Banco Bilbao Vizcaya Argentaria S.A.

Good morning, and thank you for joining us for BBVA's third quarter results presentation. As every quarter, I'm pleased to be joined by our CEO, Onur Ghent, and our group CFO, Luisa Gomez Bravo. We will start with a review of the key figures for the quarter, and then we will open the floor for your questions. So without further delay, let me hand it over to Onur.

Thank you, Patricia. Good morning to everyone. Welcome, and thank you for joining BBVA's third quarter 2025 earnings webcast. As always, let's jump into the slides, starting with slide number three. And as always, starting with the value creation numbers on the left-hand side of the page, you can see the strong evolution of tangible book value per share plus dividends, which increased by 17% year-over-year and 4.5% in the quarter. In my view, excellent figures. On the right-hand side, you see the profitability ratios. They are sustained at very high levels with an industry-leading return on tangible equity of 19.7%. and ROE of 18.8% in the first nine months of 2025. On page number four, on the left-hand side, we delivered another strong quarter in terms of net attributable profit, once again exceeding the 2.5 billion euros mark, even in the context of a much lower rate environment, obviously. The net attributable profit decreased compared to the previous quarter, mainly to two things, higher inflation in Turkey, which impacts obviously the other income line item, and mostly due to the one-off positive impacts registered in the second quarter. If you remember more specifically, the release of some fiscal provisions affecting the tax rate, and the review of value-added tax, VAT, the payment calculations around this, and in effect, which then affected the operating expenses. The net attributable profit is also slightly below last year's figure for a good reason, we think, because Mexican peso has been appreciating lately versus a depreciation in the same period last year. This had a negative effect on the FX hedges of the net trading income line of the corporate center this quarter, but they will benefit from this, from an appreciated Mexican peso in the coming quarters. We take this any day. On the right-hand side of the page, you can see our CET1 capital ratio, which improved by 8 basis points during the quarter, reaching 1342. This solid capital position obviously provides us with the capacity to increase our shareholder remuneration, which I will explain later. Page number five on the left-hand side are cumulative profits for the first nine months. They continue their upward trend to a record level, reaching almost 8 billion euros in the first nine months of 2025, a 4.7% increase year-over-year in current euros. And on the right-hand side of the page are profitable metrics compared to European peers. Once again, our 19.7% return on tangible equity. It remains unmatched, and we are clearly one of the most profitable banks in the industry. Moving to page number six. This page is a summary of the pages to follow, so allow me to directly move to the next slide. Slide number seven. As always, the summarized P&L of the quarter. I would highlight the outstanding evolution of the core revenues, especially in the last quarter, especially in the last quarter, with net interest income and fees growing 18 and 15% year over year, respectively. In my view, an impressive 7% and 6%, quarter over quarter, respectively, again, in constant euros. Slide number eight, the summarized P&L of the first nine months of the year. I would once again highlight the very positive core revenues evolution, leading to an increase in gross income of 16% in constant euros year over year. The strong gross income growth, coupled with the positive jaws and the contained growth in impairments, which we will discuss later, it led again to the record, as I mentioned, net attributable profit of almost 8 billion euros. Moving to slide number nine, which puts more light into the revenue breakdown evolution. Once again, we continue to deliver quarter on quarter on revenue growth, driven mainly by net interest income and net fees and commissions, as you can see on the page. This has been the story of EVVA in my view in the past few years, and as you can see on the page, this quarter the performance is even more pronounced, with NAI growing 7.1% in the quarter and fees growing 5.8% in the quarter, leading to a quarterly growth rate of 4.4% in gross income. Despite an uncertain macro environment, despite declining interest rates, we keep delivering on core revenues. Regarding the, on the page, the annual decline in the net trading income, I already mentioned it, but an important part of it is, again, due to the strong gains from the FX hedges linked to Mexican peso depreciation last year versus a negative FX hedge impact this quarter due to Mexican peso depreciation. But again, as I said, we can take this anytime because it will help us in the coming quarters. Moving to slide number 10. Let me focus a bit more on activity and loan growth, which has maintained its pace at an excellent 16% growth year over year, then leading to an excellent NAI performance. As we claim, this is also very good news for the coming quarters, since we delivered this loan growth in a very profitable manner. In Spain, in the middle of the page, loan growth further accelerated to 7.8% year over year, while Mexico continues in line with our ambitious guidance at 9.8% year-over-year. In the case of Mexico, let me remark that if we exclude the U.S. dollar currency impact, the loan growth figure as of September 2025 would have been 10.9%. Now, on the right-hand side of the page, thanks to the strong long-growth figures and obviously our proactive price management, we continued expanding on our core revenues, the sum of NAI and fee income in both Spain and Mexico, in both year-over-year and quarter-over-quarter comparisons. And again, gaining pace in the last quarters. If you annualize the quarterly figures of the core revenues, they are really good numbers in our view. And this is one of the most important messages of the presentation banks are generally rate sensitive as we also are in Spain and Mexico But despite the rate compression Thanks to our unmatched long growth leading to in every single country market share gains and our proactive price management we continue to grow our core revenues and Now on page number 11, you see another reason for our optimism looking into the future. As I mentioned, we are quite rate sensitive in Spain and Mexico. The last two years, and especially the last year, we have seen interest rates decrease significantly in these markets. And the good news in our view is that we believe interest rates are already at or near the expected terminal rates in both Europe, Spain, and also Mexico. In the case of Europe, we expect the terminal rate to be around 2%, where interest rates already are, compared to the 4% at the beginning of 2024. And in the case of Mexico, the policy rate was at 11.25 at the beginning of 2024, and is now at 7.5%, as you know. We estimate the terminal rate to be around 6.5%, so we are almost there as well in Mexico. We have proactively managed the impact of these rate declines, which, by the way, happens quite fast in Mexico. The reset frequency is much faster in Mexico. And with some months delay in Spain, our customer spreads on the right-hand side of the page already reflect those impacts. And with limited room for further rate cuts, we expect relative stability in customer spreads going forward. In short, let's not take too much time on the page, but if spreads... stay around these levels. And with continued dynamism in activity and loan growth, we believe our revenues and profits will further strengthen in our core markets in the coming quarters and years. Moving to slide number 12. On the left-hand side of the slide, we continue to show positive jobs at the group level. supported by the solid performance of the gross income, which grew 16.2% year-over-year, while operating expenses increased by 11%, remaining below the average inflation across our footprint. And on the right-hand side of the slide, you can see our efficiency ratio again improving, reaching 38.2%, below last year's level, obviously. Slide number 13, this page shows the solid evolution of our asset quality metrics, which are performing better than expectations, better than our guidance at the beginning of the year, in a context of strong activity growth, especially in the most profitable and typically higher cost of risk segments. On the left-hand side of the page at the bottom, our cost of risk stands at 135 basis points, again, better than guidance, slightly above last quarter's figure, with the numbers already incorporating the negative impact coming from the annual risk model calibration process, partially compensated by the positive impact from the quarterly macro adjustments. Meanwhile, on the right bottom, you see that our MPL and coverage ratios, they continue improving. Slide number 14 on capital and shareholder remuneration. On the left-hand side of the slide, our capital waterfall for the quarter-over-quarter evolution. Our CT1 ratio once again has increased 8 basis points to 1342. And following the waterfall, results, 65 basis points. Dividend accrual and 81 coupons, minus 35 basis points. Then 37 basis points due to the RWA's growth. This figure reflects, again, our ability to reinvest part of our capital generation into profitable growth. And as in other recent quarters, it also reflects the result of several risk transfer transactions, SRTs, which positively contributed five basis points to the ratio of this quarter, a bit lower than the previous quarters because of the summer seasonality. Then we have a bucket of others of 15 basis points, which comprises, among others, the market-related impacts, slightly positive, and then the credit in OCIE for hyperinflationary countries. Lastly, regarding the CET1 ratio, and as we announced last quarter, we expect a positive regulatory impact in the fourth quarter in the range of 40 to 50 basis points, reinforcing our already very strong capital position. And then moving to the right side of the page, as the process of the Sabadell transaction has ended, we will resume our shareholder remuneration programs. First, we will begin our 1 billion euros, nearly 1 billion euros share buyback program starting tomorrow. Second, we will distribute on November the 7th a record interim dividend of 32 cents per share. Then, and most importantly, as soon as we get the required ECB authorization, for which the process has already been initiated, we will start another round of a significant share buyback. The details of this last piece will be announced obviously once we receive the authorization from ECB. Moving to page number 15, it's a quick review of our strategic progress and specifically on new customer acquisition. During the first nine months of 2025, we have acquired a record 8.7 million new customers with 66% joining us through digital channels, a clear competitive advantage for BBVA. Then on slide 16, another pillar of our growth strategy, sustainability. We continue to deliver quarter after quarter, even above our own expectations. In the first nine months of 2025, we have channeled a record 97 billion euros in sustainable business with a significant increase in all segments. And finally, moving to page number 17, as you know, last quarter, we set our ambitious financial goals for the 2025-2028 period. We will report back to you on the progress versus established goals every quarter. In short, we are at the early innings, but as compared to the numbers we have in the plan for the first nine months of 2025, we are performing better than our original expectations in all the metrics. And now for the business areas update, I turn it to Luisa. Luisa?

Thank you very much, Juanur, and good morning, everyone. In slide number 19, let's start with Spain, which has shown a strong momentum throughout the year and once again has delivered excellent results in the third quarter. Net profit reached 3.1 billion euros in the first nine months of 2025, with around 1 billion euros generated in the third quarter alone. These results, in line with previous quarters, reflect solid business performance and outstanding in AI evolution despite lower rates, robust fee income, strict cost discipline, and continued strength in asset quality. Starting with net interest income, it has continued to perform exceptionally well this quarter, up 3.2% quarter-on-quarter, driven by strong loan growth in our most profitable segments. As you can see, consumer lending and mid-sized company loans both grew by around 10% year-on-year, well above the overall loan growth of 7.8%. We also continue to benefit from the positive contribution of the ARCO portfolio fully aligned with our strategy to lock in higher rates. Based on this solid performance, we are racing our NII guidance for Spain to low single-digit growth in 2025, up from slightly positive previously. Fee income this quarter was affected by the usual summer seasonality. Year on year, performance remains very solid, up 4.2%, mainly driven by strong growth in asset management fees, nearly 10% year on year higher, together with increasing contributions from insurance and credit cards. On the cost side, the quarterly increase mainly reflects a runoff related to VAT payment calculations recorded last quarter, which you may remember. Excluding this impact, expenses were very well contained, up only 1.3%, clearly showing our continued focus on cost control. Finally, asset quality remains very solid, with both the MPL ratio and coverage ratio improving. Costs of risk remain contained at 34 basis points, in line with our guidance. Overall, a remarkable quarter in Spain, with solid activity driving robust core revenue growth, even in a low-rate environment. Moving now to Mexico on slide 20 for another quarter, and despite a challenging environment, BBVA Mexico delivered a very strong set of results with net profit of 1.3 billion euros in the quarter, driven by core revenues growth. Net interest income grew by 3.3 quarter-on-quarter, supported by robust lending activity, especially in retail, where we continue to focus on the most profitable portfolios, consumer and SMEs, both growing at 4% quarter-on-quarter. Corporate lending also remains strong, increasing by 9.1% year-on-year, excluding the effects derived from the Mexican peso appreciation. Fee income performed very well, up 2.6% quarter-on-quarter, with growth across the board mainly driven by credit card payments and asset management fees. Moving to cost, the increase in expenses mainly reflects higher IT investments as we continue investing for future growth, while personnel costs remain stable in the quarter. Overall, efficiency stands at close to 30% in the nine first months. Turning to asset quality, impairments decreased in the quarter, driven by both a net positive impact from the IFRS macro adjustments and solid underlying asset quality trends. As you may know, BBVA research has reviewed upwards its GDP growth forecast for Mexico, now expecting positive growth of 0.7% in 2025, compared with a contraction of minus 0.4% in the previous GDP forecast. This revision reflects the resilience of Mexican economy, even in a highly uncertain global environment. All in all, the cumulative cost of risk stands at 327 basis points as of September, better than expected, leading us to also improve our guidance for the full year. We now expect the cost of risk in Mexico to remain below 340 basis points. Finally, net profit reached 3.8 billion euros in the first nine months of the year. That's a 4.5% increase in constant euros, confirming the strength, resilience, and superior profitability of our Mexican franchise. Moving now to Turkey on slide 21, Turkey delivered net attributable profit of €648 million in the first nine months, a strong increase close to 50% compared to the same period last year. This solid performance was driven by higher core revenues and lower impact from the hyperinflationary adjustment supported by the disinflation trend observed in the country. If we briefly look at the income statement in the first nine months of the year, a few key points to highlight. First, we've seen a solid performance in NII, supported by strong activity growth, mainly driven by retail, significant year-on-year increase in the TL customer spread, but also an improved liquidity management during the quarter. In a context of declining rates, we have benefited from lower cost of deposits while also improving loan yields, supported both by our disciplined price management and our targeted loan growth strategy, focused on the most profitable segments. As you know, in Turkey, our balance sheet shows a positive sensitivity to lower rates as deposits reprice faster than loans. This means we will continue to benefit from the current easing cycle. Second, fees continue to show a positive trend underpinned by robust performance in payment systems and asset management fees as in previous quarters. Finally, the cost of risk slightly increased to 176 basis points in the first nine months, in line with our expectations. Impairments increased this quarter is mainly explained by the higher provision increases related to big ticket exposures recorded last quarter, which you also may remember. Provisioning needs remain high in retail, although we are starting to see stabilization in MPLs inflows in this part of the portfolio. Now let's turn to South America in slide 22. The region continued to make strong contributions to the group's results, posting a net profit of €585 million in the first nine months, a 24% increase year-on-year in current terms. During the quarter, NII remained solid, supported by healthy loan growth across the region and customer spread expansion, particularly in Peru and Colombia. This positive evolution of margins was partly offset by Argentina, where, ahead of the legislative elections, we saw a sharp compression in spreads amid a highly volatile rate and currency environment. The income, on the other hand, showed a remarkable increase in this quarter, with growth across all geographies reflecting our continued efforts and renewed focus on strengthening this revenue stream. Turning to asset quality, we continue to see positive trends in Peru and Colombia, supported by a more favorable macroeconomic outlook and rate environment. Meanwhile, Argentina continues to show some deterioration in a context of strong loan growth and sharp increase in real rates. Overall, the stock of MPLs remained flattish this quarter, while the MPL ratio improved to 4.08% and the coverage level increased to 93%. The cumulative cost of risk stands at 243 basis points as of September, in line with our full-year guidance. And finally, let's move to the rest of business on slide 23. It's an area that we haven't usually covered on these calls, but given the strategic plan focus on CAB business and commercial banking business, we have decided to also give you some indications of how this P&L is moving on because its strong performance and growing contribution to group's overall results are already very worthwhile. Just as a reminder, this unit mainly includes our CIB business conducted through our BBVA branches outside our core geographies. This activity accounts for more than 90% of the area's total loans and net profit. In addition, the digital banking operations in Italy and Germany are also reported under this business unit. This unit is already delivering around €480 million in profits. This solid performance reflects robust business momentum across the board, supported by cross-border activity and sustainability. Higher activity levels have led to revenue growth of close to 25% year-on-year in the first nine months, driven by a strong increase in NII, up 15% year-on-year, thanks to greater business volumes and disciplined price management, and outstanding contribution from fee income, showing very positive dynamics across all key geographies, supported by both investment banking and global transactional banking fees. On cost, the increase reflects the rollout of our strategic growth plans, building the capabilities that will enable future growth. Finally, risk metrics remain very solid in this segment. The MPL ratio improved to 18 basis points, and the cost of risk for the first nine months stands at just 10 basis points. Overall, we see this as a very promising business area where we are leveraging our diversified footprint to support clients wherever they operate, not only in our core markets, but also in other strategic geographies for them, such as the US, the UK, continental Europe, and Asia. And now, back to Onul for the key takeaways.