Spanish lender BBVA’s CEO said Thursday that Garanti is a "critical” component of the group, while rejecting comments on speculation about a possible sale of its Turkish unit.
Onur Genç said the Turkish and Mexican markets were performing much better than expected earlier this year.
The remarks came after BBVA reported solid underlying results in the third quarter. Net profit in Türkiye rose almost three-fold backed by higher lending income, and the bank stuck to its previous guidance of reaching net profit below 1 billion euros ($1.16 billion) in 2025.
Genç noted that while Mexico is not a large market, its proximity to a major economy like the United States offers an advantage. Similarly, he said Türkiye's closeness to Europe makes it a cost-effective production hub for the European market.
Genç said that the Turkish economy is undergoing a normalization process, but noted risks related to the exchange rate.
"Türkiye is on a path of normalization, though there are still many risks around currency, but we have the best bank in the country," he added.
Garanti BBVA is the second-largest private bank in Türkiye.
Higher lending income in main markets
Earlier Thursday, BBVA said it expected its lending income to keep growing in 2025 in Mexico and Spain after the July-September results were somewhat overshadowed by a lower contribution from its Mexican unit.
The second-biggest lender in the eurozone, after surpassing on Wednesday 100 billion euros in market value reported a 4% year-over-year decline in net profit to 2.53 billion euros in the third quarter.
BBVA and rival Santander have relied on Latin American markets to offset pressure from lower interest rates in the eurozone but currency depreciations in emerging markets have sometimes impacted results.
Net interest income (NII) – the difference between earnings on loans minus deposit costs – rose 13% year-over-year in the quarter to 6.64 billion euros, above forecasts of 6.43 billion euros, thanks to solid underlying loan growth dynamics.
Shares in BBVA were down more than 2% on Thursday after having risen 83% so far this year. Barclays highlighted that a solid NII was not enough to offset higher costs and provisions.
Depreciation in the Mexican peso drove net profit in its main market down 2.8% though in constant euros it was up 1%. Lending income rose. BBVA maintained its outlook for high-single digit growth in NII in Mexico in 2025.
Net profit in Argentina fell 63% following the decline in the peso, which remains one of the biggest risk factors.
Though net profit in Spain fell 7% on lower trading gains, net interest income rose 4%. BBVA raised its NII outlook for this country to a low-single digit growth from a previously slightly positive outlook backed by loan growth.
Failed Sabadell bid 'missed opportunity'
Following the collapse of its bid for Sabadell, BBVA is focusing on its four-year plan, which also envisages shareholder distribution of 36 billion euros.
This month's resounding rejection by Sabadell shareholders dashed BBVA's dream of creating a new European banking colossus.
Its executives on Thursday said the bank would be "purely" focusing on organic growth following the failed takeover bid, which they called a "missed opportunity."
BBVA said it would resume pending shareholder remuneration of 993 million euros from Oct. 31 and would launch a "significant" additional share buyback later.
BBVA's fully-loaded core-tier 1 capital ratio, the strictest measure of solvency, rose to 13.42% as of the end of September from 13.34% as of the end of June.