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

Banco Bilbao Vizcaya Argentaria — Debt Investor Presentation (November 2023)

48 slides from Banco Bilbao Vizcaya Argentaria's debt investor presentation, Nov 1, 2023

  1. Slide 1: 3Q23 Fixed Income Presentation

    3Q23 Fixed Income Presentation

  2. Slide 2: Disclaimer

    3Q23 Fixed Income 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 o

  3. Slide 3: About BBVA: To bring the age of opportunity to everyone

    About BBVA To bring the age of opportunity to everyone Improving our clients’ Helping our clients transition financial health towards a sustainable future Reaching more clients Driving operational excellence The best and most engaged team Data and Technology Customer We think We are Comes first big on

  4. Slide 4: BBVA investment case

    Creating Opportunities BBVA investment case

  5. Slide 5: About BBVA

    About BBVA FINANCIAL HIGHLIGHTS BBVA’s GLOBAL PRESENCE SEPTEMBER 2023 2023 Net attributable profit 9M23 CET 1 FL 5,961 M€ 12.73% 0 Total Assets 757,736 M€ Loans and advances to Deposits from customer - gross customers 387,565M€ 403,861M€ Branches Employees Active customers 6,017 120,457 70.8 M DIGITA

  6. Slide 6: 1) Leading franchises in attractive markets

    3Q23 Fixed Income 6 1) Leading franchises in attractive markets STRONG POSITION Pre-Provision Profit 1 1 2 Loan Market Share (%) Ranking Market Share (%) Spain 13.8% #3 19.3% Mexico 24.7% #1 43.0% Turkey 19.4% #2 27.2% Colombia 11.4% #4 8.8% Peru 20.7% #2 23.1% (1) Latest available information. Ranki

  7. Slide 7: 2) Well diversified business model

    3Q23 Fixed Income 7 2) Well diversified business model DIVERSIFICATION UNDER A PROFITABLE BUSINESS MIX DECENTRALIZED MODEL TOTAL ASSETS1 LOANS AND ADVANCES TO CUSTOMERS (SEP-23) (PERFORMING LOANS UNDER MANAGEMENT EX-REPOS) 7% Rest of Business SEP-23 8% South America 21% CIB 25% Mortgages 45% 9% Turke

  8. Slide 8: 3) Proving track record of solid financial returns

    3Q23 Fixed Income 8 3) Proving track record of solid financial returns STRONG PRE-PROVISION PROFIT OUTSTANDING PROFITABILITY AND BEST-IN-CLASS EFFICIENCY PRE-PROVISION PROFIT/RWA EFFICIENCY RATIO ROTE 2019-9M23, % 2019-9M23, % 2019-9M23, % 1 1 2019 2020 2021 2022 9M23 2019 2020 2021 2022 9M23 2019 20

  9. Slide 9: 4) Capturing value from digitalization

    3Q23 Fixed Income 9 4) Capturing value from digitalization NEW CUSTOMERS1 SALES THROUGH DIGITAL CHANNELS (BBVA GROUP, MILLION; % ACQUISITION THROUGH (BBVA GROUP, % OF TOTAL SALES YTD, # OF DIGITAL CHANNELS) TRANSACTIONS AND PRV1) DIGITAL 65% UNITS TOTAL PVR DIGITAL 11% 9M18 9M19 9M20 9M21 9M22 9M23

  10. Slide 10: 5) Solid fundamentals

    3Q23 Fixed Income 10 5) Solid fundamentals SOUND ASSET COMFORTABLE LIQUIDITY STRONG CAPITAL QUALITY METRICS NPL Ratio CET 1 FULLY-LOADED (%) (%) Coverage Ratio NSFR Group (%) 12.73% 130% Target range 11.5-12.0% Cost of Risk YtD(%) LCR Group CET1 Requirement 1 181%2 8.77% 2019 2020 2021 2022 Sep-23 P

  11. Slide 11: 6) Strong ESG Credentials

    3Q23 Fixed Income 11 6) Strong ESG Credentials SUSTAINABLE BUSINESS SOCIAL GOVERNANCE Sustainable Business Channeling Positive impact on society Directors Sustainable Loan growth2 +8.0 % Business 300 €bn 2018-2025 (SEP-23. YOY, CONSTANT €) % Female 40% Goal: 40% Directors at least goal 100,000 400,0

  12. Slide 12: Advancing in our clear commitment to sustainability

    3Q23 Fixed Income 12 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% Ini

  13. Slide 13: We continue our path to success in our ambitious long-term goals

    3Q23 Fixed Income 13 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 (MILL

  14. Slide 14: 3Q23 Results

    Creating Opportunities 3Q23 Results

  15. Slide 15: BBVA reports one more quarter of earnings growth

    3Q23 Fixed Income 15 BBVA reports one more quarter of earnings growth NET ATTRIBUTABLE PROFIT (CURRENT €M) +13% 1 CORE REVENUES GROWTH LEVERED ON ACTIVITY +2.5% AND HIGHER SPREADS, PARTICULARLY FOR MEXICO AND SPAIN 2 POSITIVE JAWS AND STRONG IMPROVEMENT IN EFFICIENCY 3 SOLID CAPITAL POSITION AND COM

  16. Slide 16: 3Q23 Profit & Loss

    3Q23 Fixed Income 16 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

  17. Slide 17: Continued Gross Income growth driven by core revenues

    3Q23 Fixed Income 17 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 improve

  18. Slide 18: Core revenues growth levered on activity and higher spreads

    3Q23 Fixed Income 18 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% C

  19. Slide 19: Slight deterioration in asset quality metrics

    3Q23 Fixed Income 19 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-

  20. Slide 20: Spain

    3Q23 Fixed Income 20 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 & Expen

  21. Slide 21: Mexico

    3Q23 Fixed Income 21 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 1,6

  22. Slide 22: Turkey

    3Q23 Fixed Income 22 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

  23. Slide 23: South America

    3Q23 Fixed Income 23 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 1

  24. Slide 24: Capital & Liquidity

    Creating Opportunities Capital & Liquidity

  25. Slide 25: A high quality and resilient capital

    3Q23 Fixed Income 25 A high quality and resilient capital STRONG CAPITAL HIGH RWAS DENSITY, WITH A CAPITAL RESILIENCE UNDER POSITION LIMITED USE OF INTERNAL MODELS2 STRESS SCENARIOS CET1 FULLY-LOADED RWA/TOTAL ASSETS LEVERAGE RATIO FL 2023 EBA ST -ADVERSE SCENARIO (%) BBVA SEP-23/PEERS JUN-23 BBVA S

  26. Slide 26: Solid capital position with CET1 above our target

    3Q23 Fixed Income 26 Solid capital position with CET1 above our target CET1 FULLY-LOADED AT1 AND TIER 2 FL BUCKETS (%, BPS) SEP-23 (%) +6bps 2.43% +60 bps -33 bps 12.99% -32 bps -39 bps 2.05% 4 12.67% +18 bps 12.73% 1.82% 1.72% Target Range 11.5%-12.0% SREP Requirement 8.77% Dividend RWAs Jun -23 SB

  27. Slide 27: One of the lowest SREP requirement among peers with a comfortable MDA distance

    3Q23 Fixed Income 27 One of the lowest SREP requirement among peers with a comfortable MDA distance BBVA, GROUP CET1 REQUIREMENT AND DISTANCE TO MDA BBVA SEP-23/ PEERS-JUN-23 Distance to MDA2 349 bps 16.51% T2 3 12.00% 13.02% 11.13% AT1 10.93% T2 9.73% 9.73% 8.77%1 9.52% 9.20% 9.14%8.95% AT1 8.77% 8

  28. Slide 28: Capital position in BBVA, S.A. well above requirement

    3Q23 Fixed Income 28 Capital position in BBVA, S.A. well above requirement BBVA, S.A. REQUIREMENT AND DISTANCE TO MDA Distance to MDA2 17.46% SEP-23 449 bps 3 €9.4 Bn T2 12.07% AT1 T2 AT1 7.91% 1 CCyB1 CCB CET 1 Pillar 2R CET 1 Pillar 1 CET1 Total Total Capital Ratio Requirement Requirement Sep ‘23

  29. Slide 29: Sound MREL position

    3Q23 Fixed Income 29 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: Preliminar

  30. Slide 30: Liquidity ratios well above 100% minimum

    3Q23 Fixed Income 30 Liquidity ratios well above 100% minimum Ample quality collateral BBVA GROUP LIQUIDITY BALANCE SHEET1 BBVA GROUP LIQUIDITY AND FUNDING METRICS SEP-23 SEP-23 Mexico Turkey South BBVA S.A.2 America LTD 90% 100% 76%3 95% LCR 166% 163% 230% >100% 60% 66% NSFR 120% 133% 182% >100% LC

  31. Slide 31: Limited wholesale funding maturities in all geographies

    3Q23 Fixed Income 31 Limited wholesale funding maturities in all geographies DEBT OUTSTANDING BY PRODUCT MEDIUM & LONG-TERM WHOLESALE FUNDING SEP-23, € BN MATURITIES SEP-23, € BN Others1 Senior Preferred EURO 11.2 € 47 bn 19% 16.6 28% T2 / TOTAL Subordinated 16% MEXICO 59.6 € 6.9 bn 9.6 10% 16% AT1

  32. Slide 32: Funding Plan

    3Q23 Fixed Income 32 Funding Plan 2023 Funding Plan completed: €7.2bn public deals executed, including all type of instruments Broadly in line with 2023 Funding Plan both in size and instruments. Subject to 2024 Balance Sheet and liquidity evolution. BBVA, S.A. 2023 2024 Strategy1 €BN Executed (subj

  33. Slide 33: All Ratings Agencies assign BBVA a rating on the single A space

    3Q23 Fixed Income 33 All Ratings Agencies assign BBVA a rating on the single A space, with stable outlook BBVA LONG TERM BBVA RATINGS BY TYPE OF INSTRUMENT SENIOR PREFERRED RATINGS AND ISSUER Moody’s S&P Fitch DBRS Investment Aaa AAA AAA AAA CB Stable outlook grade Aa1 CB CB AA+ AA+ AA (H) Moody’s (

  34. Slide 34: Annex

    Annex 01 BBVA Group 9M23 Profit & Loss 07 Capital Base: BBVA Group & BBVA S.A. 02 NII sensitivity to interest rate 08 CET1 Sensitivity to market movements impacts 03 ALCO Portfolio 09 Group RWA breakdown 04 Customer spreads: 10 Debt Issuances 2021-2023 quarterly evolution 11 Called notes 2018-2023 05

  35. Slide 35: 9M23 Profit & Loss

    3Q23 Fixed Income 35 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 -9,24

  36. Slide 36: NII sensitivity to interest rates movements

    3Q23 Fixed Income 36 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 in

  37. Slide 37: ALCO Portfolio

    3Q23 Fixed Income 37 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 Re

  38. Slide 38: Customer spreads: quarterly evolution

    3Q23 Fixed Income 38 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 Dep

  39. Slide 39: Stages breakdown by business areas

    3Q23 Fixed Income 39 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

  40. Slide 40: Exposure to Covid-related loans and Commercial Real Estate

    3Q23 Fixed Income 40 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% Retai

  41. Slide 41: Capital Base BBVA Group & BBVA, S.A.

    3Q23 Fixed Income 41 Capital Base BBVA Group & BBVA, S.A. CAPITAL RATIOS SEP-23 (%) 17.46 16.51 2 1 T2 AT1 CET1 BBVA Group BBVA, S.A. CET 1 € 45,567 m € 26,052 m AT1 € 6,168 m € 5,832 m T2 € 7,350 m € 4,786 m Total Capital Base € 59,085 m € 36,670 m RWA € 357,972 m € 210,037 m With effect from Janua

  42. Slide 42: CET1 Sensitivity to market impacts

    3Q23 Fixed Income 42 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 c

  43. Slide 43: Group RWA breakdown

    3Q23 Fixed Income 43 Group RWA breakdown TOTAL RWA BREAKDOWN PHASED-IN 50% IRB Models ▰ Optimizing Capital Allocation is part of BBVA’S Strategic Priorities 0.4% CVA ▰ Limited usage of internal 0.8% FX Risk 87.8% Credit Risk models in Credit Risk RWAs, mitigating potential impacts 3.5% Trading Act R

  44. Slide 44: Debt Issuances 2022 - 2023 YTD

    3Q23 Fixed Income 44 Debt Issuances 2022 - 2023 YTD PRODUCT ISSUE DATE CALL DATE MATURITY NOMINAL CURRENCY COUPON BBVA, S.A. T2 Nov-23 Nov-33 Nov-34 $ 750 M 7.883% AT1 Sept-23 Sept -29* Perp $ 1,000 M 9.375% T2 Aug-23 Nov-28* Nov-33 GBP 300 M 8.250% AT1 Jun-23 Dec-28* Perp € 1,000 M 8.375% T2 Jun-23

  45. Slide 45: Called notes 2018 - 2023 YTD

    3Q23 Fixed Income 45 Called notes 2018 - 2023 YTD BBVA follows an economic call policy OUTSTANDING PRODUCT ISSUE DATE REDEMPTION COUPON CURRENCY (M) BBVA, S.A. AT1 Sep-18 Sep-23 € 1,000 5.875% BBVA, S.A. AT1 May-17 May-22 € 500 5.875% BBVA, S.A. AT1 Apr-16 Apr-21 € 1,000 8.875% Caixa Terrassa SPP Pr

  46. Slide 46: Main Subsidiaries ratings

    3Q23 Fixed Income 46 Main Subsidiaries ratings BBVA LONG TERM SENIOR UNSECURED RATINGS BBVA Mexico Garanti BBVA BBVA Argentina BBVA Colombia BBVA Peru Investment AAA/Aaa AAA/Aaa AAA/Aaa AAA/Aaa AAA/Aaa grade AA+/Aa1 AA+/Aa1 AA+/Aa1 AA+/Aa1 AA+/Aa1 AA/Aa2 AA/Aa2 AA/Aa2 AA/Aa2 AA/Aa2 AA-/Aa3 AA-/Aa3 A

  47. Slide 47: Book Value of the main subsidiaries

    3Q23 Fixed Income 47 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 su

  48. Slide 48: BBVA

    BBVA

Banco Bilbao Vizcaya Argentaria, S.A. (BBVA) — Debt Investor Presentation (November 2023) on 6ix