BBVA reports record Q2 profit of €3.06B, announces €2B buyback

Banco Bilbao Viscaya Argentaria (NYSE: BBVA) reported record second-quarter net profit of €3.06 billion, up 11.4% from a year earlier, driven by loan growth and higher core revenues across its major markets.

"We have delivered record earnings, industry-leading profitability, strong activity growth and capital generation," Chief Executive Officer Onur Genç said during the bank's earnings webcast.

Net interest income rose 17.8% year over year, supported by loan growth of 17.7% at constant exchange rates. Net fees and commissions increased 16.2%, driven by payments, asset management and corporate and investment banking activity. First-half return on tangible equity reached 22.2%, while return on equity was 21.1%.

BBVA raised its 2026 return-on-tangible-equity target to about 21% and announced a new €2 billion extraordinary share repurchase program, to begin after it completes its existing €4 billion buyback by Aug. 3. The CET1 capital ratio improved 7 basis points during the quarter to 12.90%, supported by strong earnings and risk-transfer transactions.

Spain and Mexico Drive Earnings

Spain generated second-quarter net profit of €1.1 billion, bringing first-half earnings to €2.2 billion, up 2.3% year over year. Net interest income rose 4.1%, while loan growth reached 7.4%. The Spanish unit's nonperforming loan ratio fell to a record low of 2.86%, and its cost of risk was 31 basis points for the first half.

Mexico, BBVA's largest profit contributor, reported first-half net attributable profit of €3 billion, up 8.2% year over year in constant euros. Net interest income increased 2.7% sequentially, supported by retail and wholesale loan growth. The bank upgraded its Mexican outlook, forecasting loan growth of around 10% and a year-end cost of risk below 335 basis points.

Garanti BBVA in Turkey earned €269 million in the second quarter and €532 million in the first half. The bank raised its full-year Turkey cost-of-risk outlook to about 220 basis points from its prior guidance of 200 basis points, citing elevated funding costs and continued provisioning needs in retail portfolios. South America earned €308 million in the second quarter, with BBVA upgrading its regional full-year gross-revenue outlook to high-teens growth.

Genç said the bank sees potential for increased investment activity in Mexico, pointing to renewable-energy tenders and broader government investment plans. He also noted that BBVA is advancing its artificial-intelligence strategy, with more than 100,000 employees actively using AI tools, and said the bank would provide further details at its strategic talks event scheduled for Oct. 6.

The record earnings and expanded buyback signal management's confidence in capital generation across BBVA's diversified geographic footprint. Investors will watch the bank's Oct. 6 strategic talks event for updates on AI deployment and medium-term margin targets.

This article is for informational purposes only and does not constitute investment advice.