Banco Bilbao Vizcaya Argentaria, S.A. · BME:BBVA
Banco Bilbao Vizcaya Argentaria — BBVA — Q2 2009 Earnings Presentation
57 slides from Banco Bilbao Vizcaya Argentaria's earnings presentation, Jul 28, 2009
Slide 1: Strength through generation of earnings and capital
Strength through generation of earnings and capital BBVA Group Results Second quarter 2009 Madrid, 28th July 2009 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: While immersed in an extremely complex environment
While immersed in an extremely complex environment . . . 1 2 Earnings above Good news on risk expectations 3 4 Strong organic Stronger position generation of in all markets capital 3
Slide 4: Record earnings
1 Record earnings . . . Net attrib. profit BBVA Group excluding one-offs Quarter by quarter +5.0% (€m) 1,561 1,440 1,442 1,486 1,392 1,339 1,238 1,094 +26.1% 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 Earnings per share excl. one-offs: 1H09: €0.76 (-4.1%) 2Q09: €0.42 (+5.0%) 4
Slide 5: In revenues
. . . in revenues . . . Net interest income Gross income BBVA Group BBVA Group Quarter by quarter Cumulative results (€m) (€m) NII + fees & commissions NTI + other income +7.8% +26.7% 9,626 10,380 3,586 2,829 3,043 3,088 3,272 13% 2,433 2,697 2,726 19% +9.6% +9.5% in constant € 3Q07 4Q07 1Q08 2Q08 3
Slide 6: In efficiency
. . . in efficiency . . . Strict cost control Total costs Cost-income ratio BBVA Group BBVA Group Year-on-year growth (%) (%) -3.8 p.p. 43.2 16.9 39.4 9.5 10.0 8.0 -0.7 -1.6 1H08 1H09 3M08 6M08 9M08 12M08 3M09 6M09 6
Slide 7: In all business areas
. . . in all business areas Total costs, Spain & Portugal Total costs, Mexico Year-on-year growth Year-on-year growth (%) (%) 1.8 1.7 10.8 8.3 7.1 -0.9 -1.3 6.5 2.1 -6.5 -6.5 0.6 3M08 6M08 9M08 12M08 3M09 6M09 3M08 6M08 9M08 12M08 3M09 6M09 Total costs, WB&AM Total costs, USA Total costs, South Amer
Slide 8: And in operating income
And in operating income . . . Operating income Operating income BBVA Group BBVA Group Quarter by quarter Cumulative results (€m) (€m) +15.0% +24.8% 6,293 5,472 3,474 2.688 2,784 2,695 2,819 2,306 2,483 2,355 +23.2% +18.0% in constant € 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 1H08 1H09 Recurrent oper
Slide 9: While immersed in an extremely complex environment
While immersed in an extremely complex environment . . . 1 2 Earnings above Good news on risk expectations 3 4 Strong organic Stronger position generation of in all markets capital 9
Slide 10: Good news on risk
2 Good news on risk A Lower entries to NPA Selective purchases of property B are in-line with plans C Prudent provisioning policy Ample coverage by provisions D and collateral E Limited release of generic provisions 10
Slide 11: Lower entries to NPA and higher efficiency in recoveries
Lower entries to NPA and higher A efficiency in recoveries Net additions to NPA Recoveries / entries to NPA BBVA Group BBVA Group Quarter by quarter Quarter by quarter (€m) (%) 44.4% 3,001 2,559 32.4% 2,262 2,067 27.9% 29.6% 3Q08 4Q08 1Q09 2Q09 3Q08 4Q08 1Q09 2Q09 Net entries to NPA down 19% in quar
Slide 12: Selective purchases of property are in-line with plans
Selective purchases of property are in-line B with plans Purchases of property BBVA Group Quarter by quarter (€m) 490 325 304 178 3Q08 4Q08 1Q09 2Q09 Total stock of properties: €1,028m 12
Slide 13: Prudent provisioning policy
C Prudent provisioning policy Total provisions and percentage of operating income applied to provisioning BBVA Group Quarter by quarter 1,224 (%) 916 958 876 34% 37% 35% 34% 3Q08 4Q08 1Q09 2Q09 Total provisions Percentage of operating income applied to provisoning €195m allocated to provisions for p
Slide 14: Ample coverage by provisions and collateral at Group level
Ample coverage by provisions and D collateral at Group level . . . With collateral Without collateral BBVA Group BBVA Group (€m) (€m) 186% 141% 11,316 8,023 6,076 5,698 Collateral NPA Total NPA provisions* * Specific+Generic+Substandard 14
Slide 15: Limited release of generic provisions
E Limited release of generic provisions Release of generic provisions BBVA Group Quarter by quarter (€m) 300 289 216 4Q08 1Q09 2Q09 Total generic + substandard: €4,546m 15
Slide 16: While immersed in an extremely complex environment
While immersed in an extremely complex environment . . . 1 2 Earnings above Good news on risk expectations 3 4 Strong organic Stronger position generation of in all markets capital 16
Slide 17: Sustainable profits (excl. one-off items)
3 Sustainable profits ... (€m, excl. one-off items) Annual Annual Growth Accum. Grow th BBVA Group 1H09/1H08 1Q09/1Q08 1H09 Abs. % % Net Interest Income 6,858 + 1,303 23.5% 20.1% Gross Income 10,380 + 755 7.8% 2.4% Operating Income 6,293 + 821 15.0% 4.9% Income Before Tax 4,003 - 231 -5.5% -10.8% Ne
Slide 18: Sustainable profits
Sustainable profits ... (€m) Annual Annual Growth Accum. Grow th BBVA Group 1H09/1H08 1Q09/1Q08 1H09 Abs. % % Net Interest Income 6,858 + 1,303 23.5% 20.1% Gross Income 10,380 + 755 7.8% 2.4% Operating Income 6,293 + 821 15.0% 4.9% Income Before Tax 4,003 - 488 -10.9% -34.1% Net Income 3,042 - 235 -
Slide 19: Supporting strong generation of capital
. . . supporting strong generation of capital . . . HIGHLIGHTS IMPACT Strong earnings growth ~€2,100m of core Pay-out policy capital generated in 1H09 Containment of RWAs 19
Slide 20: Strong increase in the core capital ratio
. . . and a strong increase in the core capital ratio Core capital Tier I and total capital ratio BIS II BIS II (%) (%) Organic generation 6.9 0.5 0.2 Tier I 8.2% 6.2 Total capital 12.2% ratio Dec.08 Core capital Core capital Jun.09 generation generation 1Q09 2Q09 Organic generation of capital: +70
Slide 21: Alignment with the criteria of peers
Alignment with the criteria of peers Alignment with Core capital ratio after the criteria alignment: of peers 7.1% 21
Slide 22: Superior levels of profitability
Superior levels of profitability ROA ROTE Peer Group 1Q09 Peer Group 1Q09 (%) (%) 26.7 1.00 10.0 0.04 0.22 2.3 BBVA Average Median BBVA Average Median ROA: 1.1% RORWA: 2.1% RAR: 27.0% ROE: 21.5% ROTE: 30.3% Peers: BARCL, BBVA, BNPP, CASA, CMZ, CS, DB, HSBC, ISP, LBG, RBS, SAN, SG, UBS, UCI, Lloyds a
Slide 23: BBVA Group: key figures for 1H09
BBVA Group: key figures for 1H09 EARNINGS FUNDAMENTALS Efficiency ROE Gross income incl. depr. +7.8% 21.5% 39.4% Operating income +15.0% NPA ratio Coverage 3.19% 68% Net attr. profit (excl. one-offs) -4.4% EPS excl. one-offs: €0.76 (-4.1%) 23
Slide 24: While immersed in an extremely complex environment
While immersed in an extremely complex environment . . . 1 2 Earnings above Good news on risk expectations 3 4 Strong organic Stronger position generation of in all markets capital 24
Slide 25: All our business areas are stronger
All our business areas are stronger Spain & Portugal Wholesale Banking & Asset Management Mexico USA South America 25
Slide 26: Spain & Portugal: key figures for 1H09
Spain & Portugal: key figures for 1H09 EARNINGS FUNDAMENTALS Efficiency ROE Gross income incl. depr. 36.0% +1.3% 34.4% NPA ratio Coverage Spain & Portugal Spain & Portugal Operating income 3.65% 55% +5.9% NPA ratio Coverage Business in Spain Business in Spain Net attr. profit 3.47% 58% -1.7% Cost of
Slide 27: Spain & Portugal: key figures for 1H09
Spain & Portugal: key figures for 1H09 Net interest income Total costs Operating income Spain & Portugal Spain & Portugal Spain & Portugal (€m) Year-on-year growth (€m) (%) +5.4% +5.9% 2,458 2,206 2,335 2,331 1.8 1.7 -0.9 -1.3 -6.5 -6.5 3M08 6M08 9M08 12M08 3M09 6M09 1H08 1H09 1H08 1H09 27
Slide 28: Spain & Portugal: reduction of net entries to NPA
Spain & Portugal: reduction of net entries to NPA Net entries to NPA Recoveries / entries to NPA BBVA Spain & Portugal BBVA Spain & Portugal Quarter by quarter Quarter by quarter (€m) (%) 47.4% 1,966 31.4% 1,493 1,497 26.5% 1,064 18.6% 3Q08 4Q08 1Q09 2Q09 3Q08 4Q08 1Q09 2Q09 Net entries to NPA down
Slide 29: Spain & Portugal: superior risk performance
Spain & Portugal: superior risk performance Public NPA ratio NPA ratio incl. property Change in NPA ratio incl. property Spanish peer group 1Q09 Spanish peer group 1Q09 Spanish peer group 1Q09 (%) (%) (basis points) Peer 1 1.97 BBVA 3.63 BBVA 277 Peer 2 2.40 Peer 2 3.94 Peer 2 310 Peer 3 2.82 Peer 4
Slide 30: Spain & Portugal: domestic business emerges stronger
Spain & Portugal: domestic business emerges stronger from complex environment BBVA Spain’s mkt share of recurrent operating income after provisioning (%) 36.2% 33.2% 25.3% 26.7% 23.3% 1Q08 1H08 9M08 2008 1Q09 BBVA Spain’s operating income excl. dividends and NTI, and net of provisions BBVA Spain’s m
Slide 31: Spain & Portugal: 1H09 results
Spain & Portugal: 1H09 results (€m) Annual Annual Growth Accum. Grow th Spain & Portugal 1H09/1H08 1Q09/1Q08 1H09 Abs. % % Net Interest Income 2,458 + 127 5.4% 5.6% Gross Income 3,558 + 44 1.3% 1.0% Operating Income 2,335 + 129 5.9% 5.6% Income Before Tax 1,810 - 53 -2.9% -2.5% Net Income 1,270 - 22
Slide 32: All our business areas are stronger
All our business areas are stronger Spain & Portugal Wholesale Banking & Asset Management Mexico USA South America 32
Slide 33: Wholesale Banking & Asset Management: key figures for 1H09
Wholesale Banking & Asset Management: key figures for 1H09 EARNINGS FUNDAMENTALS Gross income +0.2% Efficiency ROE incl. depr. 26.5% 25.8% Operating income -1.6% Net attr. profit NPA ratio Coverage -3.3% 0.72% 133% 33
Slide 34: Wholesale Banking & Asset Management: key figures for 1H09
Wholesale Banking & Asset Management: key figures for 1H09 Corporate & Investment Banking Corporate & Investment Banking Operating income Other revenues (€m) NII (%) +30.7% 382 58 65 292 35 42 1H08 1H09 Jun.08 Jun.09 34
Slide 35: Wholesale Banking & Asset Management: superior performance
Wholesale Banking & Asset Management: superior performance Markets Asset management Operating income Mkt share of mutual funds (€m) (%) +29.4% +163 bp +56 bp 337 261 19.78 20.22 20.34 18.71 19.11 Jun.08 Sep.08 Dic.08 Mar.09 Jun.09 1H08 1H09 35
Slide 36: Wholesale Banking & Asset Management: 1H09 results
Wholesale Banking & Asset Management: 1H09 results (€m) Annual Annual Growth Wholesale Banking & Accum. Grow th 1H09/1H08 1Q09/1Q08 Asset Management 1H09 Abs. % % Gross Income 1,022 +2 0.2% 7.7% Operating Income 758 - 12 -1.6% 7.6% Income Before Tax 744 + 47 6.7% 14.2% Net Income 541 - 19 -3.3% 0.1%
Slide 37: All our business areas are stronger
All our business areas are stronger Spain & Portugal Wholesale Banking & Asset Management Mexico USA South America 37
Slide 38: Mexico: key figures for 1H09
Mexico: key figures for 1H09 EARNINGS FUNDAMENTALS Efficiency incl. depr. Gross income 31.4% +4.5% NPA ratio Operating income 3.90% +6.4% Coverage Net attr. profit 137% -13.3% (-5.9% excl. VISA) Cost of risk 5.01% 38
Slide 39: Mexico: 1H09 highlights (part 1)
Mexico: 1H09 highlights (part 1) Net interest income Total costs Operating income excl. VISA Mexico Mexico Mexico (Constant €m) Year-on-year growth (Constant €m) (%) +5.2% +12.7% 1,717 1,683 1,524 1,599 10.8 8.3 7.1 6.5 Incl. VISA: +6.4% 2.1 0.6 3M08 6M08 9M08 12M08 3M09 6M09 1H08 1H09 1H08 1H09 Net
Slide 40: Mexico: 1H09 highlights (part 2)
Mexico: 1H09 highlights (part 2) Loan-loss provisions NPA ratio Mexico Mexico (Constant €m) (%) 3,6 3,9 135 144 121 97 1Q09 Apr.09 May.09 Jun.09 Mar.09 Jun.09 average Provisioning and NPAs under control despite impact of H1N1 flu 40
Slide 41: Mexico: superior performance
Mexico: superior performance Cost of risk vs. peers Mexico (%) 7.60 6.94 5.48 4.84 4.29 3.14 4.04 3.54 2.95 3.01 3.09 2.61 Jun.07 Dec.07 Mar.08 Jun.08 Dec.08 Mar.09 BBVA Bancomer Competitors Bancomer calculates cost of risk based on information from the consolidated accounts and also using criteria
Slide 42: Mexico: business emerges stronger from complex environment
Mexico: business emerges stronger from complex environment BBVA Bancomer’s mkt share of recurrent operating income after provisioning In Mexican pesos (%) 61.9% 47.9% 51.3% 46.5% 42.0% 1Q08 1H08 9M08 2008 1Q09 BBVA Bancomer’s operating income excl. NTI, and net of provisions BBVA Bancomer’s mkt shar
Slide 43: Mexico: 1H09 results
Mexico: 1H09 results (Constant €m) Annual Annual Growth Accum. Grow th Mexico 1H09/1H08 1Q09/1Q08 1H09 Abs. % % Net Interest Income 1,683 + 84 5.2% 6.0% Gross Income 2,503 + 108 4.5% 1.0% Operating Income 1,717 + 103 6.4% 0.4% Income Before Tax 962 - 202 -17.4% -22.6% Net Income 725 - 111 -13.3% -16
Slide 44: All our business areas are stronger
All our business areas are stronger Spain & Portugal Wholesale Banking & Asset Management Mexico USA South America 44
Slide 45: USA: key figures for 1H09
USA: key figures for 1H09 EARNINGS FUNDAMENTALS Gross income Efficiency ROE -6.4% incl. depr. 6.9% 60.4% Operating income +2.3% Compass NPA ratio Net attr. profit Coverage 4.50% -54.8% 50% 45
Slide 46: USA: 1H09 highlights (part 1)
USA: 1H09 highlights (part 1) Net interest income Total costs Operating income USA USA USA Quarter by quarter Year-on-year growth Quarter by quarter (%) (Constant €m) (Constant €m) 3.82 3.78 3.73 3.65 226 9M08 12M08 3M09 6M09 210 199 177 169 n.s. n.s. 3Q08 4Q08 1Q09 2Q09 -6.7 2Q08 3Q08 4Q08 1Q09 2Q0
Slide 47: USA: 1H09 highlights (part 2)
USA: 1H09 highlights (part 2) Net entries to NPA Recoveries / entries to NPA BBVA Compass BBVA Compass Quarter by quarter Quarter by quarter (€m) (%) 41.8% 35.8% 245 241 28.7% 224 4Q08 1Q09 2Q09 4Q08 1Q09 2Q09 Reduction of net entries Growth of recoveries to NPA 47
Slide 48: USA: 1H09 highlights (part 3)
USA: 1H09 highlights (part 3) Provisions Net attributable profit USA USA Quarter by quarter Quarter by quarter (Constant €m) (Constant €m) Impairment losses / operating income 93 41 43 165 146 124 110 23 22 77 2Q08 3Q08 4Q08 1Q09 2Q09 2Q08 3Q08 4Q08 1Q09 2Q09 37% 83% 68% 62% 68% 48
Slide 49: USA: superior performance compared to peers
USA: superior performance compared to peers NIM (Net interest margin) Efficiency 3 Provisions / operating income BBVA Compass 2Q09 1 BBVA Compass 2Q09 1 BBVA Compass 2Q09 1 (%) (%) (%) 3.82% (4) 110% 59.4% 3.17% 54.6% 62% (5) BBVA Compass Peers (2) BBVA Compass Peers (2) BBVA Compass Peers (2) (1) B
Slide 50: USA: 1H09 results
USA: 1H09 results (Constant €m) Quarter-by-quarter USA 2Q09 1Q09 4Q08 3Q08 Net Interest Income 373 370 370 371 Gross Income 542 531 540 546 Operating Income 226 199 169 177 Income Before Tax 66 61 31 30 Net Income 43 41 22 23 Net Attributable Profit 43 41 22 23 Net attr. profit excl. amortisation of
Slide 51: All our business areas are stronger
All our business areas are stronger Spain & Portugal Wholesale Banking & Asset Management Mexico USA South America 51
Slide 52: South America: key figures for 1H09
South America: key figures for 1H09 EARNINGS FUNDAMENTALS Gross income Efficiency ROE +22.1% incl. depr. 42.8% 39.7% Operating income +31.1% NPA ratio Coverage Net attr. profit 2.62% 129% +29.0% 52
Slide 53: South America: 1H09 highlights (part 1)
South America: 1H09 highlights (part 1) Lending and cust. funds Gross income Operating income South America South America South America Year-on-year growth (Constant €m) (Constant €m) (Average balances) +22.1% +31.1% 1,876 1,132 1,537 863 21.4% 5.7% Lending Customer funds 1H08 1H09 1H08 1H09 Net int
Slide 54: South America: 1H09 highlights (part 2)
South America: 1H09 highlights (part 2) Efficiency Cost of risk by quarter South America South America (%) (%) -4.8 p.p. 44.4 2.3 39.7 1.5 1.6 1.7 1.0 1.1 1H08 1H09 1T08 2T08 3T08 4T08 1T09 2T09 Net attrib. profit: €463m (+29.0%) 54
Slide 55: South America: 1H09 results
South America: 1H09 results (Constant €m) Annual Annual Growth Accum. Grow th South America 1H09/1H08 1Q09/1Q08 1H09 Abs. % % Net Interest Income 1,210 + 183 17.8% 16.2% Gross Income 1,876 + 339 22.1% 19.4% Operating Income 1,132 + 268 31.1% 24.0% Income Before Tax 912 + 190 26.3% 19.1% Net Income 7
Slide 56: In conclusion
In conclusion . . . 1 2 Earnings above Good news on risk expectations 3 4 Strong organic Stronger position generation of in all markets capital 56
Slide 57: Strength through generation of earnings and capital
Strength through generation of earnings and capital BBVA Group Results Second quarter 2009 Madrid, 28th July 2009 57