Company: BBVXF
Filing Date: 2025-09-10
Form Type: 425
Source: 0001193125-25-199850
Chunk: 3

Company: BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Filing Date: 2025-09-10
Form: 425
Chunk 3
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 a team, but every single loan that BBVA gives in any geography— and I was giving the example of any country actually you pick— but a loan that you give today in Peru, in my desktop I can go and I can check the return of that loan at the transaction level and at a client level for the return on capital of that client. So, the organic growth has to pass a certain return above cost of equity through the cycle. You can invest in a client, you have a pool of investment, but in the medium term you have to make sure that that client delivers returns. That’s the first principle: all the initiatives that consume capital have to deliver above cost of equity through the cycle. The second principle: capital is a scarce resource. They compete with each other— different initiatives who are basically demanding that capital— they have to compete with each other, and whichever is delivering the best return should get that capital. That’s the second principle that we have. With those two principles in mind, all else being equal— meaning at the same return levels— though, we have a preference. First, we prefer organic growth, because organic growth builds franchise value. You basically ensure the stability and long-term consistency of your returns. So, organic growth, all else being equal— I underline once again— organic growth comes number one. Then we go share buyback. Share buyback or any form of payout, but share buyback because it has no execution risk. Again, all else being equal, you do share buyback.

And then, if it makes strategic sense— and in that context, we like domestic consolidation, as we are trying to do with Sabadell. But going into new markets and so on, very difficult on those. But in-marketconsolidation— and if it makes sense also financially, strategically and financially— then you can do M&A. But in that order: organic growth, share buyback with very limited execution risk or no execution risk, and M&A, as long as it makes strategic sense and financial sense. That’s how we look into it. And together with the execution that we have been doing, this capital discipline and this way of being very rigid about these concepts— which we think is a good thing— we have delivered one of the best in the European banking tangible book value growth. As a bank, we have the highest return on tangible equity in Europe among the 15 largest European banks. BBVA is number one. And we do have the best TSR. If you