BBVA lifts group's profitability outlook for 2026 on Mexico and South America (updated)

Banco Bilbao Vizcaya Argentaria SA

30/07/2026 06:28

Q2 profit rises 11.4% to €3.06 billion versus €2.96 billion estimate
Lifts ROTE group target to around 21% in 2026 vs above 20% 
Q2 NII up 22.9% to €7.63 billion vs forecasts of €7.55 billion 
Q2 net profit in Mexico up 22.8%, down 3% in Spain
Expects high-single-digit growth in NII in 2026 in Mexico
Announces new buyback of €2 billion
Recasts to lead on group's forecast, outlook on Mexico and South America in paragraphs 7-8, shares in paragraph 9
By Jesús Aguado
MADRID, July 30 (Reuters) - Spain's BBVA BBVA.MC revised up the group's profitability outlook for 2026 on Thursday on higher loan growth in Mexico and South America after second quarter net profits beat analysts' forecasts and offset higher provisions.
The second-biggest lender in the euro zone by market value reported an 11.4% year-on-year rise in net profit to €3.06 billion in the quarter, compared with €2.96 billion expected by analysts.
A rise of 20.6% in revenue helped BBVA lift its return-on-tangible equity ratio (ROTE), a measure of profitability, to 22.2% from 21.7% at the end of March. It nudged up its ROTE target for the end of 2026 to around 21% from above 20%.
Overall, net interest income — the difference between earnings on loans minus deposit costs — rose 22.9% year-on-year in the quarter to €7.63 billion, above analyst forecasts of €7.55 billion.
In Mexico, net profit rose 22.8% year-on-year in the quarter, while lending income was up 19.2%. 
The bank revised up its 2026 outlook for lending income to  high-single-digit growth from mid- to high-single digit, driven by an around 10% loan growth expected this year. 
It also improved its cost of risk guidance to below 335 basis points in Mexico in 2026 from around 340 bps.
For South America, it expected gross income growth in the high teens this year from high-single-digit growth previously.
Shares in BBVA were up 2% by 0747 GMT.

NEW €2 BILLION SHARE BUYBACK
In Spain, net profit fell 3% on lower trading income while lending rose 4.5% year-on-year in the quarter. BBVA has guided for a low to mid single-digit growth in NII in 2026.
It announced a new €2 billion share buyback programme, which is part of a four-year plan.
The bank's core tier-1 capital ratio rose 7 basis points in the quarter to 12.9% or 12.41% after the buyback impact.
Loan loss provisions rose 21.8% year-on-year in the quarter to €1.68 billion, as provisions almost doubled in Turkey and rose more than five-fold in Argentina.
The group's cost of risk, which manages potential losses, fell 11 basis points in the quarter to 1.43%.
Net profit in Turkey rose 5.9% in the quarter despite higher inflation on higher lending dynamics and fees. The bank expects a net profit of around €1 billion from there in 2026.
($1 = 0.8733 euros)

 (Reporting by Jesús Aguado; additional reporting by Emma Pinedo; Editing by David Latona, Tomasz Janowski and Emelia Sithole-Matarise)
 ((jesus.aguado@thomsonreuters.com; +34 91 835 68 32; Reuters Messaging: Reuters Messaging: jesus.aguado.reuters.com@reuters.net))