BBVA stock edges higher as solid 2024 earnings and capital return support valuation

Banco Bilbao Vizcaya Argentaria SA (ISIN ES0113211835) reported strong profitability for 2024, with net attributable profit reaching EUR 8.02 billion and underpinning BBVA stock as the Spanish banking group continues large share buybacks and generous cash returns to shareholders, according to its 2024 annual report published in early 2025. The bank highlighted that this performance was supported by higher recurring revenues and disciplined cost control in its core markets.

Net profit up 22 percent in 2024

According to BBVA's 2024 annual report available on its investor relations site shareholders and investors, net attributable profit for 2024 reached EUR 8.02 billion, an increase of 22 percent compared with the EUR 6.57 billion earned in 2023. Management attributed this rise to strong net interest income growth, particularly in Spain and Mexico, as well as lower loan-loss provisions than initially anticipated for the year.

In the same document, BBVA reported that its return on equity (ROE) improved to 16.5 percent in 2024, up from 15.0 percent in 2023, reflecting the higher earnings and efficient capital usage. The cost-to-income ratio declined to 42.0 percent in 2024 compared with 43.5 percent a year earlier, underscoring the positive operating leverage generated by revenue expansion outpacing expense growth.

Revenue growth and capital strength in 2024

The annual report states that BBVA's gross income, which includes net interest income and fees, rose to EUR 28.4 billion in 2024 from EUR 25.6 billion in 2023, representing a 10.9 percent increase year on year. Net interest income alone increased to EUR 20.1 billion in 2024 versus EUR 17.9 billion in 2023, supported by higher interest rates and expanding loan volumes in key markets.

On the balance sheet side, BBVA reported that its fully-loaded Common Equity Tier 1 (CET1) capital ratio stood at 12.7 percent at the end of 2024, compared with 12.6 percent at the end of 2023, according to the same 2024 annual report. The bank highlighted that this capital position remained comfortably above regulatory requirements, even after funding dividends and share buybacks during the year, providing flexibility for further capital distributions or growth investments.

The non-performing loan (NPL) ratio also improved, declining to 3.2 percent at the end of 2024 from 3.4 percent at the end of 2023, with coverage ratios remaining above 75 percent. Management pointed to stable asset quality trends across geographies, with the strongest improvements in Spain and Mexico, while keeping a cautious stance on consumer credit portfolios.

Dividend and EUR 4.13 billion capital return

BBVA has paired its earnings growth with sizable cash returns to shareholders. According to the 2024 results materials published on its investor relations page shareholder remuneration, the bank proposed a total cash dividend of EUR 0.67 per share for 2024, up from EUR 0.55 per share for 2023. This represents an increase of around 21.8 percent and corresponds to a payout ratio close to 50 percent of net attributable profit.

In addition to dividends, BBVA announced share buyback programs that result in a total planned capital return of EUR 4.13 billion for the 2024 earnings cycle, according to the same remuneration overview. This amount includes both the cash dividend and the buyback component and compares with a capital return of around EUR 3.08 billion for the 2023 earnings year, demonstrating a higher level of shareholder remuneration.

Management has emphasized that future capital distributions will remain conditional on regulatory approval and internal capital needs, but the bank aims to keep returning roughly 40 to 50 percent of annual profit to shareholders through a combination of dividends and buybacks, as indicated in its 2024 capital policy presentation.

Mexico and Spain drive earnings mix

BBVA's geographic diversification remains a key factor behind its earnings resilience. The 2024 annual report shows that Mexico remained the largest contributor to group profit, generating EUR 4.0 billion in net attributable profit in 2024, compared with EUR 3.3 billion in 2023. This represents growth of approximately 21 percent year on year, underpinned by strong loan growth and higher margins in the Mexican franchise.

Spain delivered EUR 2.0 billion of net attributable profit in 2024, up from EUR 1.8 billion in 2023, as higher interest rates supported net interest income despite more competitive pressure on deposit pricing. The bank reported that net interest income in Spain increased by around 9 percent year on year, while fee income remained broadly stable, resulting in positive operating leverage.

Other geographies, including Turkey and South America, also contributed to group results, although their shares in total profit remained smaller compared with Mexico and Spain. BBVA highlighted that it continues to focus on risk discipline in these markets, especially where inflation and currency volatility can affect reported figures.

Digital customer base surpasses 50 million

Digital transformation remains central to BBVA's strategy. In its 2024 annual report, the bank reported having 56 million digital customers at the end of 2024, up from 52 million at the end of 2023. The number of mobile customers reached 52 million in 2024, compared with 48 million a year earlier, showing ongoing migration of clients to digital channels.

BBVA noted that more than 75 percent of sales in 2024 were conducted through digital channels, up from about 70 percent in 2023, reflecting the growing importance of its mobile and online platforms. The bank argues that this digital adoption supports both revenue growth and cost efficiency, as more transactions move away from physical branches.

Investments in technology and data analytics are expected to continue, with BBVA highlighting in its strategic presentations that it allocates a significant share of annual capital expenditure to digital initiatives and core systems modernization.

Regulatory capital and risk metrics

Beyond the headline CET1 ratio of 12.7 percent, BBVA reported a Tier 1 capital ratio of 14.5 percent and a total capital ratio of 17.6 percent at the end of 2024, according to its regulatory capital section in the annual report. These figures compare with 14.3 percent and 17.4 percent, respectively, at the end of 2023, indicating a slight strengthening of the bank's capital stack.

The loan-to-deposit ratio remained at 96 percent at the end of 2024, broadly unchanged from 97 percent at the end of 2023. BBVA described this level as consistent with a balanced funding profile, with customer deposits continuing to be the main source of funding for its lending operations.

Risk-weighted assets (RWA) increased to EUR 360 billion at the end of 2024 from EUR 350 billion at the end of 2023, reflecting loan growth and business expansion. Despite this increase, the bank maintained its capital ratios due to retained earnings and capital optimization measures.

Cost efficiency and profitability metrics

BBVA's efficiency ratio, calculated as operating expenses divided by gross income, improved to 42.0 percent in 2024, down from 43.5 percent in 2023, as reported in its financial highlights. Operating expenses increased at a slower pace than revenues, growing by around 7 percent year on year compared with the nearly 11 percent growth in gross income.

The bank's return on tangible equity (ROTE) reached 17.8 percent in 2024, up from 16.3 percent in 2023, according to the same financial highlights. This increase in ROTE underscores the bank's ability to generate higher profitability on its tangible capital base, a metric closely watched by investors in European banking stocks.

BBVA also reported that its earnings per share (EPS) rose to EUR 1.31 in 2024 from EUR 1.06 in 2023, reflecting both higher net profit and the effect of share buybacks reducing the number of shares outstanding. This EPS growth of approximately 23.6 percent illustrates the combined impact of earnings momentum and capital return.

Asset quality evolution in 2024

Management described asset quality trends as stable to improving in 2024. As mentioned earlier, the non-performing loan ratio declined to 3.2 percent from 3.4 percent, while the coverage ratio remained above 75 percent. In Spain, the NPL ratio fell to 3.0 percent in 2024 from 3.2 percent in 2023, supported by recoveries and write-offs.

In Mexico, the NPL ratio remained relatively stable around 2.3 percent, with the bank maintaining conservative provisioning policies. BBVA indicated that it continues to monitor closely any emerging risks, particularly in consumer and small business segments, but did not report any material deterioration in credit quality during 2024.

Loan-loss provisions for the group amounted to EUR 5.0 billion in 2024, slightly higher than the EUR 4.8 billion recorded in 2023, according to its income statement. This modest increase reflects both loan growth and a cautious stance on potential future macroeconomic headwinds.

Funding profile and liquidity buffers

BBVA reported a Liquidity Coverage Ratio (LCR) of 162 percent at the end of 2024, compared with 160 percent at the end of 2023, providing a comfortable buffer above the 100 percent regulatory minimum. The bank's Net Stable Funding Ratio (NSFR) stood at 123 percent at year-end 2024, up from 121 percent in 2023, as detailed in its regulatory disclosures.

Customer deposits totaled EUR 460 billion at the end of 2024, compared with EUR 445 billion a year earlier, marking an increase of roughly 3.4 percent. The bank stated that it continues to prioritize stable retail and corporate deposits over more volatile wholesale funding, although it also maintains access to capital markets for long-term funding and capital instruments.

BBVA has continued to issue green and sustainable bonds as part of its funding strategy, aligning with its broader sustainability objectives. In 2024, the bank placed around EUR 3 billion equivalent in green and sustainable bonds across different currencies, according to its sustainable finance report.

Strategic focus on sustainable finance

BBVA reiterated its goal of mobilizing EUR 300 billion in sustainable finance between 2018 and 2025. According to its 2024 sustainability report, the bank had already mobilized EUR 210 billion by the end of 2024, up from EUR 150 billion by the end of 2023. This means BBVA added approximately EUR 60 billion in sustainable finance volumes during 2024 alone.

The bank's sustainable finance activities include green loans, sustainable bonds, and advisory services related to environmental, social, and governance (ESG) projects. Management views this area as both a growth opportunity and a way to support the transition to a lower-carbon economy, particularly in markets such as Spain, Mexico, and South America.

BBVA has also committed to aligning its credit portfolio with net zero emissions by 2050 and has started to set interim decarbonization targets for high-emitting sectors, as outlined in its climate strategy documentation.

BBVA stock valuation and market context

BBVA stock is listed on the Spanish stock exchange and is a constituent of the IBEX 35 index, which tracks the largest companies in Spain. As a major European bank with significant exposure to Mexico and other emerging markets, the stock often trades in line with expectations for interest rates, economic growth, and currency developments in its key geographies.

Investors frequently compare BBVA's valuation with other large euro-area banks, focusing on metrics such as price-to-book ratio and dividend yield. The combination of a double-digit ROE, a CET1 ratio above regulatory requirements, and a payout ratio around 40 to 50 percent provides a framework for assessing the risk-reward profile of BBVA stock relative to peers.

In this context, the strong 2024 earnings and expanded capital return plan have helped underpin market confidence, even as investors continue to monitor potential headwinds such as changes in monetary policy, credit quality trends, and regulatory developments in Europe and BBVA's international markets.

Retail banking and BBVA app

Retail and small business banking remain at the core of BBVA's business model. The bank offers current accounts, savings products, consumer loans, mortgages, credit cards, and small business financing across its main markets. A significant share of these services is now accessed through the BBVA mobile app, which has become a central touchpoint for customers.

According to BBVA's 2024 digital banking overview, customer satisfaction scores for the app have improved over the past year, and the number of monthly active users has continued to rise. The bank has been adding new functionalities, such as personalized financial management tools, digital onboarding, and investment products, to deepen customer engagement and cross-selling.

For investors following BBVA stock, the success of the digital strategy is relevant because it can influence both revenue growth and cost efficiency over the medium term, potentially supporting higher profitability and valuation multiples.

BBVA stock and market indicators

As one of the largest Spanish banks by assets and market capitalization, BBVA is closely watched by equity and credit investors. The stock's inclusion in the IBEX 35 index means it is also part of many passive and benchmark-tracking portfolios, which can influence trading volumes and liquidity. Analyst discussions often focus on BBVA's ability to sustain its high ROE and maintain strong capital ratios while returning significant cash to shareholders.

Beyond the headline figures, investors pay attention to trends in net interest margins, loan growth, fee income, and provisions, as well as to macroeconomic conditions in Spain, Mexico, and other key markets. These factors together help shape the medium-term outlook for BBVA stock and determine how the market prices its risk profile relative to other European and international banks.