BBVA Q3 2026 earnings: loan growth cuts CET1 ratio to 12.21%

BBVA's third-quarter 2026 results show loan growth running ahead of expectations while consuming more capital than the quarter's profit replaced. The Spanish bank reported on October 29, 2026, through its 6-K quarterly report, results presentation and earnings call, for the quarter ended September 30 [1][2][3]. Four questions framed the quarter: whether Mexican loan growth could outrun a falling peso spread, whether Spain's customer spread had bottomed, whether Turkey's lira spread and retail provisions would recover, and whether capital could absorb a new buyback while corporate lending grew fast. Mexico confirmed the growth case. Turkey's spread recovered, but credit costs exceeded guidance. Spain's spread edged up, consistent with the earlier view. The capital buffer narrowed sharply. Overall, growth is stronger and profit conversion has held, but further extraordinary buybacks now depend on fourth-quarter earnings and risk-transfer deals.

BBVA is a banking group headquartered in Spain that runs retail and corporate banking in Spain, Mexico, Turkey and South America, and corporate and investment banking in the US, Europe and Asia [1]. It earns mainly the spread between loan yields and deposit costs in each country. Net attributable profit for the first nine months of 2026 was €9,066 million, nearly half of it from Mexico [1].

BBVA CET1 ratio falls to 12.21% as lending absorbs capital

BBVA's common equity tier 1 (CET1) ratio, the main measure of a bank's core capital, was 12.21% at September 30, down 69 basis points from 12.90% in June [1]. Deducting the €2 billion buyback took 49 basis points at once. The remaining 20 basis points were a recurring decline: results added 71 basis points, dividend accrual and AT1 coupons took 38, risk-weighted asset growth took 44 and other items took 9 [1][2]. Risk-transfer transactions added only 3 basis points, which management attributed to August seasonality [3].

Lending growth absorbed the capital. Loans in the Rest of Business unit, mainly corporate banking in the US, Europe and Asia, grew 68.5% year on year, with quarterly profit of €291 million and a cost of risk of only 0.11% [2][1]. As a result, the ratio now sits just 21 basis points above the 12% level above which BBVA distributes capital. The first €1 billion buyback tranche was completed on October 1 and the second €1 billion tranche started on October 14 [1][4]. Management said it will not raise its 11.5%-12% target range and kept its €36 billion distribution plan for 2025-2028 [3]. The CET1 requirement rises to 9.36% in 2027 [5].

Mexico: loan growth outruns the falling spread

Mexico's net interest income was €3,361 million at constant exchange rates in the third quarter, up 2.6% from the prior quarter and the second consecutive sequential rise [2]. The peso customer spread was 11.53%, only 8 basis points lower than the prior quarter, while loans grew 12% year on year, with other commercial loans up 16.9% [2]. Management said the spread has bottomed now that the central bank rate has stopped at 6.5%, and that loan growth may beat its guidance of around 10% [3].

The credit result needs a discount. The year-to-date cost of risk was 3.19%, but it includes a release from the annual recalibration of model parameters; management put the underlying figure at about 3.30% [1][3]. The NPL ratio rose 9 basis points, with new non-performing loans concentrated in retail [1]. Quarterly profit in Mexico was €1,517 million, down 0.7% from the prior quarter, as expenses and provisions offset the rise in interest income [1].

Turkey: the lira spread recovers but credit costs exceed guidance

Turkey's lira customer spread recovered to 1.08% from 0.38% in the prior quarter, and net interest income rose 16.8% from the prior quarter to €1,205 million [2]. In the same quarter, retail loan provisions rose and the year-to-date cost of risk reached 2.55% [1]. Management said the full-year cost of risk could come in slightly above its 220 basis point guidance, because high rates have lasted longer than it expected [3].

The two forces roughly offset at the profit line. Turkey earned €258 million in the quarter, and management kept its full-year profit guidance of around €1 billion with a downward bias; with €789 million earned in the first nine months, the fourth quarter still needs about €210 million [1][3].

Conclusion

In the third quarter, BBVA's growth engine accelerated, profit conversion broadly held, and the pressure fell on capital. Spain's spread rose 2 basis points to 2.87%, consistent with the earlier view that it had bottomed, but ECB rate hikes also lifted deposit costs by 13 basis points, so net interest income rose only 1.2% from the prior quarter [2]. Mexico's spread turn and loan growth look durable, while its cost-of-risk improvement is a one-off. The next evidence to look for is whether fourth-quarter risk transfers rebuild capital, whether the Mexican spread holds flat or rises, and whether Turkish rate cuts let spread gains outpace provisions.

Sources

[1] BBVA 3Q26 quarterly report 6-K furnished 2026-10-29, 2026-10-29, 6-K, https://www.sec.gov/Archives/edgar/data/842180/000162828026068042/quarterlyreport_3q26xsec.htm [2] BBVA 3Q26 earnings presentation slide images 6-K furnished 2026-10-29, 2026-10-29, 6-K, https://www.sec.gov/Archives/edgar/data/842180/000119312526437088/d172549d6k.htm [3] BBVA Q3 2026 earnings call 2026-10-29, 2026-10-29, earnings call transcript, https://gateway.drillr.ai/mcp/private [4] BBVA second buyback tranche inside information 6-K furnished 2026-10-13, 2026-10-13, 6-K, https://www.sec.gov/Archives/edgar/data/842180/000110465926115394/tm2626639d3_6k.htm [5] BBVA 2027 SREP requirements 6-K furnished 2026-10-27, 2026-10-27, 6-K, https://www.sec.gov/Archives/edgar/data/842180/000119312526432578/d181259d6k.htm