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Bond Market News
BBVA Upgraded to A- by Fitch
October 8, 2025
BBVA was upgraded by a notch to A- from BBB+ by Fitch. The upgrade reflects an improved assessment of Spain’s operating environment and BBVA’s strong earnings diversification. It also acknowledges the bank’s resilient franchise, diversified operations, and robust profitability, supported by its presence in Spain, Mexico, Turkey, and South America. According to Fitch, the bank’s earnings performance remains among the best in its peer group, with operating profit projected to approach 4% of risk-weighted assets in 2025–2026, driven by growth in EMs, higher fee income, and cost efficiency. BBVA’s CET1 ratio of 13.3% (as of end-June 2025) is backed by solid internal capital generation and self-sufficient subsidiaries under its multiple point-of-entry (MPE) structure. The bank’s funding profile remains strong, anchored by stable local deposits, diversified wholesale access, and sound liquidity coverage across markets, the rating agency said. However, Fitch noted weaker capitalisation and asset quality compared to European peers due to BBVA’s significant EM exposure, which accounts for about 40% of total assets and loans, though this could fall to 30% if the Banco Sabadell acquisition proceeds. Last week, Moody’s upgraded BBVA to A2, along with other Spanish banks.
BBVA’s bonds traded stable with its 7.75% Perp at 106.2, yielding 6.53%
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