BBVA Expects Growth This Year After Spain, Mexico Drive Earnings

BBVA, a leading global financial services provider, is anticipating significant growth in 2025 following a strong performance in its key markets of Spain and Mexico. The bank's robust earnings, driven by increased lending activity and improved profitability, have positioned it for a successful year ahead.



BBVA's geographic diversification has been a critical factor in its resilience and growth potential. The bank's presence in Spain and Mexico has allowed it to mitigate risks associated with economic downturns or political instability in any single market. In 2024, BBVA's lending activity in these regions grew by 10.7% yoy in constant euros (6.3% in current euros), contributing to its overall growth and profitability (BBVA, 2024). Additionally, BBVA's ability to adapt to changes in interest rates has been enhanced by its geographic diversification, as seen in its successful navigation of varying interest rate environments in different markets (Onur Genç, 2024).

BBVA's commitment to investing in Mexico, with plans to invest 81.4 billion pesos (around €4.45 billion) between 2019 and 2024, demonstrates its long-term confidence in the Mexican market (Carlos Torres Vila, 2024). This diversification strategy enables BBVA to maintain a robust balance sheet and generate value for shareholders, as seen in the 16% yoy increase in the tangible book value plus dividends per share in 2024 (BBVA, 2024).

BBVA's combination with Banco Sabadell is expected to create value for both banks and their shareholders through substantial synergies. According to calculations based on analyst consensus for both banks, the combination would result in Banco Sabadell shareholders obtaining 27 percent higher earnings per share (EPS) in the combined bank than if the bank continued as a separate entity (Onur Genç, 31 Jul 2024). The expected synergies from this transaction are significant and can be attributed to several factors, including cost synergies, revenue synergies, risk diversification, and increased market share.



In summary, BBVA's geographic diversification, commitment to investing in key markets, and strategic combination with Banco Sabadell position the bank for significant growth in 2025. With a strong performance in Spain and Mexico driving its earnings, BBVA is well-equipped to navigate the challenges and opportunities that lie ahead in the global financial landscape.