Banco Bilbao Vizcaya Argentaria SA (BBVA) reported a rise in quarterly profit, supported by continued credit business expansion and solid performance in its core markets. This helped cushion the impact of rising costs and increased provisions.

The Spanish bank derives more than half of its business revenue from markets outside Europe. First-quarter net profit increased by 11% year-on-year to €2.99 billion (approximately $3.49 billion), exceeding the consensus analyst estimate of €2.8 billion.

Total operating income for the quarter rose 14% year-on-year to €10.65 billion, also surpassing analyst expectations of €10.05 billion.

Revenue growth was primarily driven by two segments: net interest income achieved double-digit growth, while net fee and commission income from asset management, payments, and insurance businesses also increased.

Spain and Mexico, which contribute about two-thirds of the bank's revenue, both saw growth in corporate and consumer lending. Additionally, performances improved in Turkey and South American branches, and corporate and investment banking business continued to expand.

Operating expenses climbed 14% year-on-year to €4.05 billion, partly due to a voluntary redundancy plan in Spain.

The bank set aside €1.82 billion in loan loss provisions, an increase of approximately one-third compared to the previous year, mainly reflecting higher risk reserves aligned with the growth of its credit portfolio.

Chief Executive Officer Onur Genç stated, "This quarter's results demonstrate the steady execution of our strategic plan, keeping us on track to meet our 2028 targets."

The group slightly adjusted its guidance for tangible equity return, a key profitability metric. It now expects the metric to exceed 20% this year, compared to a previous forecast of close to 20%. The bank's tangible equity return for the first quarter already reached 21.7%.

BBVA has a broad international presence. Last year, it attempted to acquire the Spanish mid-sized bank Banco de Sabadell, but the deal was not completed. The acquisition was intended to increase its domestic scale and reduce reliance on emerging markets, which offer higher growth but also carry currency volatility risks. The group has since shifted its focus to organic growth and increasing capital returns to shareholders.

The Madrid-based bank announced it will commence the final tranche of its €4 billion share buyback program early next week, with this tranche amounting to up to €1.46 billion.

Despite overall weakness in the European banking sector due to oil price fluctuations and mixed corporate earnings, BBVA's shares rose more than 1% on Thursday.