Banco Bilbao Vizcaya Argentaria S.A.

Although the repricing of floating assets has not finished in Spain and lending growth in Mexico should continue, it may be difficult to sustain this level of returns in 2024. Additionally, we will see margin compression in a declining interest rate environment in 2025. Exchange rates, particularly the Mexican peso, could also be less supportive compared with the last two years. But we believe BBVA's results will remain solid, with RoE standing at 14.5%-13.5% over 2024-2025. The stable outlook reflects our assumption that BBVA will remain resilient. This is despite the modest growth prospects of most of the economies where it operates, and the challenges to asset quality from higher financing costs. High interest rates will still support solid earnings,

...Banco Bilbao Vizcaya Argentaria S.A. (BBVA) is overdelivering on its 2022-2024 strategic and financial targets. This is thanks to the solid implementation of the business plan and the much more favorable interest rate environment. BBVA's good results so far have caused an update to its guidance. Thus, BBVA now thinks it is more likely that its 2024 return on tangible equity (RoTE) will stand between 15% and 20%, rather than the 14% it communicated when the plan was launched. The bank also thinks that the sum of dividends distributed to shareholders and the bank's tangible book value per share will increase at a compound annual rate of 15% rather than 9%, and the number of new targeted clients will be 40%-50% above the original goal....

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