Banco Bilbao Vizcaya Argentaria SA Q3 FY2024 earnings call

• Strong NII growth of 3.5% YOY due to activity and NIM management.
• Net fees and commissions up 28% YOY.
• Industry-leading efficiency ratio at 38.9%.
• Stable asset quality metrics.
• Sound capital position with CET1 ratio at 12.84%.
• Strategic progress: 8.5 million new customers acquired in first nine months of 2024, 67% via digital; €71 billion channeled into sustainable business in first nine months of 2024.

Spain: Loan growth accelerated vs last year, 1.5% YOY, with most profitable segments like consumer and credit cards growing. NII increased 7.3% YOY, fees grew 11% YOY, efficiency ratio improved to an impressive 34.6%. Mexico: Earnings reached close to €4.2 billion in first nine months of 2024, growing above 5% YOY. Loan growth accelerated to 12.3% YOY, NII grew 8.3% YOY, fees grew, efficiency ratio below 30%. Turkey: Net attributable profit €433 million in first nine months of 2024. NII under pressure due to high funding costs, fees grew, cost of risk normalizing. South America: Net profit €471 million in first nine months of 2024. Revenues positive, NII driven by loan growth, fees strong, but Argentina had NII decrease due to lower inflation and rates.

• Expect 2025 return on tangible equity levels similar to 2024.
• Sabadell transaction pending final regulatory approvals, expected to be value-creating for shareholders.
• Cost of risk in Turkey expected to normalize, with interest rates in Turkey anticipated to come down next year.

• Currency depreciation impacts, especially in Mexico.
• Potential regulatory challenges in Turkey.
• Short-term volatility around key currencies, including Mexican peso.
• Hyperinflation accounting impacts in Argentina.

Q: In Spain, how are you containing growth in deposit costs and what's the outlook considering the forward curve?

A: Managing deposit costs firmly; cost of deposits came down 1 basis point in the quarter, expecting lower rate environment to feed through deposit costs going forward.

Q: On Mexico, with U.S. elections next week, how are clients behaving and how will it affect day-to-day business?

A: Quarterly lending growth in Mexico has been 2.9%, pipelines and future lending realization are strong; short-term volatility due to elections is not new and Mexican franchise is expected to continue performing strongly.

Q: On Turkey, what's the risk of cost of risk going out of hand and what are you doing to protect the book?

A: Cost of risk in Turkey is normalizing within guidance; expected interest rates to come down next year, and a government restructuring program will help going forward.

Q: On Argentina, have you considered pre-releasing or collapsing the P&L?

A: Argentina is a relevant part of the business, with efforts to address economic imbalances; expected economy to normalize, and hyperinflation accounting impact to diminish with lower inflation.