Banco Bilbao Vizcaya Argentaria, S.a. · BME:BBVA
Banco Bilbao Vizcaya Argentaria — Debt Investor Presentation (November 2018)
49 slides from Banco Bilbao Vizcaya Argentaria's debt investor presentation, Nov 1, 2018
Slide 1: Fixed Income Presentation
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Slide 2: Disclaimer
Fixed Income Presentation/ 2 Disclaimer This documentis only provided for information purposes and does not constitute, nor shouldit 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 t
Slide 3: Index
Fixed Income Presentation/ 3 Index 01 About BBVA O4 Asset Quality roy stung) Funding 2 BBVA's Strengths & 5 capital O8 Ratings Financial Highlights - MREL & Transformation O3 Diversified Footprint 6 Funding Plan DEN at oray TT APPENDIX BBVA Group 9M18 Profit & Loss Risk Indicators by Areas Capital B
Slide 4: Fixed Income Presentation / 4
Fixed Income Presentation / 4
Slide 5: About BBVA
About BBVA BBVA’s global presence Sep.18 €669bn 75mn 26 mn assets customers digital customers 7,999 branches >30 countries 126,357 employees Defined strategic path Six Strategic Priorities * New standard in Optimal capital ~~ customer . allocation Our Purpose “To bring the age . experience of opport
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% ° 3.3% 3.0% 7.9% 3.0% 3.5% 3.4%” profit / RWAS 123° 11. 19 m1 n4 19 12.8 10.5 10.6 10.4 10.2 E 89 Pre-provision profit 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 9M18 (1) Annualized Pre-provis
Slide 8: 9M18 Highlights
9M18 Highlights Core revenues growth Net prom interest 15.0 166 income and fees | (€ Bn, constant) 9M17 omi8 Sound asset quality NPL 4.1% Cost of Risk fo) CD) 0.90% Coverage 73% (1) Including corporates transactions: Sale of BBVA Chile capital gain€633Mn (2) Data as 0 Fixed Income Presentation / 8 C
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 Sep.18 Rest of Corporate Eurasia Center South 2 3% 3.6% America 7.6% om Turkey a 9.9% Ss) €669bn } Span, Mexico 14.4% = U 18% Gross Income® 9M18 Rest of South Eurasia America ay | Co 15.
Slide 11: 9M18 Net attributable profit
9M18 Net attributable profit(2) (constant €)
Slide 12: 9M18 Net attributable profit
9M18 Net attributable profit(1) (constant €)
Slide 13: Asset Quality
BBV. Creating Fixed Income Presentation / 13 Opportunities = a Asset Quality
Slide 14: Asset Quality indicators continue to improve
Asset Quality indicators continue to improve NPL Ratio 68 58 5.1 54 . 43 41 40 49 46 (%) 23 1 Coverage ratio % 72 74 5 57 62 61 60 64 70 65 73 (%) Cost of Risk 9 2.15 YtD (%) 155 133 159 1.15 1.19 1.25 1.06 A _— 0.84 0.89 0.90 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Sep.18 Fixed Income Pre
Slide 15: A prudent risk profile
A prudent risk profile Cost of Risk (YTD, bps) 5.0 56 BBVA Banking Peers Activity in Average Spain spain “ 22 37 _ = BBVA Banking Peers Activity in Average Spain SPAIN 11 0.9 | | BBVA Peers Compass Average usA® 47 19 = _ BBVA Peers Compass Average 2 usa? 19 I BBVA Peers Bancomer Average MEXICO 295 3
Slide 16: Capital
BBVA Creating Fixed Income Presentation/ 16 Opportunities Capital
Slide 17: Sound capital position and a proven ability to generate capital
Fixed Income Presentation/ 17 Sound capital position and a proven ability to generate capital FL Capital Ratios CET1 FL Ratio - BBVA Group BBVA Group (%) Sep.18 (%) 16% 11.3% 9.6% 10.3% 108% © yoy 10.3% 19,99 TT ‘ 8.0% 15.60% 6.2% | | | | | | | Ml Basel |! @® Basellll FL Tier 2 2.53% a 2008 2009 l 2
Slide 18: 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] 4.5% Peer] 2.9% Peer 2 4.3% ee 2.77% BBVA 3.4% In less than 4 years, ec 26. i 3 40, ct 2.5% Cc 3,2 BBVA is able to generate Pci 2/0 i
Slide 19: High quality capital
Fixed Income Presentation / 19 High quality capital RWAs/ Total Assets Fully-Loaded Leverage Ratio Jun.18 European peers / Sep.18 BBVA, % Jun.18 European peers / Sep.18 BBVA, % BBVA 51 BBVA 6.6 Peer 1 44 Peer 1 6.2 Pei Z| | Peer 2 a 5° eh, 35 Peo 53 Pei Te 3 6 Pec 4 i 5 2 ee, 3 5 Peo (__ a, a7 33 Pe
Slide 20: EBA Stress Test 2018 confirms BBVA's resilience
Fixed Income Presentation / 20 EBA Stress Test 2018 confirms BBVA’s resilience Net Attributable Profit 2018-2020 CET1 FL Depletion 2020 vs 2017 restated 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 21: Risk-Weighted Assets distribution
Fixed Income Risk-Weighted Assets distribution TOTAL RWAs Fully Loaded Optimizing Capital os Allocation is one of BBVA’s %, . . “pe “a ‘\ CVA® 0.4% Strategic Priorities a FXRisk 0.4% 8 Trading Act. Risk Operational Risk Limited usage of internal models in Credit Risk RWAs Credit Risk 86.3% ™ Spain 1
Slide 22: 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 Sep.18
Slide 23: BBVA has the lowest SREP requirement among peers
BBVA has the lowest SREP requirement among peers CET1 SREP Requirement - FL Distance to MDA vs Fully Loaded SREP requirement 11.77% 10.75% 10.07% 9.75% 9.60% 9.53% 9.50% 9.33% 9.25% 3: 4 i fo) eer 5 zg Peer 5 iS Ss ice) > 3 Peer? A S Peer 8 = a Peer + Peer? _— N ite) oO ice} <= _ N ¢ <x oO coy [ay [
Slide 24: High level of Available Distributable Items (ADIs)
High level of Available Distributable Items (ADIs) BBVA, S.A. (Parent Company) Dec.17, € Bn € 8.8 Bn c. 30x 2017 AT1 coupons € 0.30 Bn ADIs 2017 AT1 net coupons Significant payment capacity from distributable items despite conservative calculation (Share Premium not included) Supported by sustainabl
Slide 25: 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 (Sep.18) APROX For each currency -2 bps
Slide 26: ALCO & Equity HTC&S Portfolio
ALCO & Equity HTC&S Portfolio ALCO Portfolio breakdown by region (Sep.18, € Bn) —§5.6 Mexico o.w. HTC®) Portfolio breakdown (Sep.18,€ Bn) USA Others. 9% 4% Turkey Sell 44% 20% OM 28.5 Eurozone ® 5.1)... CQ Italy 03% Equity HTC&S portfolio — Main stake Telefonica 5.13% HTC&S: Held to Collect and S: w
Slide 27: MREL & Funding Plan
BBVA Creating Fixed Income Presentation/ 27 Opportunities = a MREL & Funding Plan
Slide 28: MREL requirement
Fixed Income Presentation / 28 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 29: BBVA's 2018 Funding plan
Fixed Income Presentation / 29 BBVA's 2018 Funding plan Maturity profile @ BBVAhas already filled its AT] and T2 layers a Wholesale debt maturity profile offers flexibility to a BBVA expects to maintain the 1.5% AT1 and 2% T2 refinance current instruments into new SNP, if required: regulatory bucket
Slide 30: Liquidity & Funding
BBVA Creating Fixed Income Presentation / 30 Opportunities = a Liquidity & Funding
Slide 31: 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 32: Principles of BBVA Group's self-sufficient business model
Fixed Income Presentation / 32 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 33: Financial soundness based on the funding of lending activity
Fixed Income Presentation / 33 Financial soundness based on the funding of lending activity BBVA Group Liquidity balance sheet “ (Sep.18) 63% 62% = Net Loans to = Deposits Customers = Fixed Assets ECB & Others - 9 = Funding M&L/T m Financial | 8% m 4% Assets | 11% m Equity & Others 29% | 15% = Fundi
Slide 34: Broaden geographical diversification of access to market
Fixed Income Presentation / 34 Broaden geographical diversification of access to market Medium & long-term wholesale funding maturities (Sept.1s:€ bn) EURO USA MEXICO 24.2 € 41.3bn € 3.0 bn € 6.9bn 3.9 13 7 49° 49 6.1 10 15 13 “ 0.5 0.2 | ee on oe | © | 2 i 4 2018 2019 2020 2021 >2021 2018 2019 2020
Slide 35: 4Q18 Covered Bond Securitization
4.6 4.8 1.8 0.9 1.0 4Q18 2019 2020 2021 >=2022 Covered Bond Subdebt Syndicated loans Securitization Senior Other
Slide 36: Ratings
BBVA Creating Fixed Income Presentation / 36 Opportunities = hz Ratings
Slide 37: BBVA Group Ratings by Agency
Fixed Income Presentation / 37 BBVA Group Ratings by Agency Latest Rating Actions (9M18) BBVA Ratings” Long Term Issuer / Senior Unsecured Ratings Moody's S&P Fitch DBRS Scope Outlook Issuer Senior Stable Negative Stable Stable Stable Investment ff Aaa AAA AAA AAA AAA ” . grade Aal AAS AAS AA(H) AAt
Slide 38: Transformation Strategy
BBV Creating Fixed Income Presentation/ 38 Opportunities Transformation Strategy
Slide 39: Digital Customers — BBVA Group
Digital Customers — BBVA Group Digital Customers (Mn, % penetration) PENETRATION Mobile Customers (Mn, % penetration) PENETRATION 11.2 Sep-16 23% 15.8 Sep-17 31% 26.0 21.7 Sep-18 41% Fixed Income Presentation / 39 #1 Banking App in the world in 2017 & 2018 Goal: 50% tipping point of digital customer
Slide 40: Digital Sales
Digital Sales (% of total sales YtD, # of transactions and PRV*) Fixed Income Presentation / 40 QO SPAIN QUSA “7 ea = 24.6 267 18.7 19.4 : 23.2 157 oe = Ts 10. 19.0 11.0 Sep-16 Sep-17 Sep-18 Sep-16 Sep-17 Sep-18 Q MEXICO QO TURKEY Q SOUTH AMERICA . 52.2 346 “5 7 Ww 29.6 bh erv | 42.7 uns | 7s 27.4 1
Slide 41: Appendix
BBVA Sprorttnities Fixed Income Presentation/ 41 APPENDIX « BBVA Group 9M18 Profit & Loss é Risk Indicators by Areas « Capital Base: BBVA Group & BBVA S.A. « BBVA, S.A.: 2018 SREP Requirement and distance to MDA « Debt Issuances — 2017/2018YTD a Amortized notes — 2017/2018YTD « BBVA, S.A.: 3Q18 Issu
Slide 42: BBVA Group 9M18 Profit & Loss
Fixed Income Presentation / 42 BBVA Group 9M18 Profit & Loss Change Net Attributable Profit breakdown 9M18/9M17 (%, 9M18) BBVA Group Net Interest Income 12899 -23 10.2 Net Fees and Commissions 3653-14 94 Net Trading Income 907-359 “312 13% 5 . mm Spain Other Income & Expenses 136-767 “737 10.4% 24.5
Slide 43: Risk Indicators by Areas
Fixed Income Presentation / 43 Risk Indicators by Areas NPL coverage ratio‘ (%) (%) BBVA Group 4.6 44 41 BBVA Group 65 val 73 Banking activity in Spain (2) {32) 5.2 5.0 Banking activity in Spain 50 57 56 The United States 12 12 11 The United States 104 93 101 Mexico 2.3 2.0 2.0 Mexico 123 155 150 Tu
Slide 44: Capital Base: BBVA Group
RWA € 343,051 m € 198,805 m RWA €343,271 m € 199,033 m
Slide 45: BBVA, S.A.: 2018 SREP Requirement and distance to MDA
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 Sep.18
Slide 46: Debt Issuances 2017/2018 YTD
Nominal Issuer Product Issue Date Call Date Maturity Coupon Isin currency BBVA SA AT1 Sep-18 Sep-23 Perp € 1,000 M 5.875% ES0813211002 BBVA SA Tier 2 May-18 - May-33 $ 300 M 5.25% XS1824263260 BBVA SA SNP May-18 - May-25 € 1,000 M 1.375% XS1820037270 BBVA SA SNP Mar-18 - Mar-23 € 1,500 M 3ME+ 0.60%
Slide 47: Amortized notes 2017/2018 YTD
Issue Outstanding Outstanding Product Redemption Coupon Date currency (M) € (M) AT1 May-13 May-18 $ 1,500 M 1248 9.00% Tier 2 Feb-07 Feb-18 € 257 257 3ME+0.80% Tier 2 Oct-05 Jan-18 € 99 99 3ME+0.80% Preferred Apr-07 Apr-17 $ 600 499 5.919% Preferred Sep-06 Mar-17 € 164 164 3ME+1.95% Preferred Sep-05
Slide 48: 3Q18 Issuances: BBVA AT1
Fixed Income Presentation / 48 3Q18 Issuances: BBVA AT1 Eur 1 bn PNC5 5.875% « Gives BBVA flexibility to refinance the potential next call options of AT1 lfolanese) @ Thisis the lowest coupon ever paid for a BBVA AT1 a This issuance was the third public transaction in 2018 for BBVA SA “Settlement Da
Slide 49: BBVA Fixed Income Presentation
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Banco Bilbao Vizcaya Argentaria, S.A. (BBVA) — Debt Investor Presentation (November 2018) on 6ix