53 slides from Banco Bilbao Vizcaya Argentaria's earnings presentation, Feb 1, 2018
Slide 1: 2017 Results
2017 Results February 1st 2018 / 1 2017 Results February, 1st 2018
Slide 2: Disclaimer
2017 Results February 1st 2018 / 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 de
Slide 3: Strong and Recurrent Results Quarter by Quarter
2017 Results February 1st 2018 / 3 Strong and Recurrent Results Quarter by Quarter Net Attributable Profit Quarterly evolution (€m) 12M17 vs. 12M16 (€m) Ex-Telefónica Ex-mortgage Ex-Telefónica Ex-mortgage impairment floor clauses impairment floor clauses provision provision 4,642 1,199 1,192 3,879 1
Slide 4: 2017 Highlights
2017 Results February 1st 2018 / 4 2017 Highlights 01 Strong core revenue growth NII + Fees (€ constant) +10.3% vs. 12M16 Efficiency 02 Delivery in efficiency -276 bps vs. 12M16 (constant) 49.5% NPL ratio CoR 03 Sound risk indicators 4.4% 0.87% -47 bps vs. 2016 +3 bps vs. 2016 04 CET 1 FL above 11%
Slide 5: 2017 Profit & Loss
2017 Results February 1st 2018 / 5 2017 Profit & Loss Change 2017/2016 BBVA Group (€m) 2017 % % constant Net Interest Income 17,758 4.1 10.6 Net Fees and Commissions 4,921 4.3 9.4 Net Trading Income 1,968 -7.7 -6.0 Other Income & Expenses 622 -16.3 -19.1 Gross Income 25,270 2.5 7.9 Operating Expense
Slide 6: 4Q17 Profit & Loss
2017 Results February 1st 2018 / 6 4Q17 Profit & Loss Change 4Q17/4Q16 BBVA Group (€m) 4Q17 % % constant Net Interest Income 4,557 3.9 14.3 Net Fees and Commissions 1,215 4.7 13.0 Net Trading Income 552 45.6 14.4 Other Income & Expenses 37 -87.4 -83.9 Gross Income 6,362 2.2 10.5 Operating Expenses -
Slide 7: Strong Core Revenue Growth
2017 Results February 1st 2018 / 7 Strong Core Revenue Growth Net Interest Income Net Fees and Commissions (€m constant) (€m constant) +14.3% +13.0% +10.6% +9.4% 4,797 vs 12M16 vs 12M16 4,334 4,425 1,194 1,199 1,257 1,271 4,196 4,203 +8.4 % 1,125 Excellent +1.1% Solid growth quarter across the board
Slide 8: Delivery in Efficiency
2017 Results February 1st 2018 / 8 Delivery in Efficiency Group Operating Jaws Operating expenses 12M17 vs. 12M16 YtD (%); (€ constant) (€ constant) 15.0% Inflation Developed Average 12m 8.9% 9.2% 8.6% 8.4% Gross Income ex NTI SPAIN* -5.7% 2.0% 7.1% 7.9% Gross Income 6.2% 7.6% 7.0% 6.1% Operating Ex
Slide 9: Operating Income
2017 Results February 1st 2018 / 9 Operating Income Quarterly Evolution 12M17 vs. 12M16 (€m constant) (€m constant) +14.1% vs 12M16 BANKING ACTIVITY IN SPAIN -1.3% +17.4% 3,412 USA +26.1% 3,184 3,050 3,124 2,906 +9.2 % MEXICO +9.5% TURKEY +27.8% SOUTH AMERICA +15.1% 4Q16 1Q17 2Q17 3Q17 4Q17
Slide 10: Sound Risk Indicators
2017 Results February 1st 2018 / 10 Sound Risk Indicators Total Impairments(*) NPLs (Financial Assets and RE) (€bn) (€m constant) +14.6 % - 3.1 € bn 963 985 1,026 1,104 23.6 23.2 986 22.4 20.9 20.5 +7.6% - 0.4 € bn 4Q16 1Q17 2Q17 3Q17 4Q17 4Q16 1Q17 2Q17 3Q17 4Q17 Cost of risk NPL & Coverage ratios
Slide 11: CET 1 FL above 11%
2017 Results February 1st 2018 / 11 CET 1 FL above 11% CET1 fully-loaded - BBVA Group Evolution (%, bps) +18 bps +33 bps +57 bps 11.34% 11.20% -10 bps 11.08% 10.90% -24 bps -11 bps -31 bps Dec.16 Sep.17 Net Dividend RWAs Others* Dec.17 IFRS 9 Corp. Op Dec.17 Earnings accrual Estimated proforma (ex-T
Slide 12: A clear, sustainable and predictable dividend policy
2017 Results February 1st 2018 / 12 A clear, sustainable and predictable dividend policy 2017 Shareholder Remuneration (€cents. per share, payment dates) 15€ cents / share in cash to be paid in April 2018 (1) 0.15 0.02 0.09 Cash Increased cash dividend per 0.11 Scrip share vs. 2016 by 36% Apr-17 Oct
Slide 13: Accelerating our transformation
2017 Results February 1st 2018 / 13 Accelerating our transformation
Slide 14: Digital Customers BBVA Group
2017 Results February 1st 2018 / 14 Digital Customers BBVA Group Digital Customers (Mn, % penetration) +25% 22.6 21.1 18.1 50% tipping point Dec-16 Sep-17 Dec-17 in digital PENETRATION 36% 40% 42% customers achieved Mobile Customers (Mn, % penetration) +44% TURKEY SPAIN 15.8 17.7 USA ARGENTINA 12.3
Slide 15: Digital Sales
2017 Results February 1st 2018 / 15 Digital Sales (% of total sales YtD, # of transactions) GROUP SPAIN USA 28.0 28.6 22.8 19.4 17.1 16.8 Dec-16 Dec-17 Dec-16 Dec-17 Dec-16 Dec-17 5 million units sold via mobile MEXICO TURKEY SOUTH AMERICA in 2017 21.7 32.8 36.9 25.2 11.9 15.4 Dec-16 Dec-17 Dec-16 D
Slide 16: Focused on customer satisfaction
2017 Results February 1st 2018 / 16 Focused on customer satisfaction BBVA NPS (Dec-17) Increase in NPS by channel (footprint average*) Rnk Spain #1 Online Banking Branches Mexico #1 Turkey #1 +6.4 p.p. +5.8 p.p Dec-17 vs Dec-16 Dec-17 vs Dec-16 Argentina #1 Colombia #1 Paraguay #1 Peru #1 Venezuela
Slide 17: Digital sales & improved customer experience boost sales growth: Spain
2017 Results February 1st 2018 / 17 Digital sales & improved customer experience boost sales growth: Spain Digital sales driving total sales increase Turning customer experience into more sales Total sales (million units) New app design – Increasing Mobile sales (Average daily digital sales increase
Slide 18: Digitization generates higher revenues and engagement: Mexico
2017 Results February 1st 2018 / 18 Digitization generates higher revenues and engagement, improving efficiency: Mexico Digitization drives more revenues Digital channel engagement enhances satisfaction Gross margin per customer evolution* (%) NPS by channel** (Dec-17, %) +10% +20p.p Digitized Non-D
Slide 19: Digital customers are more profitable and satisfied: Turkey
2017 Results February 1st 2018 / 19 Digital customers are more profitable and satisfied: Turkey Digital customers are more profitable Digital customers are more likely to and engaged than non digital recommend their bank Operating income per customer* (times) NPS** (Dec-17, %) 1.8x 1.5x1.5x NPS of d
Slide 20: Business Areas
2017 Results February 1st 2018 / 20 Business Areas
Slide 21: Spain Banking Activity – Profit & Loss
2017 Results February 1st 2018 / 21 Spain Banking Activity – Profit & Loss Spain Banking Change (%) Change (%) Activity 4Q17 vs 4Q17 vs 2017 vs (€m) 4Q17 4Q16 3Q17 2017 2016 NII evolution in line Net Interest Income 946 -2.7 2.1 3,738 -3.6 with our expectations Net Fees and Commissions 388 10.1 -0.5
Slide 22: Spain Banking Activity – Activity & Spreads
2017 Results February 1st 2018 / 22 Spain Banking Activity – Activity & Spreads Activity Customer Spread (Dec-17) (%) € bn YoY € bn YoY Yield on loans 167.3 -1.1% 235.3 +1.9% Others 3.7 2.06 2.04 -4.9% Others 6.7 +30.4% 2.02 2.00 Public Sector 16.0 2.00 -12.7% Off-balance 62.1 +10.5% Other Commercia
Slide 23: Spain Banking Activity - Key Ratios
2017 Results February 1st 2018 / 23 Spain Banking Activity - Key Ratios Efficiency Risk Indicators 47.0 (%, €) 37. 0 63.6 27. 0 Coverage ratio 58.7 60.1 55.8 53.8 54.7 17.0 53% 52% Cost-to-income 50% ex-NTI ratio 4.0 7.0 Cost-to-income -5.4 ratio NPL ratio -5.6 Cost Evolution 5.8% 5.6% -3.0 YoY 5.2%
Slide 24: Non Core Real Estate - Highlights
2017 Results February 1st 2018 / 24 Non Core Real Estate - Highlights Net exposure Net attributable profit (€bn) (€m) -15.8% -37.2% 12M16 12M17 10.2 Other RE 1.1 assets 7.8 RE owned 0.5 assets 6.4 -501 Foreclosed 5.3 0.4 -65.6% -595 Assets 4.5 4.3 -18.7% RE developer 3.8 loans 2.8 -54.9% 1.7 Dec-16
Slide 25: USA – Profit & Loss
2017 Results February 1st 2018 / 25 USA – Profit & Loss Change (%) Change (%) USA 4Q17 vs 4Q17 vs 2017 vs (constant €m) 4Q17 4Q16 3Q17 2017 2016 Strong YoY revenue Net Interest Income 559 10.3 2.3 2,158 13.0 growth on the back of Net Fees and Commissions 159 4.9 -3.3 647 4.1 rate increases Net Tradi
Slide 26: USA – Activity & Spreads
2017 Results February 1st 2018 / 26 USA – Activity & Spreads Activity (Dec-17) Customer Spread (constant €) (%) Yield on loans 4.12 4.16 € bn YoY € bn YoY 3.99 54.7 -0.1% 56.5 1.7% 3.88 3.71 Public Sector 5.1 +27.1% Time 11.4 -5.6% 3.76 3.75 Deposits 3.67 3.32 3.51 Other Customer Spreads 29.5 +1.5%
Slide 27: USA - Key Ratios
2017 Results February 1st 2018 / 27 USA - Key Ratios Efficiency Risk Indicators (%, constant €) 15. 0 71.9 Coverage ratio 13. 0 119% 104% 68.2 11.0 66.3 66.2 94% 9.0 Cost-to-income ex-NTI ratio 63.9 63.7 7.0 Cost-to-income 5.0 ratio NPL ratio 1.8 3.2 3.0 Cost Evolution YoY 1.6 1.0 1.5% 1.2% -1.0 1.2
Slide 28: Mexico – Profit & Loss
2017 Results February 1st 2018 / 28 Mexico – Profit & Loss Change (%) Change (%) Mexico 4Q17 vs 4Q17 vs 2017 vs (constant €m) 4Q17 4Q16 3Q17 2017 2016 Outstanding growth Net Interest Income 1,421 9.4 3.2 5,437 9.5 of core revenues: Net Fees and Commissions 325 8.3 6.4 1,217 9.3 NII + fees Net Tradin
Slide 29: Mexico – Activity & Spreads
2017 Results February 1st 2018 / 29 Mexico – Activity & Spreads Activity (Dec-17) Customer Spread (constant €) (%) Customer Spread MXN € bn YoY € bn YoY 44.5 +5.5% 62.7 +11.4% Others 0.5 +6.1% 3.0 Others +18.8% Public Sector 3.1 -12.5% Mutual 16.4 +9.3% 11.88 12.10 12.02 11.81 12.05 Funds Other Comm
Slide 30: Mexico - Key Ratios
2017 Results February 1st 2018 / 30 Mexico - Key Ratios Efficiency Risk Indicators (%, constant €) 23.0 36.6 35.6 35.8 18.0 35.4 34.5 Coverage ratio 34.4 13. 0 127% 126% 7.2 123% 5.3 Cost-to-income 8.0 4.9 ex-NTI ratio Inflation Cost-to-income 6.0%3.0 ratio NPL ratio Average 12m Cost Evolution -2.0
Slide 31: Turkey – Profit & Loss
2017 Results February 1st 2018 / 31 Turkey – Profit & Loss Change (%) Change (%) Turkey 4Q17 vs 4Q17 vs 2017 vs (constant €m) 4Q17 4Q16 3Q17 2017 2016 Strong core revenue Net Interest Income 1,001 31.5 26.6 3,331 20.6 growth Net Fees and Commissions 181 35.4 -2.4 703 18.5 Net Trading Income -7 -82.2
Slide 32: Turkey – Activity & Spreads
2017 Results February 1st 2018 / 32 Turkey – Activity & Spreads Activity (Dec-17) Customer Spread (constant €) (%) € bn YoY € bn YoY Customer Spread TL 52.0 +13.9% 48.4 +15.8% 5.57 5.51 Mutual & 3.9 +27.5% 5.24 Pension Funds 4.89 4.90 Business 31.0 +10.7% 3.88 4.04 Banking 3.68 3.73 3.74 Time Deposi
Slide 33: Turkey - Key Ratios
2017 Results February 1st 2018 / 33 Turkey - Key Ratios 40. 0 Efficiency 35.0 Risk Indicators (%, constant €) 30.0 25.0 41.6 Coverage ratio 38.0 36.7 138% 20.0 40.8 124% 85% 37.7 36.5 15. 0 Cost-to-income ex-NTI ratio 8.8 10.0 7.7 6.6 Inflation Cost-to-income NPL ratio ratio 3.9% 11.1% 5.0 Cost Evol
Slide 34: South America – Profit & Loss
2017 Results February 1st 2018 / 34 South America – Profit & Loss Change (%) Change (%) South America 4Q17 vs 4Q17 vs 2017 vs (constant €m) 4Q17 4Q16 3Q17 2017 2016 Mid-teens growth in Net Interest Income 892 25.8 11.2 3,200 15.1 core revenues due to Net Fees and Commissions 199 27.6 7.1 713 17.9 hi
Slide 35: South America – Activity & Spreads
2017 Results February 1st 2018 / 35 South America – Activity & Spreads Activity (Dec-17) Customer Spread (constant €) (%) Argentina € bn YoY € bn YoY 16.47 48.2 +9.7% 57.9 +10.5% 15.73 14.72 13.47 13.11 Others 3.0 +7.7% Others 11.9 +18.2% Peru 13.0 +0.0% Peru Peru 13.6 +0.2% 7.00 6.91 6.91 6.80 6.57
Slide 36: South America – Key Ratios
2017 Results February 1st 2018 / 36 South America – Key Ratios Efficiency Risk Indicators (%, constant €) 51.7 50.4 50.6 30.0 Coverage ratio 45.7 25.0 103% 45.0 45.1 94% 20.0 89% Cost-to-income 14.2 ex-NTI ratio 12.4 Inflation 15. 0 13.9 9.3 Cost-to-income 10.0% ratio NPL ratio Average 12m 10.0 8.5
Slide 37: 2018 Outlook
2017 Results February 1st 2018 / 37 2018 Outlook Accelerating profitable growth: Spain: Focus on fee growth, continued efficiency improvement and strong risk performance Non-core RE: Completing the run off USA: NII as the main P&L driver Mexico: solid growth to continue, in line with 2017 trends T
Slide 38: Annex
2017 Results February 1st 2018 / 38 Annex
Slide 39: Gross Income - Breakdown
2017 Results February 1st 2018 / 39 Gross Income - Breakdown 12M17 Spain 6,163 €m Rest of Eurasia 468 €m 24% 2% USA 12% 2,919 €m South America 4,451 €m 18% 16% Turkey 4,115 €m 28% Mexico 7,080 €m Note: Spain includes Banking activity in Spain and Non Core Real Estate. Figures exclude Corporate Cente
Slide 40: Group – Net Attributable Profit
2017 Results February 1st 2018 / 40 Group – Net Attributable Profit (Ex-TEF impairment in 2017 and ex-mortgage floor clauses provision in 2016) (€m) BUSINESSES +894 €m 72 4,642 105 340 73 243 3,879 94 65 -26 -204 12M16 €m FX Banking Non core RE USA Mexico Turkey Rest of South Corp. Centre 12M17 €m E
Slide 41: Total Spain – Profit & Loss
2017 Results February 1st 2018 / 41 Total Spain – Profit & Loss Change (%) Change (%) Total Spain 4Q17 vs 4Q17 vs 2017 vs (€m) 4Q17 4Q16 3Q17 2017 2016 Net Interest Income 970 -1.9 2.8 3,809 -3.2 Net Fees and Commissions 388 9.8 -0.8 1,563 5.5 Net Trading Income 161 -6.5 113.1 555 -29.1 Other Income
Slide 42: Non Core Real Estate - Profit & Loss
2017 Results February 1st 2018 / 42 Non Core Real Estate - Profit & Loss Non Core Real Change (%) Change (%) 4Q17 vs 4Q17 vs 2017 vs Estate (€m) 4Q17 4Q16 3Q17 2017 2016 Net Interest Income 23 43.6 38.8 71 19.5 Net Fees and Commissions 0 n.s. n.s. 3 -50.7 Net Trading Income 0 n.s. n.s. 0 n.s. Other
Slide 43: South America (ex-Venezuela) – Profit & Loss
2017 Results February 1st 2018 / 43 South America (ex-Venezuela) – Profit & Loss South America Change (%) Change (%) (ex-Venezuela) 4Q17 vs 4Q17 vs 2017 vs (constant €m) 4Q17 4Q16 3Q17 2017 2016 Net Interest Income 820 16,3 3,9 3.106 12,2 Net Fees and Commissions 181 16,7 -1,2 691 14,5 Net Trading I
Slide 44: Rest of Eurasia - Profit & Loss
2017 Results February 1st 2018 / 44 Rest of Eurasia - Profit & Loss Change (%) Change (%) Rest of Eurasia 4Q17 vs 4Q17 vs 2017 vs (€m) 4Q17 4Q16 3Q17 2017 2016 Net Interest Income 36 -15,5 -26,0 180 8,7 Net Fees and Commissions 39 -34,4 -9,7 164 -15,2 Net Trading Income 24 34,5 27,6 123 40,4 Other I
Slide 45: Corporate Centre - Profit & Loss
2017 Results February 1st 2018 / 45 Corporate Centre - Profit & Loss Change (%) Change (%) Corporate Center 4Q17 vs 4Q17 vs 2017 vs (€m) 4Q17 4Q16 3Q17 2017 2016 Net Interest Income -83 -25.8 -1.8 -357 -21.6 Net Fees and Commissions -20 -29.1 10.8 -86 -21.2 Net Trading Income 143 29.8 188.0 436 22.2
Slide 46: Capital Base
2017 Results February 1st 2018 / 46 Capital Base Evolution of phased-in capital ratios Evolution of fully-loaded capital ratios (%) (%) Total capital Ratio 15.1 15.7 15.5 15.4 15.3 Total capital Ratio 14.7 2.3 2.5 2.5 2.5 2.5 Tier 2 Tier 2 2.2 Additional Tier 1 0.7 1.3 1.3 Additional Tier 1 1.7 1.7
Slide 47: Capital YtD Evolution
2017 Results February 1st 2018 / 47 Capital YtD Evolution CET1 fully-loaded – BBVA Group YtD Evolution (%, bps) +31 bps Ex-Garanti & CNCB transactions +18 bps 122 bps -45 bps -21 bps 11.08% 10.90% -25 bps -13 bps % CET1 FL Net Earnings Dividend RWAs Others (*) Garanti& % CET1 FL (Dec.16) (ex-TEF acc
Slide 48: Risk-Weighted Assets by Business Area
2017 Results February 1st 2018 / 48 Risk-Weighted Assets by Business Area Phased-in RWA Breakdown by business areas and main countries (€m) Dec-16 Sep-17 Dec-17 Banking activity in Spain 113,194 106,302 111,825 Non Core Real Estate 10,870 10,736 9,691 United States 65,492 58,236 58,682 Turkey 70,337
Slide 49: Shareholder's Return: TBV per Share and Dividends
2017 Results February 1st 2018 / 49 Shareholder’s Return: TBV per Share and Dividends TBV per Share & Shareholder Remuneration (€ per Share) 5.96 6.03 6.09 5.99 5.81 0.08 0.21 0.30 0.30 0.08 5.82 5.79 5.69 5.73 5.88 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Shareholder Remuneration TBV
Slide 50: ALCO Portfolio
2017 Results February 1st 2018 / 50 ALCO Porfolio ALCO Portfolio breakdown by region (€ bn) 61.5 55.8 54.9 South America 2.9 Mexico 5.9 South America 3.2 South America 2.9 Mexico 4.8 Mexico 4.5 USA 11.4 USA 10.6 10.9 USA Turkey 10.5 Turkey 10.7 Turkey 10.5 Euro (1) Euro (1) Euro (1) 30.8 26.5 26.1 D
Slide 51: Liquidity Coverage Ratios (LCRs)
2017 Results February 1st 2018 / 51 Liquidity Coverage Ratios (LCRs): Significantly above the 100% requirement BBVA Group and Subsidiaries LCR Dec-17 BBVA Group Euroz.(1) USA(2) Mexico Turkey S. Amer. LCR 128% 151% 144% 148% 134% well >100% (1) Perimeter: Spain + Portugal + Rest of Eurasia (2) Compa
Slide 52: Customer Spreads
2017 Results February 1st 2018 / 52 Customer Spreads Average 4Q16 1Q17 2Q17 3Q17 4Q17 4Q16 1Q17 2Q17 3Q17 4Q17 Spain 1.91% 1.92% 1.94% 1.93% 1.93% Chile 3.61% 3.76% 4.16% 3.31% 3.93% Yield on Loans 2.06% 2.04% 2.02% 2.00% 2.00% Yield on Loans 6.44% 6.42% 6.71% 5.47% 6.27% Cost of Deposits -0.15% -0.
Slide 53: 2017 Results
2017 Results February 1st 2018 / 53 2017 Results February, 1st 2018