Banco Bilbao Vizcaya Argentaria, S.a. · BME:BBVA
Banco Bilbao Vizcaya Argentaria — Q2 2021 Earnings Presentation
66 slides from Banco Bilbao Vizcaya Argentaria's earnings presentation, Jul 30, 2021
Slide 1: 2Q21 Results
2Q21 Results July 30%, 2021 Creating Opportunities
Slide 2: Disclaimer
2Q21 Results 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 decision to buy or inv
Slide 3: Positive results evolution and strong capital position
2Q21 Results 3 Positive results evolution and strong capital position NET ATTRIBUTABLE PROFIT1 CET1 FULLY LOADED (CURRENT €M) (%) +25.3% 12.89% Jun-21 14.17% PRO-FORMA AFTER TARGETED 10% SHARE BUYBACK2 1,294 1,110 1,033 11.88% €701M 11.22% INCLUDING 516 NON-RECURRENT IMPACTS1 2Q19 2Q20 1Q21 2Q21 Jun
Slide 4: Delivering on our clear commitment to shareholder value creation
2Q21 Results 4 Delivering on our clear commitment to shareholder value creation TBV / SHARE + DIVIDENDS PROFITABILITY METRICS2 (€/ SHARE) (%) TBV +9.0% Dividends +4.0% ROE 10.4 9.3 6.40 4.1 6.15 0.06 1 5.87 6.34 11.0 ROTE 9.8 4.4 Jun-20 Mar-21 Jun-21 Jun-20 Mar-21 Jun-21 (1) April 2021 dividend. (2)
Slide 5: Top messages
2Q21 Results 5 Top messages 1 Strong core revenue evolution NII + FEE INCOME (constant €) NII FEE INCOME +9.7% vs.2Q20 4.1% vs.2Q20 30.8% vs.2Q20 2 Leading efficiency EFFICIENCY RATIO (%) 44.8% in 6M21 vs 61.2% European peers average1 3 Double-digit Operating Income OPERATING INCOME (constant €) +11
Slide 6: 2Q21 Profit & Loss
2Q21 Results 6 2Q21 Profit & Loss Change Change 2Q21/2Q20 2Q21/1Q21 BBVA Group (€m) 2Q21 % constant % % constant Net Interest Income 3,504 4.1 -0.9 3.9 Net Fees and Commissions 1,182 30.8 26.5 6.3 Net Trading Income 503 14.3 7.0 -10.4 Other Income & Expenses -85 20.1 6.5 n.s. Gross Income 5,104 10.0
Slide 7: 6M21 Profit & Loss
2Q21 Results 7 6M21 Profit & Loss Change 6M21/6M20 BBVA Group (€m) 6M21 % constant % Net Interest Income 6,955 0.9 -8.0 Net Fees and Commissions 2,315 19.7 12.5 Net Trading Income 1,084 14.8 6.9 Other Income & Expenses -95 n.s. n.s. Gross Income 10,259 4.9 -3.6 Operating Expenses -4,598 5.1 -1.3 Ope
Slide 8: Strong revenue growth
2Q21 Results 8 Strong revenue growth NET INTEREST INCOME NET FEES AND COMMISSIONS (CONSTANT €M) (CONSTANT €M) + 4.1% +3.9% 3,569 3,564 3,544 + 30.8% Outstanding NII increase in a +6.3% 3,406 3,411 evolution across still challenging 1,193 the board, context driven by 1,053 1,122 1,018 supported by ac
Slide 9: Economic growth strengthening in 2021, with upward revision of expected growth
2Q21 Results 9 Economic growth strengthening in 2021, with upward revision of expected growth in most of the countries REAL GDP GROWTH PREVIOUS UPDATED (YOY GROWTH; %) BBVA FOOTPRINT1 SPAIN MEXICO 7.0 6.5 7.0 6.3 4.6 7.0 3.0 5.4 4.5 5.5 4.7 2.8 -7.4 -8.5 -10.8 2020 2021e 2022e 2020 2021e 2022e 2020
Slide 10: Retail new loan production volumes above pre-pandemic levels
2Q21 Results 10 Retail new loan production volumes above pre-pandemic levels and commercial production picking up Total loan production growth BBVA NEW LOAN PRODUCTION MORTGAGES CONSUMER LOANS COMMERCIAL1 2Q21 vs.1Q21 (BASE 100 = FEB.2020) BBVA GROUP +19% SPAIN +13% MEXICO +5% 2Q vs.1Q21 2Q vs.1Q21
Slide 11: Improving NII backed by activity recovery and price management
2Q21 Results 11 Improving NII backed by activity recovery and price management LOAN GROWTH CUSTOMER SPREAD NET INTEREST INCOME YTD %, PERFORMING LOANS UNDER % CONSTANT €, MILLION EUROS MANAGEMENT (CONSTANT €)1 SPAIN +3.3% Jun.21 1.92 923 1.89 1.76 896 2.1% 885 880 867 1.82 1.77 1.76 0.4% MEXICO2 Jun
Slide 12: Outperforming our peers in efficiency
2Q21 Results 12 Outperforming our peers in efficiency EXPENSES GROWING BELOW INFLATION EFFICIENCY RATIO (CONSTANT €M) (%) INFLATION1 +5.4% RANKING VS 12m average EUROPEAN PEERS2 51.9 +5.1 % #1/15 4,598 4,375 44.8 2016 2017 2018 2019 2020 3M21 6M21 6M20 6M21 (1) Weighted by operating expenses and exc
Slide 13: Strategic restructuring process to reshape for growth
2Q21 Results 13 Strategic restructuring process to reshape for growth, affecting Spain and Corporate Center CUSTOMER TRANSACTIONS BRANCHES FTEs (MILLION TRANSACTIONS1 IN SPAIN; (# BRANCHES IN SPAIN, % EVOLUTION) (# FTES IN SPAIN AND CORPORATE 6M19-6M21 CHANGE,%) CENTER, % EVOLUTION) DIGITAL CHANNELS
Slide 14: Solid risk indicators
2Q21 Results 14 Solid risk indicators FINANCIAL ASSETS IMPAIRMENTS NPLs (€M CONSTANT) (€BN) WITH NO CHANGE IN +0.1 €Bn ACCUMULATED 1,391 COVID RESERVES 15.6 15.5 15.6 15.7 906 916 15.0 785 664 2Q20 3Q20 4Q20 1Q21 2Q21 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 COST OF RISK NPL & COVERAGE RATIOS (%, YTD) (%)
Slide 15: Strong capital position
2Q21 Results 15 Strong capital position CET1 FULLY-LOADED (QUARTERLY EVOLUTION %, BPS) +260 bps 14.17% +38 bps -25 bps 557 bps 11.88% 11.82% ABOVE REQUIREMENTS -11 bps -6 bps -14 bps -13 bps 8.60% CET1 SREP requirement Mar.2021 Results Dividend RWAs Regulatory Others 1 Jun.2021 BBVA USA Restructurin
Slide 16: Shareholder distributions increase
2Q21 Results 16 Shareholder distributions increase Share buyback program expected to start in 4Q after supervisory approvals CET1 FULLY-LOADED (%) TARGETED BUYBACK1 14.17% 12.89% 10% shares 2021 DIVIDEND POLICY2 35-40% payout 100% CASH Jun.2021 Jun. 2021 Pro-Forma after 10% targeted buyback 3 Strong
Slide 17: Customer growth and engagement through digital channels
2Q21 Results 17 Customer growth and engagement through digital channels All-time record in digital customer acquisition NEW CUSTOMERS DIGITAL ACQUISITION1 % OF NEW CUSTOMERS CONVERTED TO (CUSTOMERS ACQUIRED THROUGH DIGITAL CHANNELS, VALUE CUSTOMERS2 THOUSANDS AND % OF TOTAL ACQUISITIONS) (IN MONTH 6
Slide 18: We have doubled our target of channeling sustainable financing to €200 billion
2Q21 Results 18 We have doubled our target of channeling sustainable financing to €200 billion SUSTAINABLE FINANCING (€BN) NEW PLEDGE €8 Bn €200 Bn CHANNELED IN 2Q21 Total channeled €67 Bn ORIGINAL PLEDGE €100 Bn 2Q21 2018 2019 2020 2021 2022 2023 2024 2025 Our new pledge positions BBVA among the to
Slide 19: Business Areas
Creando Oportunidades BuSsINess Areas
Slide 20: Spain
2Q21 Results 20 Spain YtD -0.9% Profit & Loss Δ (%) Δ (%) ACTIVITY (JUN-21) YtD +1.1% YoY (€m) 2Q21 vs 2Q20 vs 1Q21 6M21 vs 6M20 €Bn Net Interest Income 896 -3.0 3.3 1,762 -2.2 266.0 +3.6% Net Fees and Commissions 551 25.4 8.7 1,058 16.5 YoY Net Trading Income 82 -21.9 -59.5 283 71.3 €Bn Other Incom
Slide 21: Mexico
2Q21 Results 21 Mexico YtD Profit & Loss Δ Constant (%) Δ Current Δ Constant ACTIVITY (JUN-21) YtD +4.0% (€m constant) 2Q21 vs 2Q20 vs 1Q21 6M21 vs 6M20 (%) vs 6M20 (%) (CONSTANT €) +2.1% YoY Net Interest Income 1,393 10.3 1.1 2,771 2.0 3.9 €Bn Net Fees and Commissions 297 27.2 4.6 581 13.6 15.7 YoY
Slide 22: Turkey
2Q21 Results 22 Turkey Δ Constant (%) Δ Current Δ Constant ACTIVITY (JUN-21) Profit & Loss (€m constant 2Q21 vs 2Q20 vs 1Q21 6M21 vs 6M20 (%) vs 6M20 (%) (CONTANT €; BANK ONLY) Net Interest Income 540 -5.6 9.0 1,036 -32.5 -10.1 Net Fees and Commissions 152 87.0 5.5 297 12.5 49.7 YoY1 YtD YoY1 Net Tr
Slide 23: South America
2Q21 Results 23 South America YtD Net Attributable Profit 0 Δ Constant(%) 1 0 Δ Current Δ Constant 1 ACTIVITY (JUN-21) +3.2% (€m constant) 2Q21 vs 2Q20 vs 1Q21 6M21 6M21 vs 6M20 (%) (CONSTANT €) YtD YoY Colombia 59 56.6 23.8 106 120.3 136.7 YoY +4.7% €Bn Peru 27 1,122.8 0.0 55 69.7 102.6 €Bn 49.2 +8
Slide 24: 2Q2021 in review
2Q2021 in review Positive results evolution driven by strong core revenues and solid underlying risk performance Customer acquisition boost leveraging digital capabilities We have doubled our target of channeling sustainable financing to €200 billion A new level of capital strength providing ample s
Slide 25: Investor Day - Save the date
SAVE THE DATE Investor Day November 18, 2021
Slide 26: Annex
Annex Net Attributable Profit ALCO Portfolio, NII Sensitivity 01 08 evolution and LCRs & NSFRs 02 Gross Income breakdown 09 CET1 Sensitivity to market impacts 03 P&L Accounts by business unit 10 CET1 YTD evolution & RWAs by business Area 04 Customer spread by country 11 Book Value of the main subsid
Slide 27: Net Attributable Profit evolution
01 Net Attributable Profit evolution
Slide 28: Net Attributable Profit evolution
2Q21 Results 28 Net Attributable Profit evolution €M +1,446€M 59 2,327 102 39 184 483 637 947 125 6M20 FX Spain Mexico Turkey South America Rest of business Corp. Center 6M21 Effect YoY (%) n.s. 75.0 92.1 87.9 36.7 (constant €) Note: excluding non-recurring impacts (discontinued & corporate operatio
Slide 29: Gross Income breakdown
Q2 Gross Income breakdown Creating Opportunities
Slide 30: Gross Income breakdown
2Q21 Results 30 Gross Income breakdown 6M21 Spain 3,057€M Rest of business 30% 400 €M 4% South America 1,480 €M 15% 16% Turkey 1,571 €M 36% Mexico 3,604 €M Note: Figures exclude Corporate Center.
Slide 31: P&L Accounts by business unit
03 P&L Accounts by business unit Rest of business Corporate Center Argentina (hyperinflation adjustment) Colombia Peru
Slide 32: Rest of Business – Profit & Loss
2Q21 Results 32 Rest of Business – Profit & Loss Profit & Loss Δ (%) Δ (%) (€m) 2Q21 vs 1Q21 vs 2Q20 6M21 vs 6M20 Net Interest Income 67 -7.1 -15.8 140 -3.5 Net Fees and Commissions 62 -14.3 -35.5 135 -25.1 Net Trading Income 45 -31.0 -17.0 109 5.4 Other Income & Expenses 8 -5.5 -21.1 16 -26.0 Gross
Slide 33: Corporate Center – Profit & Loss
2Q21 Results 33 Corporate Center – Profit & Loss Profit & Loss Δ (%) Δ (%) (€m) 2Q21 vs 1Q21 vs 2Q20 6M21 vs 6M20 Net Interest Income -38 -13.2 18.0 -82 3.3 Net Fees and Commissions -20 590.6 -31.7 -23 -39.5 Net Trading Income 121 161.1 1,701.1 168 -22.1 Other Income & Expenses 102 n.s. 205.8 84 955
Slide 34: Argentina hyperinflation adjustment
2Q21 Results 34 Argentina hyperinflation adjustment Profit & Loss 6M21 Hyperinflation 6M21 (€m) (reported) adjustment Ex. Hyperinflation Net Interest Income 426 33 393 Net Fees and Commissions 84 5 79 Net Trading Income 50 4 46 Other Income & Expenses -247 -189 -57 Gross Income 314 -147 461 Operatin
Slide 35: Colombia – Profit & Loss
2Q21 Results 35 Colombia – Profit & Loss Profit & Loss Δ (%) Δ (%) (€m constant ) 2Q21 vs 1Q21 vs 2Q20 1H21 vs 1H20 Net Interest Income 192 -2.7 2.1 389 3.7 Net Fees and Commissions 22 5.6 92.3 43 58.6 Net Trading Income 22 200.0 -8.1 29 3.6 Other Income & Expenses -9 109.3 414.3 -14 345.7 Gross Inc
Slide 36: Peru – Profit & Loss
2Q21 Results 36 Peru – Profit & Loss Profit & Loss Δ (%) Δ (%) (€m constant ) 2Q21 vs 1Q21 vs 2Q20 6M21 vs 6M20 Net Interest Income 181 1.3 5.9 360 1.6 Net Fees and Commissions 60 11.4 56.2 114 37.4 Net Trading Income 56 68.9 88.0 89 46.9 Other Income & Expenses -10 24.5 53.8 -19 55.4 Gross Income 2
Slide 37: Customer Spread by country
04 Customer Spread by country
Slide 38: Customer spreads: quarterly evolution
2Q21 Results 38 Customer spreads: quarterly evolution AVERAGE 2Q20 3Q20 4Q20 1Q21 2Q21 2Q20 3Q20 4Q20 1Q21 2Q21 Spain 1.92% 1.89% 1.82% 1.77% 1.76% Turkey TL 7.30% 6.05% 3.90% 2.55% 2.88% Yield on Loans 1.93% 1.89% 1.83% 1.77% 1.75% Yield on Loans 13.22% 12.17% 12.88% 14.30% 15.56% Cost of Deposits
Slide 39: Customer spreads: YoY evolution
2Q21 Results 39 Customer spreads: YoY evolution AVERAGE 6M20 6M21 6M20 6M21 Spain 1.94% 1.76% Turkey TL 7.37% 2.70% Yield on Loans 1.96% 1.76% Yield on Loans 13.87% 14.95% Cost of Deposits -0.02% 0.00% Cost of Deposits -6.50% -12.24% 1 Mexico MXN 10.64% 11.00% Turkey FC 5.10% 4.66% Yield on Loans 12
Slide 40: Stages breakdown by business areas
05 Stages breakdown by business areas
Slide 41: Stages breakdown by business area
2Q21 Results 41 Stages breakdown by business area CREDIT RISK BREAKDOWN BY BUSINESS AREA (JUN-21, €M) Gross Accumulated Gross Accumulated Gross Accumulated BBVA GROUP SPAIN MEXICO Exposure impairments Exposure impairments Exposure impairments Stage 1 318,837 2,029 Stage 1 170,770 695 Stage 1 50,969
Slide 42: EAD to most vulnerable sectors in the current environment
06 EAD to most vulnerable sectors in the current environment
Slide 43: Exposure at default to most vulnerable sectors
2Q21 Results 43 Exposure at default to most vulnerable sectors in the current environment BREAKDOWN BY SECTORS (JUN-21) bn € Leisure 1 8.9 Commercial Real Estate 2 6.8 Retailers non food 3 3.3 Air transportation 0.9 Total EAD to the most vulnerable sectors 20.0 as a % of total EAD 5.5% (1) Includes
Slide 44: Outstanding loan deferrals & loans backed by State guarantees
07 Outstanding loan deferrals & loans backed by State guarantees
Slide 45: Prudent deferrals' classification and proactive provisioning
2Q21 Results 45 Prudent deferrals’ classification and proactive provisioning Expired deferrals by stages TOTAL DEFERRALS GRANTED o/w expired As of Jun'21 as a % of total loans €BN % of total loans % Stage 1 Stage 2 Stage 3 Total Group (ex-USA) 25.4 7.4% 89% 4.1% 1.9% 0.6% By segment Mortgages 10.9 1
Slide 46: Outstanding loan deferrals
2Q21 Results 46 Outstanding loan deferrals OUTSTANDING DEFERRALS (JUN-21) €bn % of loans Total Group (ex-USA) 2.8 0.81% Spain 2.6 1.2% Mexico 0.0 0.0% Turkey 0.1 0.2% Peru 0.1 0.3% Colombia 0.0 0.4% Argentina 0.0 0.0% Data according to EBA criteria, excluding loans that have been cancelled.
Slide 47: Government backed loans
2Q21 Results 47 Government backed loans € BN; JUN’21 (2) (3) GROUP (ex USA) SPAIN MEXICO TURKEY ARGENTINA COLOMBIA PERU Loans Weight Loans Weight Loans Weight Loans Weight Loans Weight Loans Weight Loans Weight Households 1.3(1) 0.8% 1.1 1.1% 0.0 0.0% 0.0 0.0% 0.0 2.5% 0.0 0.4% 0.2 2.9% Corporates &
Slide 48: ALCO Portfolio, NII Sensitivity and LCRs & NSFRs
08 ALCO Portfolio, NII Sensitivity and LCRs & NSFRs
Slide 49: ALCO portfolio
2Q21 Results 49 ALCO portfolio ALCO PORTFOLIO BREAKDOWN BY REGION (€ BN) Amort Cost Fair Value 42.9 47.7 48.7 (HTC) (HTC&S) 4.0 4.1 June 2021 (€BN) (€BN) (duration) South America 3.8 10.1 9.8 South America 0.2 3.9 1.4 years 7.1 Mexico 6.6 Mexico 2.0 7.8 3.7 years 6.7 Turkey 8.0 Turkey 3.3 3.3 3.8 ye
Slide 50: NII sensitivity to interest rates movements
2Q21 Results 50 NII sensitivity to interest rates movements ESTIMATED IMPACT ON NII IN THE NEXT 12 MONTHS TO PARALLEL INTEREST RATE MOVEMENTS (%) NII SENSITIVITY TO +100 BPS NII SENSITIVITY TO -100BPS 0% 20% 15% -5% 10% -10% 5% -15% 0% -20% Euro Mexico Euro Mexico Note: NII sensitivities calculated
Slide 51: Liquidity and funding ratios
2Q21 Results 51 Liquidity and funding ratios BBVA GROUP AND SUBSIDIARIES LCR & NSFR (JUN-21) BBVA GROUP Euro Mexico Turkey S. America LCR 179% (218%1) 209% 207% 186% All countries >100% NSFR 134% 127% 139% 160% All countries >100% (1) LCR of 179% does not consider the excess liquidity of the subsidi
Slide 52: CET1 Sensitivity to market impacts
09 CET1 Sensitivity to market impacts
Slide 53: CET1 Sensitivity to Market impacts
2Q21 Results 53 CET1 Sensitivity to Market impacts1 TO A 10% DECLINE IN THE PRICE OF TELEFONICA SHARE PRICE (JUN-21) TO A 10% CURRENCY DEPRECIATION -2.9bps (JUN-21) MXN -4bps TRY 0bps TO +100 BPS MOVEMENT IN THE USD +18bps SPANISH SOVEREIGN BOND (JUN-21) - 14bps (1) CET1 sensitivity considering the
Slide 54: CET1 YTD evolution & RWAs by business area
10 CET1 YTD evolution & RWAs by business area
Slide 55: Capital YTD Evolution
2Q21 Results 55 Capital YTD Evolution CET1 FULLY-LOADED – BBVA GROUP YTD EVOLUTION (%, BPS) +265bps 14.17% +73 bps -25 bps 11.73% +7 bps 11.76% -27 bps -26 bps -22bps (1) Dec-20 Results Dividend RWAs Regulatory Others Jun-21 BBVA Restructuring Jun-21 Accrual & (constant €) impacts (excl. Paraguay &
Slide 56: Risk-Weighted Assets by business area
2Q21 Results 56 Risk-Weighted Assets by business area Fully-Loaded RWAs Breakdown by business area (€m) Jun-20 Mar-21 Jun-21 Spain 109,625 107,872 112,030 Turkey 57,190 53,252 53,554 Mexico 54,966 61,981 62,396 South America 44,015 38,948 39,113 Argentina 6,354 5,727 5,548 Chile 1,737 1,577 1,700 Co
Slide 57: Book Value of the main subsidiaries
11 Book Value of the main subsidiaries
Slide 58: Book Value of the main subsidiaries
2Q21 Results 58 Book Value of the main subsidiaries1,2 € BN; JUN’21 Mexico 12.0 Turkey 3.6 Colombia 1.3 Peru 1.0 Argentina 0.9 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 subsidia
Slide 59: TBV per share & dividends evolution
12 TBV per share & dividens evolution
Slide 60: Shareholders' return: TBV per share & dividends evolution
2Q21 Results 60 Shareholders’ return: TBV per share & dividends evolution TBV PER SHARE & DIVIDENDS (€ PER SHARE) +9.0% TBV Dividends 6.40 6.05 6.15 0.06 5.87 5.84 6.34 (1) Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 (1) Excluding non-recurring impacts (discontinued operations, and net cost related to the re
Slide 61: Garanti BBVA: wholesale funding
13 Garanti BBVA: wholesale funding
Slide 62: Turkey – Liquidity & funding sources
2Q21 Results 62 Turkey – Liquidity & funding sources Solid liquidity position: • Total LTD ratio is at 91.5%, decreasing by +4.3 p.p in Jun-21 driven by an improvement in TRY LtD • Foreign currency loans decreased by USD 0.7 Bn to c. USD 11.9 Bn in Jun-21 • Liquidity ratios above requirements: Liqui
Slide 63: Digital metrics
14 Digital metrics Digital & mobile customers Digital sales
Slide 64: Outstanding trends in digital and mobile clients
2Q21 Results 64 Outstanding trends in digital and mobile clients DIGITAL CUSTOMERS MOBILE CUSTOMERS MILLION CUSTOMERS, % MILLION CUSTOMERS, % +36.0% +44.6% 38.5 36.3 30.5 33.0 25.1 28.3 Jun-19 Jun-20 Jun-21 Jun-19 Jun-20 Jun-21 CUSTOMER PENETRATION RATE CUSTOMER PENETRATION RATE 54.7% 60.9% 66.1% 48
Slide 65: Leveraging digital capabilities to grow sales through digital channels
2Q21 Results 65 Leveraging digital capabilities to growth sales trough digital channels (% OF TOTAL SALES YTD, # OF TRANSACTIONS AND PRV1) UNITS PRV GROUP SPAIN MEXICO 70.7 67.8 66.9 60.5 63.1 62.7 58.2 55.4 49.3 UNITS 60.7 53.6 50.1 47.3 49.7 PRV 41.4 41.8 42.4 42.7 Jun-19 Jun-20 Jun-21 Jun-19 Jun-
Slide 66: BBVA
BBVA
Banco Bilbao Vizcaya Argentaria — Q2 2021 Earnings Presentation on 6ix