BBVA's Profit Suffers from Currency Hit Despite Strong Loan Growth — Update

By Elena Vardon

Banco Bilbao Vizcaya Argentaria reported a decline in its third-quarter profits, weighed down by the depreciation of the Mexican peso despite strong loan growth across its markets.

The Spanish bank, which also operates in Mexico, South America and Turkey, made a net profit of 2.53 billion euros ($2.94 billion) for the three months ended Sept. 30. That represented a 3.7% drop from a year earlier and was slightly below what analysts had expected. At constant exchange rates, net profit for the quarter edged up 0.4%, it said.

For its revenue metric--gross income--it reported a 4.4% rise to 9.10 billion euros, beating consensus estimates. The result was 10% higher at constant exchange rates. The increase was driven by better-than-expected double-digit growth in net interest income--the margin the bank makes from lending money to customers--as well as higher net fees and commissions from its asset management, payments and insurance operations. Part of this was offset by heavier costs.

The result comes after BBVA dropped its $19 billion bid for domestic rival Banco de Sabadell earlier this month after failing to convince enough shareholders. The bank, which generates more than half of its revenue from outside of Spain, had been locked in the pursuit of smaller peer to gain scale at home and lessen its reliance on emerging markets.

The collapse of the deal drew to a close the hostile battle that had dragged on for nearly 18 months. BBVA is now seeking to move past the setback and focus on delivering on its midterm targets.

"We are purely focused on organic growth from now on," Chief Executive Onur Genc told analysts on Thursday, adding that the bank is set on creating organic capital and resuming distribution to shareholders. The group has guided for accumulated profits of 48 billion euros and distributable profits of 36 billion euros over the 2025 to 2028 period.

BBVA is rewarding shareholders for their patience through the long and uncertain takeover process by speeding up the pace of investor payouts. A pending 993 million euro share buyback will start on Friday, it said, reiterating that it intends to kick off another significant program once it gets the necessary regulatory approvals.

The sharp appreciation in the bank's stock price since the start of the year has made BBVA the second-largest bank in continental Europe by market value, behind Santander. Earlier this week, the lender briefly crossed the 100 billion euros market capitalization threshold for the first time. Shares slid around 2% in morning trading following the results, causing the stock to pull back from its peak.

BBVA's common equity Tier 1 ratio--a key measure of balance-sheet strength--stood at 13.42% at the end of the quarter, ahead of the top end of its 11.5% to 12% target range.

Write to Elena Vardon at elena.vardon@wsj.com

(END) Dow Jones Newswires

October 30, 2025 06:33 ET (10:33 GMT)