BBVA's quarterly net profit falls on peso, lower lending income
The euro zone's fifth-largest lender by market value reported a net profit of 2.75 billion euros ($3.14 billion) for the April-June period, exceeding analysts' expectations of 2.37 billion euros in a Reuters poll.
BBVA's return on tangible equity (ROTE) rose to 20.4% from 20.2% in March, marking the highest profitability among listed Spanish banks. BBVA reiterated its forecast of achieving a profitability level of around 20% by the end of 2025.
It also announced new financial goals for the 2025-2028 period, where it expects to earn an accumulated net attributable profit of around 48 billion over four years and reach an average current ROTE of around 22% during this period.
BBVA, alongside peer Santander (SAN.MC), opens new tab, has relied on Latin American markets to offset pressure from lower interest rates in the euro zone. But BBVA now wants to reduce its exposure to emerging markets with an around 14 billion euros bid for smaller rival Sabadell (SABE.MC), opens new tab.
Net interest income, a metric representing the difference between earnings on loans minus deposit costs, fell 4% year-on-year in the quarter, to 6.21 billion euros, slightly below analysts' forecasts.
In Mexico, net profit fell 12% year-on-year, though underlying trends remained positive, despite a challenging economic environment due to persistent uncertainty surrounding the trade policies of the U.S., Mexico's top trading partner.
In Mexico, net profit dropped 12% year-on-year due to economic uncertainty stemming from U.S. trade policies, despite positive underlying trends. However, net profit in Spain rose 6%, driven by loan growth, while Turkey saw a 23% increase in net profit, buoyed by an 85% rise in lending income.
BBVA maintained its guidance for Turkey, forecasting net profit to close 2025 at slightly below 1 billion euros.
($1 = 0.8747 euros)
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The vineyards he sells begin at around the €1m mark, rising to €20m in the prime appellations like the Loire, Languedoc and the Rhône Valley. But the wine crisis means some are selling at a hefty discount. 'There's a readjustment in the market. We have to explain to sellers that they will have to take a lower price.' David and Amanda know three English couples who have sold up their French vineyards in the last few years. But the pair are determined to tough it out. 'We've never thought about throwing in the towel,' Amanda says. 'We love it here. Our kids hate the idea of us selling it.' David looks across from a row of vines to a pale-stoned building plonked in the middle of an empty field. There are no windows and part of the tiled roof has caved in. Their plan, he says, is to turn the ruin into a gîte with three bedrooms and a swimming pool – the latest venture to boost the vineyard's income. David estimates the refurbishment will cost €50,000, including a new roof, and installing electricity and running water. They hope to fund some of the building work with the government grant. It is ambitious given the economic climate and the hard labour required. But after years of defying the odds, David looks at the ruin and sees another opportunity. 'We're not a million miles away from 60 and it's not going to get much easier physically – but there's still a lot more we want to do,' he says. 'There's nothing like a bit of a struggle here and there. You wouldn't want it on a plate. 'Doing it all ourselves is very satisfying. Sometimes we sit here and pinch ourselves and look around and think: we made this.' *Please note that by submitting your content to us you are consenting to The Telegraph processing your personal data where required by law. For further details please see our Privacy Notice.
