Takeaways:
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BBVA’s chairman signaled that excess capital could be returned to shareholders through an extraordinary dividend.
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Management views the 2020 sale of its U.S. subsidiary as a value-accretive decision that strengthened growth in core markets.
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BBVA continues to favor organic growth over large-scale acquisitions, citing faster growth than peers.
Excess Capital Opens the Door to Shareholder Returns
BBVA may be preparing the ground for an extraordinary dividend as capital levels exceed internal requirements. Chairman Carlos Torres said the bank’s combination of growth and capital strength differentiates it from peers, leaving room to reward shareholders beyond ordinary payouts.
The comments were made alongside the presentation of BBVA’s 2025 results and reflect growing confidence in the bank’s balance-sheet flexibility following several years of disciplined capital management.
U.S. Exit Framed as a Strategic Win
Torres reiterated that the sale of BBVA’s U.S. subsidiary in 2020 was the “right decision,” noting it generated strong returns and enabled the bank to reinforce its position in other markets. The business was sold to PNC Financial Services for more than €10 billion, at a time when valuation multiples in the U.S. were high relative to Europe.
According to Torres, BBVA had previously explored potential acquisitions in the U.S., but concluded that deals on offer would have diluted shareholders. Selling at attractive multiples, he argued, ultimately created more value than pursuing scale at any cost.
Scale Through Growth, Not Deals
While declining to comment directly on Santander’s recent U.S. acquisition activity, Torres emphasized that scale remains important in any banking market. However, BBVA’s approach centers on organic expansion rather than major corporate transactions.
Management believes the group is already achieving scale naturally by growing faster than competitors across its core geographies. This growth-led strategy, combined with strong capital generation, underpins the potential for additional shareholder distributions.
What It Means for Investors
An extraordinary dividend would signal confidence in BBVA’s capital position and earnings outlook, particularly as regulatory requirements stabilize and organic growth continues. Investors are likely to assess any such payout in the context of future growth investment needs, ongoing buyback potential, and the sustainability of excess capital generation.
At the same time, BBVA’s stance highlights a broader contrast in European banking strategies: prioritizing disciplined capital returns and organic growth over large, potentially dilutive acquisitions.
For a confidential discussion on how excess capital generation, dividend optionality, and organic growth strategies at European banks can be evaluated within a global portfolio allocation, contact our senior advisory team.
