44 slides from Banco Bilbao Vizcaya Argentaria's earnings presentation, Apr 25, 2012
Slide 1: First quarter results 2012
1Q12 Results / April 25th 2012 First quarter results 2012 Ángel Cano, BBVA President & Chief Operating Officer Madrid, April 25th 2012 1
Slide 2: Disclaimer
1Q12 Results / April 25th 2012 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
Slide 3: Diverse macroeconomic environment ...
1Q12 Results / April 25th 2012 Diverse macroeconomic environment ... ... special focus ... good growth Uncertainty in Europe ... on Spain ... at world level Fiscal Greece Asia and Latam: consolidation strong growth Contagion Debt level Governance Financial sector USA: recovery in Growth Growth progr
Slide 4: ... four main concerns in Spain ...
1Q12 Results / April 25th 2012 ... four main concerns in Spain ... Steps taken: •Steps 1. Fiscal - National Budget consolidation - Budgetary Stability Act Ambitious and - Plans for rebalancing regional government budgets and a determined approach to supplier payments programme austerity measures - M
Slide 5: … which are being addressed
1Q12 Results / April 25th 2012 … which are being addressed • Installed capacity 3. Financial - Savings banks: down from 45 in 2007 to 11 today sector - Branches: 4,700 less since 2007 Provisioning •Provisioning Restructuring nearly complete but still - 15% GDP including RDL 2/12* 87% of land •87% un
Slide 6: BBVA: a global bank that has demonstrated its ability to adapt
1Q12 Results / April 25th 2012 BBVA: a global bank that has demonstrated its ability to adapt 6
Slide 7: The quarter's highlights
1Q12 Results / April 25th 2012 T h e q u a r t e r ’s h i g h l i g h t s 1 Growth of recurring revenues . . . . . . in all regions . . . . . . outpacing cost increases 2 Net attributable profit tops €1,000m 3 Early compliance with EBA 7
Slide 8: Strong net interest income in all regions ...
1Q12 Results / April 25th 2012 Strong net interest income in all regions ... Spain Stability, despite weak Net interest income +0.2% activity BBVA Group (€m) USA +13. 3% Resilience that absorbs -3.0% changes in mix and regulatory impacts Mexico 3,485 3,597 Growing faster than 3,175 3,215 3,286 +9.4%
Slide 9: … upward trend in gross income ...
1Q12 Results / April 25th 2012 … upward trend in gross income ... Recurring gross income BBVA Group (€m) +12.6% 5,000 4,500 5,053 4,869 4,000 4,566 4,602 3,500 4,488 3,000 2,500 2,000 775 1,500 595 646 NTI + dividends 394 1,000 25 500 0 1Q11 2Q11 3Q11 4Q11 1Q12 Gross 5,263 5,162 4,627 5,515 5,447 in
Slide 10: … and costs growing slower than recurring revenues
1Q12 Results / April 25th 2012 … and costs growing slower than recurring revenues Year-on-year change (Constant €) Recurring gross income vs costs BBVA Group Developed (Year-on-year change, %) -0.7% -2.1% Recurring gross Costs income 12.6% 9.6% Recurring Gross Costs Emerging income • Heavy investmen
Slide 11: Highly resilient operating income …
1Q12 Results / April 25th 2012 Highly resilient operating income … Recurring operating income BBVA Group (€m) +15.9% 5,000.00 2,468 4,000.00 2,141 2,217 2,129 2,088 3,000.00 2,000.00 NTI + dividends 775 595 646 394 1,000.00 25 0.00 1Q11 2Q11 3Q11 4Q11 1Q12 Operating 2,904 2,683 2,166 2,863 2,862 inc
Slide 12: … and stable provisioning
1Q12 Results / April 25th 2012 … and stable provisioning Spain BBVA Group Loan-loss and real-estate provisioning (€m) BBVA Group Quarterly average 836 674 707 (€m) 1,286 1,236 1,297 Ave. qtr. 2010 Ave. Qtr. 2011 1Q12 Remainder of Group BBVA Group (€m) 613 529 461 Ave. qtr. 2010 Ave. qtr. 2011 1Q12 C
Slide 13: Strong net attributable profit supported by diversification
1Q12 Results / April 25th 2012 Strong net attributable profit supported by diversification Net attributable profit by region Net attributable profit by economies BBVA Group BBVA Group (%) (%) USA Spain 8% Developed 16% 28% Mexico 30% EurAsia 21% 72% 26% Emerging South America Net attributable profit
Slide 14: Summary: a good quarter
1Q12 Results / April 25th 2012 Summary: a good quarter (€m) Growth Accum. BBVA Group 1Q12 / 1Q11 1Q12 Abs. % Net interest Income 3,597 DE INTERESES MARGEN + 422 13.3 Gross Income MARGEN BRUTO 5,447 + 183 3.5 Operating Income M A R G E N N E T O 2,862 - 42 -1.5 Income Before tax RESULTADOS ANTES DE 1
Slide 15: Risk indicators are stable …
1Q12 Results / April 25th 2012 Risk indicators are stable … NPAs – net balance NPA & coverage ratios BBVA Group BBVA Group (%) (€bn) Coverage ratio 16.1 61 61 60 61 60 15.5 15.8 16.0 15.9 4.1 4.0 4.1 4.0 4.0 NPA ratio Mar.11 Jun.11 Sep.11 Dec.11 Mar.12 Mar.11 Jun.11 Sep.11 Dec.11 Mar.12 15
Slide 16: Marked ability to generate capital organically
1Q12 Results / April 25th 2012 Marked ability to generate capital organically Core capital ratio (Basel 2.5) BBVA Group (%) 0.1 0.3 10.7 Stable dividend policy 10.3 With two cash dividends Without selling strategic assets Dec.11 Organic Other effects Mar.12 generation Early compliance with EBA: 9% 1
Slide 17: Proactive management of euro balance sheet liquidity
1Q12 Results / April 25th 2012 Proactive management of euro balance sheet liquidity ... that continues to be Solid liquidity position ... managed proactively •LTRO I + II: mainly designed to improve liquidity structures •Reduction in credit gap: - €4bn •Debt redemptions in 2012-2013 already covered
Slide 18: Highlights / Business areas
1Q12 Results / April 25th 2012 1 Highlights 2 Business areas 18
Slide 19: Spain: focus on price management …
1Q12 Results / April 25th 2012 Spain: focus on price management … Customer spread excluding Time deposits new production cost markets BBVA vs Deposit Entities** (%) (%) 2.7 2.4 2.5 2.5 2.5 2.3 2.4 2.3 2.5 2.3 2.3 2.4 1.96 2.02 2.06 1.76 2.2 2.0 1.71 BBVA (Time+notes) BBVA (Time) System* (Time) 1.9 1
Slide 20: Spain: ... that led to a slight improvement in net interest income
1Q12 Results / April 25th 2012 Spain: ... that led to a slight improvement in net interest income Net interest income Quarter-by-quarter (€m) +0.2% 1,310 1,257 1,183 1,148 1,110 1,101 1,094 1,086 1,113 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 Plus good performance by fee income during the quarte
Slide 21: Spain: strict cost control and resilient operating income
1Q12 Results / April 25th 2012 Spain: strict cost control and resilient operating income Costs Recurring operating income Quarter-by-quarter Quarter-by-quarter (€m) (€m) +1.9% -1.6% 1,143 703 699 876 892 688 1Q10 1Q11 1Q12 1Q10 1Q11 1Q12 21 Note: Recurring operating income excludes NTI
Slide 22: Spain: limited rise in NPAs
1Q12 Results / April 25th 2012 Spain: limited rise in NPAs NPAs – net balance NPA & coverage ratios (€bn) (%) Coverage ratio 43 43 42 44 43 11.0 11.2 11.3 11.2 11.3 4.8 4.7 4.9 4.8 4.9 NPA ratio Mar.11 Jun.11 Sep.11 Dec.11 Mar.12 Mar.11 Jun.11 Sep.11 Dec.11 Mar.12 22
Slide 23: Spain: income statement
1Q12 Results / April 25th 2012 Spain: income statement (€m) Growth Accum. Spain 1Q12 / 1Q11 1Q12 Abs. % Net interest Income 1,113 DE INTERESES MARGEN +2 0.2 Gross Income MARGEN BRUTO 1,633 - 130 -7.4 Operating Income M A R G E N N E T O 946 - 119 -11.2 Income Before tax R E S U L T A D O S A N T E S
Slide 24: EurAsia: high potential ...
1Q12 Results / April 25th 2012 EurAsia: high potential ... Turkey - Garanti Asia - CITIC Profit rank 1st Turkish bank 7th Chinese bank Gross € 3,806m €9,477m income 2011 Net attrib. €1,430m € 3,789m profit 2011 ... plus a wholesale banking franchise that is firmly based on customers (resilient in Eu
Slide 25: EurAsia: vigorous business and growing earnings
1Q12 Results / April 25th 2012 EurAsia: vigorous business and growing earnings Gross income – Rest of Europe (€m) +93.7% Breakdown of gross income - EurAsia 368 (%) CAGR Turkey 211 N.A. 190 24 Rest of -6% 166 157 Europe 31.1% 39.5% 1Q11 1Q12 Gross income - Asia 29.4% (€m) +12.7% Asia 166 CAGR Rest o
Slide 26: EurAsia: income statement
1Q12 Results / April 25th 2012 EurAsia: income statement (€m) Growth Accum. EurAsia 1Q12 / 1Q11 1Q12 Abs. % Net interest Income 182 DE INTERESES MARGEN + 79 76.3 Gross Income MARGEN BRUTO 534 + 197 58.3 Operating Income M A R G E N N E T O 362 + 116 47.5 Income Before tax R E S U L T A D O S A N T E
Slide 27: Mexico: buoyant lending with improvement in the liabilities mix
1Q12 Results / April 25th 2012 Mexico: buoyant lending with improvement in the liabilities mix and a direct impact on pricing Lending: +6.6% Cust. funds: +10.4% Customer spread Yr/yr change – average balances Balance sheet customer funds mix Customer spread (Base 100, %) (%) Local Business Current +
Slide 28: Mexico: new record for quarterly revenue
1Q12 Results / April 25th 2012 Mexico: new record for quarterly revenue Net interest income Recurring gross income Quarter-by-quarter Quarter-by-quarter (Constant €m) (Constant €m) +9.4% +8.8% 1,013 1,375 1,277 1,264 926 886 1Q10 1Q11 1Q12 1Q10 1Q11 1Q12 Growing faster Gross income: +4.9% than lendi
Slide 29: Mexico: growing share of peer group total
1Q12 Results / April 25th 2012 Mexico: growing share of peer group total Market share of operating income BBVA Bancomer vs Peer Group total* (%) 37.6 34.5 35.3 2009 2010 2011 Reaping the benefits of the investment in growth plans 29 * Peer group: Banamex, Banorte + IXE, HSBC, Santander, Scotiabank.
Slide 30: Mexico: stable risk premium
1Q12 Results / April 25th 2012 Mexico: stable risk premium Cumulative risk premium NPA ratio (%) (%) 4.3 3.8 3.6 3.5 3.4 3.6 3.7 3.7 Mar.10 Mar.11 Mar.12 Mar.11 Jun.11 Sep.11 Dec.11 Mar.12 Coverage ratio 136 134 128 120 116 30
Slide 31: Mexico: income statement
1Q12 Results / April 25th 2012 Mexico: income statement (Constant €m) Growth Accum. Mexico 1Q12 / 1Q11 1Q12 Abs. % Net interest Income 1,013 DE INTERESES MARGEN + 87 9.4 Gross Income MARGEN BRUTO 1,450 + 68 4.9 Operating Income M A R G E N N E T O 897 + 20 2.3 Income Before tax R E S U L T A D O S A
Slide 32: South America: vigorous business ...
1Q12 Results / April 25th 2012 South America: vigorous business ... Net interest income Quarter-by-quarter (Constant €m) Lending +23.6% +29.9% Mar.12 (Yr/yr change in average balances) 953 947 876 729 801 Balance sheet funds +25.4% Mar.12 (Yr/yr change in average balances) 1Q11 2Q11 3Q11 4Q11 1Q12 3
Slide 33: South America: ... which carries over to revenue
1Q12 Results / April 25th 2012 South America: ... which carries over to revenue Gross income Operating income (Constant €m) (Constant €m) +18.1% +21.8% 1,366 813 1,157 667 1Q11 1Q12 1Q11 1Q12 33
Slide 34: South America: improvement in efficiency and the best risk indicators
1Q12 Results / April 25th 2012 South America: improvement in efficiency and the best risk indicators in the Group Efficiency NPA & coverage ratios (%) (%) Coverage ratio 140 146 141 134 138 42.3 40.5 2.5 2.4 2.3 2.2 2.3 NPA ratio 1Q11 1Q12 Mar.11 Jun.11 Sep.11 Dec.11 Mar.12 Cost increases (+13%) in
Slide 35: South America: income statement
1Q12 Results / April 25th 2012 South America: income statement (Constant €m) Growth Accum. South America 1Q12 / 1Q11 1Q12 Abs. % Net interest Income 947 DE INTERESES MARGEN + 218 29.9 Gross Income MARGEN BRUTO 1,366 + 210 18.1 Operating Income M A R G E N N E T O 813 + 146 21.8 Income Before tax R E
Slide 36: United States: selective growth of lending and improvement in the liabilities mix
1Q12 Results / April 25th 2012 United States: selective growth of lending and improvement in the liabilities mix Lending Balance sheet funding mix Year-on-year change (Base 100) (% average balances) CAGR 2.0 +8.8% 75 80 -0.3 Current + savings -2.8 -3.9 -15.6% -4.2 Time 25 20 Mar.11 Jun.11 Sep.11 Dec
Slide 37: United States: resilient revenues and cost control ...
1Q12 Results / April 25th 2012 United States: resilient revenues and cost control ... Net interest income – local business Costs Quarter-by-quarter Year-on-year change (Constant €m) (Constant €m) +5.9% -2. 3% 391 382 369 392 383 1Q11 2011 ave. 1Q12 1Q11 1Q12 Absorbing regulatory impacts 37
Slide 38: United States: risk continues to improve
1Q12 Results / April 25th 2012 United States: risk continues to improve Loan-loss provisions NPA & coverage ratios (Constant €m) (%) Coverage ratio -66.3% 73 75 67 69 64 4.3 104 4.0 3.8 NPA ratio 3.5 35 3.2 1Q11 1Q12 Mar.11 Jun.11 Sep.11 Dec.11 Mar.12 Cum. risk 1.0 0.3 premium 38
Slide 39: United States: income statement
1Q12 Results / April 25th 2012 United States: income statement (Constant €m) Growth Accum. United States of America 1Q12 / 1Q11 1Q12 Abs. % Net interest Income 420 DE INTERESES MARGEN - 13 -3.0 Gross Income MARGEN BRUTO 599 - 45 -7.1 Operating Income M A R G E N N E T O 216 - 36 -14.5 Income Before
Slide 40: C&IB: diversification of revenues ...
1Q12 Results / April 25th 2012 C&IB: diversification of revenues ... Gross income by region Gross income by business type (1Q12, %) (1Q12, %) Corporate finance Eurasia Credit Global transactional 2% 11% FX Spain 13% USA banking 22% 6% 2% Equities 37% 10% Mexico 19% 25% 32% Rates 21% Global lending S
Slide 41: C&IB: ... supported by an efficient client-centric model
1Q12 Results / April 25th 2012 C&IB: ... supported by an efficient client-centric model with high added value and low risk Source of gross income C&IB (%) (Year-on-year change, %. Constant €) Other revenues 9% 17.9 Client-centric High quality 12.6 11.1 91% Customer revenues Lending NII Fee income Ef
Slide 42: C&IB: income statement
1Q12 Results / April 25th 2012 C&IB: income statement (Constant €m) Growth Accum. Corporate & Investment Banking 1Q12 / 1Q11 1Q12 Abs. % Gross Income MARGEN BRUTO 717 - 33 -4.4 Operating Income M A R G E N N E T O 502 - 40 -7.5 Income Before tax R E S U L T A D O S A N T E S D E 438 IM P U E S T O S
Slide 43: Quarter highlights
1Q12 Results / April 25th 2012 Quarter highlights 1 Growth of recurring revenues . . . . . . in all regions . . . . . . outpacing cost increases 2 Net attributable profit tops €1,000m 3 Early compliance with EBA 43
Slide 44: First quarter results
1Q12 Results / April 25th 2012 F i r s t q u a r t e r r e s u l t s 2 0 1 2 Ángel Cano, BBVA President & Chief Operating Officer Madrid, April 25th 2012 44