BBVA México: How a 2000 Bank Deal Became Half of a Spanish Group

BBVA is a Mexican bank with a Spanish headquarters, and its 2025 results made the point without ambiguity. Of €10.5bn of net attributable profit, €5.26bn came from Mexico and €4.18bn from Spain; Turkey, South America and the rest of the world shared what remained. This case study explains how a 2000 merger with Grupo Financiero Bancomer became the engine of a European bank, what that engine costs in currency and political risk, and why the failed attempt to buy Sabadell was really an attempt to rebalance. It is part of the Spain Company Stories hub.

How did BBVA come to own Bancomer?

Through a 2000 merger that gave the Spanish group control for around $1.4bn of fresh capital, followed by a 2004 buyout of the remaining 40.6% of minorities for roughly €3.3bn. The total outlay of about €5bn bought a bank that now earns more than that every year.

Bancomer was Mexico’s second-largest bank when the 1994–95 Tequila crisis wiped out its capital. The Mexican government’s rescue programme left the country’s banks weak and for sale, and in 2000 BBVA — itself only a year old following the merger of BBV and Argentaria — injected capital into Bancomer and merged its existing Mexican subsidiary, Probursa, into it. Citigroup bought Banamex the following year for $12.5bn; HSBC bought Bital in 2002; Santander bought Serfin in 2000, the start of the Mexican leg of Santander’s global model. Within three years, foreign banks controlled more than 80% of Mexican banking assets.

The 2004 minority buyout was the decisive move. BBVA offered $4.1bn for the shares it did not own, took the group private from the Mexican exchange, and captured 100% of a profit stream that was about to expand with the credit cycle of the 2000s. No other Spanish acquisition, in any sector, has generated a comparable return on the capital committed.

How dominant is BBVA in Mexico today?

It is the country’s largest bank by almost every measure, with a loan market share in the mid-20s per cent, more than 30 million customers and a return on equity in the high 20s. Its nearest rivals, Banorte and Santander México, are each roughly two-thirds its size.

Mexican banking is concentrated, under-penetrated and expensive. Private credit is around 35% of GDP against more than 100% in Spain, which means the loan book grows with the economy for decades to come. Net interest margins of 6% or more, against roughly 1.5–2% in Spain, are the source of the profitability. BBVA México’s efficiency ratio sits around 30%, half the level of most European banks.

The franchise is also digital in a way the Spanish parent has copied rather than exported. BBVA México’s app has been the country’s most-used banking application for years; more than 70% of the bank’s sales are now digital. The consumer and card businesses, in particular, have compounded at double-digit rates through the 2020s.

Why is Mexico half of BBVA’s profit?

Because Mexico kept growing after 2008 while Spain shrank, and because the Mexican bank’s return on equity has run at two to three times the Spanish level for fifteen years. Mexico was around a third of group profit in 2007; the Spanish real estate collapse then removed the domestic denominator.

The Spanish parent lost money on real estate provisions in 2012 and earned little at home until 2021. Through those years the Mexican dividend funded BBVA’s group dividend, its capital ratios and its investment in technology. The turnaround in Spain since 2022 — profit of €4.18bn in 2025 — has narrowed the gap but not closed it.

The other legs of the group are small by comparison. Turkey’s Garanti BBVA earned €805m in 2025 in a hyperinflationary economy where accounting adjustments have swung results by billions. South America (Colombia, Peru, Argentina) contributes several hundred million. The United States was sold to PNC in 2021 for $11.6bn, a deal that concentrated the group further on Mexico rather than diluting it.

What does the currency cost?

Roughly a third of the Mexican bank’s local-currency growth over the past decade, on a cumulative basis. The peso traded around 16 per euro in 2013 and above 20 for most of the period since, touching 24 in 2020. Each percentage point of depreciation subtracts roughly €50m from reported Mexican profit.

BBVA hedges a portion of the expected Mexican dividend and of the capital ratio impact, but it cannot hedge the franchise. A structural devaluation reduces the euro value of the equity the group holds in Mexico and, through the capital ratio, the amount BBVA can distribute in Madrid. The 2025 results, with the peso relatively stable, showed reported Mexican profit up 5.7% in current euros; in weaker peso years the same growth has disappeared entirely in translation.

The market prices this. BBVA trades at a discount to European peers with comparable returns because investors apply an emerging-market multiple to half its earnings. That valuation gap is the financial reason why management wanted more European profit, and why Sabadell, with almost no Latin American exposure, was the obvious target.

Why did BBVA need Sabadell?

To move the profit mix toward Europe. Adding Sabadell would have lifted Spain from around 40% of group earnings toward 50%, reduced Mexico’s share to roughly 40%, and given BBVA a second developed-market franchise in Britain through TSB. Every strategic argument in the offer document was, at root, an argument about diversification.

The bid launched in May 2024, was blocked in its merger form by the Spanish government in June 2025 on condition that the banks remain separate for at least three years, and was improved to a value of around €16bn in September 2025. Sabadell — whose long defence of its independence is told in our Sabadell case study — sold TSB to Santander during the offer period, removing the British leg. When the acceptance period closed in October 2025, shareholders holding only 25.5% of Sabadell’s capital had tendered, below the 50% minimum, and the offer lapsed. Our anatomy of the €16bn takeover that failed covers the sequence in detail.

The one significant Sabadell shareholder to accept publicly was David Martínez, the Mexican financier who then held about 3.5% and sat on Sabadell’s board — a detail that neatly illustrates how far Mexican capital reaches into Spanish banking, as described in our article on Latin American capital in Spain. Without Sabadell, BBVA remains structurally half-Mexican, and management has since pivoted to buybacks: €3.96bn announced in December 2025 alongside a €5.25bn dividend.

How does Mexico compare with Turkey?

Mexico is the franchise that worked; Turkey is the one that shows what happens when the currency and the politics go wrong at once. BBVA has invested around €7bn in Garanti since 2011 and holds 86% of it; the lira has lost more than 90% of its euro value over that period.

Garanti BBVA is a well-run bank that earned €805m for the group in 2025 under hyperinflation accounting. But BBVA’s 2022 offer to buy out Garanti minorities was made at a fraction of the price it paid for its first stake a decade earlier, and the Turkish contribution to group profit has been volatile in every year since 2018. Turkey demonstrates that a leading domestic bank cannot outrun a collapsing currency.

The comparison matters because Mexico’s stability is not guaranteed. The peso is a floating, liquid, investment-grade currency with an independent central bank, which is precisely what the lira is not. The premium BBVA enjoys in Mexico is a premium on Mexican institutions; the 2024 judicial reform, which subjected judges to popular election, was the first sign that investors have started to price institutional risk into Mexican assets.

Is nearshoring an upside or a trap?

Both, and the answer depends on Washington. The relocation of manufacturing from China to northern Mexico from 2021 onward is the strongest structural argument for Mexican credit growth in a generation, and BBVA is its largest financier. The 2025 US tariff regime is the strongest threat to that argument.

Mexico overtook China as the largest source of US imports in 2023. Foreign direct investment into Mexico reached record levels in 2023 and 2024, concentrated in Nuevo León, Coahuila and the Bajío industrial belt, where BBVA México has its densest commercial banking network. Every new plant needs working capital, payroll accounts, supplier finance and mortgages for its employees. BBVA’s corporate loan growth in those states has outpaced the national average since 2022.

The tariff risk cuts the other way. Goods compliant with the USMCA trade agreement have largely remained exempt, but the review of that agreement scheduled for 2026 and the sectoral duties on cars and steel have already slowed new investment decisions. BBVA’s own research arm cut its Mexican GDP forecasts twice in 2025. The bank’s exposure to the automotive supply chain, in particular, is meaningful and unhedgeable.

What does BBVA do next?

It runs Mexico for cash and returns capital to shareholders, because no European acquisition of the size required is available at a price it can pay. The 2025–2028 plan promises cumulative profit of around €48bn and an average return on tangible equity of about 22%, most of it Mexican.

The strategic options are narrow. Another Spanish bank is politically difficult after the Sabadell decision; Italian and German banks are expensive and, in Germany’s case, politically blocked, as UniCredit’s experience with Commerzbank showed. Organic growth in Spain is real but slow. The alternative is to accept the Mexican concentration and price it into distributions, which is what the €9bn of announced payouts for 2025 does.

Investors have, so far, accepted that trade. BBVA’s shares outperformed most European banks in 2025 despite the failed bid. The wager is that Mexican institutions hold, the peso stays investable and nearshoring survives the tariff cycle. It is the same wager that Spanish companies have been making on Latin America for thirty years, described across our review of the Spanish investment cycle in Latin America — BBVA is simply the one that has been paid best for it.

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