Speaking to CNBC on Thursday, Carlos Torres Vila, chief executive officer of BBVA, explained the reason for the 90 percent drop, saying it was related to stock price movements. He said the capital position of the bank remains intact.
"There is really no change in our strategy with our Telefonica stake, it is only an accounting impact," Vila told CNBC.
"It really has no impact in our capital position nor does it have an impact on cash flow, it is just registering earnings at the end of the year given the significant drop in prices the stock has had over the last few months," he added.
Spain's second largest bank reported a profit of 70 million euros in the October to December period, compared to analyst forecasts in a Reuters poll of a loss of 139 million euros.
Net interest income (NII), a measure of earnings on loans minus deposit costs, was 4.6 billion euros in the quarter, up 3.9 percent from a year earlier and up 3.6 percent against the previous quarter. Analysts had forecast a NII of 4.4 billion euros.
-CNBC's Silvia Amaro contributed reporting to this story.