Banco Bilbao Vizcaya Argentaria, S.A. (BBVA) Q3 2025 Earnings Report, Transcript and Summary

Good morning, and thank you for joining us for BBVA's third quarter results presentation. As every quarter, I'm pleased to be joined by our CEO, Onur Genc and our Group CFO, Luisa Gomez Bravo. We will start with a review of the key figures for the quarter, and then we will open the floor for your questions. So without further delay, let me hand it over to Onur. Onur Genç: Thank you, Patricia. Good morning to everyone. Welcome, and thank you for joining BBVA's Third Quarter 2025 Earnings Webcast. As always, let's jump into the slides, starting with Slide #3. And as always, starting with the value creation numbers on the left-hand side of the page, you can see the strong evolution of tangible book value per share plus dividends, which increased by 17% year-over-year and 4.5% in the quarter, in my view, excellent figures. On the right-hand side, you see the profitability ratios. They are sustained at very high levels with an industry-leading return on tangible equity of 19.7% and ROE of 18.8% in the first 9 months of 2025. On Page #4, on the left-hand side, we delivered another strong quarter in terms of net attributable profit once again exceeding the EUR 2.5 billion mark even in the context of a much lower rate environment, obviously. The net attributable profit decreased compared to the previous quarter, mainly to 2 things: higher inflation in Turkey, which impacts obviously the other income line item. And mostly due to the one-off positive impacts registered in the second quarter. If you remember more specifically, the release of some fiscal provisions affecting the tax rate and the review of value-added tax, VAT, the payment calculations around this and an effect which then affected the operating expenses. The net attributable profit is also slightly below last year's figure for a good reason, we think, because Mexican peso has been appreciating lately versus a depreciation in the same period last year. This had a negative effect on the FX hedges of the net trading income line of the Corporate Center this quarter, but we will benefit from this from an appreciated Mexican peso in the coming quarters. We take this any day. On the right-hand side of the page, you can see our CET1 capital ratio, which improved by 8 basis points during the quarter reaching 13.42%. This solid capital position, obviously provides us with the capacity to increase our shareholder remuneration, which I will explain later. Page #5 on the left-hand side, our cumulative profits for the first 9 months. They continued their upward trend to a record level, reaching almost EUR 8 billion in the first 9 months of 2025, a 4.7% increase year-over-year in current euros. And on the right-hand side of the page are profitability metrics compared to European peers. Once again, our 19.7% return on tangible equity, it remains unmatched, and we are clearly one of the most profitable banks in the industry. Moving to Page #6. This page is summary of the pages to follow. So allow me to directly move to the next slide, Slide #7. As always, the summarized P&L of the quarter. I would highlight the outstanding evolution of the core revenues, especially in the last quarter with net interest income and fees growing 18% and 15% year-over-year, respectively. And in my view, an impressive 7% and 6% quarter-over-quarter, respectively, again, in constant euros. Slide #8, the summarized P&L over the first 9 months of the year. I would once again highlight the very positive core revenues evolution leading to an increase in gross income of 16% in constant euros year-over-year. The strong gross income growth, coupled with the positive jaws and the contained growth in impairments, which we will discuss later, it led again to the record, as I mentioned, net attributable profit of almost EUR 8 billion. Moving to Slide #9, which puts more light into the revenue breakdown evolution. Once again, we continue to deliver quarter-on-quarter on revenue growth, driven mainly by net interest income and net fees and commissions, as you can see on the page. This has been the story of BBVA in my view in the past few years. And as you can see on the page, this quarter, the performance is even more pronounced with NII growing 7.1% in the quarter and fees growing 5.8% in the quarter, leading to a quarterly growth rate of 4.4% in gross income despite an uncertain macro environment, despite declining interest rates, we keep delivering on core revenues. Regarding on the page, the annual decline in the net trading income, I already mentioned it, but an important part of it is, again, due to the strong gains from the FX hedges linked to Mexican peso depreciation last year versus a negative FX hedge impact this quarter due to Mexican peso appreciation. But again, as I said, we can take this any time because it will help us in the coming quarters. Moving to Slide #10. Let me focus a bit more on activity and loan growth, which has maintained its pace at an excellent 16% growth year-over-year, then leading to an excellent NII performance. As we claim, this is also very good news for the coming quarters since we delivered this loan growth in a very profitable manner. In Spain, in the middle of the page, loan growth further accelerated to 7.8% year-over-year, while Mexico continues in line with our ambitious guidance at 9.8% year-over-year. In the case of Mexico, let me remark that if we exclude the U.S. dollar currency impact, the loan growth figure as of September 2025 would have been 10.9%. Now on the right-hand side of the page, thanks to the strong loan growth figures and obviously, our proactive price management. We continued expanding on our core revenues, some of NII and fee income in both Spain and Mexico, in both year-over-year and quarter-over-quarter comparisons. And again, gaining pace in the last quarter, if you annualize the quarterly figures, of the core revenues, they are really good numbers in our view. And this is one of the most important messages of the presentation. Banks are generally rate sensitive as we also are in Spain and Mexico. But despite the rate compression, thanks to our unmatched loan growth, leading to in every single country, market share gains, and our proactive price management, we continue to grow our core revenues. Now on Page #11, you see another reason for our optimism looking into the future. As I mentioned, we are quite rate sensitive in Spain and Mexico. The last 2 years, and especially the last year, we have seen interest rates decrease significantly in these markets. And the good news in our view is that we believe interest rates are already at or near the expected terminal rates in both Europe, Spain and also Mexico. In the case of Europe, we expect the terminal rate to be around 2%, where interest rates already are compared to the 4% at the beginning of 2024. And in the case of Mexico, the policy rate was at 11.25% at the beginning of 2024, and is now at 7.5%, as you know, we estimate the terminal rate to be around 6.5%. So we are almost there as well in Mexico. We have proactively managed the impact of these rate declines, which by the way, happens quite fast in Mexico, the reset frequency is much faster in Mexico and with some months delay in Spain. Our customer spreads on the right-hand side of the page already reflect those impacts. And with limited room for further rate cuts, we expect relative stability in customer spreads going forward. In short, let's not take too much time on the page. But if spreads stay around these levels and with continued dynamism in activity and loan growth, we believe our revenues and profits will further strengthen in our core markets in the coming quarters and years. Moving to Slide #12. On the left-hand side of the slide, we continue to show positive jaws at the group level, supported by the solid performance of the gross income, which grew 16.2% year-over-year while operating expenses increased by 11%, remaining below the average inflation across our footprint. And on the right-hand side of the slide, you can see our efficiency ratio, again, improving reaching 38.2% below last year's level, obviously. Slide #13. This page shows the solid evolution of our asset quality metrics, which are performing better than expectations, better than our guidance at the beginning of the year in a context of strong activity growth, especially in the most profitable and typically higher cost of risk segments. On the left-hand side of the page at the bottom, our cost of risk stands at 135 basis points, again, better than guidance, slightly above last quarter's figure with the numbers already incorporating the negative impact coming from the annual risk model calibration process, partially compensated by the positive impact from the quarterly macro adjustment. Meanwhile, on the right bottom, you see that our NPL and coverage ratios, they continue improving. Slide #14 on capital and shareholder remuneration. On the left-hand side of the slide, our capital waterfall for the quarter-over-quarter evolution, our CET1 ratio once again has increased 8 basis points to 13.42%. And following the waterfall, results 65 basis points, dividend accrual and AT1 coupons, minus 35 basis points, then 37 basis points due to the RWAs growth. This figure reflects, again, our ability to reinvest part of our capital generation into profitable growth. And as in other recent quarters, it also reflects the result of several risk transfer transactions, SRTs which positively contributed 5 basis points to the ratio this quarter, a bit lower than the previous quarters because of the summer seasonality. Then we have a bucket of others of 15 basis points, which comprises, among others, the market-related impacts, slightly positive. And then the credit in OC (sic)[ OCI ] for hyperinflationary countries. Lastly, regarding the CET1 ratio. And as we announced last quarter, we expect a positive regulatory impact in the fourth quarter in the range of 40 to 50 basis points reinforcing our already very strong capital position. Then moving to the right side of the page, as the process of the Sabadell transaction has ended, we will resume our shareholder remuneration programs. First, we will begin our EUR 1 billion -- nearly EUR 1 billion share buyback program starting tomorrow. Second, we will distribute on November 7, a record interim dividend of EUR 0.32 per share. Then, and most importantly, as soon as we get the required ECB authorization for which the process has already been initiated, we will start another round of a significant share buyback. The details of this last piece will be announced, obviously, once we receive the authorization from ECB. Moving to Page #15, with a quick review of our strategic progress and specifically on new customer acquisition. During the first 9 months of 2025, we have acquired a record 8.7 million new customers with 66% joining us through digital channels, a clear competitive advantage for BBVA. Then on Slide 16, another pillar of our growth strategy, sustainability. We continue to deliver quarter after quarter, even above our own expectations. In the first 9 months of 2025, we have channeled a record EUR 97 billion in sustainable business with a significant increase in all segments. And finally, moving to Page #17. As you know, last quarter, we set our ambitious financial goals for the 2025-2028 period. We will report back to you on the progress versus the established goals every quarter. In short, we are at the early innings, but as compared to the numbers we have in the plan for the first 9 months of 2025, we are performing better than our original expectations in all the metrics. And now for the business areas update, I turn it to Luisa. Luisa?

Thank you very much, Onur, and good morning, everyone. In Slide #19, let's start with Spain, which has shown a strong momentum throughout the year and once again has delivered excellent results in the third quarter. Net profit reached EUR 3.1 billion in the first 9 months of 2025 with around EUR 1 billion generated in the third quarter alone. These results, in line with previous quarters, reflect solid business performance and outstanding NII evolution despite lower rates, robust fee income, strict cost discipline and continued strength in asset quality. Starting with net interest income, it has continued to perform exceptionally well this quarter, up 3.2% quarter-on-quarter, driven by strong loan growth in our most profitable segments. As you can see, consumer lending and midsized company loans both grew by around 10% year-on-year, well above the overall loan growth of 7.8%. We also continue to benefit from the positive contribution of the ALCO portfolio fully aligned with our strategy to lock in higher rates. Based on this solid performance, we are raising our NII guidance for Spain to low single-digit growth in 2025, up from slightly positive previously. Fee income this quarter was affected by the usual summer seasonality. Year-on-year, performance remains very solid, up 4.2%, mainly driven by strong growth in asset management fees, nearly 10% year-on-year higher together with increasing contributions from insurance and credit cards. On the cost side, the quarterly increase mainly reflects a one-off related to VAT payment calculations recorded last quarter, which you may remember. Excluding this impact, expenses were very well contained up only 1.3%, clearly showing our continued focus on cost control. Finally, asset quality remains very solid with both the NPL ratio and coverage ratio improving, cost of risk remained contained at 34 basis points in line with our guidance. Overall, a remarkable quarter in Spain with solid activity driving robust core revenue growth even in a low rate environment. Moving now to Mexico on Slide 20. For another quarter and despite a challenging environment, BBVA Mexico delivered a very strong set of results with net profit of EUR 1.3 billion in the quarter, driven by core revenues growth. Net interest income grew by 3.3% quarter-on-quarter, supported by robust lending activity, especially in retail, where we continue to focus on the most profitable portfolios, consumer and SMEs, both growing 4% quarter-on-quarter. Corporate lending also remained strong, increasing by 9.1% year-on-year, excluding the FX derived from the Mexican peso appreciation. Fee income performed very well, up 2.6% quarter-on-quarter with growth across the board, mainly driven by credit card payments and asset management fees. Moving to cost. The increase in expenses mainly reflects higher IT investments as we continue investing for future growth while personnel costs remained stable in the quarter. Overall, efficiency stands at close to 30% in the first 9 months. Turning to asset quality. Impairments decreased in the quarter, driven by both a net positive impact from the IFRS macro adjustments and solid underlying asset quality trends. As you may know, BBVA Research has reviewed upwards its GDP growth forecast for Mexico now expecting positive growth of 0.7% in 2025 compared with a contraction of minus 0.4% in the previous GDP forecast. This revision reflects the resilience of Mexican economy even in a highly uncertain global environment. All in all, the cumulative cost of risk stands at 327 basis points as of September, better than expected, leading us to also improve our guidance for the full year, we now expect the cost of risk in Mexico to remain below 340 basis points. Finally, net profit reached EUR 3.8 billion in the first 9 months of the year. That's a 4.5% increase in constant euros, confirming the strength, resilience and superior profitability of our Mexican franchise. Moving now to Turkey on Slide 21. Turkey delivered net attributable profit of EUR 648 million in the first 9 months, a strong increase, close to 50% compared to the same period last year. This solid performance was driven by higher core revenues and lower impact from the hyperinflationary adjustment, supported by disinflation trend observed in the country. If we briefly look at the income statement in the first 9 months of the year, a few key points to highlight, first, we've seen a solid performance in NII, supported by strong activity growth, mainly driven by retail, significant year-on-year increase in the TL customer spread, but also an improved liquidity management during the quarter. In a context of declining rates, we have benefited from lower cost of deposits, while also improving loan yields, supported both by our disciplined price management and our targeted loan growth strategy focused on the most profitable segments. As you know, in Turkey, our balance sheet shows a positive sensitivity to lower rates as deposits reprice faster than loans. This means we will continue to benefit from the current easing cycle. Second, fees continued to show a positive trend, underpinned by robust performance in payment systems and asset management fees as in previous quarters. Finally, the cost of risk slightly increased to 176 basis points in the first 9 months in line with our expectations. Impairments increased this quarter is mainly explained by the higher provision releases related to big ticket exposures recorded last quarter, which you also may remember, provisioning needs remain high in retail, although we are starting to see stabilization in NPL inflows in this part of the portfolio. Now let's turn to South America on Slide 22. The region continued to make strong contribution to the group's results, posting a net profit of EUR 585 million in the first 9 months, a 24% increase year-on-year in current terms. During the quarter, NII remained solid, supported by healthy loan growth across the region and customer spread expansion, particularly in Peru and Colombia. This positive evolution of margins was partly offset by Argentina where ahead of the legislative elections, we saw a sharp compression in spreads amid a highly volatile rate and currency environment. Fee income, on the other hand, showed a remarkable increase in this quarter with growth across all geographies, reflecting our continued effort and renewed focus on strengthening this revenue stream. Turning to asset quality. We continue to see positive trends in Peru and Colombia, supported by a more favorable macroeconomic outlook and rate environment. Meanwhile, Argentina continues to show some deterioration in the context of strong loan growth and sharp increase in real rates. Overall, the stock of NPLs remained flattish this quarter, while the NPL ratio improved to 4.08% and the coverage level increased to 93%. The cumulative cost of risk stands at 243 basis points as of September, in line with our full year guidance. And finally, let's move to the rest of business on Slide 23. It's an area that we haven't usually covered on these calls, but given the strategic plan focus on CIB business and commercial banking business, we have decided to also give you some indications of how this P&L is moving on because it's strong performance and growing contribution to group's overall results are already very worthwhile. Just as a reminder, this unit mainly includes our CIB business conducted through our BBVA branches outside our core geographies. This activity accounts for more than 90% of the area's total loans and net profit. In addition, the digital banking operations in Italy and Germany are also reported under this business unit. This unit is already delivering around EUR 480 million in profits. This solid performance reflects robust business momentum across the board, supported by cross-border activity and sustainability. Higher activity levels have led to revenue growth of close to 25% year-on-year in the first 9 months, driven by a strong increase in NII, up 15% year-on-year, thanks to greater business volumes and disciplined price management and outstanding contribution from fee income showing very positive dynamics across all key geographies supported by both investment banking and global transactional banking fees. On costs, the increase reflects the rollout of our strategic growth plans, building the capabilities that will enable future growth. Finally, risk metrics remain very solid in this segment. The NPL ratio improved to 18 basis points, and the cost of risk for the first 9 months stands at just 10 basis points. Overall, we see this as a very promising business area where we are leveraging our diversified footprint to support clients wherever they operate not only in our core markets, but also in other strategic geographies for them, such as the U.S., the U.K., continental Europe and Asia. And now back to Onur for the key takeaways. Onur Genç: For the main takeaways, it's on Page 24. Let me not take time because they are quite obvious on the page. But let me once again repeat the very high-level overall message, which is we are, once again, very happy with the performance in the quarter, especially the quarterly core revenue evolution, and we are very focused, very focused on creating organic capital and resuming our distributions to shareholders, which will be starting tomorrow morning. And with that, we go to Q&A. Patricia?

Yes. Thank you very much, Onur, and Luisa. So we are ready now to start with the Q&A session. Operator, please?

[Operator Instructions] Our first question comes from Maks Mishyn from JB Capital.

I have 2 questions. The first one is on loan book growth in Spain. Can you please talk more about the type of demand you are seeing in corporate loans? And also why growth in mortgages is below the average for the sector? And the second one is on cost of risk in Mexico, even though you improved guidance, the new guidance implies a pickup in the fourth quarter, and I was wondering why. Onur Genç: Very good. Loan growth in Spain, the corporate loan growth, and you see it in the documentation, but the midsized companies, as we call them, the middle part of the corporate area, it is growing 11% and the corporate and CIB is growing 18%. Where is this coming from? It's coming across the board in all the sectors, actually, there is some investment drive. As you know, the Spanish economy is doing really well. We upgraded our GDP growth rate forecast in Spain to 3% this year and 2.3% -- we also upgraded next year 2026 to 2.3%. So the economy does well for a few reasons. Number one, immigration, basically, there is a new flow of population into the geography. Number two, Spain is a very service-based economy, relatively speaking, obviously, and services sectors, in general, are doing really well. For Spain, tourism is very important, under that chapter, doing really well. Number three, next-generation EU funds, it is affecting in a positive way, the growth in Spain. And number four, there is an investment pickup in the country. In multiple dimensions, we see 2 very clear strong areas. Number one, the energy and renewables, they continue to attract investment. And number two, the housing, there is a big demand in the market. You might know these numbers already Maks. But in Spain every year, basically around 300,000 new households are being formed -- 300,000 versus the new supply of homes is around 150,000. So there's a mismatch in terms of demand and supply. This 150,000 new houses being constructed every year used to be 100,000 2 years ago. So there is also some vibrant activity in the construction and the housing sector as well. All combined is leading to the numbers that you see on the corporate segment. Why loan growth is not so good in mortgages? You know the answer. The pricing, we just don't see value in growing the mortgage book at these prices. Even if you incorporate the cross-sell additional income to those loans, we just don't see the value. That's why we are staying out. This is not new for us. From the beginning of this year, actually, we have been losing market share in mortgages, and we are completely fine with it if there is no return on the cartera, on the book. Cost of risk in Mexico, we are actually upgrading our guidance to less than 340 basis points. Less than 340 basis points does that mean 340. The dynamics are very good. And as I mentioned in my part of the presentation, in the third quarter, in Mexico and in general, there was the impact -- positive impact from macro adjustment because we have upgraded the macro expectation for Mexico, but there was a larger negative impact coming from annual recalibration of the IFRS 9 modeling. That was the reason why it slightly went up versus the first 6 months of the year. It's lower than the second quarter. But the average of the first 6 months, it went up slightly. And the reason was that, basically. So we are quite positive, actually, what we are seeing in Mexico in terms of the growth dynamics and in terms of the cost of risk dynamics. Luisa, do you want to add anything?

I would just only add to your point just in case we -- just be fully transparent the IFRS annual recalibration update that we do this year has taken place in the third quarter. Last year, it took place in the fourth quarter. This is done throughout the whole of our geographies, and it coincided also this quarter with a positive macro IFRS update in the geographies as well across the board. Onur Genç: Very good.

Thank you, Maks. Next question, please.

The next question comes from Antonio Reale from Bank of America.

It's Antonio from Bank of America. A couple of questions from my side, please. The first one, you forgive me if I go back to the Sabadell bid, but as a management team, you've put a lot of energy and resources into the project, which, for one reason or the other didn't work out. So looking back, is there anything you think you would have done differently or maybe just your takeaway, what do you walk away with? I mean we've seen 2 failed bids in Europe and not something we've seen very frequently in the past. So that's my first question. My second question is more forward-looking and relates to sort of capital and your distribution outlook. Your 13.4% today and you flagged some additional capital tailwinds of 40 to 50 basis points coming through. And that's in Q4. Now you've confirmed also that your go-to capital target is at 11.5% to 12%. How quickly do you think you can go to that level. The market seems to be a bit skeptical about you running your business with that capital buffer. So maybe you can touch on that as well. Onur Genç: Very good. Thank you, Antonio. As always good questions. On the Sabadell topic, as you can see in the presentation today as well and as we have been operating since that day of Friday, we closed that chapter. We closed that chapter. We do think it's a missed opportunity, it's a missed opportunity for our shareholders, our clients, our employees, but definitely for Sabadell shareholders as well, Sabadell clients and Sabadell employees as well. For Spain, for Europe, for Catalunya, we do think it's a missed opportunity, but we closed that chapter. We closed the chapter for one very good reason because we always care about our own stakeholders, our shareholders, our clients, our employees and for the benefit of our own shareholders, our stakeholders, it's much better to move forward, to look into the future and to focus on what we do best, which is running our business. And in that sense, again, we closed that chapter. The learnings, obviously, we are reflecting on the learnings, but the chapter is clearly closed for us. On the capital, 13.42%, as you mentioned, we are expecting another 40 basis points to 50 basis points in the fourth quarter only from a positive regulatory impacts. If you add that and if you also add the organic capital generation that we would be creating in the fourth quarter, fourth quarter is typically a better quarter in terms of SRT activity also. You would see that we have a lot of excess capital. And as we said many times before, we are fully committed to the target, 11.5% to 12%. If you take the upper end of that range 12%, we are going to be basically distributing that capital back to our shareholders to get to that 12% level. That's why we said that we are waiting for ECB approval for this extraordinary significant share buyback. And we'll go from there. Now coming back to the question of, you said, I don't know what word you used, but the 12% is that the right target and so on. I repeat the same thing every quarter, but I will do the repetition once again. We have to look not at the absolute level of that number, but we have to look into the difference versus the requirement because that requirement that is set by the ECB, by the supervisor is basically set based on many things, based on the results of the stress test. Once again, we come as one of the best in the stress test results. Based on return on tangible equity and the organic capital generation capacity, based on the volatility of your organic capital generation, based on multiple, multiple metrics. In all these metrics, not only we create much better levels of organic capital, if you take 5 years, 10 years, 15 years, you also see that the volatility around the trend line is one of the lowest in the European banking sector for us because we have these wonderful franchises in our view, in the different markets that we operate, one of the best franchises in every single country that we operate. In short, as a result, our requirement is 9.13%. If you take the upper end of our capital target range, 12%, it's 287 basis points difference, okay? So the buffer that we have versus our requirement is 287 basis points. We have a peer group. We keep reporting our numbers against the peer group, 15 largest banks of Europe. If you take out the non-EU banks from that list because the list is European geography, which includes some U.K. banks and Swiss banks. If you take out those, the EU banks, for which the requirements are set by the same supervisor, ECB, the average of the buffer of the rest, which is the 10 other banks in our peer group is 240 basis points. So our buffer is actually one of the best and clearly above the average of our peers. And we feel very comfortable operating with 12%, and we are going to be distributing our excess capital back to our shareholders to get to that level.

Thank you very much, Antonio. Next question, please.

The next question comes from Francisco Riquel from Alantra.

I want to ask about margins. First in Spain, the customer spread has fallen below 2.9%. And I thought 3% was the trough of this interest rate cycle. So I wonder if you can share guidance on customer spread going forward. I have seen the loan yield falling 21 basis points Q-on-Q. So how much of the fall is mix related? You have mentioned fast growth in CIB and public sector. Price competition, already some banks have flagged about this, Euribor resets pending and then the cost of deposits falls very slowly, just 3 basis points and I see fast growth in time deposits. So you can explain the trends on the liability side as well. And then my second question, margins on Mexico. They are proving, on the contrary, very resilient despite the sharp fall in interest rates that you have mentioned. So I wonder if this is just a timing issue, given the speed of the repricing between the assets and liability? And where do you see the 11% customer spread once the balance sheet is fully repriced to lower interest rates and how fast is the repricing? Onur Genç: Thank you, Paco, for the questions. I think for both, there is a common theme that I would put on the table first, and then I go into each one of the countries that you mentioned. The theme is, given the rate cycle is coming, again, as we have also put into the presentation, the rate cut cycle is coming to an end. There's some more to be done in Mexico. But in general, we are very closely in our view, to the marginal rate. We do think the spread that you see -- the customer spreads that you see in the pages that you indicated are relatively the levels that you would be seeing going forward. What does this mean? Let's go then country by country to be more specific. For Spain, you mentioned 3% as the floor. I'm not sure whether we quoted that number at all, but I don't think so, the 2.88% that you see in the quarterly average, actually, the monthly figure, monthly average for September, if I'm not mistaken, it's 2.83%, we were basically expecting margins to stabilize around these levels. And we do think they are going to be stabilizing around these levels if ECB doesn't again start cutting rates. So the stability is already kicking in. You asked about the lending yields why it came down too much. It's a bit mixed, but more than the mix, it's because of the repricing. I'm sure you are aware, you know our book really well. But the reset frequency for corporate lending book is typically 1 month or 3 months and the reset frequency for the mortgage book is for 2/3 of the mortgage book is basically 6 months, but you take the Euribor 12 months or 2 months ago, so it's effectively 8 months and 1/3 is basically more than a year. So there is some delay in the reflection of the rate cuts into the lending yield. The lending yield coming down is partially driven by mix, but more importantly, it was driven by the reflection of the rate declines that we have seen in the market in the last 2 years, in the last year. But we are quite positive on what we are seeing for a few reasons. Number one, the customer spread decline is as such, but the NIM in basically in Spain was basically flat in the quarter because we do have this more than EUR 50 billion ALCO book that we do think we did fix at the right time. So the average yield of that book is at 3%, that is helping obviously in the NIM overall. But on the customer spread, specifically and on the lending specifically, what you see is that the front book yields are now better than the back book yields, which is also a signal that the curve is coming now to the end. And we are growing in some areas, especially consumer and SME, which typically will help us in terms of mix going forward and in terms of spread. In short, we do think we are basically very close to the bottom of the customer spreads in Spain. Now going back to Mexico, as you said, slight increase. You also asked about deposits, sorry, in Spain in deposits because there was a large growth of wholesale deposits in the quarter and that has basically created a mix effect on the deposit costs. And as you know, our deposit prices as compared to other Spanish peers is much lower. So the decline versus a starting point much lower is going to be much less. That's the reason. But the key reason in the quarter was the mix. Mexico, again, the overall message is that we should be seeing some stabilization, slightly below around these levels. The reason that it has increased a bit in the quarter is, again, a bit mix because we have grown much more in the retail lending book versus the corporate lending book. But these levels, in our view, are relatively close to the levels that you would be seeing going forward as well. Luisa?

Yes. I would add to that on the Mexican front, Onur that, as you know and everybody knows, we maintain NII sensitivity in Mexico of around 2.5% to 100 basis points movement. That 2.5% is actually around 1.9% on the Mexican peso side. And as you know, rates in Mexico have come down very significantly since the rate peak at 11.25%. Now we're expecting rates to come down to 7% this year, moving on to what we think are going to be more terminal rates of 6.5% next year. With downward bias depending on how the strength of the peso and the macroeconomic policies go. But in general, we see those rates stabilizing. And with -- I think the positive news is that, that significant rate decline with that sensitivity that I just mentioned of 1.9% to 100 basis point movement have been very much absorbed by the -- on the NII side by excellent, I think, price management, also on the cost of deposits, which keep on being quite resilient. And very much below our peers, which now have a cost of deposits of around 4.7%, more or less. Onur Genç: And maybe on Mexico, one final thing to remind, we mentioned it, I think in the past. In the 2020-2021 period, the interest rates in Mexico was around 4.25%, if I don't remember incorrectly. 4.25% was the Central Bank rate. Even in that environment, we had basically 10% margin. Since then, we have improved the mix of the loan book in such a way that you would see these double-digit more than 10% margins are quite resilient and quite expected in Mexico going forward.

Thank you very much Paco. Next question, please.

The next question comes from Benjamin Toms of RBC.

The first one is on group costs, which are running up about 11% year-over-year. That's broadly in line with your inflation footprint. But do you have any additional levers you can pull going into 2026. I appreciate your footprint is different, but your largest peer is guiding to flat to slightly down cost that just seems quite a large step in aspirations here, but maybe you feel the cost growth is a natural consequence of higher balance sheet growth. And then secondly, you've broken out today some more details on the rest of the business division. Can you remind us what your ambitions are for your global CIB business? How fast do you think that business can grow by over the next 3 years? Onur Genç: Maybe you do costs, Luisa, and I do CIB.

Yes. Well, I think the group costs were also affected quarter-on-quarter by the impact that we had of the one-offs in the second -- in the second quarter. What I think is very important with regards to the cost is that we are containing the cost increase in the different geographies. I think it's important to highlight the Mexican efficiency plans that were carried out at the beginning of the year in terms of headcount reviews and revisions. Also in Colombia. Spain is containing costs, I think, very well with that 1.9% increase year-on-year. I think what we need to really look at is with our strategic business plan going forward is that cost-to-income level. We are very much focusing on cost-to-income ensuring that we have the right operational level leverage, sorry, as long as we continue to invest in the franchises, which I think is very important for us. In this regard, we do think that the cost to income target of 35% at the end of our period, the 2028 number is very much our focus. We have, as you know, the low 30s in Spain, low 30s in Mexico, low 30s in Turkey, cost-to-income ratios, and that's the way we are managing our cost side investing, but at the same time, being disciplined and ensuring that those investments generate revenues and allow us to achieve best-in-class efficiency ratios. Onur Genç: Very good. On costs, I would just add, Benjamin, the topic of 2 principles that we -- it's really important for BBVA management. Number one, the concept of jaws, our costs should not be growing higher than our revenues. And the second thing is we should grow in general because of the efficiencies that we are baking into the business every single day, we should not grow higher than inflation. The numbers that you mentioned and also you compare with the competitors, I can judge who the competitor that you are comparing to is. You should look into the hyperinflationary countries and the customer -- the country mix in that growth rate. But we stick with our 2 very important principles, positive jaws, less than inflation. On the CIB business, we already basically carved it out and then talked about it in the second quarter call. But if you remember in the second quarter call, we put some numbers, goals for this division as well. I would highlight only the 2 of them, which is revenue growth, we said would be around 20%. If you take -- if you compound this 20%, the real goal that we have is that in the 4-year period that we are looking into, we are going to double this business, that's the aspiration. And then we are going to have an RoRWA. And as you might have seen in the country pages that Luisa went through, we are now reporting RoRWA and RoRWA will improve to more than 2% for that division, which then would yield, in our view, also very decent return on capital numbers. How are we going to do that? Basically, 2 things, 2 very important strategic levers. We will talk more about this maybe in the following calls. But number one, cross-border trade finance focused, basically plain vanilla corporate banking, corporate banking, transaction banking focused and basically entailing going with our clients into these geographies that they also operate. We did realize that there are many clients of us in Mexico, in Spain, in South America, Turkey, many clients of us who do business outside of their home geographies, and we are not fairly represented. We have amazing relationships with them in their domestic business. But beyond their core geography, we don't basically serve them as well as we would like it to be. As such, we are going to be focusing on this multinational cross-border-related business that we can tap into, and that's going to be a differential point for us. The second topic is, again, a bit -- we have asked as we were planning and as we were creating that plan -- strategic plan on the CIB business, where we are different from others. And the second topic is the institutional business. There are many institutional clients, funds, asset managers, insurance companies and so on, which we believe can benefit from our presence once again across the globe. We are the market maker of Mexican peso securities, for example. If any institutional investor wants to buy a Mexican peso security, we are the bank and we have seen that many institutional clients were using our competitors. We are going to leverage our positioning and again, our footprint being in multiple geographies would lead us to do better in the CIB business and the observation or the aspiration is doubling in 4 years.

Thank you very much, Benjamin. Next question, please.

The next question comes from Sofie Peterzens from Goldman Sachs.

This is Sofie from Goldman Sachs. So my first question would be going back to Mexico. We have seen some press headlines that Revolut wants to be quite aggressive in Mexico. Nubank is already quite aggressive in terms of competition. How do you think about the competitive landscape? And do you feel competition has increased? And if you could just remind us BBVA's competitive strengths in Mexico? And then the second question is on inorganic growth opportunities and maybe also organic growth opportunities. Given that your capital position is quite solid and you have 40 to 50 basis points of capital tailwinds coming in the fourth quarter, do you think it would make sense to consider growing or looking at something outside of Spain? And how do you think about kind of inorganic growth opportunities across Europe? Would you consider that? And also, if you could remind us how the Italian and German kind of digital banks are going? Onur Genç: Thank you, Sofie. Maybe I'll start with the second one. We are purely focused on organic growth from now on. I see what you're asking. But after the experience that we have had, I do think it's very fair that we will only focus on organic growth. We will always look into things. Obviously, that's our job as well. But our plan, our numbers, our commitments that you see in the second quarter when we announced them and today is purely based on organic growth. You mentioned about Germany and Italy. Again, our plan there is to grow through our digital banks. This is the first time that we are now putting numbers into that business. It is covered in the page that Luisa disclosed on rest of business, which is, again, mainly CIB business. But in that page, you do see under the customer funds, there is a breakdown now which says digital banks. At the end of September, basically, we had EUR 10 billion of deposits in that unit, which is again, Italy and Germany. And we will continue to grow in those geographies. We are going much better than our original business plan. We are going faster than what we thought we would be doing at this point in time in both geographies. Germany even better actually as compared to Italy. Italy was an amazing experience, and Germany is doing even better. So we will continue to grow through that business model, which is pure digital banking, leveraging the infrastructure and leveraging the application and the technology base of Spain to grow in Italy and Germany with the digital banking proposition. That's going to be the plan there. Regarding Mexico, and Luisa, please jump in as well. The only thing I would say is that I said it many times in the past, I keep repeating it, I do know, but I do think it is important. What we have in Mexico in my view, is just amazing. It's an amazing bank. And if you have not been to Mexico, you cover us very nicely, please do go there and then meet our management, meet our team there. It's an amazing bank. And I mentioned this every quarter, but it is important to highlight once again, we have 44% market share in payrolls, all the cash flow-related products, transactionality-related products, which is the bedrock of our business. We have amazing positioning in the country. We have the best talent. We have the best brand power. We have the best client franchise in the country. So let me not go more into it, but it's an amazing bank for multiple dimensions and not hard to replicate with -- not easy to replicate assets and infrastructure. In that context, we take the newcomers, the neobanks very seriously. really very seriously in Mexico. They are amazing companies in our view, but we are going to compete, and we are going to compete hard. So what you see with these neobanks is that they are basically attacking 2 different markets. One is credit cards, typically. And on credit cards, again, the brand power and the scale benefit that we have is very tough to beat because we come up with campaigns, rewards and points for our customers because of our size, that's not very easy to be replicated by others. So we are going to be fighting really hard in credit cards. You might have seen it in the figure you can come up with that also in the numbers that we provide, but also the markets authority in Mexico publishes it. We have been gaining market share. Even in this environment, we have been gaining market share, even including all these neobanks, we have been gaining market share in credit cards in Mexico. So we are going to compete hard and we have a scale benefit, and we have a program, which is very powerful that we think we will continue to gain market share independent of the newcomers. And then the second thing is the deposit market that they are competing. On deposits, they are offering really very high rates. You might have seen it, but last a year ago, they were offering 15% to deposits when the interest rate in the market, the Central Bank rate was 11.25%. And what we have defended then when there was such a big difference is going to be, in our view, easier for us going forward because now all of them basically reduced their rates because they cannot sustain those rates anymore. The latest that we see, most of these neobanks, now they are offering 7%, 8%, which we can compete even more easily. And on that one, again, hard to replicate asset. Basically, 1/3 of our deposits are within this band of less than EUR 30,000, 1/3. And 1/3, that bucket, the average deposit size is EUR 790. It's a very small ticket, transactionality driven, payroll account-driven, small ticket deposits. We will maintain that strength in our view going forward. But anything you want to add on the Mexican?

No, I would just end up saying that, as you know, the profitability of our Mexican franchise is well beyond the peers. We have a 28% ROE in Mexico versus the peers at 15%, and it's highlighting those strengths that Onur was mentioning. It's a universal bank with a #1 NPS score of 70, above also all their competitors, including the neobanks. And I think it's a very focused bank and doing exceptionally well. So nothing else to add. Onur Genç: Very good. We are going to pick up some speed. Otherwise, you're not going to be done.

Yes, next question, please.

The next question comes from Alvaro Serrano from Morgan Stanley.

Good to be back. On Mexico, maybe a follow-up on this latest question on Mexico. And look, I completely agree that you've got the best franchise in Mexico and very difficult to replicate anywhere in the world. My question is more to try to pick your brains on the medium term. Because if I look at -- is there a level of market share where some of the incumbents -- sort of the challengers, sorry, could get to where they start to be more of a scale competitor? Maybe not for you, but for others, sort of the second layer of competitors after you, I'm thinking Santander and some of the others, which could start to put more competition. Is there a level of market share, which we should be looking out for? Because when I look at your deposits, it's true that you very successfully reduced the deposit yield, but the mix is slightly sort of increasing to more savings and time. And I wonder if that's reflective of competition. The second question is on delinquencies on Turkey and Argentina, in particular Turkey, they're ticking up as it was expected and you had guided for. Should we expect this for a few more quarters? Any color you can give on that as to when -- how many more quarters would you expect NPLs to continue to tick up there? Or any handholding there? Onur Genç: Very good. There was a noise. So if you don't capture all the questions that you asked, Alvaro, please let us know. But what strength do we have? We discussed about Mexico, but you're asking whether the second layer of competitors can come along and so on. I go back to the same thing. I mean, the strength that we have in Mexico is so unmatched in our view, the scale benefit, but also more the client franchise and the underlying business franchise. Of course, many others will come along, but we will maintain our position. And you see that in the last 5 years, in the last 3 years, we have been gaining market share. In this last year, only in the last year, we have gained 49 basis points market share in the lending market share with the profitabilities that Luisa just mentioned. Once again, we think it's a unique franchise, and we'll continue to build upon that. And when others where they can go, I don't know. If you're asking about the neobanks, one of the competitors there in Mexico, obviously, is Nubank, which is originally from Brazil. And in Brazil, they do have a market share. But when you look into their market share evolution, what you would see is that they started well. They are now at 3.5% market share in credit cards. Again, a very credible competitor. We take them really seriously. But relatively speaking, their curve is now going lower than Brazil. So where they can get to? We don't know. We are going to fight hard and we are going to compete hard. But I don't think we will be the ones who would be losing market share. You asked about deposit savings and time. You said that the time has gone up slightly more in the quarter, true. I mentioned this very clearly in the previous calls as well. Nacho kept asking me about this many times. But when the rates were much higher, 11.25% and the Central Bank rate was 11.25%, we decided to be a bit out of the deposit market. We wanted to fund ourselves through wholesale funding because when rates are very high, heating up, the competition doesn't help us, doesn't help doesn't help. When rates come down, and as you know, again, the latest Central Bank rate now is 7.5%, we now want to go back to the deposit market a bit. That's what we did, especially in the corporate segment, in the wholesale segment, company segment. We have acquired some deposits, and that's why you have seen the time deposits going up. But that in our view, and you have seen that our loan-to-deposit ratio versus the changes that we have seen in a year ago and so on is now going to be not there. We're going to grow in deposits going forward in this context of a lower interest rate environment. That's the reason. It's not -- it was very purposeful, very clear part of the strategy that we have employed and now we are coming back a bit to the deposit market. That's the reason for the mix change. About asset quality in Turkey and Argentina, Luisa?

Yes. Well, in Turkey, I think that the numbers that we're seeing are very much within the guidance that we've given to the market at the beginning of the year, the 180 basis points. It's true that quarter-on-quarter, the comparisons are affected obviously by macro adjustments, but also by big ticket releases, especially that we had in the second quarter. What I would say with regards to underlying asset quality is that we are seeing the NPL ratios and the asset quality of the retail portfolio stabilizing at the current levels. So I think that, that is good news in the sense that we had an increase in rates at the beginning of the year and rates now should be coming down going forward into the next year. Having said that, I think 180 basis points is a cost of risk that is not a normalized cost of risk within a country like Turkey. We've had higher cost of risk in the past. So I think that the positive news is that those retail portfolios are stabilizing in terms of cost of risk. And going forward, I think that the numbers we will see what they look like. But in general, when we guided, I think we guided for around 200 basis points to our midterm, long-term plan. And in Turkey, or should we move to Argentina? Argentina. Onur Genç: Yes, Argentina.

So Argentina is a little bit of a different story. So Argentina, we had been seeing already in the second quarter, I would say, a sharp increase in Stage 3 and defaults in especially the retail portfolios. This is obviously due to inflation coming down quickly, but also very high real interest rates, which moved sharply in the third quarter, as you all know, we had rates touching the 60% in October versus inflation of around 31%. This has created a significant increase in deterioration in the asset quality, again, especially in the retail portfolios. We are already deciding and taking decisions regarding the origination. You've seen in the third quarter that the quarter-on-quarter growth in Argentina slowed down significantly. We grew 10% versus the 21% in the second quarter. And specifically, we are curtailing our growth in credit cards and consumers, where loan production in the quarter fell 9%, focusing our growth towards more of the commercial segment, which we feel is better. But we'll see how the macro develops. We think that the continued focus on the macro policies and decreasing inflation and decreasing rates should be supportive for a better environment. But we still need to see, I think, there quarter-on-quarter, how things develop, again, especially on the retail portfolios. Onur Genç: On asset quality, Alvaro, I would finalize by saying that as compared to what we were thinking at the beginning of the year, in Spain, in Mexico, for sure, Colombia, Peru, we have done much better than what we thought we would do in asset quality. Turkey is completely in line. Argentina is worse than what we expected because the real rates in Mexico -- in Argentina, sorry, is so high now that it is creating a load on the Argentinian lending book. But overall, this has been, in my view, a positive highlight of the year, and we are quite positive going forward as well.

Very good. Thank you, Alvaro. Next question please.

The next question comes from Ignacio Ulargui from BNP Paribas Exane.

So I just have one question. When I just look to the capital, you have covered organic and inorganic growth, I just wanted to ask on the cost side, I mean, could be any chance that you do or launch another restructuring plan in any of your geographies, thinking probably about Spain or Mexico in terms of trying to control further cost growth or that will be ruled out at this stage? Onur Genç: Very good. Again, let's pick up some pace, Nacho. The plan that we have put forward that we are executing and that we will deliver on, does not incorporate any restructuring plan as they call it [indiscernible] in Spain, into the plan at all. But we always look for productivity. Luisa mentioned it in the second quarter call and also partially today. We are always looking for productivity improvements. You might remember this in the first quarter of this year, we actually -- it wasn't a very official program, but we have reduced our employee base in Mexico, for example. So we will always look for the productivity enhancement initiatives. And I wouldn't call them a program, but the restructuring program in the sense that you mean it is not incorporated into the plan.

Thank you, Nacho. Next question, please.

The next question comes from Carlos Peixoto from Caixa Bank.

The first one would actually be on the 20% ROE target that you had before -- that you had announced previously for 2025. Do you see that as still achievable? I reckon that the capital base is quite wide, given the current capital excess. But should we still see that as something doable? Or should we focus more on the actual bottom line number around EUR 12 billion? Then on the second question regarding Turkey. In light of the ongoing evolution, I mean the previous target or the previous quarters, you had guided towards slightly below EUR 1 billion net profit target for Turkey. And do you see that still achievable? Or should we be thinking more of something below EUR 900 million as the 9-month annualized figure seem to suggest? Onur Genç: Very good. Thank you, Carlos. As always, 20% for the year. As you said, the excess capital has built up in the denominator of the ratio. Now that we are starting the share buybacks tomorrow morning, it will help as well, but we are still committing to that number, yes. About Turkey, we are not giving guidance for the coming year yet. The only thing I would tell you is that for this year, we said first EUR 1 billion, but it was very clear. I remember it very, very clearly because there was even a footnote in that presentation in the first quarter presentation saying that, that EUR 1 billion was under the scenario, so I don't remember it incorrectly, but 26.5% inflation and 31% interest rate. And there was also an FX depreciation assumption. Under this scenario, it will be EUR 1 billion. And then once we realize in the second quarter that those assumptions would be very tough to achieve for the macro, we said somewhat below EUR 1 billion. And this year, we still stick with it. For next year, we will do it in the next quarterly call.

Very good. Thank you, Carlos. Next question, please.

The next question comes from gnacio Cerezo from UBS.

There's 2 quick ones, hopefully. First one is on the approval of the buyback process by the ECB. If you can give us some indication about the timing? And if it can be announced actually in the middle of the quarter when the approval is given or we need to wait for the full year results? And then the second one on Turkey. If you can give us a bit of a sense actually of how far are we from the customer spread you think you can achieve and the rates actually in the 20%, 25% region you're targeting? I mean, how quickly actually can we get there? And how far are we from the normalized customer spread in Turkey? Onur Genç: Very good. On the approval of the share buyback, we cannot -- as you have seen, we cannot disclose the specific amount that we ask for approval for and so on because there's a clear regulation or clear guidance on this from ECB saying that unless it's fully approved, it doesn't -- it cannot be announced and the amount cannot be known. But again, we initiated the process last week. It's in the process now. The legal maximum that they would use is 4 months actually. But as you might -- as you can imagine, given the excess capital that we have, given all the dialogue that we have with them, we do expect it to be much earlier than that time frame. But again, we are dependent on ECB for their approval to be done. And once we receive the approval, it can be tomorrow, it can be 2 months, it can be less. Once we receive the approval, we will announce it, yes. Then on the Turkey customer spread, not sure, it goes back to, again, how fast the interest rates are going to come down. You might know this already, obviously, but 39.5% is the latest Central Bank rate, 39.5%. We were expecting it to be, as I said, at the beginning of the year at 31%. So it's coming down much slower than what everyone anticipated because inflation has turned out to be much more sticky than otherwise. But this country is still on, in our view, a very positive path. It is on a path of normalization. They stick with the clear aspiration to reduce inflation and as a result, also reduced interest rates. So once interest rates come down, and we will be giving you in the next call all the expectations for the coming year. But obviously, our expectation is that interest rates will continue to come down. Once that happens, the spread will normalize as well. But until that happens, it's going to be very challenged. One other thing that I should mention is that the customer spread and NIM, the difference between the 2 is actually larger in Turkey than in all the other markets because in Turkey, there is a repo facility, again, at 39.5% for the Central Bank. You can fund yourself a bit with the repo and then also through swaps, 39.5%, but our cost of funding is higher because there are -- beyond the availability of funding mechanisms, there are certain regulatory ratios, one being very specific, the Turkish lira deposits divided by the total deposits. There are certain ratios that we have to satisfy every month, which is basically creating a deposit market at a higher price than other cheaper available funding opportunities. So NIM, as much as we can use those other, and we cannot use them all the time and -- but the NIM would be better than the customer spread going forward because when you use the repo facility, we would be optimizing the cost of funding a bit for the whole bank. So in the quarter, for example, you haven't seen the spread in Turkey to improve too much, the customer spread, but you would realize that the NIM has improved by 65 basis points more or less, mainly because we tapped into a cheaper funding resource, which is the repo market as much as we can in the context of those regulatory restrictions that I talked to you about, and that has helped us improve NII in a very good way.

Next question, please.

Next question comes from Borja Ramirez from Citi.

I have 2. Firstly, on capital. You're showing a very strong capital position. And also, I think you mentioned there may be SRTs coming in Q4. So I would like to ask if you could provide some details. And linked to this, I see some upside to the EUR 13 billion of capital available for distribution in the short term. So this would be my first question. And my second question would be in Spain, you are gaining market share quite nicely. I would like to ask if there are any -- on this point, any learnings from when you're analyzing the Sabadell transaction in the Spanish market, maybe you've learned about new ways to gain share? Onur Genç: OK. The first one, SRTs, Luisa?

As Onur mentioned in the quarter, we did 5 basis points of SRTs. We've done a total of around EUR 8.2 billion RWA SRT transactions, SRT-able transactions. We also do and have engaged also this quarter on asset sales that you've also seen in the NPL ratios in Spain. I would say that the target that we had this year and going forward, by the way, is to generate around between 30 to 40 basis points of capital through SRTs. And obviously, in the first 9 months of the year, we're already at 28 basis points, and we'll be within that range comfortably in the fourth quarter. Again, it depends on the deal flows and the approvals process. The quarter will be obviously higher than the third quarter. And will be above, obviously, very much above the 30 basis points in general in that context of the fourth quarter being better than the third quarter. But in general, I would say 30 basis points to 40 basis points is what we can expect from SRT's capital generation going forward. Onur Genç: Perfect. And then second question was on market share, any learnings from Sabadell and so on. I'll go to the market share directly. Borja, we are gaining market share everywhere except Peru actually because of the CIB, the large corporate lending book because of the pricing, we are a bit out of that market. And because of mortgages in Spain, because of the pricing there, we are a bit out. We are losing market share. But beyond that, basically, we are gaining market share everywhere. It goes back to the strength really of our people. I keep saying that in the bank also. We are a people-based business. Our people -- we have amazing people in the bank, and we will go for profitable growth, gaining market share. In the case of Spain, we don't -- I mean, you might not see it fully in the breakdown, but we are gaining market share 21 basis points in the year in total loans. But it is basically negatively affected from mortgages, as I just mentioned, since the beginning of this year, given the lack of profitability in that market, we are out. So we lost 30 basis points in mortgages, but we are gaining market share, public sector, consumer. We gained 58 basis points in the company's segment in Spain, 58 basis points in a year. And we will keep doing what we know well, go after clients and provide our service because we have amazing people. In short, we already have our own medicine, and we will replicate what we have been doing in the past 5 years -- in the past 5 years, by the way, in the company segment, we gained 200 basis points. We will do what we know well, and you'll continue to gain market share.

Thank you very much, Borja. Next question, please.

Next question comes from Britta Schmidt from Autonomous Research.

A couple of clarifications, please. With regard to Turkey and the net interest income development, the repo financing that you mentioned, is that what Garanti talked about when you mentioned opportunistic liquidity management? And is that something that is quite sticky. So I'm kind of trying to figure out what the outlook here is for the net interest income going forward. Then secondly, could you just help us quantifying the net impact of the IFRS 9 calibration and the macro updates on the EUR 1.6 billion loan losses this quarter, i.e., what would have been the underlying cost of risk in the quarter? And would that underlying run rate be a good steer for not just Q4, but also the next couple of quarters? And then 2 questions related to capital and distributions very quickly. Can you give us any expected impact on operational risk RWA changes in Q4? And maybe also clarify what you mean with the pending approval from governing bodies for the significant new share buyback program? Onur Genç: Very good. Let me start with the last one, Britta, very quickly. I mean we only wait for the ECB approval. But then once we receive the approval, the specifics of how much, whether it's externalized and so on, it is also subject to obviously to the Board approval. But the real -- the only requirement that we have is ECB. On the first one, on the Turkish situation, it is in the context that I just explained, I gave some details. I don't want to go into too much detail, but you are now asking it again. So maybe I do a bit more. But as I mentioned, the customer spread didn't improve too much in Turkey, but NIM has increased by 67 basis points. Why? Because in Turkey, we now have a situation where interest rate declines are not immediately being reflected in the customer spread. Rates come down, but the deposit rates do not come down as much. Why? Because of some of the restrictions that I mentioned to you. In Turkish lira deposits, the supervisor, Central Bank in this case, they have a certain ratio of TL deposits over total that needs to be satisfied. Otherwise, you are penalized. As a result, there is a big competition in the deposit market to deliver those restrictions -- the requirements. And as a result, deposit prices are higher than wholesale funding opportunities. As long as those restrictions are as such, you might see that the customer spread doesn't improve as much, but you would see that the NII and NIM improves. So the rate declines would be converted into real value generation, value creation, maybe not completely through customer spread improvement, but through the NIM improvement, because we can be tapping into those. Obviously, we have our own restrictions and our risk management metrics and so on, but we can tap into those cheaper funding resources as long as the situation as such, okay? But you're asking more the sustainability of this or can you expect more of this going forward? The answer is yes. If rates come down and that rate decline is not very much converted in the customer spread, you would see that NIM decline would be there. Not maybe as much, but would be there, but the customer spread would not be moving ahead too much. I hope I'm clear. And if not, we have many details on this, you can call the IR team to get more on this one. On the provisions, the macro and so on, we don't disclose that. As you know, Britta. The only thing I would say to you is that the business as usual, if you incorporate all the 2 things, actually, the macro impact and also the annual recalibration impact, if you isolate for those, the business as usual would have been better, slightly better, not too much, but slightly better would have been. And there was another question, Luisa. The tough ones, you get them, so.

On the operational RWAs, we have adjusted a little bit the number already in the third quarter. And in the fourth quarter, we will update the operational RWAs with the actual related number, but we don't expect a significant impact from operational RWAs in the fourth quarter.

Thank you, Britta. Next question, please.

The next question comes from [ Marina Correa ] from Jefferies.

I just had 1 on your return on tangible equity guidance for this -- Hello? Onur Genç: Yes, we can hear you, [ Marina ], go ahead.

Can you hear me? Onur Genç: Yes, please, go ahead.

Perfect. Sorry. My question was around your 20 -- about your 20% return on tangible equity guidance for this year. Obviously, that implies quite a strong performance in Q4 versus Q3. So could you please just walk us through the moving parts in the increase in return on tangible equity quarter-on-quarter in Q4 that you're expecting to see hit the guidance? Onur Genç: I partially mentioned it in one of the previous questions, but you should also look into the denominator because we would be doing share buybacks. So the equity base would be coming down. So it's not just the numerator, which is the profit, but also the denominator that would be affected in the quarter. And then that number is for the full year. When we look into the numbers, we are at those levels, basically.

Thank you, [ Marina ]. Next question, please.

[Operator Instructions] The next question comes from Fernando Gil de Santiva es from Intesa Sanpaolo. Fernando Gil de Santivañes d´Ornellas: Two quick ones. One, regarding Spain, I see loan growth in the quarter being flat, mainly explained by public sector. Can you comment on these trends on the public sector, if there's anything I should be looking at? Second, regarding Spain and the litigation and the appeal that you guys presented against the Supreme Court and against the government measures due to the merger. Is the bank going to proceed with that? And finally, a short one, have you done any update on the hedging strategy regarding Argentina and the latest events after the elections and the intervention in FX markets? Onur Genç: Very good. Let me do it very quickly, if that's okay, Luisa. On the public sector, there are some one-offs in there. So you cannot expect 20% growth year-over-year every quarter. But you should see that the public sector is going to be quite positively reflected in the growth rate of Spain lending book going forward for one reason. The local governments in Spain for many years did not use bank financing because there was a central scheme that they could have been financing themselves from the central government. Now the bank financing is coming into the play. So you would see decent growth going forward, not maybe at these levels because there were some one-offs here, but you would see good decent growth. Then the Supreme Court, we don't comment on the legal proceedings of the bank. Then the hedging strategy of Argentina, given the costs of hedging in Argentina, we have not been hedging and we will continue to be not hedging Argentina. It's so small also for the whole account that we can live with it without hedging.

Thank you very much, Fernando. Next question please.

We have no further questions at this time. So I'll hand the call back to you.

Okay. Thank you very much, everyone, for joining this call, and thank you for participating with your questions. So if you have any further questions or clarifications, please reach out the IR team. Thank you very much.