Bank of America has downgraded its outlook on BBVA and Unicaja, removing its buy recommendation on the Spanish lender BBVA just days before the bank is set to release its second-quarter earnings.
The move signals growing investor caution regarding the geopolitical risks embedded in European bank portfolios, particularly those with significant exposure to Turkey.
The downgrade on BBVA follows the bank’s recent struggles to offset domestic growth with international operations.
Bank of America cited heightened risks associated with the lender’s operations in Turkey as the primary driver for the rating cut.
This comes as markets remain skeptical of the bank’s ability to navigate the volatile economic environment in the region, which has previously weighed on its credit quality and profitability.
Unicaja, another Spanish lender, also saw its rating trimmed by the US bank.