Banco Bilbao Vizcaya Argentaria, S.a. · BME:BBVA
Banco Bilbao Vizcaya Argentaria — Debt Investor Presentation (November 2017)
46 slides from Banco Bilbao Vizcaya Argentaria's debt investor presentation, November 2017
Slide 1: Fixed Income Investors Presentation 3Q17
Fixed Income Presentation / 1 Fixed Income Investors Presentation 3Q17
Slide 2: Disclaimer
Fixed Income Presentation / 2 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 decisio
Slide 3: Index
Fixed Income Presentation / 3 Index 01 BBVA’s Strengths & 05 MREL 9M17 Financial Highlights 06 Liquidity & Funding 02 Diversified Footprint 07 Transformation Strategy 03 Asset Quality APPENDIX BBVA Group 9M17 Profit & Loss 04 Capital Capital Base: BBVA Group & BBVA S.A. BBVA S.A: 2017 SREP Requireme
Slide 4: BBVA's Strengths & 9M17 Financial Highlights
Fixed Income Presentation / 4 01 BBVA’s Strengths & 9M17 Financial Highlights
Slide 5: BBVA's Strengths
Fixed Income Presentation / 5 BBVA’s Strengths Resilience and Low Earnings Volatility Diversified footprint (€ bn, %) 4.2% 3.7% 3.8% 3.7% 3.2% 3.3% 3.5% 3.0% 3.0% 2.8% Pre-provision Prudent risk profile profit / RWAs 12.3 11.9 11.9 10.5 10.6 11.1 11.4 10.2 10.4 9.5 Sound capital and Pre-provision li
Slide 6: 9M17 Highlights
Fixed Income Presentation / 6 9M17 Highlights Core revenues growth Cost control Increasing results Net +9.3% Gross Gross Operating Group Net +29% interest income Income Expenses Attributable 16.9 3.4 income 15.5 vs. Op. Profit 2.7 and fees Expenses 9M2017 (€ bn, constant) (YtD, %, € constant) +7.2%
Slide 7: Diversified Footprint
Fixed Income Presentation / 7 02 Diversified Footprint
Slide 8: Well diversified footprint with high growth prospects
Fixed Income Presentation / 8 Well diversified footprint with high growth prospects Breakdown by Business Area (1) Higher Growth Prospects GDP growth (YoY, %) Total Assets 4.4 3.9 3.4 Sep 17 Rest of 3.0 2.6 South 2.4 2.4 2.2 America Eurasia 1.7 1.9 BBVA’s footprint (3) 2.7% 10.9% 2.1 EZ+UK 2.0 1.6 1
Slide 9: Business areas in 9M17: Spain
FixedIncome Fixed IncomePresentation Presentation//9 9 Business areas in 9M17 SPAIN Banking activity MAIN MESSAGES NET ATTRIBUTABLE PROFIT (9M17) NPL RATIO Sep.17 Loan evolution impacted by deleverage in mortgages and public sector, more than offsetting significant growth in Consumer and SMEs 1,061
Slide 10: Business areas in 9M17: Mexico and Turkey
FixedIncome Fixed Presentation//10 IncomePresentation 10 Business areas in 9M17 MEXICO constant € MAIN MESSAGES NET ATTRIBUTABLE PROFIT (9M17) NPL RATIO Sep.17 +8.9% YoY loan growth, in line with expectations driven by the commercial portfolio 1,616 €m 2.3% vs. 2.3% Dec.16 Sustained growth in all P&
Slide 11: Asset Quality
Fixed Income Presentation / 11 03 Asset Quality
Slide 12: Asset Quality: continued improvement after the crisis
Fixed Income Presentation / 12 Asset Quality: continued improvement after the crisis NPL Ratio 5.1 6.8 5.8 5.4 (%) 4.3 4.1 4.0 4.9 4.8 4.8 4.5 Risk Framework Risk Framework 2.3 A Risk Management A Risk Management Model based Model on prudence based on and proactivity prudence and proactivity 92 Cove
Slide 13: A prudent risk profile
Fixed Income Presentation / 13 A prudent risk profile 5.7 6.1 2.6 3.2 2.2 2.1 2.4 2.4 NPL 1.4 1.1 ratio (%) BBVA Banking Peers BBVA Peers BBVA Peers Garanti Peers BBVA Peers Activity in Average Compass Average Bancomer Average Average S. America Average Spain SPAIN USA (1) MEXICO TURKEY S. AMERICA 3
Slide 14: Capital
Fixed Income Presentation / 14 04 Capital
Slide 15: Sound capital position and proven ability to generate capital
Fixed Income Presentation / 15 Sound capital position and proven FL Capital Ratios ability to generate capital BBVA Group Sep-17 (%) CET1 FL Ratio – BBVA Group (%) 15.35% 11.6% 10.9% 11.0% 11.1% 11.2% 10.3% 10.8% 9.7%(2) 10.3% Tier 2 2.45% 8.0% 9.6% Basel II 6.2% AT 1 1.71% Basel III – c.1.95% (1) F
Slide 16: BBVA USD 1.0 bn PNC10 AT1
Fixed Income Presentation / 16 BBVA USD 1.0 bn PNC10 AT1 General corporate purposes which includes to increase flexibility to refinance outstanding AT1 instruments Rationale To preserve regulatory capital levels and distance to MDA supporting BBVA’s 1.5% AT1 layer To take advantage of current market
Slide 17: Low earnings volatility and ability to generate capital allow for lower capital needs
Fixed Income Presentation / 17 Low earnings volatility and ability to generate capital allow for lower capital needs Pre-provision profit(1) / Net Loans Pre-provision profit(1) / RWAs 9M17 9M17 BBVA 3.2% Peer 1 4.4% Peer 1 3.0% Peer 2 4.1% Peer 2 2.6% BBVA 3.5% Peer 3 2.3% Peer 3 3.1% Peer 4 2.2% Pe
Slide 18: High quality capital
Fixed Income Presentation / 18 High quality capital RWAs/ Total Assets Fully-Loaded Leverage Ratio Sep-17, % Sep-17, % BBVA 53 BBVA 6.7 #1 #1 Peer 1 42 Peer 1 6.1 Peer 2 42 Peer 2 5.7 Peer 3 37 Peer 3 5.4 Peer 4 36 Peer 4 5.3 Peer 5 35 Peer 5 5.2 Peer 6 34 Peer 6 5.0 Peers Av. 31 Peer 7 5.0 Peer 7 2
Slide 19: Risk-Weighted Assets distribution
Fixed Income Presentation / 19 Risk-Weighted Assets distribution TOTAL RWAs Sep-17 Optimizing Capital 365,464 €m Allocation is one of BBVA’s Strategic 32% 32% IRB Models Priorities 3% CVA (2) 0.6% 4% FX Risk 1.6% ~ 80% of the RWAs Trading Act. Risk 2.9% located in Investment 16% 15% Operational Risk
Slide 20: Capital ratios well above requirements
Fixed Income Presentation / 20 Capital ratios well above requirements 2017 SREP Requirement and distance to MDA(1) at Group level Sep-17 Well above 2017 DISTANCE TO MDA(5) 15.66% Total Capital and CET1 401 bps T2: 2.53% SREP requirements 11.125% (4) €14.6 Bn AT1: 1.26% On a phased-in T2: 2.0% basis
Slide 21: High level of Available Distributable Items (ADIs)
Fixed Income Presentation / 21 High level of Available Distributable Items (ADIs) BBVA, S.A. (Parent Company) December 2016, € bn € 9.2 bn Significant payment capacity BBVA S.A. from distributable items ADIs: despite conservative calculation c. 35x (Share Premium not included) 2016 AT1 coupons Suppo
Slide 22: FX Hedging policy
Fixed Income Presentation / 22 FX Hedging policy Capital P&L POLICY BBVA hedges c.70% of the excess POLICY BBVA hedges on average between capital (what is not naturally hedged 30%-50% of foreign subsidiaries by the ratio) expected net attributable income GOAL Reduce Consolidated CET1 ratio GOAL Redu
Slide 23: ALCO & Equity AfS Portfolio
Fixed Income Presentation / 23 ALCO & Equity AfS Portfolio ALCO Portfolio breakdown by region (Sept.17, € bn) 3.2 South America € 55.8 bn 4.8 Mexico o.w. HTM Portfolio breakdown (Sept.17, € bn) 10.6 USA Others 1% Diversified portfolio 10.7 Turkey € 14.1 bn Turkey Spain across BBVA’s footprint 43% Sp
Slide 24: MREL
Fixed Income Presentation / 24 05 MREL
Slide 25: MREL framework: creation of SNP layer in Spain
Fixed Income Presentation / 25 MREL framework: creation of SNP layer in Spain Spanish legal framework creating the Senior Non Insolvency Hierarchy Preferred layer (RDL 11/17) was approved in June Previous Insolvency Law Approved New Spanish Clear identification and prioritization of debt securities
Slide 26: MREL framework: uncertainty remains but closer to the final outcome
Fixed Income Presentation / 26 MREL framework: uncertainty remains but closer to the final outcome MREL requirements and calendar are yet to be Key themes to manage communicated (still under discussion) “As a first step, the SRB intends to set binding MREL targets at a consolidated level or appropri
Slide 27: BBVA's MREL Strategy: 2017-2018 Plan
Fixed Income Presentation / 27 BBVA’s MREL Strategy: 2017-2018 Plan Maturity profile BBVA has already filled its AT1 and T2 layers Wholesale debt maturity profile offers flexibility to Capital BBVA expects to maintain the 1.5% AT1 and refinance current instruments into new SNP, if required: 2% T2 re
Slide 28: BBVA Eur 1.5 bn Inaugural Senior Non Preferred Issuance
Fixed Income Presentation / 28 BBVA Eur 1.5 bn Inaugural Senior Non Preferred Issuance After the new legal framework implementing the SNP was approved in Spain in late June 2017, BBVA updated its GMTN programme enabling the issuance of these instruments. Rationale With this issuance, BBVA seeks to s
Slide 29: Liquidity & Funding
Fixed Income Presentation / 29 06 Liquidity & Funding
Slide 30: Liquidity & Funding
Fixed Income Presentation / 30 Liquidity & Funding Self-sufficient Retail profile of Parent and Ample high quality subsidiaries from BBVA Group subsidiaries proven collateral available, a liquidity point of balance sheet ability to access the compliant with view, with robust with limited wholesale f
Slide 31: Principles of BBVA Group's self-sufficient business model
Fixed Income Presentation / 31 Principles of BBVA Group’s self-sufficient business model Subsidiaries Advantages Self-sufficient balance-sheet Market discipline and proper management incentives / sustainable credit growth Own capital and liquidity management Market access with its own credit, name a
Slide 32: Financial soundness based on the funding of lending activity
Fixed Income Presentation / 32 Financial soundness based on the funding of lending activity BBVA Group Liquidity balance sheet (1) BBVA Group Liquidity metrics (Sept.17) (Sept.17) Euroz.(2) USA Mexico Turkey S. Amer 64% Net Loans to 66% LTD 106% 94% 90% 117% 106% Customers Deposits ECB Fixed Assets
Slide 33: Broaden geographical diversification of access to market
Fixed Income Presentation / 33 Broaden geographical diversification of access to market Medium & long-term wholesale funding maturities (Sept.17; € bn) EURO USA MEXICO 19.2 € 41.9 bn € 2.4 bn € 5.8 bn 2.9 5.8 1.4 5.0 4.5 4.9 2.5 1.4 1.1 0.3 0.5 0.2 0.2 0.2 2017 2018 2019 2020 2021 >2021 2017 2018 20
Slide 34: BBVA Group Ratings by Agency
Fixed Income Presentation / 34 BBVA Group Ratings by Agency Latest Rating Actions BBVA Ratings(1) Three major agencies – Long Term Issuer / Moody’s S&P Fitch DBRS Scope Senior Unsecured Ratings Outlook Issuer/Senior Stable Positive Stable Stable Stable Investment Aaa AAA AAA AAA CB AAA CB Moody’s gr
Slide 35: Transformation Strategy
Fixed Income Presentation / 35 07 Transformation Strategy
Slide 36: Digital Customers – BBVA Group
Fixed Fixed Income Income Presentation / /36 Presentation 36 Digital Customers – BBVA Group Digital Customers (Mn, %penetration) +24% 21.1 17.0 18.1 Sep 16 Dec 16 Sep 17 Achieved 50% PENETRATION 33% 36% 40% penetration in digital Mobile Customers customers: (Mn, %penetration) +43% 15.8 USA VENEZUELA
Slide 37: Digital Sales
Fixed Fixed Income Income Presentation / /37 Presentation 37 Digital Sales (% of total sales YtD, # of transactions) GROUP SPAIN USA 25.4 26.5 23.3 17.1 19.4 16.8 Exponential growth Dec-16 Sep-17 Dec-16 Sep-17 Dec-16 Sep-17 Exponential growth in all MEXICO TURKEY SOUTH AMERICA franchises 18.3 31.8 3
Slide 38: BBVA Spain Transformation Tangible Results
Fixed Income Presentation / 38 3Q 2017 Results October 27th 2017 / 38 BBVA Spain Transformation Tangible Results Consumer loans: new loan production Consumer loans: Growing market (€m, %) +31% share in new loan production thanks to digital loans (Market share, %) # 1 Mobile banking 2,101 +4 p.p. app
Slide 39: APPENDIX
Fixed Income Presentation / 39 APPENDIX BBVA Group 9M17 Profit & Loss Capital Base: BBVA Group & BBVA, S.A. BBVA S.A: 2017 SREP Requirement and distance to MDA EBA’s Stress Test Debt Issuances – 9M17 Amortized notes – 9M17
Slide 40: BBVA Group 9M17 Profit & Loss
Fixed Income Presentation / 40 BBVA Group 9M17 Profit & Loss Change 9M17/9M16 BBVA Group (€m) 9M17 % % constant Net Attributable Profit breakdown(1) Net Interest Income 13,202 4.2 9.5 (9M17) Net Fees and Commissions 3,705 4.2 8.4 Net Trading Income 1,416 -19.2 -13.3 Other Income & Expenses 585 31.1
Slide 41: Capital Base: BBVA Group & BBVA S.A.
Fixed Income Presentation / 41 Capital Base: BBVA Group & BBVA S.A. Phased-in capital ratios Fully-loaded capital ratios Sep.17 (%) Sep.17 (%) 22.63 2.02 22.26 2.95 2.00 Tier 2 15.66 Tier 2 2.96 2.53 15.35 Additional Tier 1 1.26 Additional Tier 1 2.45 1.71 17.66 17.30 11.88 11.20 CET1 CET1 BBVA Grou
Slide 42: Capital ratios well above requirements
Fixed Income Presentation / 42 Capital ratios well above requirements 2017 SREP Requirement and distance to MDA(1) at Parent Company level (BBVA, S.A) Sep-17 DISTANCE TO MDA 22.63% (4) 1,041 bps T2: 2.02% AT1: 2.95% Well above 2017 10.75%(3) €20.3 Bn Total Capital and CET1 T2: 2.0% SREP requirements
Slide 43: EBA's Stress Test
Fixed Income Presentation / 43 EBA’s Stress Test Profit generation in the adverse scenario CET1 Fully Loaded ratio evolution in the adverse scenario Cumulative 2016-2018 (€ m) 2015-2018 (bps) 183 BBVA -199 Peer 1 The only bank -445 Peer 1 -208 BBVA generating -750 Peer 2 -226 Peer 2 Resilient positi
Slide 44: Debt Issuances – 9M17
Fixed Income Presentation / 44 Debt Issuances – 9M17 Nominal Product Issue Date Call Date Maturity Coupon Isin currency (M) SNP Sep-17 - Sep-22 € 1,500 M 0.75% XS1678372472 AT1 May-17 May-22 Perp € 500 M 5.875% XS1619422865 Tier 2 May-17 - May-27 CHF 20 M 1.60% XS1615673701 Tier 2 May-17 - May-27 €
Slide 45: Amortized notes – 9M17
Fixed Income Presentation / 45 Amortized notes – 9M17 Outstanding Product Issue Date Redemption Outstanding € (M) Coupon currency (M) BBVA Preferred Apr-07 Apr-17 $ 600 M 536 5.919% International Preferred Sep-06 Mar-17 € 164 M 164 3ME+1.95% Preferred SA Unipersonal Preferred Sep-05 Mar-17 € 86 M 86
Slide 46: Fixed Income Investors Presentation 3Q17
Fixed Income Presentation / 46 Fixed Income Investors Presentation 3Q17
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