BBVA Overview

International Stock Performance: In 2025, international stocks, particularly in export-driven countries like Korea and China, experienced strong gains, surpassing the performance of the S&P 500 despite high U.S. tariffs.

Future Market Outlook: There is potential for further rallies in non-U.S. markets in 2026, driven by decreasing interest rates and increasing corporate earnings.

Extraordinary Share Buyback Program: BBVA is launching a €3.96 billion share buyback program on December 22, marking the largest buyback in the company's history after receiving necessary approvals.

Future Shareholder Distributions: This buyback is part of a broader plan where BBVA anticipates distributing €36 billion to shareholders from 2025 to 2028, which includes both regular and additional distributions.

Strategic Partnership: Banco Bilbao Vizcaya Argentaria (BBVA) has formed a strategic partnership with OpenAI to enhance AI applications in banking, focusing on customer service, internal operations, and employee productivity.

AI Integration: The collaboration aims to create an intelligent conversational assistant for customer financial activities, streamline risk analysis, and develop tools for personalized support, while also extending the use of ChatGPT Enterprise to BBVA's workforce.

Customer Experience Enhancement: BBVA's chairman emphasized the ambition to integrate AI deeply into banking operations, aiming for a more proactive and personalized customer experience.

Industry Benchmark: The partnership is set to establish a new standard for AI-driven transformation in financial services, with OpenAI's CEO highlighting BBVA as a model for rapid AI adoption in large financial institutions.

Historic Rally in European Banks: European bank equities have surged in 2025, with the EURO STOXX Banks Index up 76% year-to-date, marking one of the strongest performances in the sector's history, driven by positive investor sentiment and broad-based gains across all constituents.

Macroeconomic Factors Supporting Growth: The rally is attributed to favorable macroeconomic conditions, including high interest rates supporting margins, strong economic growth, and robust capital buffers, which have allowed banks to increase dividends and share buybacks.

Valuation and Investment Outlook: Despite the significant gains, European banks are still seen as undervalued, with analysts predicting continued double-digit earnings growth and a focus on growth and efficiency in 2026, moving away from rate and credit concerns.

Key Performers and Future Potential: Notable performers include Société Générale and Commerzbank, with analysts highlighting stocks like UBS Group and UniCredit as having substantial upside potential, suggesting that the sector's rally may continue into the future.