BBVA Earnings: Record Profit in 2024 and Share Buyback Reinstated

Narrow-moat Banco Bilbao Vizcaya Argentaria continued its strong performance in fourth-quarter 2024, booking an exceptional 2024. The bank reported a record net attributable profit of EUR 10.1 billion, a 25% increase from 2023 and exceeding our expectations, despite a 7% sequential decline in the fourth quarter. Full-year profit growth was driven by strong lending activity (14% year over year) while the nonperforming loan ratio improved to 3% from 3.4% over the previous two years. Efficiency gains also played a role as increased digitalization and branch closures contributed to a 226-basis-point improvement in the group’s efficiency ratio, bringing it down to 40%. We maintain our EUR 11.50/share fair value estimate and see shares as slightly undervalued.