments tied to BBVA’s strategic plan. He also pointed to voluntary redundancy programs in the quarter that included a one-off restructuring charge of approximately EUR 125 million, mainly in Spain and corporate centers. Excluding this charge, cost growth would have been 13.9%, and Genç said the efficiency ratio would have been 36.8% without the redundancies.

Regarding provisioning, Genç said the quarter included a post-model adjustment (PMA) of around EUR 100 million due to macro uncertainty, primarily affecting Spain and Turkey. Excluding this adjustment, he said cost of risk would have been 147 basis points. Management also said the non-performing loan ratio and coverage ratio improved year-over-year and quarter-over-quarter.

Capital return: buybacks and risk transfer transactions

Chief Financial Officer Luisa Gómez Bravo and Genç detailed the CET1 “waterfall,” including a 75 basis point contribution from results, a 40 basis point impact from dividend accruals and AT1 coupons, and a 34 basis point impact from RWA growth. Genç also noted that risk transfer transactions (SRTs) contributed 12 basis points to CET1 during the quarter.

Gómez Bravo said BBVA remains on track with its guidance to complete 30 to 40 basis points of SRT benefit for the year, calling the transactions “very well received by the market.”

On shareholder distributions, Genç said BBVA planned to start execution of the third tranche of the buyback program—around EUR 1.5 billion—on May 6. He reiterated the bank’s approach to returning excess capital above the upper end of its CET1 target range.

Regional performance: Spain and Mexico lead, Turkey guidance sees “downward bias”

In Spain, Gómez Bravo said quarterly net profit again exceeded EUR 1 billion, supported by gross income growth of 5.4% year-over-year and 4.3% quarter-over-quarter. She said net interest income rose 3.6% year-over-year, with customer spreads “broadly stable,” while quarter-to-quarter NII reflected a day-count effect. She said fees were seasonally affected by fourth-quarter asset management success fees; excluding that seasonality, fees rose 5.5% quarter-over-quarter. Excluding the restructuring charge, she said cost growth in Spain was 4.8% year-over-year, and she said expected savings from the redundancies would be “largely realized in 2026.”

In Mexico, Gómez Bravo said BBVA Mexico delivered net profit of EUR 1.45 billion, up 4.5% year-over-year in constant euros, with gross income up 10.3%. Net interest income increased 8.3% year-over-year, driven by loan growth and “resilient margins despite a declining rate environment.” She said BBVA expects rates to bottom out at 6.5% this year, from 6.75% currently. Mexico’s efficiency remained strong, with a cost-to-income ratio of 30.8%. Cost of risk was 345 basis points, “flat quarter-on-quarter and in line with guidance,” she said.

During Q&A, Genç addressed questions about Mexican credit cards, stating, “We don’t see any deterioration whatsoever,” and said the bank remained confident in its cost of risk guidance. He also cited loan growth momentum in March and pipelines on the corporate side, referencing “Plan Mexico” and increased infrastructure and energy-related projects as supportive of activity. He said a slight decline in customer spread in the quarter reflected mix, including stronger enterprise growth versus retail and typical seasonality in credit cards.

In Turkey, Gómez Bravo reported profit of EUR 263 million, supported by net interest income growth and “robust revenue dynamics,” while hyperinflation adjustment was higher due to inflation metrics. Cost of risk was 253 basis points, and she said excluding the PMA, it would have been 238 basis points. She said the first half was expected to be higher than full-year guidance and “expected to converge over the year,” but added that “given the uncertain environment, we now see a downward bias to our guidance.” Genç attributed the shift to changed macro parameters, including higher inflation expectations, and said net interest income could be negatively affected in the second quarter by rate increases, while stressing that BBVA was “activating other levers” including cost actions.

Strategy update: AI initiatives and medium-term targets

Genç said BBVA continued to progress on its transformation strategy, particularly highlighting artificial intelligence as a priority. He said BBVA is pursuing “eight very tangible initiatives,” including a personal advisor for clients (“Blue”) and tools “for the banker,” as well as applications in risk, operations, and software development. He said the bank is also “revamping our operating system” to industrialize AI agents at scale, and described early results as “very promising.”

Genç also said BBVA was performing “in line or better than our original expectations” on the 2025–2028 financial goals announced previously. In closing remarks, he said the bank upgraded its 2026 outlook for group return on tangible equity and for “rest of business,” while expressing optimism on Mexico activity and maintaining a prudent stance on Turkey given macro uncertainty.

About Banco Bilbao Viscaya Argentaria NYSE: BBVA

Banco Bilbao Vizcaya Argentaria NYSE: BBVA is a Spanish multinational financial services group headquartered in Bilbao, Spain. The bank traces its roots to several historic regional banks and was formed through a series of mergers that consolidated its position as one of Spain's largest banking groups. BBVA operates as a universal bank offering a broad range of financial services to retail, corporate and institutional clients.

BBVA's core businesses include retail and commercial banking, corporate and investment banking, private banking and wealth management, asset management, and insurance.

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