S&P Upgrades BBVA's Rating to A+ With Stable Outlook

Strategic Insights -

The rating agency Standard & Poor's has upgraded BBVA's rating by one notch, from A to A+, matching Spain's sovereign rating, with a stable outlook. This upgrade is driven by BBVA's solid financial strength, which is now on par with larger and more diversified European and global peers. The bank's solid volume growth, competitive advantage, growing margins, and strong digital capabilities all contribute to its ability to deliver sustainable positive results over time.

Key Takeaways:

  • S&P has upgraded BBVA's rating to A+ from A, matching Spain's sovereign rating, with a stable outlook.
  • BBVA's financial strength is now on par with larger and more diversified European and global peers, according to S&P.
  • The bank's solid volume growth, competitive advantage, growing margins, and strong digital capabilities contribute to its ability to deliver sustainable positive results over time.
  • BBVA earns EUR5.45 billion through June, expects accumulated profit of EUR48 billion for 2025-2028, with an average ROTE of about 22 percent.
  • S&P values BBVA's profitability levels, with an ROE of 19.5 percent as of June 2025, which is well above the 14.3 percent average for comparable European banks.
  • The agency expects BBVA's strategic focus and consistent execution to enable it to maintain robust profitability over the next couple of years.
  • The proposed acquisition of Banco Sabadell would provide BBVA with the opportunity to increase its scale in its home market, strengthen its franchise, and moderately rebalance its footprint toward more stable economies.
  • S&P believes that the deal would provide an opportunity to boost efficiency and returns, despite the Spanish government's condition to maintain independent management of both banks for at least three years.

Statistics:

  • BBVA's financial strength is now on par with larger and more diversified European and global peers, as of June 2025.
  • The bank's ROE is 19.5 percent as of June 2025, which is well above the 14.3 percent average for comparable European banks.
  • BBVA earns EUR5.45 billion through June, expecting accumulated profit of EUR48 billion for 2025-2028, with an average ROTE of about 22 percent.
  • The bank's NPL ratio is 3.2 percent, which is the lowest in the past decade, as of June 2025.
  • BBVA's cost to income is expected to be below 45 percent, benefiting from its strong digital focus and advanced digital proposition.

Sources:

  • S&P (Standard & Poor's)
  • ENPublishing - http://www.enpublishing.co.uk
  • M2 Communications - http://www.m2.co.uk