Net profits fell 14 per cent to 3.14bn euros ( £2.7bn) missing the average market forecast of 3.21bn euros. Excluding the hit on trading revenues the fall in net profit was 4.98 per cent.
However, net interest income -- what a bank earns on loans minus what it pays out on deposits -- came in broadly in line with forecasts at 9.68 billion euros, underpinned by an improvement in trend in the third quarter.
The euro zone debt crisis has made access to international money markets difficult and expensive for Spanish banks, putting increasing pressure on their margins.
"The decline in trading revenues was a bit more than we expected, but otherwise results look reasonably good," an analyst at a leading Spanish bank said.
BBVA's core capital adequacy ratio stood at 9.1 percent of assets at the end of September, up from 9.0 percent at the end of June.
EU finance ministers neared an agreement on Saturday to provide 100 billion euros to European banks which would be obliged to raise their core tier 1 capital ratios to 9 percent of risk-adjusted assets to help them withstand losses on euro zone sovereign debt.
A decade-long property boom in Spain came to an abrupt end in 2008, leaving the country's banks with billions of euros worth of bad loans.
Bad loans as a percentage of total lending at BBVA's Spanish business grew to 4.9 per cent in the third quarter from 4.7 per cent in the second, although at group level they were contained at 4.1 per cent.
The bank's overseas business once again drove earnings, with Mexico and Latin America continuing to show robust growth. Its Eurasia business, including Turkey and China, accounted for 17.2 percent of group profits in the first nine months