Banco Bilbao Vizcaya Argentaria SA (BBVA) experienced a significant pre-market decline of 5.53% on Thursday. The sharp drop followed the Spanish bank's fourth-quarter earnings release, which revealed underlying pressures on profitability and raised questions about its future growth trajectory.
The decline appears driven by several factors highlighted in the bank's financial report and analyst commentary. Most notably, BBVA reported a 19% surge in provisions compared to the same period last year, primarily driven by its operations in Turkey and Mexico. This increase in risk provisions is pressuring the bank's profitability despite overall revenue growth. Additionally, the bank's sales of $11.403 billion in the quarter missed analyst estimates of $11.550 billion.
Market concerns have been amplified by the collapse of BBVA's plan to acquire smaller rival Banco de Sabadell, a deal pursued for over a year. The failed acquisition has reignited worries about the bank's exposure to emerging markets and its ability to sustain growth. Analysts have expressed skepticism about the stock's potential for further advancement, with RBC Capital Markets noting that BBVA's attractive financial profile is already largely reflected in consensus estimates and that further share price increases could be difficult to achieve given current trading levels.
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