Mexico Lifts BBVA Despite Turkish Risks

Spanish banking group BBVA reported a 19% increase in third-quarter profit on Thursday, supported by stronger lending income and growth in Mexico, although rising credit provisions in Turkey unsettled investors.

Net profit reached €3.02 billion during the July-to-September period, broadly matching analysts' expectations of €3.01 billion. Group net interest income, the difference between revenue earned on loans and the cost of deposits, climbed 22% to €8.08 billion. Mexico, BBVA's largest market, delivered a 19% increase in profit, helped by lending growth and a stronger peso against the euro.

Performance elsewhere was less encouraging. Profit in Spain declined 5.5%, partly reflecting a sharp reduction in trading income. In Turkey, earnings increased 9% to €258 million, but provisions for potentially troubled loans jumped 74% amid persistent inflation and economic uncertainty. Across the group, loan-loss provisions rose 24% to €1.95 billion, exceeding forecasts. BBVA shares fell as much as 6% following the announcement.

The contrasting results highlight both the advantages and vulnerabilities of BBVA's international business model. Mexico continues to provide substantial earnings growth, helping offset weaker conditions in Europe, while Turkey introduces greater uncertainty around credit quality. The bank reported a return on tangible equity of 22%, indicating continued profitability despite those pressures. Maintaining that performance will depend partly on how effectively BBVA manages lending risks across its emerging markets while preserving the revenue growth that has supported its recent financial results.