Banco Bilbao Vizcaya Argentaria, S.a. · BME:BBVA
Banco Bilbao Vizcaya Argentaria — BBVA — Debt Investor Presentation (February 2019)
47 slides from Banco Bilbao Vizcaya Argentaria's debt investor presentation, Feb 1, 2019
Slide 1: Fixed Income Presentation
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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 decision
Slide 3: Index
Fixed Income Presentation/ 3 Index 01 About BBVA 04 Asset Quality o7 Liquidity & Funding 2 BBVA's Strengths & 5 capital O8 Ratings Financial Highlights a . MREL & Transformation O3 Diversified Footprint O6 Funding Plan OS es cstian, MM EEE APPENDIX 4 BBVA Group 2018 Profit & Loss i BBVAS.A.: 2018 SR
Slide 4: About BBVA
Fixed Income Presentation / 4
Slide 5: About BBVA
Fixed Income Presentation/ 5 About BBVA BBVA’s global presence Diversification under a decentralized model Dec.18 Total Assets Gross Income” Dec.18 2018 Merwe develoved € 677 bn 745mn 27mn Emerging C ar% Markets: pereaee assets customers digital customers 33% 61% 39% «Leading franchises in Developed
Slide 6: BBVA's Strengths & Financial Highlights
BBVA Creating Fixed Income Presentation / 6 Opportunities BBVA’s Strengths & Financial Highlights
Slide 7: BBVA's Strengths
BBVA’'s Strengths Resilience and Low Earnings Volatility 4.2% Pre-provision 3.7% 3.8% 3.7% Pp : 3.2% * 33% 3.0% 5.9 3.0% 35% 35% profit / RWAs 12.8 12.3 119 m1 n4 19 12.0 10.5 10.6 10.2 10.4 Pre-provision profit 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 (1) Excluding Telefénica one off
Slide 8: 2018 Highlights
2018 Highlights Core revenue growth 10.4% Net pee i 22.5 interest 0/1 income and fees (€ bn, constant) 2017 2018 Sound risk indicators NPL 3.9% Cost of Risk 1.01% (ytD) Coverage 73% (1) Liquidity Coverage Ratio. C ring excess liquidity of the sub: Fixed Income Presentation / 8 Efficiency improvement
Slide 9: Diversified Footprint
BBV Creating Fixed Income Presentation / 9 Opportunities Diversified Footprint
Slide 10: Unique footprint with high growth prospects
Fixed Income Presentation/ 10 Unique footprint with high growth prospects Breakdown by Business Area Total Assets Dec.18 Rest of Corporate Eurasia Center South 2.7% 33% America 7.7% Turkey 9.8% ay We” bn span Mexico 14.3% S 12.1% Gross Income® 2018 Rest of Eurasia South Furr America og a teta( 2327
Slide 11: 2018 Net attributable profit (constant €)
2018 Net attributable profit(1) (constant €)
Slide 12: 2018 Net attributable profit (constant €)
2018 Net attributable profit(1) (constant €)
Slide 13: Asset Quality
BBV. Creating Fixed Income Presentation / 13 Opportunities = a Asset Quality
Slide 14: Sound risk indicators
Fixed Income Presentation/ 14 Sound risk indicators NPL Ratio 5) 88. 58 54 (%) 43 41 40 #9 46 39 : 23 A Risk Management Model based on prudence and proactivity . 92 Coverage ratio 57 62 61 72 6 64 74 70 6 73 (%) Risk Management Goal To preserve the Group's solvency, . support its strategy and ensure
Slide 15: Capital
BBVA Creating Fixed Income Presentation / 15 Opportunities Capital
Slide 16: Group's sound capital position and proven ability to generate capital
Fixed Income Presentation / 16 Group's sound capital position and proven ability to generate capital FL Capital Ratios CET1 FL Dec.18 (%) YtD Evolution (%, bps) +26 bps 15.45% 136 bps | Tier 2 2.54% | c AT 1.57%”) d 349 Se 11.08% 50 bps 58bps 24 bps | _ 11.34% a i | -37bps ——_-10 bps CET1 11.34% | -
Slide 17: Low earnings volatility and ability to generate capital
Low earnings volatility and ability to generate capital allow for lower capital needs Pre-provision profit / Net Loans _— Pre-provision profit / RWAs BBVA 3.2% Peer 1 5.0% Peer] 3.1% Peer 2 4.3% Peer 2 20% BBVA 35% In less than 4 years, Pees a 2 7 Pei 3.41, ct 2.3% Cc, 33% BBVA is able to generate P
Slide 18: High quality capital
Fixed Income Presentation/ 18 High quality capital RWAs/ Total Assets Fully-Loaded Leverage Ratio Sep.18 European peers / Dec.18 BBVA, % Sep.18 European peers / Dec.18 BBVA, % BBVA 52 BBVA 64 Peer 1 43 Peer 1 6.2 Pe, Z| | woo aaa 5 4 ci, 3 Peo me 5! i ——T 36 Pe 4 3 Pee, 35 Peo | Peer 6 a 33 Pec a 5
Slide 19: 2018 EBA Stress Test results confirm BBVA's resilience
Fixed Income Presentation / 19 2018 EBA Stress Test results confirms BBVA’s resilience Net Attributable Profit 2018-2020 CET1 FL Depletion 2020 vs 2017 under the adverse scenario (cumulative € Mn) under the adverse scenario (bps) Peer 1 m 1,208 Peer 1 = BBVA 1 344 BBVA 13 = Peer 2 1,279 Peere 219 —
Slide 20: Risk-Weighted Assets distribution
Fixed Incom: Risk-Weighted Assets distribution TOTAL RWAs Fully Loaded 30% . Optimizing Capital “a \ CVA® 0.4% Allocation is one of BBVA's “El oe ome. Strategic Priorities Operational Risk \ v4 ae Limited usage of internal ~ 5% models in Credit Risk RWAs, mitigating potential ™ Spain® 103,972 impact
Slide 21: 2018 SREP requirements
T2: 2.0% AT1: 1.5% 0.563% 1.875% 1.5% 4.5% 2018 CET1 SREP 2018 Total Capital BBVA Group Total Requirement SREP Requirement capital ratio phased-in Dec.18
Slide 22: The lowest 2018 SREP requirement among peers
The lowest 2018 SREP requirement among peers CET1 SREP Requirement - FL Distance to MDA vs Fully Loaded SREP requirement 3 1.77% 437 10.75% 15 ono 10.07% 9.75% 9.60% 9.53% 9.50% 9.33% 9.25% 300 I 209° 204 = 202 7 § 8 : @ Peo TT | Pr; Pe) aT ro! Peer Peer Peer Peer 5 BBVA Peer 1 Peer 4 ; Peer5 i Peer
Slide 23: High level of Available Distributable Items (ADIs)
High level of Available Distributable Items (ADIs) BBVA, S.A. (Parent Company) Dec.18, € Bn €9.1 Bn c. 30x 2018 AT1 coupons €0.3 Bn ADIs 2018 AT1 net coupons Significant payment capacity from distributable items despite conservative calculation (Share Premium not included) Supported by sustainable p
Slide 24: FX Hedging policy
FX Hedging policy Capital Policy BBVA hedges c.70% of the excess capital (what is not naturally hedged by the ratio) GOAL —_ Reduce Consolidated CET1 ratio volatility as a result of FX movements CET1 FL Ratio Sensitivity to a 10% Depreciation of EM Currencies (Dec.18) APROX For each currency -2 bps
Slide 25: ALCO & Equity HTC&S Portfolio
Fixed Income Presentation/ 25 ALCO & Equity HTC&S Portfolio ALCO Portfolio breakdown by region (Dec.18, € Bn) o.w. HTC@) Portfolio breakdown 47 Mexico (Dec.18,€ Bn) USA (Others y Diversified portfolio Turkey se across BBVA’s footprint 22.6 Eurozone f i HTC®) portfolio contributes to mitigate the ove
Slide 26: MREL & Funding Plan
BBVA Creating Fixed Income Presentation / 26 Opportunities = a MREL & Funding Plan
Slide 27: MREL requirement
Fixed Income Presentation / 27 MREL requirement 15.08% 28.04% Total Requirement of European Resolution Group in terms of RWA® Total requirement of liabilities and own funds of European resolution Group « These requirements will be binding on 1st January 2020 BBVA considers that it currently complies
Slide 28: BBVA's 2019 Funding plan
BBVA's 2019 Funding plan Goals: * Keep AT1 and T2 layers endowed * Preserve compliance with MREL requirements MREL Funding Plan for 2019: * Hybrid instruments: keep buckets fulfilled, considering maturities and potential future call options * AT1: €1 bn AT1 PNC 5.875% issuance Sep'18 * €1.5bn AT1 7%
Slide 29: Liquidity & Funding
BBVA Creating Fixed Income Presentation / 29 Opportunities = a Liquidity & Funding
Slide 30: Liquidity & Funding
Liquidity & Funding Self-sufficient subsidiaries from a liquidity point of view, with robust supervision and control by parent company Retail profile of BBVA Group balance sheet with limited dependence on wholesale funding Fixed Income Presentation Ample high quality collateral available, compliant
Slide 31: Principles of self-sufficient business model: Multiple Point of Entry
Fixed Income Presentation / 31 Principles of BBVA Group's self-sufficient business model: Multiple Point of Entry ® Advantages cB) Subsidiaries a Medium term orientation / consistent with retail banking ‘ Self-sufficient balance-she@ee oe a Improves risk assessment: management imposes market discipl
Slide 32: Assets and Liabilities
63% 63% Deposits Net Loans to Customers ECB Fixed Assets Funding M&L/T & Others 7% 4% Financial Equity & Others 10% Assets 15% Funding S/T 30% 8% Assets Liabilities
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 (0ec.18;¢ bn) EURO 173 USA MEXICO € 40.5bn € 3.1bn € 6.9bn 52 49 6.1 7.0 bo 25 ; 15 13 14 i I | ' | 05 45 i 07 Q7 02 i zs | 2 & or it 2019 2020 2021 2022 2022 2019
Slide 34: Turkey — Liquidity & Funding Sources
Fixed Income Presentation / 34 Turkey — Liquidity & Funding Sources 4 LTD ratio101%, 15 p.p. improvement in the year, mainly driven by a reduction in Local Currency LTD. On top of this Foreign Currency LTD improved by 7 p.p. to 65% «Liquidity Coverage Ratio (EBA): 209% vs. 100% required for 2018 ‘Fo
Slide 35: Ratings
BBVA Creating Fixed Income Presentation/ 35 Opportunities = hz Ratings
Slide 36: BBVA Group Ratings by Agency
Fixed Income Presentation / 36 BBVA Group Ratings by Agency “ BBVA Long Term Issuer / Senior BBVA Ratings by type of instrument Unsecured Ratings Stable outlook (ct. 26.2017) Note: CB = Covered Bonds, SNP = Senior Non Preferred (1) Arating is not a recomme time by the assigning rating org: on to buy
Slide 37: Transformation Strategy
BBV. Creating Fixed Income Presentation/ 37 Opportunities Transformation Strategy
Slide 38: Mobile customers
2019 Goal: Dec-16 Dec-17 Dec-18 50% mobile customers
Slide 39: Digital sales
Figures have been restated due to the inclusion of additional products. Group and South America figures exclude Venezuela and Chile. (*) Product Relative Value as a proxy of a better economic representation of units sold
Slide 40: Appendix
BBVA Creating Fixed Income Presentation/ 40 Opportunities APPENDIX « BBVA Group 2018 Profit & Loss « BBVA, S.A.: 2018 SREP Requirement and distance to MDA « Debt Issuances — 2017/2019YTD a Amortized notes — 2017/2019YTD a Risk Indicators by Areas « Capital Base: BBVA Group & BBVA S.A.
Slide 41: BBVA Group 2018 Profit & Loss
Fixed Income Presentation/ 41 BBVA Group 2018 Profit & Loss Change 12M18/12M17 . . BBVA Group FoR Net Attributable Profit breakdown Net Interest Income 17,591 17,758 -0.9 10.8 (% 2018) Net Fees and Commissions 4,879 4921 -0.8 89 Net Trading Income 1,223 1,968 37.8 -33.9 Other Income & Expenses 54 62
Slide 42: Risk Indicators by Areas
Fixed Income Presentation / 42 Risk Indicators by Areas age ratio (%) (%) BBVA Group 4.6 4.1 3.9 BBVA Group Banking activity in Spain {32) 5.0 46 Banking activity in Spain The United States 12 W 13 The United States Mexico 23 2.0 21 Mexico 123 150 154 Turkey 39 52 53 Turkey 85 77 81 Argentina 08 11
Slide 43: Capital Base: BBVA Group & BBVA S.A.
RWA € 348,264 m € 194,663 m RWA €348,804 m € 195,083 m
Slide 44: BBVA S.A. 2018 SREP Requirement
T2: 2.0% AT1: 1.5% 1.875% 1.5% 4.5% 2018 CET1 SREP 2018Total Capital BBVA, S.A. Total Requirement SREP Requirement capital ratio phased-in Dec.18
Slide 45: Debt Issuances 2017/2019YTD
Nominal Product Issue Date Call Date Maturity Coupon ISIN currency AT1 Sep-18 Sep-23 Perp € 1,000 M 5.875% ES0813211002 Tier 2 May-18 - May-33 $ 300 M 5.25% XS1824263260 SNP May-18 - May-25 € 1,000 M 1.375% XS1820037270 SNP Mar-18 - Mar-23 € 1,500 M 3ME+ 0.60% XS1788584321 SNP Nov-17 - Nov-23 € 150
Slide 46: Amortized notes 2017/2019YTD
Issue Outstanding Product Redemption Coupon Date currency (M) AT1 Feb-14 Feb-19 € 1,500 7.00% AT1 May-13 May-18 $ 1,500 9.00% Tier 2 Feb-07 Feb-18 € 257 3ME+0.80% Tier 2 Oct-05 Jan-18 € 99 3ME+0.80% Preferred Apr-07 Apr-17 $ 600 5.919% Preferred Sep-06 Mar-17 € 164 3ME+1.95% Preferred Sep-05 Mar-17
Slide 47: BBVA Fixed Income Presentation
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