Banco Bilbao Vizcaya Argentaria, S.a. · BME:BBVA
Banco Bilbao Vizcaya Argentaria — FY2019 Earnings Presentation
59 slides from Banco Bilbao Vizcaya Argentaria's earnings presentation, Jan 31, 2020
Slide 1: 2019 Results
2019 Results January 31st, 2020 BBVA Creating Opportunities
Slide 2: Disclaimer
Disclaimer This document is only provided for information purposes and does not constitute, nor should 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 securiti
Slide 3: Excellent profit growth, outstanding value creation and strong capital position
2019 Results January 31st 2020 2019 Results January 31st 2020 Excellent profit growth, outstanding value creation and strong capital position NET ATTRIBUTABLE PROFIT TBV/SHARE + DIVIDENDS CET1 FULLY-LOADED (M) ( PER SHARE) (%) Also absorbing -25 bps from + 15% +11.5% -\ TRIM + IFRS16 excluding BBVA
Slide 4: Excellent results despite a very challenging environment
Excellent results despite a very challenging environment 2019e GDP GROWTH ESTIMATES (%YoY) REFERENCE INTEREST RATES EUROPE(%) As of Dec-18 As of Jan-20 0.2 FWD EURIBOR 12M Spain 2.4 1.9 0.0 Dec-18 -30bps usa 2.8 2.3 -0.2 O A EURIBOR 12M Mexico 2.0 0.0 -0.4 Jan-19 Apr-19 Jul-19 Oct-19 Dec-19 Turkey 1
Slide 5: 2019 Profit & Loss
2019 Profit & Loss Net Interest Income 18,202 4.8 5.6 Net Fees and Commissions 5,033 3.9 4.2 Net Trading Income 1,383 16.6 18.9 Other Income & Expenses -77 n.a. n.a. Gross Income 24,542 4.7 5.4 Operating Expenses -11,902 3.0 3.5 Operating Income 12,639 6.2 7.4 Impairment on Financial Assets
Slide 6: 4Q19 Profit & Loss
4Q19 Profit & Loss Net Interest Income Net Fees and Commissions Net Trading Income Other Income & Expenses Gross Income Operating Expenses Operating Income Impairment on Financial Assets Provisions and Other Gains and Losses Income Before Tax Income Tax Non-controlling Interest BBVA USA Goodwill imp
Slide 7: Robust core revenue growth
Robust core revenue growth NET INTEREST INCOME NET FEES AND COMMISSIONS (M CONSTANT) (M CONSTANT) Net Interest Income 18,202 4.8 5.6 Net Fees and Commissions 5,033 3.9 4.2 Net Trading Income 1,383 16.6 18.9 Other Income & Expenses -77 n.a. n.a. Gross Income 24,542 4.7 5.4 Operating Expenses -11,
Slide 8: Further improvement in best-in-class efficiency
Further improvement in best-in-class efficiency GROUP OPERATING JAWS GROUP OPERATING INCOME EFFICIENCY RATIO (12MYoY(%); CONSTANT) (YoY (%); M CONSTANT) (%; CONSTANT) + 74% 63.6% INFLATION 5.4% 12,639 11,773 1 50.1% -92 bps- Core Operating 12M18 12M19 12m17 12M18 12M19 European Revenues Expenses Pee
Slide 9: Sound risk indicators
Sound risk indicators FINANCIAL ASSETS IMPAIRMENTS NPLs (M CONSTANT) (CBN) 9.9% 0.4 bn Impacted by provision Net Interest Income 18,202 4.8 5.6 Net Fees and Commissions 5,033 3.9 4.2 Net Trading Income 1,383 16.6 18.9 Other Income & Expenses -77 n.a. n.a. Gross Income 24,542 4.7 5.4 Operating Ex
Slide 10: Strong capital position
Strong capital position CET1 FULLY-LOADED—BBVA GROUP QUARTERLY EVOLUTION (%, BPS) +18 bps 31 bps 3 bps 11.74% 11.56% Sep-19 Net Dividends & ATI RRRWAs Others1 Dec-19 Earnings coupons (constant Euros) (1) Others includes market related impacts such as FX impact, mark to market of the Held To Coll
Slide 11: Outstanding delivery on shareholder value creation
Outstanding delivery on shareholder value creation TBV PER SHARE & DIVIDENDS LEADING PROFITABILITY METRICS Net Interest Income 18,202 4.8 5.6 Net Fees and Commissions 5,033 3.9 4.2 Net Trading Income 1,383 16.6 18.9 Other Income & Expenses -77 n.a. n.a. Gross Income 24,542 4.7 5.4 Operating
Slide 12: A clear, sustainable and predictable dividend policy
A clear, sustainable and predictable dividend policy 2019 SHAREHOLDER REMUNERATION DIVIDEND YIELD remuneration policy a 16 cents / share in cash in April 0.10 2020 a 2019 Pay-out of 36%(3) a Going forward, we remain 0 m CASH (4) October and April)
Slide 13: Business Areas
Business Areas BBVA Creating Opportunities
Slide 14: Spain
activity (dec 19) Net Interest Income 925 0.2 3,645 -1.4 Bn Net Interest Income 18,202 4.8 5.6 Net Fees and Commissions 5,033 3.9 4.2 Net Trading Income 1,383 16.6 18.9 Other Income & Expenses -77 n.a. n.a. Gross Income 24,542 4.7 5.4 Operating Expenses -11,902 3.0 3.5 Operating Income 12,639 6.
Slide 15: USA
usa Net Interest Income 18,202 4.8 5.6 Net Fees and Commissions 5,033 3.9 4.2 Net Trading Income 1,383 16.6 18.9 Other Income & Expenses -77 n.a. n.a. Gross Income 24,542 4.7 5.4 Operating Expenses -11,902 3.0 3.5 Operating Income 12,639 6.2 7.4 Impairment on Financial Assets -4,151 5.3 7.1 Prov
Slide 16: USA
usa Net Interest Income 577 -7.5 2,395 -0.2 5.2 Net Fees and Commissions 154 2.8 644 2.6 8.1 Net Trading Income 34 -14.6 173 51.6 58.8 Other Income & Expenses 10 2.8 12 29.3 31.7 Gross Income 775 -5.9 3,223 2.3 7.8 Operating Expenses -509 2.0 -1,966 0.3 5.7 Operating Income 266 -18.0 1,257 5.8 11.4
Slide 17: Mexico
1 Mexico Net Interest Income 1,593 4.1 6,209 5.9 11.5 Net Fees and Commissions 343 7.4 1,298 2.3 7.8 Net Trading Income 68 165.7 310 31.7 38.7 Other Income & Expenses 91 31.2 212 2.1 7.6 Gross Income 2,095 7.8 8,029 6.0 11.6 Operating Expenses -680 5.3 -2,645 4.9 10.6 Operating Income 1,415 9.0 5,38
Slide 18: Turkey
Turkey Net Interest Income 791 -12.5 2,814 0.1 -10.2 Net Fees and Commissions 171 1.3 717 16.5 4.5 Net Trading Income 75 n.s. 10 -1.6 -11.7 Other Income & Expenses 13 -29.7 50 -20.5 -28.7 Gross Income 1,050 -2.3 3,590 2.6 -8.0 Operating Expenses -331 1.9 -1,215 8.6 -2.6 Operating Income 719 -4.1 2,3
Slide 19: South America
South America Colombia 70 50.6 267 25.5 19.1 Peru 48 -28.7 202 1.9 5.9 Argentina 29 n.s. 133 n.s. n.s. Other2 22 -38.2 120 -3.6 -8.6 Venezuela in current €. Other includes BBVA Forum, Venezuela, Paraguay, Uruguay and Bolivia. South America comparison at constant perimeter (excl. BBVA Chile). KEY RAT
Slide 20: Update on strategy
Update on strategy Creating Opportunities.
Slide 21: BBVA defined a new strategy in 2015 to boost its transformation
BBVA defined a new strategy in 2015 to boost its transformation OUR PURPOSE STRATEGIC PRIORITIES «To bring the age ‘ New standard in customer experience of opportunity DIGITAL New business models everyone Optimize capital allocation OUR VALUES Unrivaled efficiency Customer comes first A first class
Slide 22: Impressive progress on the digitization of our clients and value proposition
Impressive progress on the digitization of our clients and value proposition DIGITAL CUSTOMERS MOBILE CUSTOMERS BEST MOBILE APP MILLION MILLION FORRESTER RESEARCH x2.1 x3.2 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 CUSTOMER PENETRATION RATE, % 32% 37% 45 % 52% 57% 19% 25% 35% 44%
Slide 23: Digital channels allow significant acceleration in sales growth and client acquisition
Digital channels allow significant acceleration in sales growth and client acquisition DIGITAL SALES E2E DIGITAL ONBOARDING (% OF TOTAL SALES YTD, # OF TRANSACTIONS AND PRV1) FOR SMEs First bank in Spain to provide full digital onboarding for SMEs 59% Hazte cliente 100% Online UNITS 650k potential n
Slide 24: Transformation positively impacting customer
Transformation positively impacting customer
Slide 25: Our transformation is delivering strong financial results...
Our transformation is delivering strong financial results... NET ATTRIBUTABLE PROFIT TBV/SHARE + DIVIDENDS CET1 FULLY-LOADED (€M) (€ PER SHARE) (%) +28.7% +25.0% +142bps 4(830 11.74% 1 745 10.32% Dividends 2015 2019 2015 2019 2015 2019 Note: 1) 2015 Net Attributable Profit excludes corporate operati
Slide 26: ... and allowing to extend our lead over our peers
... and allowing to extend our lead over our peers EFFICIENCY RATIO (%) ROTE (%) Peers 66.2% 11.9% ™ BBVA 7.0% BBVA -352bps +336bps 48.5% 2015 2019 2015 2019 European Peer Group: BARC, BNPP, CASA, CS, CMZ, DB, HSBC, ISP, LBG, RBS, SAN, SG, UBS, UCG. 2019 European Peer Group figures as of Sep-19. BBV
Slide 27: We are evolving our Strategic Priorities to strengthen our purpose
We are evolving our Strategic Priorities to strengthen our purpose Improving our client’s piping our clients transition towards financial health a sustainable future Reaching more clients Operational excellence engaged team MOST Data and Technology
Slide 28: Save the Date: Investor Day March 24, 2020
BBVA Creating Opportunities SAVE THE DATE Investor Day March 24, 2020 ‘ T Madrid
Slide 29: Final Remarks & 2020 Outlook
Final Remarks & 2020 Outlook Creating Opportunities.
Slide 30: Final Remarks and 2020 Outlook
BBVA Creating Opportunities Final Remarks 2019 Outstanding performance Great operating income growth, in a difficult environment, driven by core revenues and efficiency improvement Risk indicators in line with expectations Strong capital position, with CET1 FL within the target range Outstanding del
Slide 31: Annex
BBVA Creating Opportunities Annex Customer spread by country Gross Income breakdown Net Attributable Profit evolution P&L Accounts by business unit Argentina: hyperinflation adjustment ALCO Portfolio, NIl Sensitivity and LCRs & NSFRs Garanti: wholesale funding Capital and RWAs by business area Book
Slide 32: Customer spread by country
01 Customer spread by country
Slide 33: Customer spreads: Quarterly evolution
BBVA Creating Opportunities Customer spreads: Quarterly evolution AVERAGE Spain 1.95% 1.95% 1.99% 2.00% 1.99% Turkey TL 1.12% 2.50% 2.72% 4.10% 7.12% Yield on Loans 2.03% 2.04% 2.06% 2.05% 2.02% Yield on Loans 18.98% 19.02% 19.09% 18.56% 16.46% Cost of Deposits -0.08% -0.07% -0.06% -0.05% -0.04% Cos
Slide 34: Customer spreads: YTD evolution
Customer spreads: YTD evolution YTD AVERAGE Spain 1.94% 1.99% Turkey TL 3.66% 4.17% Yield on Loans 2.02% 2.04% Yield on Loans 16.51% 18.26% Cost of Deposits -0.07% -0.05% Cost of Deposits -12.85% -14.09% USA 3.98% 3.98% Turkey FC1 4.36% 5.19% Yield on Loans 4.58% 4.92% Yield on Loans 6.98% 7.13% Cos
Slide 35: Gross Income breakdown
02 Gross Income breakdown BBVA Creating Opportunities
Slide 36: Gross Income breakdown
Gross Income breakdown 12M19 (CONSTANT€) Spain 5,734 Cm Rest of Eurasia 454 Cm 23% #2% South America 15% 3,850 Cm 15% Mexico 8,029 €m Note: Figures exclude Corporate Center. N USA 13% 3,223 Cm 14% Turkey 3,590 Cm
Slide 37: Net Attributable Profit evolution
03 Net Attributable Profit evolution BBVA Creating Opportunities
Slide 38: Group Net Attributable Profit
Group—Net Attributable Profit (€M) BUSINESSES +315 Cm 4,767 33 31 281 4,830 205 12M18(1) BBVA Chile FX Spain USA Mexico Turkey Rest of South Corp. Center 12M19 Effect Eurasia America (w/o BBVA Chile) YoY (%) -10 -23.9 8.2 -0.5 32.2 64.0 (constant €) 2 Excluding BBVA USA goodwill impairment
Slide 39: P&L Accounts by business unit
04 P&L Accounts by business unit
Slide 40: Rest of Eurasia Profit & Loss
Rest of Eurasia Corporate Center Colombia Peru BBVA Creating Opportunities Rest of Eurasia—Profit & Loss Net Interest Income 45 -9.1 175 0.0 Net Fees and Commissions 33 38.3 139 0.4 Net Trading Income 37 54.3 131 29.2 Other Income & Expenses 1 -169.0 9 n.a. Gross Income 116 19.8 454 9.6 Operating Ex
Slide 41: Corporate Center Profit & Loss
Corporate Center- Profit & Loss Net Interest Income -41 -36.0 -233 -13.4 Net Fees and Commissions -11 30.9 -73 24.0 Net Trading Income -1 -98.9 -54 -65.0 Other Income & Expenses 22 -17.0 21 -66.1 Gross Income -31 -70.7 -339 -19.3 Operating Expenses -237 12.6 -955 9.6 Operating Income -268 -15.0 -1,2
Slide 42: Colombia Profit & Loss
Colombia—Profit & Loss Net Interest Income Net Fees and Commissions Net Trading Income Other Income & Expenses Gross Income Operating Expenses Operating Income Impairment on Financial Assets Provisions & other gains (losses) Income Before Tax Income Tax Non-controlling interest 211 4.5 829 4.8 21 -2
Slide 43: Peru Profit & Loss
Peru—Profit & Loss Net Interest Income Net Fees and Commissions Net Trading Income Other Income & Expenses Gross Income Operating Expenses Operating Income Impairment on Financial Assets Provisions & other gains (losses) Income Before Tax Income Tax Non-controlling interest 216 -4.3 898 7.3 57 -8.4
Slide 44: Argentina: hyperinflation adjustment
05 Argentina: hyperinflation adjustment BBVA Creating Opportunities
Slide 45: Argentina hyperinflation adjustment
Argentina hyperinflation adjustment Net Interest Income 1,040 173 867 Net Fees and Commissions 134 22 112 Net Trading Income 298 57 241 Other Income & Expenses -442 -367 -75 Gross Income 1,031 -116 1,146 Operating Expenses -483 -99 -384 Operating Income 548 -215 763 Impairment on Financial Assets (n
Slide 46: ALCO Portfolio, NII Sensitivity and LCRs & NSFRs
BBVA Creating Opportunities 06 ALCO Portfolio, NIl Sensitivity and LCRs & NSFRs
Slide 47: ALCO portfolio
ALCO portfolio ALCO PORTFOLIO BREAKDOWN BY REGION (€ BN) 49.7 51.6 50.8 South America g 2.4 3.3 2.7 (£bn) (€bn) Mexico 47 49 6.3 South 2y 17vears Turkey 8 3 8 6 7.9 America Mexico 0.8 5.5 1.4 years USA â– 11-7 112.2 â– 12.0 Turkey 4.3 3.7 3.1 years I USA 5.5 6.5 2.1 years 22.6 122.6 I 21.9 Euro 12.5
Slide 48: NII sensitivity to interest rates movements
NIl sensitivity to interest rates movements ESTIMATED IMPACT ON NIl IN THE NEXT 12 MONTHS TO PARALLEL INTEREST RATE MOVEMENTS (%) NIl SENSITIVITY TO +100 BPS NIl SENSITIVITYTO -100BPS 15% 0% 10% 5% 0% -15% Euro USA Mexico Euro USA Mexico Note: Nil sensitivities calculated using our dynamic internal
Slide 49: Liquidity and funding ratios
Liquidity and funding ratios BBVA GROUP AND SUBSIDIARIES LCR & NSFR BOTH SIGNIFICANTLY ABOVE THE 100% REQUIREMENTS AT A GROUP LEVEL AND IN ALL BANKING SUBSIDIARIES DEC-19 LCR 129% (158%) 147% 145% 147% 206% well >100% nsfr 120% 113% 116% 130% 151% well >100%1 LCR of 129% does not consider the excess
Slide 50: Garanti: wholesale funding
07 Garanti: wholesale funding BBVA Creating Opportunities
Slide 51: Turkey Liquidity & funding sources
Turkey—Liquidity & funding sources m Solid liquidity position: Improved Total LTD ratio to 94%, decreasing by 1.5 p.p. in 4Q19, driven by improvement both in TRY Currency LTD and Foreign Currency LTD. Foreign currency loans remained same at c. USD 13.1 Bn in 4Q19 Liquidity ratios above requirements:
Slide 52: Capital and RWAs
08 Capital and RWAs Capital YTD RWAs by business area BBVA Creating Opportunities
Slide 53: Capital YTD evolution
Capital YTD evolution CET1 FULLY-LOADED—BBVA GROUP YTD EVOLUTION (%, BPS) +40 bps +136 bps 1 +17 bps 11.74% +5 bps -34 bps bps 1 2 Dec-18 Net Dividend RWAs Regulatory Reg. Others Dec-19 Earnings accrual &AT1 (constant impacts Equivalence Coupons Euros) Argentina
Slide 54: Risk-Weighted Assets by business areas
Risk-Weighted Assets by business areas Spain 104,925 105,866 104,113 USA 65,170 65,902 64,175 Turkey 59,299 58,521 56,486 Mexico 56,642 57,454 53,177 South America 45,674 45,284 42,724 Argentina 6,093 6,070 8,036 Chile 2,121 2,248 2,243 Colombia 14,172 14,051 12,680 Peru 19,293 19,130 15,739 Others
Slide 55: Book Value of the main subsidiaries
09 Book Value of the main subsidiaries BBVA Creating Opportunities
Slide 56: Book Value of the main subsidiaries
Book Value of the main subsidiaries’ € BN, DEC 19 Mexico11.2 USA 7.7 Turkey 4.2 Colombia 1.5 Peru 1.1 Argentina 0.8 Chile 0.3 Venezuela 0.1 (1) Includes the initial investment + BBVA’s undistributed results + FX impact + other valuation adjustments. The Goodwill associate to each subsidiary has been
Slide 57: Digital sales breakdown
10 Digital sales breakdown Creating Opportunities.
Slide 58: Outstanding trend in digital sales across the board
Outstanding trend in digital sales across the board (% of total sales YtD, # of transactions and PRV1) * UNITS PRV GROUP a SPAIN m USA2 52.3 594 52 9 PRV 10.2 Jan-16 Dec-18Dec-19 Jan-16 Dec-18Dec-19 Jan-16 Dec-18 Dec-19 MEXICO TURKEY ® SOUTH AMERICA 55.2 83.0 84.6 437 58.4 634 43 3 42.2 8.7 30.5 61.
Slide 59: Signature
BBVA SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Banco Bilbao Vizcaya Argentaria, S.A. Date: January 31, 2020 By: /s/ María Ángeles Peláez Morón Nam
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