Mexico
Highlights
- The strong growth in lending activity continues, with larger dynamism of the retail segment
- Positive performance of recurring revenues and other gross income components
- Improvement of risk indicators
- Quarterly attributable profit remains at high levels
BUSINESS ACTIVITY (1)
(VARIATION AT CONSTANT EXCHANGE RATE COMPARED TO 31-12-24)
(1) Excluding repos.
NET INTEREST INCOME / AVERAGE TOTAL ASSETS
(PERCENTAGE AT CONSTANT EXCHANGE RATE)
OPERATING INCOME
(MILLIONS OF EUROS AT CONSTANT EXCHANGE RATE)
(1) At current exchange rate: -7.7%.
NET ATTRIBUTABLE PROFIT (LOSS)
(MILLIONS OF EUROS AT CONSTANT EXCHANGE RATE)
(1) At current exchange rate: -7.6%.
| FINANCIAL STATEMENTS AND RELEVANT BUSINESS INDICATORS (MILLIONS OF EUROS AND PERCENTAGE) | ||||
|---|---|---|---|---|
| Income statement | 1Q25 | ∆ % | ∆ % (1) | 1Q24 |
| Net interest income | 2,767 | (7.7) | 7.6 | 2,999 |
| Net fees and commissions | 583 | (9.2) | 5.8 | 642 |
| Net trading income | 220 | 3.3 | 20.4 | 213 |
| Other operating income and expenses | 135 | 19.4 | 39.2 | 113 |
| Gross income | 3,705 | -6.6 | 8.9 | 3,967 |
| Operating expenses | (1,144) | (4.2) | 11.7 | (1,194) |
| Personnel expenses | (553) | (2.7) | 13.4 | (568) |
| Other administrative expenses | (483) | (3.0) | 13.1 | (498) |
| Depreciation | (108) | (15.1) | (1.0) | (127) |
| Operating income | 2,561 | -7.7 | 7.7 | 2,773 |
| Impairment on financial assets not measured at fair value through profit or loss | (696) | (7.5) | 7.8 | (752) |
| Provisions or reversal of provisions and other results | (14) | 16.5 | 35.8 | (12) |
| Profit (loss) before tax | 1,852 | -7.8 | 7.4 | 2,009 |
| Income tax | (520) | (8.5) | 6.7 | (568) |
| Profit (loss) for the period | 1,332 | -7.6 | 7.8 | 1,441 |
| Non-controlling interests | (0) | (5.4) | 10.3 | (0) |
| Net attributable profit (loss) | 1,332 | (7.6) | 7.8 | 1,441 |
Balance sheets | 31-03-25 | ∆ % | ∆ % (1) | 31-12-24 |
| Cash, cash balances at central banks and other demand deposits | 13,135 | 4.5 | 7.0 | 12,564 |
| Financial assets designated at fair value | 49,525 | (9.2) | (7.0) | 54,547 |
| Of which: Loans and advances | 2,408 | 15.4 | 18.1 | 2,088 |
| Financial assets at amortized cost | 93,824 | (0.8) | 1.5 | 94,595 |
| Of which: Loans and advances to customers | 88,522 | (0.2) | 2.1 | 88,725 |
| Tangible assets | 1,962 | (3.7) | (1.4) | 2,038 |
| Other assets | 4,461 | (5.6) | (3.4) | 4,726 |
| Total assets/liabilities and equity | 162,908 | (3.3) | (1.0) | 168,470 |
| Financial liabilities held for trading and designated at fair value through profit or loss | 24,943 | (19.2) | (17.3) | 30,885 |
| Deposits from central banks and credit institutions | 8,120 | (11.2) | (9.1) | 9,149 |
| Deposits from customers | 86,731 | 2.1 | 4.5 | 84,949 |
| Debt certificates | 10,917 | 1.9 | 4.3 | 10,717 |
| Other liabilities | 20,082 | (4.6) | (2.3) | 21,043 |
| Regulatory capital allocated | 12,115 | 3.3 | 5.8 | 11,727 |
Relevant business indicators | 31-03-25 | ∆ % | ∆ % sup>(1) | 31-12-24 |
| Performing loans and advances to customers under management (2) | 88,705 | (0.4) | 2.0 | 89,044 |
| Non-performing loans | 2,264 | (10.0) | (7.9) | 2,517 |
| Customer deposits under management (2) | 85,777 | 2.2 | 4.6 | 83,962 |
| Off-balance sheet funds (3) | 58,655 | 2.4 | 4.9 | 57,253 |
| Risk-weighted assets | 87,158 | (6.2) | (4.0) | 92,925 |
| Efficiency ratio (%) | 30.9 | 30.3 | ||
| NPL ratio (%) | 2.4 | 2.7 | ||
| NPL coverage ratio (%) | 129 | 121 | ||
| Cost of risk (%) | 3.05 | 3.39 | ||
(1) At constant exchange rate.
(2) Excluding repos.
(3) Includes mutual funds, customer portfolios and other off-balance sheet funds.
Macro and industry trends
BBVA Research forecasts GDP growth around 1.0% in 2025, after reaching 1.2% in 2024. The growth would be supported by private consumption, in a context where contained inflation (3.8% in March and with a slight additional moderation forecasted), would allow for additional cuts in benchmark interest rates, from 9.0% in April to around 7.5% in December. However, the deceleration of the economy during the first months of 2025, and above all, the tariffs imposed by the United States administration, suggest that growth could be below the actual forecasts. In any case, the tariffs applied to the Mexican exports could be lower than the ones imposed to China and other of the country's main competitors in the United States market, which could structurally benefit the Mexican economy.
Regarding the banking system, with data at the end of February 2025, the volume of credit to the non-financial private sector increased by 14.5% year-on-year, with growth in all the main portfolios: consumer credit (+18.6%), credit for home purchases (+6.9%) and credit to companies (+15.8%). Growth in total deposits (demand and time deposits) remained slightly below the growth in lending (+8.8% year-on-year February 2025), with growth in time deposits (+7.0%) and in demand deposits (+9.8%). The system's NPL ratio improved slightly to 2.23% in February 2025 and capital indicators are healthy.
Unless expressly stated otherwise, all the comments below on rates of variation, for both activity and results, will be given at constant exchange rate. These rates, together with variations at current exchange rates, can be found in the attached tables of financial statements and relevant business indicators.
Activity
The most relevant aspects related to the area's activity in the first quarter of 2025 were:
- Lending activity (performing loans under management) grew 2.0% between January and March 2025, with greater dynamism of the retail portfolio, which grew more than the wholesale portfolio (+2.6% versus +1.0%). This progress is largely explained by the boost in SME lending (as a result of specific initiatives to promote this segment) and by the good performance of consumer credit, which also contributed significantly to growth.
- With regard to the asset quality indicators, the NPL ratio stood at 2.4% at the end of March 2025, which represents a decrease of 26 basis points compared to the end of 2024, mainly explained by the reduction in the non-performing balance, as a result of the decrease in entries into NPLs and higher write-offs. On the other hand, the NPL coverage ratio was 129% at the end of March 2025, also above the end of 2024.
- Customer deposits under management were 4.7% above the balances at December 2024, mainly due to the evolution of demand deposits, the lowest cost deposits for BBVA Mexico, which grew 4.6% in the first quarter of the year and, to a lesser extent, to the growth in investment funds (+4.9% in the same period).
Results
BBVA Mexico achieved a cumulative net attributable profit of €1,332m at the end of March 2025, which represents a growth of 7.8% compared to the same period of the previous year, mainly due to the evolution of the net interest income.
The most relevant aspects of the year-on-year changes in the income statement as of the end of March 2025 are summarized below:
- Net interest income grew by 7.6%, as a result of the higher volumes in lending activity and the lower cost of customer funds and the wholesale financing.
- Net fees and commissions grew 5.8%, mainly favored by the revenues from asset management and wholesale activity.
- The contribution from NTI increased (+20.4%) including a better performance of Global Markets unit.
- Other operating income and expenses grew by 39.2%, driven by the favorable evolution of the insurance business.
- Operating expenses grew (+11.7%), due to both higher personnel expenses and the increase in general expenses, especially investments in technology.
- Loan-loss provisions increased (+7.8%), as a result of the dynamism of activity observed in the retail portfolio. The cumulative cost of risk at the end of March 2025 stood at 3.05%, a decrease of 34 basis points compared to that recorded at the end of December 2024.