Spain's BBVA Posts Earnings Beat as Sustained Loan Growth Cushions Costs — Update

By Elena Vardon

Banco Bilbao Vizcaya Argentaria reported a rise in profit on continued lending growth and a steady performance in its largest markets, which mitigated the impact of heavier costs and higher provisions.

The Spanish bank, which generates more than half of its business from outside of Europe, posted an 11% rise in net profit to 2.99 billion euros ($3.49 billion) for the first quarter of the year, surpassing expectations of a 2.80 billion-euro figure taken from an analyst consensus compiled by the company.

Gross income--its top-line figure--rose 14% to 10.65 billion euros, also beating analyst forecasts of a 10.05 billion-euro result. The increase was driven by double-digit growth in net interest income--what it earns from loans minus what it pays out on client deposits--as well as higher net fees and commissions from its asset management, payments and insurance operations.

BBVA saw loan volumes rise across both the business and consumer segments in Spain and Mexico, which represent roughly two thirds of its revenue. The bank also flagged better results at its units in Turkey and in South America, adding that its corporate and investment banking operations continue to expand.

Operating costs climbed 14% to 4.05 billion euros, partly due to voluntary redundancies in Spain. The bank also set aside 1.82 billion euros to cover bad loans--an increase of roughly a third from a year prior that reflects the growth of its lending book.

"Our results this quarter indicate that we are making progress in the execution of our strategic plan and are on track to achieve the goals set for 2028," Chief Executive Onur Genc said. The group tweaked its guidance for return on tangible equity--a key profitability measure--and now sees it reaching more than 20% this year, compared with a forecast "around" that level previously and a 21.7% return for the first quarter.

BBVA, which has a sprawling network outside of Spain, last year failed in its pursuit of Sabadell, the smaller domestic lender it hoped to absorb in order to gain scale in its home market and lessen its reliance on emerging markets that offer higher growth but also carry currency risk. The group has now turned its focus to organic growth and to returning capital to shareholders.

The Madrid-based lender added that it will start the last tranche of its 4 billion-euro share buyback program early next week, under which it will repurchase up to 1.46 billion euros of its own shares.

Shares were up more than 1% on Thursday amid declines in the European banking sector on the back of oil volatility and mixed corporate earnings.

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

(END) Dow Jones Newswires

April 30, 2026 07:42 ET (11:42 GMT)