Banco Bilbao Vizcaya Argentaria (BBVA) 29th Annual Financials CEO Conference summary

Performance and strategic strengths

• Achieved 20% return on tangible equity in H1, leading among 15 largest European banks in both growth and profitability metrics.

• Lending book grew 6.3% year-over-year, outpacing sector peers, with tangible book value also up 20%.

• Unique franchises in key markets, consistently outperforming sector ROE due to scale and market position.

• Digitalization is a core driver, with 67% of new customers acquired digitally group-wide, and 85% in Mexico.

• Focus remains on delivery and shareholder returns, regardless of market valuation.

Mexico outlook and competitive landscape

• Mexico accounts for about 60% of profits, with long-term optimism driven by structural cost advantages and low leverage.

• Manufacturing costs in Mexico are now lower than China, making it the top exporter to the U.S.

• New government policies support private investment and nearshoring, reinforcing positive outlook.

• Holds leading market shares in credit cards (32%), POS acquiring (38%), and payroll (42%), with unmatched transactionality.

• Faces credible competition from both incumbents and digital attackers, but scale, infrastructure, and digital acquisition provide a strong edge.

Spain and Sabadell acquisition rationale

• Pursuing Sabadell to achieve greater scale, as banking shifts to a fixed-cost, technology-driven model.

• Strategic and financial synergies estimated at €850 million per year, with significant EPS uplift for Sabadell shareholders.

• Offer includes a 30–50% premium over Sabadell’s undisturbed price, making it highly attractive.

• Deal process involves three stages: authorization, tender, and merger; currently awaiting Competition Authority approval.

• Confident no competition issues exist, citing recent CaixaBank precedent and regulatory thresholds.