Banco Bilbao Vizcaya Argentaria S.A.

Good morning, everyone, and welcome to BBVA's third quarter results presentation. I'm joined today by our CEO, Onur Genc, and our CFO, Gonzalo Rodriguez. As in previous quarters, Onur and Gonzalo will walk you through the quarterly figures, and we will then open the line for the Q&A session. With that, I will turn it over to Onur. Onur, please.

Thank you, Patricia. Good morning to everyone. Welcome and thank you for joining BBVA's third quarter 2026 earnings webcast. Before going into the presentation, sitting next to me is Gonzalo. I believe most of you have already had the opportunity to meet him at different events since he took on the role. But I would like to welcome Gonzalo to his first earnings webcast as the CFO of BBVA Group. Gonzalo, welcome. Regarding the quarterly results, let's jump into it, starting with slide number three. Slide number three, on the left-hand side of the page, basically what you see is we continue to deliver outstanding value creation for our shareholders. Our tangible book value per share plus dividends increased by 14.3% year over year. Very strong figure already, but if you exclude the impact of the share buybacks, you arrive at nearly 20% growth year over year, indicating an exceptional underlying organic growth of tangible book value. On the right-hand side, our profitability ratios remain at outstanding levels with a return on tangible equity of 22% and return on equity of 20.8% for the first nine months of the year, placing BBVA once again as the most profitable large bank in Europe. On page number 4, on the left hand side, another basically 3 billion plus net attributable profit quarter, which represents a 19.1% increase year over year, the quarterly profit. Earnings per share at the bottom of the page, it grew even faster at nearly 23.9% year on year, supported by the share buyback programs that we are executing, that we have executed, as you know, in the last year. On the right-hand side, our CT1 capital ratio decreased from the pro forma 1241 in June to 1221. During the quarter, as we will discuss in a second, strong earnings generation was more than offset by the capital consumed by our excellent, excellent profitable growth. Moving to page number five. Let me highlight the outstanding and sustained evolution of our earnings over the past few years. As you can see on the left-hand side, we have surpassed the 9 billion euros mark in the first nine months of 2026, up 13.6% year-over-year. But more importantly, we remain positive about our earnings outlook going forward. The macro in general remains supportive across our footprint with good prospects for continued lending growth in Mexico, in Spain, and in many other geographies that we are in. At the same time, interest rate headwinds are gradually fading in Mexico and Spain, markets where our NAI has a clear positive correlation with interest rates. This means that looking forward, volume growth should increasingly translate into earnings growth. While part of our lending growth has so far in the past few years has so far helped offset margin compression, we expect to capture more of this positive contribution to our P&L, the contribution of volume in the future. Moving to page number six. This slide illustrates what I believe is BBVA's truly unique profile, which is becoming even more evident this quarter. Our ability to combine strong growth with best-in-class profitability, consistently over years. On the left-hand side, you can see the acceleration in our long growth since December 2023, reaching more than 20% year-on-year in current euros at the end of last quarter. And while our European peers are also growing faster, BVA continues to outperform, supported by our diversified presence in relatively low-leverage countries, the strength of our leading franchises, our growth in the enterprise segment per our strategic plan, and our consistent ability to gain new customers. And what is particularly remarkable is that we are delivering this growth while maintaining outstanding profitability. On the right side of the page, our 22% return on tangible equity stands well above our cost of equity and compares very well with the 15.6% for our European peers, an important gap that we have consistently maintained over time. On page number 7, this slide summarizes the key financial messages of the quarter, which I will cover in more detail in the following slides. So let me move directly to the next page, page number 8, the summarized P&L for the quarter. As usual, I would highlight the excellent performance of the core revenues with NAI, especially with NAI growing 16.5% year-over-year and 5.7% quarter-over-quarter in constant. Serving as the main driver behind our net attributable profit growth. Slide number nine, the summarized P&L for the first nine months of 2026. Similar message, similar to quarterly evolution. Our excellent core revenue growth is the fundamental reason behind the record 9 billion, 66 billion euros of net attributable profit. Moving to slide number 10. You see the quarterly evolution of each revenue component, starting with net interest income. It is worth highlighting the acceleration of NAI growth in the last quarter, supported by the strong activity growth. Turning to net fees and commissions, we recorded a 12.4% increase year-over-year, with payments and asset management business continuing to be the main growth drivers here. Net trading income increased by 5.7% year-over-year, with a slightly positive quarterly evolution, as the positive contributions coming from the FX hedges are practically offset by the muted global markets activity. All-in gross income increased by 15.7% year-over-year, and 4.2% versus the previous quarter. Moving to slide number 11, for Spain and Mexico, our two largest markets, let me focus on activity and loan growth, which again remain the key drivers of our net interest income growth. In Spain, loan growth remains very strong at 7.3% year over year, while in Mexico it further accelerated to 12% growth. In both markets, growth continues to be driven by the most profitable segments. You also see that in the middle of the page. Consumer and credit cards on the retail side and enterprises on the wholesale side, most profitable segments, they are growing even faster. Coupled with the stabilization of interest rates, the very strong activity growth translates into a very strong quarterly growth of NAI in both markets. In fact, if you annualize the last quarter growth of NAI in both markets, you arrive at a higher run rate of annual growth, which again makes us positive for the quarters to come. Moving to page 12, on efficiency, on the left-hand side, gross income grew by 16.3%, as we discussed in the first nine months, year over year, while expenses increased by 16%, leading to positive jobs, even including the non-recurring items recorded during the year. On the right side of the slide, our efficiency ratio slightly improved by nine basis points to 37.9% in annual comparison. Excluding the non-recurring effects described in the footnote, the true improvement in the efficiency ratio would have been 81 basis points which we also value a lot. In short, we continue to deliver an outstanding efficiency ratio while investing on growth and transformation. Asset quality metrics remained stable throughout the quarter in a context of very good growth in lending. Starting with the cost of risk on the bottom left, it remained broadly stable at 144 basis points for the first nine months of the year, in line with our expectations. The quarterly evolution of absolute impairments shows an increase due to the impact of a large portfolio sale that we have done, if you remember, in the second quarter. On the bottom right, our NPL ratio also remained stable at 2.6%, while the coverage ratio stood at 84%, basically overall broad stability. Slide number 14, on capital, our CET1 ratio stood at 1221 compared to 1241 in June, the pro forma after deducting the 2 billion extraordinary share buyback currently underway. This represents a 20 basis point, as we discussed in the first pages, 20 basis point reduction during the quarter. So focusing on that difference in the waterfall, main impacts of the quarter. Number one, the strong results that contributes 71 basis points. Dividend accrual and 81 coupons, deducting 38 basis points. Then, as you see on the page, minus 44 basis points from RWA's growth. Again, reflecting our exceptional lending activity in the quarter, deploying capital to profitable growth, enabling our future earnings and future capital generation, as we discuss all the time. This figure, the 44, its net of SRTs, it includes the result of SRTs, basically, which contributed plus three basis points, which is, as you know, a somewhat smaller figure than other quarters due to summer seasonality. and finally, minus 9 basis points in the other category, which is also a bit different from other quarters. It includes a relatively large minus 22 basis points impact from the market movements, especially the sharp movement of the interest rate curves and the currencies. On shareholder remuneration, on the right-hand side, we paid a record interim dividend of 37 euro cents per share on October 15th, and we are now executing the second 1 billion euro tranche of the extraordinary 2 billion euro share buyback program that we announced last quarter. Moving to page number 15, let me briefly also update you on our AI transformation strategy. As I mentioned last quarter and also even the quarter before, at BBVA, we are determined to lead the AI transformation in banking as we did in digital transformation. We held our BBVA strategic talk on AI, on other things but including AI, on October 6th. Thank you very much. We are already starting to see very tangible, positive impact. Using AI, we are improving customer experience, achieving high productivity by redesigning our processes, and utilizing AI tools broadly across the bank. Just to give you a couple of examples that are listed here, our AI-powered voice assistant is achieving close to a 90% successful resolution rate in pilot interactions, While some of our first AI agents are reducing the time for the preparation of a financial program on the risk side for the enterprises by as much as 30%. And the second message in this page is that we believe the real opportunity is to scale these use cases and the results across the entire bank. and in a controlled but facilitated manner. And this is precisely what the frame, as we call it, will allow us to do. We are already making headway in industrializing AI and this will enable us to build, deploy and manage the AI agents at scale, again faster, but with full control. And more to come on this one in the following quarters. And finally, moving to page number 16, regarding the evolution of our financial goals for the 2025-2028 period. This page is very important to us, that's why we bring it to you every quarter. As usual, I will not go through each one of them, but we do have the full confidence to beat our goals at the end of the planning period, I guess, is the main message. And now, for the business areas update, I turn it to Gonzalo. Gonzalo.

Thank you very much, Onur, and good morning, everyone. Let me start with Spain, where net profit reached $934 million in the quarter, with nine-month earnings reaching $3.1 billion. That is up 2.3% year-on-year, excluding two non-requiring items. First of all, VAT adjustments in the second quarter of both this year and last year, and second, residency costs in the first quarter. Overall, in Spain, solid earnings performance. This performance is supported by strong core revenue growth and commercial momentum. On lending, lending grew by 7.3% year-on-year, given by sustained growth across the most profitable segments, with consumer and enterprise lending both growing at around 10%. On the liability side, deposits grew 5.8% year-on-year, driven by sustained growth in retail deposits through customer acquisition, through our focus on customers' transactionality, and additionally whole sign-time deposits. Now turning to the P&L in Spain, NII increased by 3.4% year-on-year and 1.2% quarter-on-quarter, supported by robust lending activity. Customer spread improved slightly in the quarter, benefiting from higher lending yields due to the pricing of our new loan production. Deposit costs also increased, mainly reflecting the immediate repricing of wholesale deposits, while retail deposit costs remain broadly stable in the quarter. Looking ahead, we expect further support for customer spread from the gradual repricing of our mortgage portfolio, which is still at an early stage. As for fees, net commissions grew 2.3% year-on-year. The quarterly decline mainly reflects lower CIB fees, partly offset by growth in asset management. Costs remain well controlled in Spain, increasing by 4.5% year-on-year, excluding the non-recurring items. And finally, asset quality metrics remain very solid in Spain. Higher impairments in the quarter is explained by the positive one-off of a portfolio sale in the second quarter, and cost of risk stood at 33 basis points within our full year guidance. So overall, Spain continues to deliver a very solid performance, fully in line with our guidance. Turning now to Mexico, on slide 19, the business in Mexico delivered again another strong quarter, driven by lending growth and solid core revenues. Net profit in Mexico totaled 4.5 billion in the first nine months, up by 8.4% year-on-year in constant euros. Long growth accelerated to 12% year-on-year, supported by stronger demand from mid-sized companies and retail lending, which also maintained very solid momentum, with consumer and SME segments growing at around 2% in the quarter. This strong activity translated into solid revenue performance. Let me elaborate this a bit further. NII increased by 2.6% quarter-on-quarter and 8.5% year-on-year, with strong lending growth, more than offsetting the remaining pressure on customer spread from the easing rate cycle. As Onur mentioned before, we expect lending growth to provide further support to NII as the easing cycle has come to an end. Fee remains broadly stable in the quarter due to lower CIV fees following a strong second quarter while maintaining a solid year-on-year growth of 7%. At the operating level, gross income grew by 8.5% year-on-year with a cost-to-income ratio of 30.7%, supporting outstanding efficiency in Mexico while we continue to invest for future growth in this country. Now moving to asset quality, the key message is that underlying trends remain very sound. Cost of risk declined to 319 basis points year-to-date, mostly benefiting from provision releases following the annual model parameter update. Underlying cost of risk stood around 330 basis points in line with our expectations. So overall, Mexico continues to deliver strong and profitable growth, and we remain on track to meet our full year guidance in Mexico. Moving now to Turkey, on slide 20, net profit in Turkey reached close to 260 million in the third quarter, with cumulative earnings of 799 million. That is close to up 22% year-on-year in current euros. Looking first at revenues, we deliver strong NII growth, up 16.8% quarter-on-quarter. NII benefited from a significant improvement in Turkey's lira customer spread, reflecting the normalization of funding condition and also our active funding cost optimization strategy. Higher lending volumes also contributed positively and fees in Turkey remained broadly stable in the quarter. On asset quality, retail credit risk remains under pressure in a higher for longer interest rate environment and cost of risk increased to 255 basis points year-to-date explained by elevated provisioning needs in retail portfolios and lower recoveries in wholesale. As a result, cost of risk in Turkey could come slightly above our guidance of 220 basis points for the year, reflecting a more prolonged period of elevated rates that we initially anticipated. Nevertheless, we remain confident in delivering our net profit guidance in Turkey of around 1 billion with a downward bias. Given our positive sensitivity to lower rates in Turkey, the recent easing cycle should support customer spread and NII growth going forward. Now moving to South America on slide 21. The region continues to deliver strong year-on-year earnings growth. Net profit reached 265 million in the third quarter, taking the nine-month total to 821 million, up 42% year-on-year in current euros. This performance in South America was supported by solid core revenue generation across our main franchises. NII benefited from sustained lending growth, with the loan book increasing by close to 15% year on year in constant euros, together with improved customer spread, particularly in Colombia and in Peru. Fincom also contributed positively, driven by growth in payments and transactional service fees. So overall, solid income growth in South America that combined with disciplined cost management brought the region's cost-to-income ratio to 41.5% in the first nine months of the year. Thank you very much. For the full year in South America, cost of risk could come slightly above our guidance of below 250 basis points, mainly depending on asset quality developments in Argentina. However, a stronger gross income performance should offset this impact in the region. So overall, in short, we remain confident in the region's earnings contribution to the group. And finally, let me turn to rest of business on slide 22. The unit delivered another strong quarter with net profit reaching 291 million, up 7% quarter on quarter, and 800 million for the first nine months. Lending continues to grow strongly across geographies, reflecting the strength of our global CIB franchise and our ability to support corporate clients as they grow internationally. As we have been emphasizing, our CIB strategy is about corporate banking. Our aim is to be a key partner for wholesale clients. And in fact, close to 90% of our CIB business revenues are client-driven, with close to 40% involving cross-border activity. This strong commercial momentum continues to translate into solid revenue growth. Gross income increased close to 12% quarter-on-quarter, supported by a strong NII and higher NTI. Expenses continue to reflect investments in strategic initiatives and key capabilities while maintaining positive jobs year-on-year. Finally, on asset quality, asset quality remains very strong, with cost of risk declining to 11 basis points year-to-date. So overall, in short, rest of business continues to deliver a strong and profitable growth supported by the strength of our CIP franchise. And now, back to Onur for the final remarks.