Banco Bilbao Vizcaya Argentaria S.A.

Good morning, and thank you for joining us for BBVA's four-quarter results presentation. As every quarter, I'm pleased to be joined by our CEO, Onur Genç, and the group CFO, Luisa Gómez-Lavo. We will begin with Onur reviewing the group's performance and key strategic developments during the year, followed by Luisa, who will walk you through the business genius results. After their remarks, we will open the call to take your questions. With that, I now turn the call over to Onur.

Thank you. Thank you, Patricia. Good morning to everyone. Welcome and thank you for joining BBVA's 2025 full-year results audio webcast. I will start with page three right away. So I'm happy to say that in 2025, we achieved outstanding results across critical dimensions. Value creation, as you see on the page, growth, profitability, strategic execution, and shareholder enumeration. First, I would like to highlight the excellent value creation achieved during the year, which is rooted in our outstanding profit evolution. Despite falling interest rates in our core markets, we still managed to increase our net attributable profit, which reached a record 10.5 billion euros, 4.5% higher than last year in current euros. Secondly, as we have emphasized in previous results presentations, BBVA offers a unique combination of profitability and growth, which was further reinforced in 2025. Our loan portfolio increased by an exceptional 16.2% at constant euros and 11.7% in current euros, an exceptional figure, while our return on tangible equity remained at industry-leading 19.3%. Third, in the page, we are advancing consistently in the execution of our strategy, First of all, we are transforming the bank with a radical customer perspective, leveraging the power of AI and innovation, and also growing the bank, especially in areas where we believe we have an opportunity of superior return. And finally, all of this is enabling us to significantly increase distributions to our shareholders with a regular payout of 5.2 billion euros from 2025 results, while at the same time, our CET1 ratio remains comfortably above our target. As you can see on the page, the regular payout against 2025 results will be paid entirely in cash through a total cash dividend of 92 cents per share, being the highest cash dividend ever by BBVA. And additionally, we continue with the execution of the first 1.5 billion tranche of the Extraordinary Shared Buyback Program amounting to 4 billion euros. These are the key highlights that I will expand in the following pages, but as you see, in my humble view, 2025 has been a remarkable year for BBVA, and we are on track to achieve our ambitious 2025-2028 long-term goals. Moving to slide number four, on the left-hand side, our tangible book value per share plus dividends continue to show an excellent performance. with a growth rate of 12.8% at face value. But it is worth highlighting, however, here, the number, excluding the impact of share buybacks, that is 15.2%. As you all know, through the share buyback programs launched in 2025, the 993 million euros already executed and the existing tranche of 1.5 billion currently in execution, we have been buying our shares at higher value than the book value. which then leads to some negative impact on tangible value per share creation. On the right-hand side of the page, you can see the very positive evolution of our net attributable profit, which continues its upward trend, reaching a new record, as we discussed, exceeding 10.5 billion euros, again, despite the negative impact of falling interest rates in our core markets, especially in Spain and Mexico. At the same time, our earnings per share, it reached €1.78, representing a 5.8% year-over-year increase. And if you look into a larger timeframe, a compounded annual growth rate of 26% in the last five years. Slide number five, I want to underscore the truly unique positioning of BBVA within the European banking sectors, combining growth and profitability at the same time. You have seen this page before in other presentations of ours, but the situation has improved even further in our view in 2025. But the page, just to explain the page, on the x-axis, we show the return on tangible equity as a profitability metric, while on the y-axis, we present long growth in current euros for equal footing of all large European players. And as an indicator of future value creation, in our view, because growth and profitability, those are the two core dimensions of future value, BBVA clearly stands out. Positioned in the top right quadrant, by far the highest long growth, by far the highest long growth in current Euros, and best profitability metrics among our peers. On return on tangible equity as the measure of profitability, we should also underscore the fact that this number is partially negatively influenced by the excess capital that we have held throughout the year because at the denominator of this ratio, as you all know, it's the average equity throughout the year. Moving to page number six, new customer acquisition. As we have reiterated consistently, again, we put this page also in every single analyst presentation. Expanding our customer base is a key driver of healthy and profitable growth. In 2025, we reached a new record in customer acquisitions with 11.5 million gross new customers. Maintaining the space year after year is particularly remarkable in our view because we are already one of the largest banks in the markets in which we operate, and it's always a smaller pool to look for new clients, but despite that, a record number in 2025. And the value of this growth, on the right-hand side of the page, there are two factoids there, but they are very important in our view. The value of this growth becomes clear when we look at the monetization of new clients over time. For example, in Spain, revenue per customer increases by 3.7 times between the first and the fifth year of that relationship. And in Mexico, it's very important this number, 75% of the new credit cards sold in 2025 are to the customers acquired in the last five years. With such focus on cross-sell in place, we believe our future business in the coming years is already hatched with the customer acquisition activity of the past few years. Moving to page number seven, all the great results of the past few pages are due to our relentless focus on executing our strategy. You all know our new strategic plan. Our new strategic plan announced in 2025 has outlined few critical priorities to sustain and improve our delivery. The plan foresees the continued need for the transformation of our business. That transformation in our view has to start with the customer, which we call radical customer perspective, putting ourselves in the shoes of our customers. We are adopting a radical approach to understand and analyze every single customer interaction with the bank so that we act on these insights to improve customer service and eliminate frictions, eliminate frictions with agility and empathy. And this is reinforcing our NPS leading positions in most of our geographies and is leading to a significant reduction of negative experiences with our customers related to events like fraud, claims or service waiting times. Improving obviously quality of service across geographies as you see on the left hand side of the page. As part of this new wave of transformation, we also have started to maximize the potential of AI and innovation within BBVA. We will pursue this across eight initiatives listed there in the page, including our digital advisor, the blue, the AI system for bankers, and injecting efficiency and effectiveness in different processes across the bank in different areas like the software development. In addition, AI is increasingly being embedded across our organization. Our 127,000 employees all around the world, they have now access to OpenAI and Gemini. We are still at the early innings on this, but we are already starting to see the positive impact from all of our AI work, and we will update you on this further in the coming quarters. On page 8, as part of our strategic plan also, you see certain businesses that we have prioritized to grow faster than average. We have achieved that superior growth in 2025 in all selected areas, enterprises, sustainability, and capital light businesses. On the left-hand side of the page, you see the levers through which we grow our enterprise business, cross-border, a natural lever for a global bank like us to serve our multinational enterprise clients beyond their home geography, and sustainability, also mainly on the enterprise side, a strategic priority for us to accompany our clients in their transition, all yielding excellent results in 2025, again, as you see, in the growth rates. And you can compare those growth rates with the rest of the bank, which is on the right-hand side. But in the middle and the right hand side of the page also you see the prioritized capital light fee generating businesses again displaying excellent growth performance in insurance, in payments, in wealth management where again we grew much better than the average of the bank in all of those areas. Slide number nine from this slide on I'm going to walk you through the financials but let me not and also to save time let me not spend too much time on this page as it is a summary of the following pages so let's jump into page number ten. In the annual P&L, a similar story as in the recent years, but I would like to highlight the very strong performance of core revenues, which drove gross income growth to 16.3% year-over-year in constant euros, with 13.9% in NAI growth and 14.6% in fee income. And this solid growth in gross income, together with positive jobs, as you see on the page, contained impairment charges. It resulted, again, in the record net attributable profit of 10.5 billion euros. Slide 11, the P&L for the quarter, for the fourth quarter. Again, I will not stop long here, but just to remark on the strong quarterly performance with a net attributable profit above 2.5 billion euros, once again, despite some negative one-offs, like a tax code change in Turkey at the final days of the year. You might have seen it on Christmas Day, actually. The continued and accelerating delivery at the core revenue lines, net interest income and fee income, is worth highlighting again on this page. Core revenue, especially in Spain and Mexico, is behaving exceptionally well. And talking about that, maybe on page number 12, talking about Spain and Mexico, our two core geographies. First of all, before the country is at the group level, on the left-hand side of the page, one of the clear highlights of the quarter was the growth in activity. Long growth maintained an excellent pace, increasing 16.2% year-over-year, which is translating into that strong net interest income performance. And then talking about the countries within that, in Spain, long growth further accelerated to 8% year-over-year, while Mexico maintained a solid 7.5% year-over-year growth. In the case of Mexico, excluding the impact of the US dollar affecting the value of our US dollar-denominated loan book in Mexico, if you isolate for that impact, loan growth would have reached 9.9%, fully in line with our 2025 guidance. And on the right-hand side of the page also, you see how all of this, supported by strong loan growth and proactive price management in a declining rate environment, how we translated this into growth in core revenues in both Spain and Mexico year over year, but also look into the quarterly evolution with an acceleration in the last quarter if you annualize those quarterly figures. Moving now to slide number 13, again talking about growth, our strong activity growth is not only due to the overall industry growth, but also due to our clear-out performance versus competitors. As shown on the page, we have been gaining low market share in all of our markets in the past few years, and in 2025 specifically, we continued that trend in practically all of our markets, again with meaningful gains across the board. We have to be careful here. Market share by itself is not an isolated goal for the bank. As the underlying growth has to be profitable. We are not here for the sake of growth. But as we monitor and manage the profitability of any granted loan in any country of the bank, we take pride in the consistent track record of market share gains across the board. Moving to slide number 14 on costs, I would first highlight that once again, and in line with our DNA, we closed the year with positive jaws, with gross income growing by 16%, clearly outpacing the growth in costs. And as a result, on the right-hand side of the page, our efficiency ratio continues to be one of the best among European peers, and it improved to 38.8%. Again, picking up some speed, slide number 15, The evolution of our asset quality, it remains in line with our expectations, even in a context of strong activity growth in our most profitable segments. And starting on the left-hand side, at the bottom of the page, our cost of risk stands at 139 basis points year-to-date, improving versus 2024, and delivering a better performance versus guidance in most of the countries. At the same time, on the bottom right-hand side, both our non-performing loan ratio and coverage ratio, they continue to improve year-over-year and quarter-over-quarter. Slide number 16 on capital, quarter-over-quarter evolution clearly illustrates both the underlying growth dynamics of the business that I just talked to you about and the one-off timing effects at year-end. First, results. Remain at the core driver of capital generation. Strong earnings contributed 64 basis points to CT1. Then with the accrual of the dividends and 81 coupons deducting 34 basis points. Then RWAs, turning to RWAs, activity-driven growth implied an impact of around 57 basis points. Overall, we saw a higher pace of RWA consumption compared with previous quarters. Again, this reflects very strong and exceptional business dynamics across all geographies, with an acceleration in the loan portfolio growth, explaining the majority of the increase in RWAs. In addition, the thing that I mentioned about the fourth quarter exceptional number, the quarter includes also the year-end operational risk calculation, which in the context of higher revenues and higher activity also came slightly higher than usual. Importantly, this capital consumption for the right reason as it is driven by profitable growth. We would like to underscore this. I mean, it's 57 basis points, much higher than usual, because we have grown much higher than usual, and that's good, as long as the growth is a profitable growth. And on that one, again, we remain highly disciplined in the use of capital as it is a scarce resource. I shared with you before, we have developed this concept of micro-capital management framework, which ensures that at the most granular level, The level of every single loan, again I'm repeating but it's important, granted at any part of the world, capital is deployed profitably above the respective cost of equity in that respective market. In the page, other impacts, marginally positive, adding around four basis points, as negative market-related impacts were more than offset by the positive credit in OSI from hyperinflationary countries and higher minority interests. Regulatory impacts, we have basically advanced this to you, I think, two quarters ago, but we added 56 basis points, somewhat above the original expectations that we shared with you during the, again, July presentation, I think it was. These effects are technical in nature and mainly reflect the reversion of some portfolios to standard and to foundation in Spain and in Mexico. As a result, CET1 reached 1375 in December 2025 before capital distributions. Then you deduct the 4 billion euros of extraordinary share buyback program. A clear demonstration of our commitment to shareholder returns and to get back to our capital target. But this reduced the CET1 by 105 basis points, taking us to 1270. Slide 17 on shareholder distributions. In line with our payout policy, I'm very pleased to announce that the proposal to be submitted to the governing bodies contemplates a total regular distribution of 5.2 billion euros for 2025, equivalent to a 50% payout, the upper end of our distribution policy. The distribution will be fully paid in cash, amounting to 92 cents per share, which represents a 31% increase versus the 2024 cash dividend. And this implies a final dividend of 60 euro cents per share to be paid in April 2026, complementing the 32 euro cents per share that we have distributed back in November. In short, I mean, by far the highest dividend of our history. And in addition, we continue to execute the extraordinary share buyback program, 4 billion euros announced last December, of which the first tranche of 1.5 billion euros is already being executed, again, as a share buyback program. Then page number 19, as you know, in the second quarter of 2025 in July, we set our ambitious financial goals for the 2025-2028 period. We are completely in track of those numbers. We are still in the first year of the program, but as compared to the numbers we had in the plan for 2025, we are performing in line with our original expectations, in some better, but overall in line with our original expectations in all of the metrics that you see on the page. And with this, I pass over to Luisa for the business areas.

Thank you very much, Onur, and good morning, everyone. Let's start with Spain, which has delivered outstanding results in 2025. Net profit grew at a double-digit number, reaching €4.1 billion for the year, driven by strong business dynamics, with loans up 8% year-on-year, more than offsetting some margin pressure in a declining rate environment. This was further supported by robust fees, contained costs, and improving asset quality trends. The fourth quarter was particularly solid, with net profit exceeding the €1 billion mark. Looking to quarterly dynamics, Net interest income remained highly resilient, supported by continued commercial momentum. Loan growth remained very solid, supported by strong new production up 9% quarter on quarter. Loan balances evolved positively across the board, with particularly strength in consumer and across the enterprise segments. This translated into further market share gains in the most profitable segments. to highlight the evolution in the enterprise segment, where we have successfully closed the gap with the overall loan market share, gaining 60 basis points of market share in the year. Robust fee income driven by sustained growth in asset management and insurance fees, along with the recognition in the quarter of asset management success fees. On costs, expenses remained well-contained, growing by 1.9% if we exclude the positive one-off related to VAT calculations recorded in the second quarter. The quarterly increase mainly reflects year-end adjustments, variable compensation accrual according to the strong performance in the year. Overall, efficiency remained best in class with cost-to-income ratio at 33.1%. Finally, we continue to see positive trends in asset quality. The MPL ratio declined, coverage increased, and the cost of risk improved to 34 basis points in line with guidance. Turning to Mexico. 2025 was a remarkable year for Mexico with a very strong performance despite a challenging macro environment. On a full year basis, earnings were supported by robust core revenue growth, up by 8% year over year, driven by strong activity momentum outpacing peers, leading to continued market share gains. Total market share reached 25.6%, increasing by close to 30 basis points over the year, while total deposit market share also increased by close to 70 basis points. Looking into the fourth quarter, net profit reached 1.4 billion euros, up close to 5% quarter-on-quarter, supported by very solid activity dynamics. Loan book growth accelerated in the final quarter, increasing by 4%, excluding the FX impact, with sound performance both in the retail and enterprise segments. Total deposits grew by 5.4%, quarter on quarter, outpacing loan growth, driven by strong inflows in retail deposits, particularly the band deposits. Cost of deposits declined further in the quarter, supported by lower interest rates and an improved deposit mix. All in, this translated into strong gross income growth of close to 6% quarter on quarter. Turning to costs, the increase in expenses during the quarter, as in Spain, and by the way, in the other geographies as well, mainly reflects year-end adjustments in the variable compensation accrual. Efficiency levels remain outstanding, with the cost-to-income ratio stable at 30% in the year and in line with guidance. Finally, asset quality remained solid with a flattish MPL ratio in the year, higher coverage levels, and broadly stable cost of risk. Moving now to Turkey. The franchise delivered a net profit of 805 million euros in the year, representing a significant improvement compared to 2024. The improvement in earnings is mainly supported by a strong increase in net interest income, underpinned by higher activity levels and a significant recovery in the TAL customer spread in Turkish Lira, in a context of declining interest rates. Fee income remained robust, supported by growing activity. In addition, the negative impacts from hyperinflation adjustment continue to decline, reflecting the ongoing disinflation process in the country. Cost of risk stood at 194 basis points in 2025, reflecting still elevated provisioning needs in the retail portfolios following a long period of negative real interest rates. Finally, the effective tax rate increased significantly in the fourth quarter by the full year impact of the recently announced tax code change, which Onur already mentioned, and weighed on guaranteed UVA earnings at the end of the year. Let's turn now to South America. The region delivered a strong performance in 2025. Net profit reached 726 million euros, growing by 14.3% year-on-year, mainly supported by earnings improvement in both Peru and Colombia, as well as lower negative impact of hyperinflation adjustment in Argentina as this inflation process continues. Core revenues dynamics were very positive in Peru and Colombia, growing at mid-single-digit year-on-year in current euros, supported by solid long growth and wider spreads. Net interest income in the year is affected by Argentina, reflecting a lower contribution from the securities portfolio and some compression in customer spread over the year, despite the recovery observed in the fourth quarter. Robust fee income across the region, supported by the rollout of new initiatives, aimed at reinforcing fee generation and improving efficiency. The cost-to-income ratio improved to 43.9% in 2025. Turning to asset quality, trends continued to improve in Peru and Colombia, while in Argentina, provisioning requirements in the retail portfolio remained high, leading to adjustments in the risk appetite for this segment. Overall, risk indicators improved across the region, with the NPL ratio declining to 4%, coverage increasing to above 90%, and the cost of risk improving to 250 basis points. All in all, South America continues to show increasingly positive dynamics, reinforcing our confidence in the region's outlook going forward. Going now to Rest of Business. In 2025, Rest of Business delivered strong net profit of €627 million, compared to €485 million in 2024. The strong performance was driven by solid activity across geographies. Loan growth remained healthy with important contributions, corporate lending, transactional banking, project finance. Funding dynamics were also positive across the board. The strong momentum translated into robust revenue growth. Net interest income increased by 15.9% year over year, supported by higher volumes and disciplined price management. The income also showed remarkable growth with positive trends across countries driven by both investment banking and global transactional banking. On cost, expense evolution reflects the rollout of our strategic growth plans, including continued investments to reinforce our capabilities and growth plans going forward. Risk metrics remain very solid. Cost of risk stood at 16 basis points in 2025, broadly stable year on year. Overall, rest of business continues to show very positive momentum. Back to you.