Maksym Mishyn

Maksym Mishyn from JB Capital Markets asked if the 2028 efficiency targets include restructuring costs and questioned the rationale for pursuing the Sabadell deal given BBVA's ambitious standalone plan and Sabadell's comparatively lower ROTE target.

Answer

Global Head of Finance Luisa Gómez Bravo confirmed the efficiency plan incorporates productivity gains from AI and technology, mainly in the later years. CEO Onur Genç defended the Sabadell deal by emphasizing the strategic need for scale and cost synergies in European banking, but stressed that BBVA has an 'amazing' standalone plan and will move on if the deal does not happen.

Maksym Mishyn of JB Capital asked why BBVA is not improving its loan growth guidance for Mexico despite a 17% increase in Q1. He also questioned the reason for the lower-than-guided cost of risk in Mexico for the quarter and inquired about the application of deductions for the special banking tax in Spain.

Answer

CEO Onur Genç stated that while the 17% loan growth in Mexico was strong, the bank is maintaining its high-single-digit guidance due to macro uncertainty related to global tariffs, noting that much of the growth was in short-term loans. He applied the same cautious reasoning for not upgrading the cost of risk guidance. CFO Maria Gomez Bravo confirmed that for the Spanish banking tax, the bank is applying all deductions established in the new law.

Maksym Mishyn from JB Capital asked why BBVA was not upgrading its loan growth guidance for Mexico despite a strong 17% increase in Q1. He also questioned the reason for the lower-than-guided cost of risk in Mexico and inquired about the application of deductions for the special banking tax in Spain.

Answer

CEO Onur Genç stated that while the 17% loan growth in Mexico would normally warrant a guidance upgrade, the company is remaining cautious due to global uncertainties, particularly around trade tariffs, which could impact Mexico's economic activity. He applied the same cautious reasoning for not upgrading the cost of risk guidance. CFO Maria Gomez Bravo confirmed that the company is applying the legally established deductions for the special tax in Spain.

Maksym Mishyn of JB Capital asked for the reasons behind BBVA's loan growth outperformance in Spain and which segments are most attractive, and also inquired if more RWA management actions should be expected.

Answer

Executive Onur Genç attributed Spain's outperformance to a strong appetite for growth in consumer lending, where BBVA has a strong retail position, and a strategic push into enterprise segments where it is underrepresented. He confirmed that more management actions to optimize RWA are planned for 2025, following a positive 20 bps impact in Q4 from measures like significant risk transfers (SRTs).

Maksym Mishyn from JB Capital Markets inquired about trends in the corporate loan book, the rationale for maintaining a conservative cost of risk guidance despite strong performance, and any capital optimization efforts in Q1.

Answer

Gonzalo Gortázar Rotaeche (executive) described business lending dynamics as good across the board, particularly with SMEs, and noted that investment in equipment is accelerating. On cost of risk, he stated that while performance is better than expected, the company remains conservative due to global uncertainty but acknowledged clear upside potential. Javier Pano Riera (executive) confirmed that no specific capital optimization impacts were recorded in Q1 but that projects are underway for future quarters, targeting €3-4 billion of RWA optimization over three years.

Maksym Mishyn from JB Capital asked for details on the corporate loan book's maturity profile, the potential for a cliff effect from ICO loan phase-outs, the nature of a one-off in fee revenue from BPI, and whether the bank's neutral outlook on the Basel IV impact remains.

Answer

CEO Gonzalo Gortázar clarified that new business lending is skewed towards longer-term funding and that no cliff effect is expected from ICO loan repayments. CFO Javier Pano detailed the fee one-off as a EUR 16 million positive impact at BPI and reiterated the non-material impact expected from Basel IV, while maintaining a cautiously optimistic outlook for full-year fee income.

Maksym Mishyn from JB Capital Markets asked for details on corporate loan production, particularly regarding maturities and the potential for a cliff effect from the phase-out of ICO loans. He also inquired about a one-off in fee revenue from BPI and the outlook for the Basel IV impact.

Answer

CEO Gonzalo Gortázar noted that corporate loan growth is driven more by long-term funding than working capital and stated there is no expected cliff effect from ICO loan repayments. CFO Javier Pano detailed the BPI one-off as a EUR 16 million gain from terminating a legacy life risk portfolio. He reiterated a neutral impact from Basel IV and expressed cautious optimism on fee income, expecting to be at the upper bound of the low single-digit growth guidance.

Maksym Mishyn asked for follow-ups on whether the 'flattish' loan book guidance for 2024 still holds, if improved loan growth could alter capital distribution plans, and for details on the drivers of 'other provisions' during the quarter.

Answer

CFO Javier Pano indicated there is now 'limited upside' to the flattish loan book guidance but that it would not change short-term capital distribution plans. CEO Gonzalo Gortázar clarified that higher 'other provisions' were for mortgage cost claims and guided for the full-year figure to be around €300 million.