Rating action

Scope Ratings GmbH (Scope) has affirmed the A+ issuer rating of Banco Bilbao Vizcaya Argentaria SA (BBVA). The Outlook is Stable.

The full list of rating actions is detailed at the end of this rating action release.

Key rating drivers

Business model assessment: Very Resilient (Low). The issuer rating is anchored at the Very resilient (Low) business model assessment. The group's business model is characterized by leading retail and commercial banking positions in its key markets. The group’s credit risk profile also benefits from a geographic diversification in countries that have uncorrelated economic cycles and distinct banking sector dynamics. We see the group’s business profile as very resilient despite the meaningful weight of operations in markets that are more volatile than that of its domestic franchise, which accounted for about 50% of assets and 36% of net attributable profit (excluding the corporate center) in H1 2025. The group has steadily strengthened its competitive footprint, with market shares ranging from 10% to 25% in both retail and commercial banking across its core markets. BBVA's performance has been resilient over the cycle and is helped by business diversification. Fees and commissions and wealth management products have grown in importance and account for more than 20% of operating income.

The unsuccessful conclusion of the bid for Sabadell has not significantly impacted our business model assessment for the group. The addition of Sabadell would have allowed the bank to improve its market share in Spain and strengthened its position in the bank’s core SME segment, but the shift would not have been material enough to have moved our assessment of the bank’s business model to a higher level. Our assessment reflects BBVA’s focused strategy and sound execution track record, which mitigates moderate strategic challenges posed by the outcome of the bid for Sabadell.

Operating environment assessment: Moderately supportive (High). The assessment reflects Scope’s blended view of the different markets where BBVA operates. Spain represents around 52% of BBVA’s total assets, followed by Mexico with 21% and Türkiye with 10%, respectively, in 1H 2025. Although BBVA’s operations have a greater exposure to economies with higher risks compared to other large, internationally diversified European peers, its positive performance track record in these markets is a testimony of the group's ability to generate sustainable earnings in challenging conditions. Sabadell’s addition to the group would have somewhat rebalanced the bank’s exposures to the lower risk operating environment of Spain. However, the impact would not have been material enough to shift our blended operating environment.

We assess the environment for bank’s operating in Spain (A/Stable) as ‘Supportive – Low’. Spain, where BBVA generated over 27% of gross income in H1 2025, is a diversified economy ranking among the largest economies in the Eurozone. The county’s GDP per capita has grown steadily reaching EUR 35,000 in 2024. This, together with a significant decline in private sector debt levels to historical lows that compare well by international standards, has benefited credit conditions for Spanish banks. Spain's economy has demonstrated resilience to global economic challenges, achieving a robust 3.4% GDP growth in 2024, significantly outperforming the euro area's growth. Scope maintains its 2025 growth forecast at 2.5%, reflecting solid domestic demand and EU-funded investment. However, it expects growth to moderate to 1.8% in 2026, thus converging toward its estimated medium-term potential, as temporary growth drivers fade.

The Spanish banking sector is highly concentrated, with the top four banks (with BBVA ranking third by assets) accounting for around 55.6% of the sector’s domestic assets as of June 2025. The sector is characterised by strong cost efficiency, which has improved significantly in recent years following the last consolidation cycle. Profitability metrics have improved, in line with what has been observed in other European economies, allowing banks to strengthen their financial profile after years of weaker performance.

Mexico, for which we assess the operating environment for banks as ‘Moderately supportive-low’, accounted for about 40% of the group’s gross income as of 1H 2025. The IMF expects Mexico’s economy to grow by 1.0 percent in 2025 and to pick up slightly in 2026. Fiscal consolidation, tight monetary policy and trade tensions with the US have weighed on domestic demand, though exports remain resilient. The banking system is relatively fragmented. However, the presence of large international players provides stability through solid asset quality, strong capitalization and supportive profitability. The challenging economic outlook, due to policy risks and potential US tariffs could impact the performance of the banking sector, with lower loan volumes, pressure on margins and potential asset quality deterioration. However, domestic economic momentum supports the performance of the sector over the medium term.

Türkiye’s, for which we see the operating environment as ‘Constraining-low’, represents almost 13% of the group’s gross revenues in 1H 2025. Türkiye’s economic performance has been steadily improving following by a disinflationary process. The deceleration in real GDP growth (3.0% in 2024, down from 5.1% in 2023 and average of above 5.0% between 2013 -2023), together with the tight policy mix underpins a real GDP growth projected at 3.0% in 2025 and 3.2% in 2026. The current geopolitical uncertainties, as well as inflationary pressure and restrictive monetary policy, weigh on investor sentiment and consumer demand. External and financial stability risks remain significant due to high external financing needs, foreign capital outflows, and high dollarisation of the economy. Domestic challenges are compounded by geopolitical tensions and regional instability. The banking sector oversight, while it has improved in the last years, remains in our view a key constrain.

BBVA follows a multiple point of entry resolution strategy. The Spanish resolution perimeter accounts for the main operating group. Spain, which is part of the European Banking Union, has brought about a significant strengthening and harmonisation in bank regulation and supervision under the ECB’s Single Supervisory Mechanism, which Scope considers to be supportive of financial stability. The European Central Bank also shares with national central banks the role of lender of last resort, which limits liquidity risks for banks.

Scope arrives at an initial mapping of a- based on a combined assessment of the issuer’s operating environment and business model.

Long-term sustainability assessment (ESG factor): Positive (+1 notch). The assessment reflects Scope’s view that the issuer stands out as an early adopter of advanced industry sustainability-related standards or practices. The issuer’s approach to long-term sustainability, including target setting and commitment to delivery, clearly enhances its credit standing.

BBVA has been able to develop digital capabilities that are a competitive advantage and that have become a key tool for sales in all core markets. Customer acquisition is mostly driven by digital platforms, representing 79% of total sales (number of transactions) as of June 2025. With 60.4m mobile customers as of June 2025, the ability of the group to leverage its digital capabilities to enter and continue growing in new markets is also demonstrated by the recent expansion to Italy and Germany, following a well-structured and purely digital strategy.

The clear focus on sustainable finance from a strategic perspective, with meaningful targets and resources allocation (EUR 700bn for 2025-2029 to promote sustainable businesses), places BBVA as a key player considering the group’s geographical footprint.

The long-term sustainability assessment leads to an adjusted rating anchor of a.

Earnings capacity and risk exposures assessment: Supportive (+1 notch). The assessment reflects Scope’s view that earnings capacity is stable through economic cycles and provides a strong buffer against losses. Risks are well managed and are highly unlikely to lead to losses capable of undermining the issuer’s viability.

The bank maintains strong performance thanks to its better-than-average efficiency and its strong pricing power in line with the group’s solid franchise in its core markets. BBVA’s return on RWAs has been steadily growing since 2020, maintaining levels significantly above peer’s average, to reach 2.8% in Q2 2025 vs 2.4% for peer’s average at the same date. Just as importantly, the bank’s loss absorption capacity benefits from outperforming risk-adjusted pre-provision returns (4.8% in Q2 2025). We continue to see the Turkish operations returns as modest relative to their risk profile, however. BBVA’s healthy operating performance is supported by solid core revenue generation, with a significant contribution from net interest income underpinned by business volumes growth and effective structural hedges mitigating interest rate pressures in both Spain and Mexico, as well fees and commissions expansion leveraging on payment and asset management activities. The group’s cost discipline and ability to leverage digital capabilities has resulted in one of the best efficiency metrics among national and international peers. The bank’s cost to income ratio declined to 37.6% in H1 2025 compared with 40.9% a year earlier.

BBVA’s rating is supported by the group’s sound credit risk management, which has supported the bank’s resilient asset quality throughout the cycle. The bank’s higher than average exposure to inherently higher-risk higher-return businesses (SMEs and consumer lending) and geographies (i.e. Mexico and Türkiye) constrain our Risk Exposures assessment. Against this background, we take into account that the bank maintains stable, healthy asset quality indicators and cost of risk, at levels consistent with credit risk profiles of operations in each of the banking systems in which it is present. The bank maintains sound loss absorbing cushions, with reserve coverage of problem assets gradually improving over the past few years. We expect BBVA’s risk management strengths will continue to support adequate asset quality going forward even in the context of potentially less benign economic environments in Spain and Mexico.

The concentration in the ALCO portfolio is manageable with the largest sovereign exposure being Spanish bonds, representing around 66% of CET1 capital in Q2 2025. We are rating BBVA above its home sovereign as in line with Scope's Financial Institutions Rating Methodology, this exposure does not constrain our Earnings Capacity and Risk exposures assessment.

Financial viability management assessment: Adequate. The assessment reflects Scope’s view that financial viability management provides some buffer and, under a base case scenario, should not imminently push any metric close to minimum requirements or jeopardise the issuer’s financial viability.

Although BBVA has recently accumulated organic capital improving core capital levels (reaching 13.3% CET1 ratio in Q2 2025 vs 13.09% in Q1 2025 and below 13% in 2024), our assessment takes into account that the bank’s capital management remains unchanged after Sabadell’s bid has not succeeded. The bank announced its plans to accelerate its shareholder distribution which entails distributing capital in excess of a 12% CET1 ratio. The bank’s management’s target in the medium term for CET1 ranges between 11.5% and 12%. We do not anticipate that BBVA’s strong organic capital generation capacity will translate in sustainably higher than average capital cushions vs regulatory requirements than in the past. We expect the bank to operate with MDA buffers in the tune of 300bps in the outlook horizon. While this level is comparable to other European peers, the bank’s capital policy means that the bank is likely to maintain only adequate levels of core capital on a routinely basis (which we see as constraining the bank’s financial flexibility compared to other better capitalized European peers, although it is on a par with Spanish competitors). BBVA’s hedging policy (for expected profits and regulatory capital) provides comfort regarding potential impacts on reported capital metrics from not only interest rate risk, but also FX risk. We also factor in our view that BBVA is likely to maintain healthy MREL levels, particularly in the subordinated level.

BBVA’s funding profile remains a strength. This is not only because of the large retail funding component and low wholesale funding diversification (Mexico remains the only part of the group with a LTD ratio above 100%). It is also because of the bank’s strategy to maintain a strategy for subsidiaries in different geographies to be self-funded, which limits risks for the group and supports funding diversification. Thus, the group's retail focus drives the funding strategy and supports the granularity of the deposit base, while wholesale funding diversification also remains healthy by product and maturity.

Regulatory liquidity indicators remain healthy at group and individual entities’ level. The group’s NSFR stood at 126% in Q2 2025 and its LCR calculated using a 100% restricted LCR at subsidiaries level at 140% at the same date (the consolidated LCR calculated without this restriction stood at 168%). With €122.7bn Level 1 HQLAs at Q2 2025, balance sheet liquidity management also continues to support BBVA’s credit risk profile.

One or more key drivers of the credit rating action are considered an ESG factor.

Outlook and rating sensitivities

The Stable Outlook reflects Scope’s view that the risks to the current rating are balanced.

The upside scenarios for the ratings and Outlooks are (individually or collectively):

1. A more conservative strategy for managing capital and targets, with larger buffer to requirements, leading to a higher financial viability management assessment.
    
2. Although the bank’s renewed strategic focus on organic growth makes meaningful shifts unlikely, a sustained improvement in the bank’s business diversification, without impairing the bank’s credit risk profile, could lead to a positive reassessment of the business model assessment.

The downside scenarios for the ratings and Outlooks are (individually or collectively):

1. A material deterioration in the stability of earnings or asset quality due to a weakening of performance in emerging markets, leading to a lower earnings capacity and risk exposures assessment.
    
2. More aggressive capital management, leading to thinner buffers relative to regulatory requirements or tighter core capital indicators, would put pressure on our Financial Viability Management assessment.

Debt ratings

Preferred senior unsecured debt: A+/Stable. The rating is aligned with the issuer rating and applies to senior unsecured debt ranking above other classes of senior unsecured debt.

Non-preferred senior unsecured debt: A/Stable. The rating is one notch lower than the issuer rating, reflecting statutory subordination.

Short-term debt: S-1+/Stable. The short-term credit rating is derived from the long-term issuer credit rating. The rating is consistent with Scope’s long-term/short-term rating correspondence table. The choice of the highest possible short-term rating (S-1+ given the A+ issuer rating) reflects the strength of the group’s funding profile and liquidity metrics and access to central bank funding.

Environmental, social and governance (ESG) factors

Please refer to the ‘long-term sustainability assessment’ under the ‘key rating drivers’ section above for the ESG analysis.

All rating actions and rated entities

Banco Bilbao Vizcaya Argentaria SA

Issuer rating: A+/Stable, affirmed

Preferred senior unsecured debt rating: A+/Stable, affirmed

Non-preferred senior unsecured debt rating: A/Stable, affirmed

Short-term debt rating: S-1+/Stable, affirmed

Stress testing & cash flow analysis
No stress testing was performed. No cash flow analysis was performed.

Methodology
The methodology used for these Credit Ratings and/or Outlooks, (Financial Institutions Rating Methodology, 18 September 2025), is available on scoperatings.com/governance-and-policies/rating-governance/methodologies.
Information on the meaning of each Credit Rating category, including definitions of default, recoveries, Outlooks and Under Review, can be viewed in ‘Rating Definitions – Credit Ratings, Ancillary and Other Services’, published on scoperatings.com/governance-and-policies/rating-governance/definitions-and-scales. Historical default rates of the entities rated by Scope Ratings can be viewed in the Credit Rating performance report at scoperatings.com/governance-and-policies/regulatory/eu-regulation. Also refer to the central platform (CEREP) of the European Securities and Markets Authority (ESMA): registers.esma.europa.eu/cerep-publication/. A comprehensive clarification of Scope Ratings’ definitions of default and Credit Rating notations can be found at scoperatings.com/governance-and-policies/rating-governance/definitions-and-scales. Guidance and information on how environmental, social or governance factors (ESG factors) are incorporated into the Credit Rating can be found in the respective sections of the methodologies or guidance documents provided on scoperatings.com/governance-and-policies/rating-governance/methodologies.
The Outlook indicates the most likely direction of the Credit Ratings if the Credit Ratings were to change within the next 12 to 18 months.

Solicitation, key sources and quality of information
The Credit Ratings were not requested by the Rated Entity or its Related Third Parties. The Credit Rating process was conducted:
With Rated Entity or Related Third Party participation        YES
With access to internal documents                                      NO
With access to management                                               NO
The following substantially material sources of information were used to prepare the Credit Ratings: public domain, the Rated Entity and Scope Ratings’ internal sources.
Scope Ratings considers the quality of information available to Scope Ratings on the Rated Entity or instrument to be satisfactory. The information and data supporting these Credit Ratings originate from sources Scope Ratings considers to be reliable and accurate. Scope Ratings does not, however, independently verify the reliability and accuracy of the information and data.
Prior to the issuance of the Credit Rating action, the Rated Entity was given the opportunity to review the Credit Ratings and Outlooks and the principal grounds on which the Credit Ratings and Outlooks are based. Following that review, the Credit Ratings and Outlooks were not amended before being issued.

Regulatory disclosures
These Credit Ratings and Outlooks are issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0. The Credit Ratings and Outlooks are UK-endorsed.
Lead analyst: Angela Cruz, Executive Director
Person responsible for approval of the Credit Ratings: Karlo Fuchs, Managing Director
The issuer Credit Rating/Outlook was first released by Scope Ratings on 2 April 2014. The Credit Rating/Outlook was last updated on 13 December 2024.
The short-term Credit Rating/Outlook was first released by Scope Ratings on 22 May 2014. The Credit Rating/Outlook was last updated on 13 December 2024.
The preferred senior unsecured debt Credit Rating/Outlook was first released by Scope Ratings on 2 April 2014. The Credit Rating/Outlook was last updated on 13 December 2024.
The non-preferred senior unsecured debt Credit Rating/Outlook was first released by Scope Ratings on 25 July 2017.The Credit Rating/Outlook was last updated 13 December 2024.

Potential conflicts
See scoperatings.com under Governance & Policies/Regulatory for a list of potential conflicts of interest disclosures related to the issuance of Credit Ratings, as well as a list of Ancillary Services and certain non-Credit Rating Agency services provided to Rated Entities and/or Related Third Parties.

Conditions of use / exclusion of liability
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