西班牙对外银行(BBVA)

SpaceX has filed for one of the largest IPOs in history, with Anthropic and OpenAI expected to follow in the most significant fundraising cycle in years. No European bank holds a lead equity arranger role; that honor belongs to five US banks. 

Why it matters: Market valuations are eyewatering, but the free float is small, and equity underwriting fee margins are thin on trophy deals. On SpaceX, the underwriting economics flow overwhelmingly to a handful of US banks. We expect the Anthropic and OpenAI listings to follow a similar pattern. Barclays, Deutsche Bank, and UBS sit in the second tier of the equity syndicate as joint bookrunners, below the five US lead managers. ING, Santander, and Société Générale appear in the third tier, which carries the lowest fee potential. BNP Paribas is the most noteworthy absentee.

The bottom line: Missing out on lead arranger roles for US tech listings should come as no surprise — this is not an area of strength for European banks. We think debt financing is a more durable and significant revenue opportunity. AI companies burn through capital fast and will keep on borrowing. European banks tend to be more competitive in debt capital markets, especially in servicing their deep bond-friendly home markets. Barclays, Deutsche Bank, and UBS appear in both the equity syndicate and the SpaceX credit facilities, giving them a head start in securing future mandates. As the debt program scales, the syndicate will widen — creating openings for other European banks.

Bears say: A calendar crowded with mega-cap roadshows will compress the midmarket pipeline, the deal tier where European banks do win lead mandates. Some issuers may rationally defer to 2027, which could reduce European banks' underwriting fees in 2026.

We value BBVA at $21 per share, equal to 1.8 times 2025 tangible book value and 10 times what we anticipate BBVA will earn per share in 2026.

We believe BBVA has a narrow economic moat that largely stems from the powerful competitive position of its Mexican operation. We identify cost advantages and switching costs as moat sources for BBVA. We estimate that BBVA will generate a 14% midcycle return on tangible common equity, ahead of our 11% cost of equity assumption. We believe that BBVA will still generate excess normalized returns 10 years from now; thus, it clears the threshold to qualify for a narrow economic moat.

Around 90% of BBVA's midcycle earnings should come from its three primary operations: Mexico (around 50% of earnings), Spain (25%), and Turkey (15%). The Mexican business' attractive, transactional deposit-heavy funding profile, scale efficiencies, and sound credit underwriting support a clear cost advantage. A competitive advantage for BBVA in Spain is not evident, as it relies more on wholesale funding than its peers. While the Turkish operation shows signs of a moat, the macroeconomic challenges in Turkey lower our confidence that BBVA can consistently generate excess profitability. BBVA's digital leadership supports customer satisfaction/retention and cost efficiency across all its operations.

We typically find moats for retail and commercial banks in the interaction between cost advantages and switching costs. Cost advantages stem from lower funding costs, scale benefits, and acceptable credit costs. Deposit funding, especially demand/transactional deposits, is less interest-rate-sensitive than funding obtained in the wholesale markets. Banks primarily funded by deposits, with a healthy share of them being demand/transactional deposits, tend to enjoy a funding cost advantage. Scale and cost control are required to profitably spread a bank's typically large fixed cost requirements over its revenue pool. Sound credit underwriting and risk management are essential to safeguard banking moats.

Switching costs support a bank's cost advantage. Most bank products are easily replicable and, therefore, commodity-like in nature. In theory, clients should seek out the lowest-cost producer with complete rational efficiency for each product, but this does not happen. While switching is nominally free, the benefits are often unclear with similar bank products across firms. Moreover, switching is viewed by customers as troublesome, especially for customers who use multiple products from their bank. The hassle of switching accounts often prevents clients from constantly changing between banks, even if there is a slightly better deal somewhere else.

Understanding a country's banking system's strengths and weaknesses is critical to evaluating banking moats. The more stable a banking system is, the higher the confidence we have that excess returns will persist long enough for banks to earn narrow and wide economic moats.

BBVA's Mexican operation is a textbook example of a moaty bank, with materially higher profitability than its peers. A large deposit base made up mainly of cheap and sticky demand/transactional deposits provides it with a funding cost advantage. At the same time, its dominant market position and broad product range allow it to spread its fixed cost base over a larger revenue pool, generating economies of scale.

We calculate that BBVA Mexico has, on average, generated a return on equity of 22% over the past decade, 8% ahead of the average return of its three main peers over the same period. It achieved this without taking any excess risk, which its slightly superior credit underwriting metrics confirm. We estimate that Mexico should contribute around half of BBVA's midcycle consolidated net profit.

Data from the Bank of Mexico indicates that BBVA Mexico has funded itself at a substantially lower cost than the system average and its closest competitors. BBVA's market-leading position in low-cost demand deposits results in low-cost demand deposits making up a more significant portion of its funding than its peers. BBVA previously indicated that around 40% of Mexican salaries go into a BBVA account. According to the Nilson Report, BBVA acquires 30% of payments for Mexican merchants. These two data points confirm that BBVA is dominant as a primary banker to Mexican individuals and firms. Apart from providing BBVA with cheap and stable funding from demand deposits, these client relationships allow BBVA to cross-sell additional products to clients, increasing switching costs and economies of scope.

After the Mexican peso crisis of 1994, the Mexican banking system became much more stable. Banking regulation improved significantly, the banking sector consolidated, and foreign entrants were allowed. Mexico continues to follow sound fiscal and monetary policies that support its investment-grade credit rating. The Mexican banking system is well capitalized, and private sector leverage is low. Concerns remain about populist government policies, including intervention in the banking sector. However, nothing has yet come of a proposal to cap banking fees.

We estimate that Spain should contribute around one-fourth of BBVA's midcycle consolidated profits. There is evidence of an economic moat in BBVA's Spanish operation, but its deposit market share significantly lags the market shares of the two market leaders. We are also unsure how sticky BBVA's and other Spanish banks' low-cost demand deposit base will prove to be and to what extent depositors will switch to interest-rate-sensitive time deposits.

BBVA has struggled to outearn its cost of capital in Spain historically. However, European interest rates have been close to zero for a decade, obscuring banks' profitability. BBVA is the third largest bank in Spain, but its deposit base is around a third less than the market leaders CaixaBank and Santander. Its deposit base is, however, nearly twice as large as that of fourth-place Sabadell. The Spanish banking sector has undergone significant consolidation after the 2008 financial crisis. More-concentrated banking sectors tend to be more profitable.

It does seem that BBVA has the edge in digital banking. According to Smartme Analytics, 27% of all Spaniards use BBVA's banking app. While market leader CaixaBank has a much larger deposit base than BBVA, an equal portion of Spaniards use its banking app.

BBVA owns 84% of the Turkish bank Garanti. We estimate that Garanti should contribute around 15% of BBVA's midcycle profits. While we view Garanti as a high-quality bank, Turkey's highly uncertain economic and political environment makes it impossible to view it as a moaty bank.

Garanti is the largest of Turkey's non-state-owned banks, with mid-20s market shares in most product categories. Considering the challenging Turkish macroeconomic environment, Garanti has generated remarkably consistent profitability over the past decade. Its midteens return on equity have consistently been higher than its peers. Turkish Central Bank data indicates that Garanti enjoys the lowest funding costs of all Turkish banks. Even in the current hyperinflationary environment, credit quality remains sound. Its late thirties and early forties historical cost/income ratio is world-class. In isolation, this would suggest the presence of an economic moat. Turkey's challenging economic outlook reduces our conviction that Garanti will continue to generate excess profitability. We are especially concerned about the lack of central bank independence and the highly unorthodox monetary policy that resulted from government intervention.

Being the market leader in the attractive, oligopolistic Mexican banking market supports a high midcycle level of profitability.

As Mexico remains underpenetrated with banking products, this gives BBVA a clearer growth path than many of its European-focused peers that operate mainly in ex-growth banking markets.

BBVA should have lower earnings volatility than its peers, given its geographic diversification and its focus on retail and commercial banking, with relatively low exposure to market risks.

Cross-border synergies have proved to be elusive for most banks to extract in retail and commercial banking

BBVA is highly exposed to emerging markets, and historically Mexico, South America, and Turkey have been prone to financial crises.

Currency translation reduces earnings. Earnings growth from BBVA's emerging market operations is likely to be lower after translation into the euro.