BBVA - COVID-19 Intensifying Longer-Standing Issues At BBVA

• With CaixaBank acquiring Bankia, BBVA management may be feeling more pressure to act on long-running expectations for an acquisition of Sabadell.
• COVID-19 has undermined BBVA's crown jewel, the Mexico operations, as Mexico is feeling significant strain from the pandemic, leading to weaker spreads, loan demand, and credit quality.
• BBVA's U.S. operations have been a long-term laggard, and management should think seriously about a sale when bank valuations recover.
• BBVA has been a long-running underperformer, with no real core earnings growth in over a decade, but the shares do look undervalued even on flat core earnings (from 2019) for a decade to come.

For further details see: