By Alex V 
Spain’s Banco Bilbao Vizcaya Argentaria (BBVA), the fifth-largest lender in the euro zone by market value, reported its second-quarter numbers on July 31, with a small drop in net profit caused by the weakening of the Mexican peso and lower lending revenue. By pushing past analysts’ forecasts and confirming its long-term profitability goals, the bank proved it could stand up to adversity.
For the second quarter, BBVA reported a net profit of €2.75 billion ($3.14 billion), a 2% drop from last year but exceeding the Reuters consensus forecast of €2.37 billion. The varied performance underscored problems in its Latin American business, especially in Mexico, which were partially compensated for by expansion in Spain and Turkey.
Effect of Peso Depreciation and Lending Income
The bank’s net interest income (NII), one of the most important measures of profitability and reflecting the spread between interest received on loans and interest expended on deposits, fell 4% year-over-year to €6.21 billion. This underperformance was primarily due to weaker lending revenue and exchange rate depreciation in Latin America, which is an area where BBVA has a large presence.
Mexico’s net income fell 12% from a year ago, weighed down by economic instability around US trade policies, which have placed the nation’s financial markets in a difficult situation. Despite this, BBVA reported that Mexico’s underlying business trends continued to be positive, reflecting strength despite pressures from abroad.
On the other hand, the bank’s domestic market of Spain registered positive development, as net profit improved by 6% due to improved loan expansion. Turkey likewise recorded success with a 23% improvement in net profit underpinned by an amazing 85% increase in lending income. BBVA reiterated guidance for Turkey, predicting net profit to be slightly below €1 billion in 2025.
Strategic Outlook and Financial Targets
BBVA’s return on tangible equity (ROTE), a profitability measure in relation to tangible assets, rose marginally to 20.4% from 20.2% at the end of March, becoming the most profitable listed Spanish bank by this measure. The bank reaffirmed its projection to maintain profitability of around 20% by the end of 2025.
Looking forward, BBVA introduced new financial objectives for the years 2025-2028. The bank hopes to have accumulated net attributable profits of around €48 billion over four years and have an average current ROTE of some 22% over this period. These targets reflect BBVA’s interest in long-term growth and better returns for shareholders.
The bank is also taking strategic steps to cut its exposure to emerging markets, with an eye on deepening its presence in Spain and Europe. One such example is its proposal to bid €14 billion for smaller rival Sabadell, marking BBVA’s intent to strengthen its dominance in the Spanish banking market.
Even as it encountered external shocks such as currency volatility and geopolitical tensions, BBVA has shown consistent operational resilience. Its geographically diversified presence absorbed the effects of underperforming Latin American markets, while expansion in Spain and Turkey lent significant support. The bank’s strong profitability ratios and aggressive future ambitions imply a bullish outlook, though tempered by macroeconomic uncertainty.
Frequently Asked Questions (FAQs) about the Q2 results of BBVA
Why did BBVA’s net profit decrease in Q2 2025?
BBVA’s net profit dropped 2% largely because of a devaluation of the Mexican peso and reduced income from lending in its Latin American markets. Economic volatility tied to U.S.-Mexico trade policies also had a negative effect on the bank’s Mexican business.
What was BBVA’s performance in Spain and Turkey for the quarter?
In Spain, BBVA’s net profit grew by 6%, led by loan expansion. There was robust growth in Turkey with a 23% improvement in net profit, aided by an 85% improvement in lending income. Both markets showed positive growth despite adversity in other markets.
What is the return on tangible equity (ROTE) for BBVA, and why does it matter?
ROTE tests profitability in relation to tangible equity, that is, the extent to which a bank converts its tangible assets into profit. BBVA’s ROTE improved slightly to 20.4%, the highest among listed Spanish banks and a reflection of operational efficiency.
What are BBVA’s financial targets for 2025-2028?
BBVA wishes to generate roughly €48 billion in net profit amassed over four years and aims for an average current ROTE of about 22%. These targets emphasise its growth and shareholder value maximisation focus.
How is BBVA adapting its strategy in emerging markets?
BBVA aims to lower its exposure to emerging markets by consolidation in Europe, such as a €14 billion offer for Sabadell. The strategic move is geared towards offsetting risks and leveraging opportunities nearer home.
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