Banco Bilbao Vizcaya Argentaria, S.a. · BME:BBVA

Banco Bilbao Vizcaya Argentaria — Q3 2023 Earnings Presentation

60 slides from Banco Bilbao Vizcaya Argentaria's earnings presentation, Oct 31, 2023

  1. Slide 1: 3Q23 Results

    3Q23 Results October 31, 2023

  2. Slide 2: Disclaimer

    3Q23 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

  3. Slide 3: BBVA reports one more quarter of earnings growth

    3Q23 Results 3 BBVA reports one more quarter of earnings growth NET ATTRIBUTABLE PROFIT CET1 FULLY LOADED (CURRENT €M) (%) +13% +2.5% 12.73% Target Range 11.5%-12.0% SREP Requirement 8.77% 3Q22 2Q23 3Q23 Sep-23 EPS (€)1 0.28 0.33 0.33 NOTE: In the presentation, 2022 figures have been restated accordi

  4. Slide 4: Robust upward trend in Operating Income

    3Q23 Results 4 Robust upward trend in Operating Income OPERATING INCOME (CONSTANT €M) 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23

  5. Slide 5: Outstanding shareholder value creation and excellent profitability metrics

    3Q23 Results 5 Outstanding shareholder value creation and excellent profitability metrics TBV + DIVIDENDS PROFITABILITY METRICS3 (€ / SHARE1) (%) TBV / share Dividends / share ROTE +18% +5.5% 8.15 8.60 0.472 7.30 0.312 ROE 7.84 8.13 9M22 2022 9M23 Sep-22 Jun-23 Sep-23 (1) Total number of shares consi

  6. Slide 6: 3Q23 Profit & Loss

    3Q23 Results 6 3Q23 Profit & Loss Change Change 3Q23/3Q22 3Q23/2Q23 BBVA Group (€M) 3Q23 % constant % % constant % Net Interest Income 6,434 35.6 22.5 13.4 11.5 Net Fees and Commissions 1,685 27.6 21.7 13.6 14.6 Net Trading Income 658 37.1 14.7 79.9 96.6 Other Income & Expenses -820 115.4 120.2 221.3

  7. Slide 7: 9M23 Profit & Loss

    3Q23 Results 7 9M23 Profit & Loss Change 9M23/9M22 BBVA Group (€M) 9M23 % constant % Net Interest Income 17,843 36.5 29.4 Net Fees and Commissions 4,594 17.5 13.6 Net Trading Income 1,430 -0.8 -14.3 1 Other Income & Expenses -1,763 6.4 41.3 Gross Income 22,104 31.8 21.1 Operating Expenses -9,241 22.3

  8. Slide 8: Continued Gross Income growth driven by core revenues

    3Q23 Results 8 Continued Gross Income growth driven by core revenues NET INTEREST INCOME NET FEES AND COMMISSIONS (CONSTANT €M) (CONSTANT €M) +36% +28% +13.4% +13.6% Outstanding NII Sound fee income growth driven by levered on activity and Payments, Asset customer spread Management and improvement t

  9. Slide 9: Core revenues growth levered on activity and higher spreads

    3Q23 Results 9 Core revenues growth levered on activity and higher spreads LOAN GROWTH CUSTOMER SPREAD CORE REVENUES (YOY, CONSTANT €) (%) (YOY, CONSTANT €M) SPAIN +39% +7.8% +5.3% +3.8% Consumer + Mid-sized Credit Cards companies 3Q22 2Q23 3Q23 3Q22 2Q23 3Q23 MEXICO +19% +5.8% +20.0% +18.8% Consume

  10. Slide 10: Positive jaws and strong improvement in efficiency

    3Q23 Results 10 Positive jaws and strong improvement in efficiency POSITIVE JAWS EFFICIENCY RATIO (9M23 YOY, CONSTANT €) (COST-TO-INCOME, % CONSTANT €) FOOTPRINT INFLATION1 18.1% -328bps 12M AVERAGE +31.8% +22.3% Gross Operating Income Expenses 9M22 9M23 (1) Weighted by operating expenses and excludi

  11. Slide 11: Slight deterioration in asset quality metrics

    3Q23 Results 11 Slight deterioration in asset quality metrics FINANCIAL ASSETS IMPAIRMENTS NPL (CONSTANT €M) (€BN) 3Q22 4Q22 1Q23 2Q23 3Q23 Sep-22 Dec22 Mar-23 Jun-23 Sep-23 COST OF RISK NPL & COVERAGE RATIOS (%, YTD) (%) COVERAGE 2019 at 1.04% NPL Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Sep-22 Dec-22 Ma

  12. Slide 12: Strong shareholders distribution levered on our solid capital position

    3Q23 Results 12 Strong shareholders distribution levered on our solid capital position CET1 FULLY-LOADED (%, BPS) +6bps +60 bps -33 bps 12.99% -32 bps -39 bps 12.67% +18 bps 12.73% Target Range 11.5%-12.0% SREP Requirement 8.77% Jun -23 SBB Jun’23 Results Dividend RWAs Others1 Sep -23 proforma accru

  13. Slide 13: Excellent improvement in digital customer acquisition

    3Q23 Results 13 Excellent improvement in digital customer acquisition NEW CUSTOMERS1 (BBVA GROUP, MILLION; % ACQUISITION THROUGH DIGITAL CHANNELS) DIGITAL 65% TOTAL DIGITAL 11% 9M18 9M19 9M20 9M21 9M22 9M23 (1) Gross customer acquisition through own channels for retail segment. Excludes the US busin

  14. Slide 14: Advancing in our clear commitment to sustainability

    3Q23 Results 14 Advancing in our clear commitment to sustainability SUSTAINABLE BUSINESS (€ Bn) BY SEGMENT New target (€ Bn) YoY growth (2022) 300 €Bn +25% 49 €16 Bn channeled in 7.3 Retail +69% 3Q23 Revised target 39 (2021) €185 Bn 200 €Bn 4.3 Channeled since 2018 8.0 15.6 Enterprises +95% Initial

  15. Slide 15: Positive impact on society

    3Q23 Results 15 Positive impact on society BBVA GROUP LOAN GROWTH1 (Sep-23, YOY, CONSTANT €) +8.0 % INCLUSIVE GROWTH FINANCING 100,000 400,000 70,000 12.0 €Bn MOBILIZED IN 9M23 FAMILIES BOUGHT SMEs AND LARGER THEIR HOME2 SELF - EMPLOYED CORPORATES BOOSTED THEIR INVESTED IN BUSINESS2 GROWTH3 (1) Perf

  16. Slide 16: We continue our path to success in our ambitious long-term goals

    3Q23 Results 16 We continue our path to success in our ambitious long-term goals COST-TO-INCOME ROTE1 TBV + DIVIDENDS (%) (%, ANNUALIZED) (€/SHARE, %) YoY CAGR 2021-9M23 HIGH TEENS MID 19.3 TEENS 17.7 CAGR SLIGHT IMPROVEMENT 2021-24 CAGR 9M 9M 9M NEW TARGET CUSTOMERS2 SUSTAINABLE BUSINESS (MILLION C

  17. Slide 17: Business Areas

    Business Areas Creating Opportunities

  18. Slide 18: Spain

    3Q23 Results 18 Spain PROFIT & LOSS (€M) Δ (%) Δ (%) ACTIVITY (SEP-23) €Bn YoY YoY 3Q23 vs. 3Q22 vs. 2Q23 9M23 vs. 9M22 +2.2% Net Interest Income 1,510 62.4 11.0 4,053 50.8 €Bn Net Fees and Commissions 510 -3.0 -8.5 1,603 -2.0 -1.8% Net Trading Income 91 121.9 -7.2 309 -6.2 Other Income & Expenses 9

  19. Slide 19: Mexico

    3Q23 Results 19 Mexico PROFIT & LOSS (CONSTANT €M) ACTIVITY (SEP-23) (CONSTANT €) Δ Constant (%) Δ Current (%) Δ Constant (%) €Bn YoY YoY 3Q23 vs. 3Q22 vs. 2Q23 9M23 vs. 9M22 vs. 9M22 +11.2% €Bn +11.7% Net Interest Income 2,802 17.6 4.9 8,164 37.9 23.3 Net Fees and Commissions 589 28.5 10.3 1,626 38

  20. Slide 20: Turkey

    3Q23 Results 20 Turkey PROFIT & LOSS (CURRENT €M) ACTIVITY (SEP-23) Δ Current (%) Δ Current (%) (CONSTANT €; BANK ONLY) €Bn YoY1 3Q23 vs 3Q22 vs 2Q23 9M23 vs. 9M22 Net Interest Income 601 -25.6 70.0 1,581 -19.3 FC -23.1% Net Fees and Commissions 345 113.7 204.3 630 35.9 €Bn Time -70.6% YoY1 Net Trad

  21. Slide 21: South America

    3Q23 Results 21 South America NET ATTRIBUTABLE PROFIT ACTIVITY (SEP-23) (CONSTANT €M) (CONSTANT €) €Bn €Bn YoY YoY Δ Constant (%) Δ Current (%) Δ Constant (%) -9.5% +10.0% 3Q23 vs. 3Q22 vs. 2Q23 9M23 vs. 9M22 vs. 9M22 Colombia 16 -74.1 -71.9 115 -47.5 -41.9 Colombia +11.7% Peru 43 -12.1 -19.8 155 -8

  22. Slide 22: Takeaways

    3Q23 Results 22 Takeaways BBVA delivered another very strong quarter Excellent core revenues evolution on the back of activity growth and higher spreads, particularly for Mexico and Spain Delivering exceptional value creation for all of our stakeholders: shareholders, clients, employees and society

  23. Slide 23: Annex

    Annex 01 Net Attributable Profit 08 CET1 Sensitivity to market evolution impacts 02 Gross Income breakdown 09 CET1 YTD evolution & RWAs by business area 03 P&L Accounts by business 10 Book Value of the main unit subsidiaries 04 Customer spread by country 11 TBV per share & dividends evolution 05 Stag

  24. Slide 24: Net Attributable Profit evolution

    01 Net Attributable Profit evolution

  25. Slide 25: Business Areas Contribution to Group's NAP 3Q23 yoy growth

    3Q23 Results 25 Business Areas Contribution to Group's NAP 3Q23 yoy growth NET ATTRIBUTABLE PROFIT (BUSINESS AREAS CONTRIBUTION TO 3Q23 YOY GROWTH; CURRENT €M) +13% 3Q22 Spain Mexico Turkey South Rest of Corporate 3Q23 America Business Center NAP 3Q23 (€M) 879 1,373 -158 130 109 -249 NAP growth (YoY

  26. Slide 26: Business Areas Contribution to Group's NAP 9M23 yoy growth

    3Q23 Results 26 Business Areas Contribution to Group's NAP 9M23 yoy growth NET ATTRIBUTABLE PROFIT1 (BUSINESS AREAS CONTRIBUTION TO 9M23 YOY GROWTH; CURRENT €M) +19% 9M22 Spain Mexico Turkey South Rest of Corporate 9M23 America Business Center NAP 9M23 (€M) 2,110 3,987 367 496 322 -1,321 NAP growth

  27. Slide 27: Gross Income breakdown

    BBVA Creating Opportunities Gross Income breakdown

  28. Slide 28: Gross Income breakdown

    3Q23 Results 28 Gross Income breakdown 9M23 (€M, %) Rest of business 852 €M Spain South America 4% 5,833€M 3,577 €M 16% 25% Turkey 10% 2,310 €M 45% Mexico 10,475€M Note: Figures exclude Corporate Center.

  29. Slide 29: P&L Accounts by business unit

    03 P&L Accounts by business unit Rest of Corporate Turkey Argentina Colombia Peru Business Center (hyperinflation (hyperinflation adjustment) adjustment)

  30. Slide 30: Rest of Business - Profit & Loss

    3Q23 Results 30 Rest of Business - Profit & Loss PROFIT & LOSS (€M) Δ (%) Δ (%) 3Q23 vs 3Q22 vs 2Q23 9M23 vs 9M22 Net Interest Income 145 65.0 -0.7 405 66.6 Net Fees and Commissions 60 -6.6 -6.2 192 3.5 Net Trading Income 78 64.8 -19.4 251 66.6 Other Income & Expenses 4 191.0 n.s. 4 -21.5 Gross Incom

  31. Slide 31: Corporate Center - Profit & Loss

    3Q23 Results 31 Corporate Center - Profit & Loss PROFIT & LOSS (€M) Δ (%) Δ (%) 3Q23 vs 3Q22 vs 2Q23 9M23 vs 9M22 Net Interest Income -113 235.2 40.9 -253 159.8 Net Fees and Commissions -10 102.2 -59.0 -40 59.8 Net Trading Income -102 n.s. -69.7 -697 n.s. Other Income & Expenses -1 n.s. n.s. 48 -18.1

  32. Slide 32: Turkey - hyperinflation adjustment

    3Q23 Results 32 Turkey - hyperinflation adjustment PROFIT & LOSS (€M) 9M23 Hyperinflation 9M23 (reported) adjustment (2) Ex.Hyperinflation Net Interest Income 1,581 45 1,537 Net Fees and Commissions 630 -14 644 Net Trading Income 798 1 798 Other Income & Expenses -699 -2,077 1,378 Gross Income 2,310 -

  33. Slide 33: Argentina - hyperinflation adjustment

    3Q23 Results 33 Argentina - hyperinflation adjustment PROFIT & LOSS (€M) 9M23 Hyperinflation 9M23 (reported) (1) adjustment (2) Ex.Hyperinflation Net Interest Income 2,034 -41 2,075 Net Fees and Commissions 180 -9 189 Net Trading Income 147 -11 158 Other Income & Expenses -1,213 -941 -272 Gross Income

  34. Slide 34: Colombia - Profit & Loss

    3Q23 Results 34 Colombia - Profit & Loss PROFIT & LOSS (€M CONSTANT) Δ (%) Δ (%) 3Q23 vs 3Q22 vs 2Q23 9M23 vs 9M22 Net Interest Income 189 -2.5 5.0 552 -6.4 Net Fees and Commissions 26 6.2 -17.8 83 17.1 Net Trading Income -3 n.s. n.s. 59 -17.8 Other Income & Expenses -9 n.s. 184.9 -10 n.s. Gross Inco

  35. Slide 35: Peru - Profit & Loss

    3Q23 Results 35 Peru - Profit & Loss PROFIT & LOSS (€M CONSTANT) Δ (%) Δ (%) 3Q23 vs 3Q22 vs 2Q23 9M23 vs 9M22 Net Interest Income 334 17.3 4.9 962 23.9 Net Fees and Commissions 68 -2.9 -8.6 216 2.1 Net Trading Income 49 12.3 8.7 143 18.9 Other Income & Expenses -10 26.5 13.1 -32 25.5 Gross Income 44

  36. Slide 36: Customer Spread by country

    04 Customer Spread by country

  37. Slide 37: Customer spreads: quarterly evolution

    3Q23 Results 37 Customer spreads: quarterly evolution AVERAGE 3Q22 4Q22 1Q23 2Q23 3Q23 3Q22 4Q22 1Q23 2Q23 3Q23 Spain 1.85% 2.21% 2.75% 3.12% 3.33% Turkey TRY 9.00% 7.19% 3.92% 0.81% 0.51% Yield on Loans 1.93% 2.42% 3.11% 3.64% 4.01% Yield on Loans 20.92% 18.67% 16.84% 16.50% 20.20% Cost of Deposits

  38. Slide 38: Customer spreads: YtD evolution

    3Q23 Results 38 Customer spreads: YtD evolution AVERAGE 9M22 9M23 9M22 9M23 Spain 1.76% 3.06% Turkey TRY 7.16% 1.41% Yield on Loans 1.80% 3.59% Yield on Loans 19.26% 18.00% Cost of Deposits -0.04% -0.53% Cost of Deposits -12.09% -16.59% 1 Mexico MXN 11.65% 12.66% Turkey FC 5.77% 8.86% Yield on Loans

  39. Slide 39: Stages breakdown by business areas

    05 Stages breakdown by business areas

  40. Slide 40: Stages breakdown by business areas

    3Q23 Results 40 Stages breakdown by business areas CREDIT RISK BUSINESS BREAKDOWN BY AREA (SEP-23, € M) Gross Accumulated Gross Accumulated Gross Accumulated BBVA GROUP Exposure impairments SPAIN Exposure impairments MEXICO Exposure impairments Stage 1 394,329 2,143 Stage 1 174,266 421 Stage 1 84,73

  41. Slide 41: Exposure to Covid-related loans and Commercial Real Estate

    06 Exposure to Covid-related loans and Commercial Real Estate

  42. Slide 42: Exposure to Covid-related loans backed by State guarantees and Commercial Real Estate

    3Q23 Results 42 Exposure to Covid-related loans backed by State guarantees and Commercial Real Estate COVID-RELATED LOANS, SPAIN AND PERU COMMERCIAL REAL ESTATE (OUTSTANDING LOANS AS OF SEP’23) (GROUP’s CRE EAD, %, AS OF SEP’23) 9.7 Bn€1 0.6 Bn€ c.10 Bn€ 2 of which of which 62% Retail 58% Retail c.2

  43. Slide 43: ALCO Portfolio, NII Sensitivity and LCRs & NSFRs

    07 ALCO Portfolio, NII Sensitivity and LCRs & NSFRs

  44. Slide 44: ALCO Portfolio

    3Q23 Results 44 ALCO Portfolio ALCO PORTFOLIO BREAKDOWN BY REGION (€ BN) Amort Cost Fair Value (HTC) (HTC&S) (duration Sep-23 (€BN) (€BN) incl. hedges) South America 0.2 6.1 1.2 years Turkey 6.2 2.2 3.5 years Mexico 7.1 10.8 2.5 years Euro 24.1 13.9 2.5 years (1) Spain 18.0 7.0 Italy 3.2 4.2 Rest 2.

  45. Slide 45: NII sensitivity to interest rates movements

    3Q23 Results 45 NII sensitivity to interest rates movements ESTIMATED IMPACT ON NII IN THE NEXT 12 MONTHS TO PARALLEL INTEREST RATE MOVEMENTS(1) (TO +100 BPS INTEREST RATES INCREASE, %) +5 /10% +2.3% EURO BALANCE MEXICO(2) (+1.6% for MXN SHEET BALANCE SHEET) (1) NII sensitivities to parallel interes

  46. Slide 46: Liquidity and funding ratios

    3Q23 Results 46 Liquidity and funding ratios BBVA GROUP AND SUBSIDIARIES LCR & NSFR (SEP-23) LCR NSFR Loan To Total Group 181% / 143%1 130% Deposits BBVA, S.A. 166% 120% 90% Mexico 163% 133% 100% 2 Turkey 230% 182% 76% S. America 95%3 All countries >100% >100% (1) Using a more restrictive criterion

  47. Slide 47: CET1 Sensitivity to market impacts

    08 CET1 Sensitivity to market impacts

  48. Slide 48: CET1 Sensitivity to market impacts

    3Q23 Results 48 CET1 Sensitivity to market impacts1 TO A 10% CURRENCY DEPRECIATION 2 TO A 10% DECLINE IN TELEFONICA’S (SEP-23) SHARE PRICE (SEP-23) MXN -9bps -3 pbs TRY -5bps TO +100 BPS MOVEMENT IN THE SPANISH SOVEREIGN BOND (SEP-23) USD +18bps -10 bps (1) CET1 sensitivity considering the FL capita

  49. Slide 49: CET1 YTD evolution & RWAs by business area

    9 CET1 YTD evolution & RWAs by business area

  50. Slide 50: Capital YtD evolution

    3Q23 Results 50 Capital YtD evolution CET1 FULLY-LOADED – BBVA GROUP YTD EVOLUTION (%, BPS) 1 2 (1) Includes the reversal of the NPL backstop deduction (+19 bps) in January 2023, resulting in a P2R increase of +21 bps. (2) Includes, among others, minority interests, market related impacts, regulator

  51. Slide 51: Risk-weighted assets by business area

    3Q23 Results 51 Risk-weighted assets by business area Fully-Loaded RWAs Breakdown by business area (€M) Sep-22 Jun-23 Sep-23 Spain 108,733 116,767 117,112 Mexico 80,491 85,111 88,290 Turkey 53,435 50,672 53,056 South America 51,484 50,144 50,255 Argentina 7,574 7,309 6,678 Chile 2,164 2,316 2,176 Co

  52. Slide 52: Book Value of the main subsidiaries

    10 Book Value of the main subsidiaries

  53. Slide 53: Book Value of the main subsidiaries

    3Q23 Results 53 Book Value of the main subsidiaries1,2 € BN; SEP-23 Mexico 19.9 Turkey 6.9 Colombia 1.8 Argentina 1.4 Peru 1.3 Chile 0.3 Venezuela 0.1 (1) Includes the initial investment + BBVA’s undistributed results + FX impact + other valuation adjustments. The Goodwill associated to each subsidi

  54. Slide 54: TBV per share & dividends evolution

    11 TBV per share & dividends evolution

  55. Slide 55: Shareholder's return: TBV per share & dividends evolution

    3Q23 Results 55 Shareholder’s return: TBV per share & dividends evolution TBV PER SHARE & DIVIDENDS1 (€ PER SHARE) TBV Dividends +17.7% 2 2 2 (1) 2022 figures restated for IFRS17. Including the deduction of the whole Share Buy Back program. (2) April 2023 dividend per share paid 0.31 € (gross) and Oc

  56. Slide 56: MREL

    Creating Opportunities MREL

  57. Slide 57: Sound MREL position

    3Q23 Results 57 Sound MREL position POSITION AS OF SEP-23 (% RWA1) MREL REQUIREMENT2 + CBR SUBORDINATION REQUIREMENT + CBR 27.23% 24.78% 22.50% CBR: 3.32% 16.82% CBR: 3.32% MREL 21.46% Subordination 13.50% 3 3 M-MDA Buffer 244 bps (5.1€bn) Subordination Buffer 568 bps (11.8€bn) Note: Preliminary Dat

  58. Slide 58: Digital metrics

    BBVA Creating Opportunities Digital metrics

  59. Slide 59: Digital metrics mobile customers & digital sales

    3Q23 Results 59 Digital metrics mobile customers & digital sales MOBILE CUSTOMERS DIGITAL SALES - UNITS (MILLION CUSTOMERS, %) % OF TOTAL SALES YTD, # OF TRANSACTIONS) +35% DIGITAL SALES - PRV2 % OF TOTAL SALES YTD, PRV) CUSTOMER PENETRATION RATE1 63.7% 69.5% 72.7% Note: data excludes USA, Paraguay

  60. Slide 60: BBVA

    BBVA

Banco Bilbao Vizcaya Argentaria — Q3 2023 Earnings Presentation on 6ix