BBVA stock soars after strong Q2 earnings and upgraded guidance

Investing.com -- BBVA (BME:BBVA) stock jumped 8.5% following the bank’s second quarter earnings report, which showed attributable profit 17% above company consensus. The strong performance was driven by better-than-expected cost management, lower impairments, and favorable tax outcomes.

The Spanish banking giant reported a pre-tax profit 8% above consensus, with pre-provision profit beating expectations by 3%. While overall revenues slightly missed estimates by 1%, primarily due to weaker trading income, the bank’s core businesses performed well across key geographies.

By region, BBVA saw significant beats in Spain, Turkey, and South America, with improvements in cost control and lower impairments driving results. Mexico’s performance was largely in line with expectations. The bank’s loan portfolio exceeded consensus by 3%, while risk-weighted assets came in 3% below expectations. BBVA’s CET1 capital ratio reached 13.34%, beating forecasts by 16 basis points.

Following these strong results, BBVA upgraded its 2025 guidance across most regions. The bank now expects Group Return on Tangible Equity (RoTE) to reach 20%, up from its previous "high-teens" forecast. The cost-to-income ratio is projected to be below 40%, with €13 billion available for shareholder distributions in the short term.

In Spain, BBVA now anticipates positive net interest income growth year-over-year, with loan growth above mid-single digits, low-to-mid-single-digit fee growth, declining costs, and a cost of risk below 35 basis points. For Mexico, the bank raised its loan growth forecast to approximately 10% from high single digits previously, with cost of risk below 350 basis points. South America’s cost of risk guidance was also improved to below 250 basis points from less than 270 basis points previously.

The bank maintained its guidance for Turkey unchanged.

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