Banco Bilbao Vizcaya Argentaria (BBVA) stands out as an exceptional case among European banks. Despite the political volatility in countries like Italy, Spain, and France, BBVA generates a significant portion of its profits from Mexico and Turkey. This is particularly impressive given the challenging economic conditions in these regions.
In May, BBVA made a bold move by making a hostile takeover offer for Sabadell, a Spanish competitor. This demonstrates its ambition and willingness to take risks, which sets it apart from other banks that may become more inward-focused due to the uncertainty caused by politics.
The recent election-related drop in France’s government debt has brought back memories of the euro-zone crisis, which adds to the uncertainty surrounding European banks. However, Macron had previously advocated for a more integrated banking market in an interview with Bloomberg. The final round of the elections, scheduled for July 7th, is expected to empower either left-leaning or right-leaning spenders, further adding to this uncertainty.
Overall, while political volatility could potentially make European banks more inward-focused and less ambitious, BBVA’s exceptional case shows that some banks are still willing to take risks and generate profits even in challenging economic conditions.