Luisa Gómez Bravo presents BBVA’s profitability and value creation to investors in London
BBVA’s Global Head of Finance, Luisa Gómez Bravo, took part this past Thursday in JP Morgan’s annual investor conference. During her presentation, she explained that BBVA’s strategy is predicated on the bank being one the leading players in each market in order to secure a competitive edge. She pointed to the profitability and value creation that the bank is achieving in 2025, which are paving the way toward its financial targets. BBVA’s unrivalled profitability will ultimately lead to strong capital generation that can be paid out to shareholders (up to €36 billion through 2028¹).
BBVA has set itself some ambitious financial targets for the 2025–2028 horizon: €48 billion in cumulative attributable net profit, an average RoTE of 22%, and a compound annual growth rate in tangible book value per share plus dividends of around 15%. The bank is also looking to improve its cost-to-income ratio to around 35%. The outstanding results for the first nine months of the year—with record profit of nearly €8 billion, a RoTE of 19.7%, and year-on-year growth in tangible book value per share plus dividends of 17% as of September—go to show that the Group is already on the right path.
Gómez Bravo outlined several structural factors that set BBVA apart and which will continue to cement its leadership in profitability and growth moving forward. First of all, the Group’s geographic diversification is a key competitive strength. It operates in a number of attractive markets with low leverage levels and compelling growth potential.
Second, and following on from this, BBVA holds leading positions in its main markets. Achieving local scale and operating as one of the top banks in each country leads to higher profitability when compared with its peers.
Third, the bank is one step ahead of its peers in the digital realm and also in terms of sustainability. BBVA invested in digital transformation earlier and with greater determination than most of its competitors, and today those investments are paying off. As Gómez Bravo explained, the bank’s strategy is to grow the business by expanding its customer base, with its digital offering being the key enabler in this regard. Over the past three years, BBVA has succeeded in adding around 11 million new customers per year, of which almost two-thirds arrived through digital channels. And the value these new customers bring increases significantly over time. For all these reasons, “we are very optimistic about the future,” she remarked.
Gómez Bravo also discussed the growth drivers of the Group’s main franchises. Looking at Spain, she noted that “BBVA is the best bank in the country, being the most profitable and also the most efficient.” She also cited the bank’s ability to continue expanding its customer base in Spain: “Since 2022, we’ve added more than three million customers in Spain. So far this year, around 730,000, of which around 100,000 are SMEs. And what we’re seeing is that when we bring in a new customer, that customer becomes ‘engaged’ within the following 12 months, all thanks to our end-to-end digital experience.” She added that the bank is “highly disciplined” on pricing and to drive further growth in Spain it relies on customer growth and engagement, and also on its distribution and risk models.
BBVA aims to continue outpacing its competitors in terms of loan book growth (at around +5% annually through 2028), focusing on those segments that offer the best risk-adjusted returns, mainly corporate and consumer lending, which will help shift the business mix toward more profitable segments.
In Mexico, BBVA’s Global Head of Finance sees a very positive backdrop for the banking sector thanks to the resilience of the economy and low leverage levels, which have been consistently driving credit growth above nominal GDP for the past 20 years.
BBVA fully expects its loan book in Mexico to grow at a high single-digit compound annual rate between 2024 and 2028, on the back of consumer and corporate lending. For this year, the bank projects around 10% loan growth and expects that increased activity to feed directly into earnings, with the interest rate-cutting cycle now nearing its end: “BBVA Mexico will make a strong contribution to the Group’s positive forward momentum,” she added.
As for Türkiye, Gómez Bravo pointed to a steady improvement in the macroeconomic outlook, which will boost the local franchise’s contribution to the Group’s earnings. This positive outlook is supported by two factors: Garanti BBVA benefits from positive sensitivity to lower interest rates, and lower inflation is easing the strain on the Turkish economy and is already having a less negative impact on the franchise’s attributable profit. “Our strategy in Türkiye is very clear: to maintain a high-quality franchise that stands to benefit as the economy steadily normalizes,” she remarked.
Against this positive backdrop of growth and value creation, Gómez Bravo also addressed the Group’s capital outlook. As of the end of September, the CET1 capital ratio stood at 13.42%. The bank’s goal is to pay out capital above 12%, something that will happen “in a matter of months, not years,” she added. BBVA plans to allocate up to €36 billion to its shareholders through 2028.¹
On the subject of BBVA’s CET1 target, she noted that the bank happens to have one of the largest buffers above minimum regulatory capital requirements among all European banks: “We are one of the banks with the best relative position compared with what the supervisor requires.”
¹Pending approval from the governing bodies and subject to mandatory regulatory approvals.