By Elena Vardon

Banco Bilbao Vizcaya Argentaria reported better-than-expected earnings for the first quarter of 2025 as revenue and profit saw double-digit percentage increases compared with a year prior.

The Spanish bank made a net profit of 2.70 billion euros ($3.08 billion) for the three months ended March 31 compared with 2.20 billion euros for the same period last year, ahead of expectations of a 2.43 billion euro figure taken from a company-compiled consensus.

Gross income--its top-line figure--rose to 9.32 billion euros from 8.22 billion euros, beating consensus' 9.04 billion euros on higher commissions, fees and trading on the back of stronger market activity.

Net interest income--the difference between what banks earn on loans and what they pay clients for deposits, which is a key revenue driver--dipped on-year as central banks lowered interest rates, though the decline was limited by higher loan volumes.

"The increase in our lending activity is a clear highlight, particularly in Mexico and Spain," Chief Executive Onur Genc said.

A lighter impact from Spain's banking tax compared to a year prior--when it booked the full 2024 levy in the first quarter--also contributed to the profit beat.

BBVA is Spain's second-biggest bank by market capitalization, though it generates more than half of its income from outside the country. The bank has been trying to buy smaller peer Banco Sabadell in a $12 billion-plus all-share deal to gain scale in its home market and lessen its reliance on Mexico, its largest market.

The hostile takeover battle has dragged for almost a year on pending regulatory approvals and the value of the bid has fluctuated given that it is tied to both banks' share price. Spain's competition regulator is expected to announce its decision this week.

The stock edged up as high as 1.5% in early exchanges, in line with analysts' positive initial reactions to the print despite the softer results from BBVA's Turkish operations. Shares reverted course and traded around 1% lower at midday at roughly 12.5 euros.

BBVA expects to keep its profitability levels around those of 2024, Genc said. Its return on tangible equity stood at 19.7% at the end of the year, and had risen to 20.2% over the first quarter.

The lender's common equity Tier 1 ratio--a key measure of balance-sheet strength--stood at 13.09% at the end of the quarter, above the 12.99% expected and the top end of its target range.

Write to Elena Vardon at elena.vardon@wsj.com

(END) Dow Jones Newswires

April 29, 2025 06:23 ET (10:23 GMT)

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