Banco Bilbao Vizcaya Argentaria, S.a. · BME:BBVA
Banco Bilbao Vizcaya Argentaria — Investor Presentation (November 2006)
31 slides from Banco Bilbao Vizcaya Argentaria's investor presentation, Nov 27, 2006
Slide 1: Profitable growth and financial discipline
Not for distribution or publication in the United States Profitable growth and financial discipline Capital increase 27th November, 2006 1
Slide 2: Disclaimer
Disclaimer This document is only provided for information purposes and does not constitute, nor must it be interpreted as, an offer to sell or exchange or acquire, or an invitation for offers to buy securities issued by any of the aforementioned companies. Any decision to buy or invest in securities
Slide 3: Contents
Contents Transaction overview and rationale BBVA, strong case of value creation: delivering growth with strategic and financial discipline The future: tangible growth Conclusions 3
Slide 4: Equity offering summary
Equity offering summary • Up to € 3bn Size • Approximately 4.6% BBVA market capitalization • 7 trading days • Accelerated book building, without pre-emptive rights Terms • New shares fully fungible with existing shares • Directed solely to institutional investors Timetable • Subscription period: sta
Slide 5: BBVA has presented a consistent record of focused profitable growth
BBVA has presented a consistent record of focused profitable growth, delivering strong value creation Organic: tangible opportunities in our home markets And non organic: looking for superior sources of growth Capital increase: to finance the development of the Group and maintain an appropriate solv
Slide 6: Capital increase to finance growth ahead and maintain an appropriate solvency level
Capital increase to finance growth ahead and maintain an appropriate solvency level Core capital evolution (e) +46bp +110bp +118bp -90bp 5.6% -21bp(2) -62bp -42bp Dec-05 Retained Asset RWAs Texas Extra. Capital Dec 06 Q107 earnings sales Regional Charges(1) Increase Proforma (1) Extraordinary charge
Slide 7: Contents
Contents Transaction overview and rationale BBVA, strong case of value creation: delivering growth with strategic and financial discipline The future: tangible growth Conclusions 7
Slide 8: BBVA's retained earnings have self-financed the organic growth opportunities
BBVA’s retained earnings have self-financed the organic growth opportunities, despite … 1 … acceleration of growth in RWAs … … increased weight of more profitable 2 and capital consuming assets … … strong dividend growth and high 3 pay-out ratio 8
Slide 9: BBVA's retained earnings have self-financed the organic growth opportunities
BBVA’s retained earnings have self-financed the organic growth opportunities, despite … RWAs Loans breakdown Dividend 1 (YoY %) 2 (%) 3 (YoY %) 2003 9m06 20,1 19 17 Retail Spain 46.5 47.1 15,1 Wholesale 39.2 36.3 7 México 6.4 10.1 South America 7.9 6.6 2004 2005 9m06 2004 2005 Among the fastest High
Slide 10: Active management of the business portfolio
Active management of the business portfolio … Assets disposals 2003-YTD* Acquisitions 2003–YTD* €M Bancomer minorities 3,300 Businesses LNB + Valley Bank 699 €2,736 m Hipotecaria Nacional 302 Granahorrar 348 Forum 84 TRBI + SNBI 2,082 Financial stakes Maggiore Fleet 67 €4,215 m CNCB / CIFH 989 € 7 b
Slide 11: Shift in the composition of BBVA business mix and economic capital allocation
… has resulted in a shift in the composition of BBVA business mix and economic capital allocation BBVA 2002 Economic Capital BBVA 2006e Economic Capital Corporate Industrial Corporate Center Portfolio 14% Center Industrial 9% 7% South 24% Portfolio America 10% 4% 24% USA 19% Wholesale W.I.B South Bu
Slide 12: Investing in important initiatives to improve the efficiency of the Group
Investing in important initiatives to improve the efficiency of the Group Increases in network productivity Unified IT platform in Latam Retail Spain: +34% Mexico: +42% Transformation: procedures, distribution channels Improving efficiency of domestic networks in Spain * Streamlining Retail and Cost
Slide 13: As a result of this strategy, the Group has delivered profitable growth
As a result of this strategy, the Group has delivered profitable growth Net Attributable Profit ROE (%) € million 37,0 35,8 33,2 AGR C 4% 4,493 +2 3,806 2004 2005 2006(*) 2,923 EFFICIENCY (%) 44,6 43,2 41,2 2004 2005 2006(1) 2004 2005 2006(*) (1)Consensus data (*) Annualised, 9m06 net attributable p
Slide 14: BBVA has offered a consistent and attractive return for shareholders
BBVA has offered a consistent and attractive return for shareholders YTD 2006 (%) Last 3 years (%) Equivalent annual return SPIMI 36,30% SG 30,05% BBVA 30,60% BBVA 28,20% SAN 29,80% BNP 25,98% SG 29,30% CS 25,55% BNP 26,70% UBS 25,35% DB 25,60% CA 24,97% CA 23,30% DB 24,47% CS 22,40% SPIMI 22,79% Ll
Slide 15: Contents
Contents Transaction overview and rationale BBVA, strong case of value creation: delivering growth with strategic and financial discipline The future: tangible growth Conclusions 15
Slide 16: Favourable economic environment in BBVA's key geographies
Favourable economic environment in BBVA’s key geographies GDP growth (%) Spain 3,5 3,7 3,3 GDP growth above average of EU (2.7%) Spain Latam 2005 2006e 2007e • Sound public policies, institutional 4,6 stability 3,6 3,0 • Inflation under control Mexico • Stable FX 2005 2006e 2007e • Improvement of so
Slide 17: In Spain, we have identified new opportunities in SMEs
In Spain, we have identified new opportunities in SMEs … Penetration Increase in marketing 33.3% productivity (since Dec 2004) BBVA 2nd 27.7% 3rd 24.4% + 22% 4th 19.7% 5th 13.1% +59% in new business 6th 10.4% + 144% Riskpyme no. operations 7th 10.1% + 28% 8th 7.2% new customers Source: Inmark, 2005
Slide 18: …in Consumer Finance…
…in Consumer Finance… Consumer loans per capita still low in Spain BBVA Initiatives Consumer loans per capita ($) Préstamo Nacimiento 6.230 Préstamo Nómina 0% 4.136 2.633 2.073 Crédito Fácil 1.051 Préstamo PIDE USA UK Germany France Spain Source: ECRI & Eurostat … however, with a high Consumer & C.C
Slide 19: …and new customer segments: immigrants
… and new customer segments: immigrants Foreign nationals/Spain´s population Two complementary 12.0% approaches 10.0% Foreign nationals to grow +26% 2005-2008 8.0% 6.0% Basic Banking 4.0% 2.0% 0.0% More developed products 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 200
Slide 20: In Latin America, we see opportunities in Consumer Finance
In Latin America, we see opportunities in Consumer Finance ... Bancarised Non-bancarised Mid-High Low income income segments segments 28% of 72% of population population Bancomer´s market share Auto: 33.5% Alliances with retailers: Credit cards: 35.5% 5 million credit cards Total consumer finance: 3
Slide 21: …a high potential for mortgage development…
…a high potential for mortgage development … Mortgages in Colombia Mortgages in Mexico ($m) (Thousand units) +4% +42% -1% +42% +33% +42% 902 875 830 635 723 600 480 489 531 420 315 310 318 246 2001 2002 2003 2004 2005 2006E 2001 2002 2003 2004 2005 2006E 2007E 2008E 21% Market Share 35% Market Share
Slide 22: …and great prospects in SMEs
… and great prospects in SMEs Bancomer Loan Penetration SMEs and Corporates (€m) t rke er et Ma m cts Spain Mexico r get n c o a r k du T a B a al M pro c tu r edi users t A C Customer 10,660 4,239 45,000 25,000 3,387 Funds SMEs clients (13%) and Corporates Lending 30,251 2.839 (56%) • Sales > 30 md
Slide 23: BBVA's non-organic expansion has showed strategic fit
BBVA´s non-organic expansion has showed strategic fit Consolidating Building Reinforcing Creating a presence in our high potential franchise in new high position businesses USA growth in Mexico markets Buyout of BBVA • Hipot. Nacional •Laredo •Asia Plan Bancomer • Granahorrar (Col) •Texas Regional •
Slide 24: Track record in acquisitions, best in class among European financial institutions
Track record in acquisitions, best in class among European financial institutions Investments to 2006 (M US$) ROI (%) BBVA Bancomer (1) 8.370 23,8 Latin American Rest of Latin America (2) 5.202 16,8 acquisitions Total Latin America 13.573 21,1 (1) Banking Group (2) Rest of Banks, Pension and Insuran
Slide 25: BBVA Texas: A big step in our expansion strategy
BBVA Texas: A big step in our expansion strategy Texas USA USA /Tx Population 23 298 12.9x SNB SNB Ft. Worth TRB (million / 2005) Dallas West Texas/El Paso/New Mexico TRB Population 2 East Texas Growth 10.6% 5.4% +6.2pp 1 3 4 5 (05-10e) % Hispanic 36% 15% +21pp 7 population LNB Eagle Pass/ Del Rio/A
Slide 26: China & Hong Kong: a great opportunity for BBVA
China & Hong Kong: a great opportunity for BBVA First Stage Second Stage Option to increase to 9.9% 5% stake in CNCB1 (2007-2010) Defining final business plan 15% stake in CIFH2 for wholesale banking in the region (2007-08) Defining profit-sharing Exclusivity agreements schemes in auto finance, trad
Slide 27: Contents
Contents Transaction overview and rationale BBVA, strong case of value creation: delivering growth with strategic and financial discipline The future: tangible growth Conclusions 27
Slide 28: BBVA continues to be very disciplined in its use of capital
BBVA continues to be very disciplined in its use of capital BIS ratio (%) 11.7 BIS ratio 11.4 7.8 8.2 Tier I 6.2 6.2 6.7 Core capital BBVA (proforma after European banks average(1) capital increase + announced investments) (1) Data as of June 06 refers to largest European groups . 28
Slide 29: Conclusions
Conclusions BBVA continues to be very disciplined in 1 its use of capital The capital increase reflects the higher 2 visibility of growth prospects we have today. High growth will remain for longer BBVA reinforces its commitment to focus on 3 profitable growth and shareholder return Tangible opportu
Slide 30: Equity offering summary
Equity offering summary • Up to € 3bn Size • Approximately 4.6% BBVA market capitalization • 7 trading days • Accelerated book building, without pre-emptive rights Terms • New shares fully fungible with existing shares • Directed solely to institutional investors Timetable • Subscription period: sta
Slide 31: Profitable growth and financial discipline
Not for distribution or publication in the United States Profitable growth and financial discipline Capital increase 27th November, 2006 31
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