BBVA's Scalable Growth: A 3-Part Analysis for the Growth Investor

BBVA's current financial strength is not just a headline; it's a scalable platform for future growth. The bank delivered a record profit of €10.5 billion in 2025, a figure that underscores its unique combination of growth and profitability. This performance was driven by robust core banking activity, with lending increasing by 16.2 percent and return on tangible equity (ROTE) reaching 19.3 percent. That kind of profitability, coupled with a solid capital buffer, directly funds the bank's expansion ambitions.

The strategic plan translates this strength into a concrete capital generation target. BBVA expects to generate €49 billion in top-quality capital between 2025 and 2028. This isn't just a number on a slide; it's a dedicated capital pool explicitly earmarked for two purposes: financing organic growth across its markets and returning value to shareholders. The bank is already demonstrating this commitment, with a record dividend of €0.92 per share and a nearly €4 billion share buyback program announced last year.

This capital engine is designed to power specific growth initiatives. In its core Spanish market, BBVA projects a compound annual loan growth rate of around 5 percent until 2028. Crucially, this growth is focused on higher-margin segments like corporate and consumer lending, which directly expands net interest income. This disciplined approach to capital allocation-using record profits to fund future expansion while rewarding investors-creates a powerful flywheel. It provides the financial fuel for international scaling and technology investments, turning today's profitability into tomorrow's market leadership.

Reason 2: Aggressive International Expansion Targets High-Growth TAM

BBVA's growth strategy is now explicitly targeting the vast, underpenetrated markets of Latin America. The bank is moving beyond its existing universal banking franchises in Mexico and Colombia to aggressively capture a larger slice of the region's Total Addressable Market. The plan is to launch wholesale banking services in Brazil and Chile, a move designed to serve the cross-border needs of global corporate clients and deepen BBVA's role as a partner for international trade corridors to Asia and Europe.

This expansion is not just about physical presence; it's about leveraging digital capabilities as a scalability lever. BBVA's digital platform is already central to its operations, with 66% of its customers using digital channels. This existing digital infrastructure provides a low-cost, high-reach foundation for scaling new services across the region. The bank's recent launch of a 100% digital bank in Germany and its focus on AI integration show a clear commitment to using technology to drive efficiency and customer reach, a model it can now replicate in Latin America.

The strategy also involves deepening fintech partnerships to cross-sell and embed financial services. A key example is BBVA's participation in a $70 million debt facility to Clara, a leading Latin American spend management platform. This move strengthens BBVA Spark's position in the tech ecosystem and creates a direct channel to serve the growing base of corporate clients that use Clara's platform. It's a smart play to capture value in the corporate payments and credit card market, a segment with high growth potential.

The bottom line is that BBVA is using its capital strength and digital prowess to target a high-growth TAM. By expanding wholesale banking, scaling its digital reach, and forging strategic fintech alliances, the bank aims to convert its regional presence into a dominant market share. This aggressive international playbook is the next phase of its scalable growth story.

Reason 3: Superior Growth Metrics vs. Peer Benchmark

When assessing scalability, the growth trajectory and financial discipline relative to peers are critical. BBVA's performance in 2025 starkly contrasts with that of its Spanish rival, Santander. The bank's core lending activity accelerated to 16.2 percent, a pace that outstripped the broader market and set a new benchmark for growth. This aggressive expansion is supported by a disciplined cost of risk, with BBVA projecting an average of approximately 30 basis points in Spain through 2028. That level of credit control is essential for sustaining the high profitability needed to fund future scaling.

On a broader market basis, BBVA's momentum is clear. While Santander's stock has delivered a 4.26% return year-to-date, BBVA's shares have rallied 10.04% over the same period. This outperformance, which extends to a superior 10-year annualized return of 21.10% versus Santander's 16.13%, signals that investors are pricing in BBVA's stronger growth and execution. The market is effectively rewarding BBVA's unique combination of rapid lending growth and robust profitability.

Valuation further reflects this growth premium. BBVA's P/E ratio of 12.10 as of early January 2026 is notably elevated from its own 5-year average. This multiple suggests the market expects the bank's earnings to grow significantly from current levels, a direct bet on the scalability of its international expansion and digital strategy. In contrast, Santander's higher P/E of 14.09, while also elevated, appears to be anchored to a slower growth trajectory.

The bottom line is one of relative leadership. BBVA is not just growing; it is growing faster and more profitably than its key peer. Its superior loan growth, disciplined risk management, and market-beating returns create a more compelling case for sustained scalability. For a growth investor, this sets BBVA apart as the bank with the clearer path to capturing a larger share of its Total Addressable Market.