BBVA(US:BBVA)2025-07-31 08:30Financial Data and Key Metrics Changes - The tangible book value per share plus dividends increased by 14.6% year over year and 2.9% quarter over quarter [4] - Return on tangible equity reached 20.4% and return on equity was 19.5% for the first half of 2025 [4] - Net attributable profit for the quarter was EUR 2,749 million, maintaining record profit levels despite falling rates and currency headwinds [5][7] - CET1 capital ratio improved by 25 basis points to 13.34% [8] Business Line Data and Key Metrics Changes - Core revenues showed robust growth with net interest income and fees increasing by 11% and 18% year over year, respectively [10] - Loan growth at the group level was 16% year over year, with Spain at 6.3% and Mexico at 11.7% [14][15] - Efficiency ratio improved to 37.6%, with costs growing at 10% below the average inflation rate [16] Market Data and Key Metrics Changes - In Spain, net profit reached EUR 1,100 million, supported by positive dynamics in net interest income and lower operating expenses [24] - BBVA Mexico reported a net profit of nearly EUR 1,300 million, driven by strong lending activity [28] - Turkey's net profit increased by over 17% year over year, driven by higher core revenues [30] - South America achieved a net profit of EUR 421 million, representing a 33% year-on-year increase [33] Company Strategy and Development Direction - The company aims to strengthen its leadership position through customer service excellence and sustainable growth [38] - Focus on increasing contributions from sustainability and enterprise segments, with a target of channeling EUR 700 billion in sustainable finance by 2029 [23] - Plans to improve profitability and efficiency, targeting a cost-to-income ratio of around 35% by 2028 [47] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining strong profitability despite macroeconomic challenges [36] - Expectations for stable interest rates in the coming years, which will help improve margins and profitability [44] - Anticipated gradual decline in inflation and interest rates in Turkey and Argentina, with a focus on improving asset quality [42] Other Important Information - The company plans to distribute approximately EUR 36 billion of capital, with a maximum of EUR 24 billion allocated for regular payouts [56][80] - The integration of Banco Sabadell is expected to enhance earnings generation, with further details to be provided in September [86] Q&A Session Summary Question: What would your RoTE and CET1 available for distribution look like using current forward FX rates? - The company uses forward rates in every country except Turkey, where a range of depreciations is applied due to uncertainty [63][65] Question: Can you clarify the 40 to 50 basis points benefit from capital simplification? - The ECB has formally approved the simplification, which will reduce RWA density and positively impact capital ratios [66][68] Question: How much were the VAT gross impacts and the recognition of DTAs? - The total impact from VAT and tax rate adjustments was around EUR 250 million, with half attributed to VAT and half to tax rate impacts [75] Question: Is there a chance to start the buyback before launching the offer for Sabadell? - The buyback will likely occur after the completion of the Sabadell integration process [91] Question: What are the prospects for lending growth in Mexico? - Lending growth is expected to remain strong, supported by investments and improved banking penetration [92]