BBVA's Q1 2025 Earnings Call: Contradictions in Loan Growth Strategies Across Spain, Mexico, and Turkey

Spain's loan growth strategy, Mexico's loan growth guidance, Mexico's deposit costs, Turkey's cost of risk guidance, and Mexico's loan growth and profitability are the key contradictions discussed in Banco Bilbao Vizcaya Argentaria's latest 2025Q1 earnings call.



Revenue and Profitability Growth:
- BBVA reported a net attributable profit of EUR 2.698 million for Q1 2025, representing a 23% increase compared to the same quarter last year and 10.9% higher than the previous quarter.
- The growth was driven by the strong performance of core business and a 28% year-over-year increase in gross income, supported by robust activity growth in key regions like Spain and Mexico.

Activity and Loan Growth:
- Loan growth accelerated to 15.1% year-over-year at the group level, with Spain seeing a 6.6% year-over-year growth and Mexico at 17.2% year-over-year.
- This was driven by strong business activity, particularly in consumer and credit cards segments, and strategic priorities like lending to enterprises.

Capital Management and Efficiency:
- BBVA's CET1 ratio improved by 21 basis points to 13.09%, well above regulatory requirements and target range.
- The improvement was due to the reinvestment of part of the capital generation into profitable growth and successful risk transfer transactions.

Asset Quality and Risk Management:
- The cost of risk decreased to 130 basis points, supported by better-than-expected performance across business units, particularly in Mexico and Spain.
- This improvement was due to the positive evolution of NPLs and higher coverage levels, despite an uncertain macroeconomic environment.