64 slides from Banco Bilbao Vizcaya Argentaria's earnings presentation, Oct 28, 2022
Slide 1: 3Q22 Results
3Q22 Results October 28, 2022
Slide 2: Disclaimer
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 invest in securiti
Slide 3: BBVA once again reports a very strong quarter
3Q22 Results 3 BBVA once again reports a very strong quarter RECURRENT NET ATTRIBUTABLE PROFIT1 CET1 FULLY LOADED (CURRENT €M) (%) +31% -1.9% 12.45% Target Range MERLIN 11.5%-12.0% TRANSACTION 1,675 REPORTED €1,193 M SREP Requirement LAST 5 YEARS 8.60% AVERAGE 3Q21 2Q22 3Q22 Sep-22 EPS (€)1 0.20 0.3
Slide 4: At the operating income level, passing the €4Bn threshold for the first time
3Q22 Results 4 At the operating income level, passing the €4Bn threshold for the first time OPERATING INCOME (CURRENT €M) +37% +16.6% 3Q21 2Q22 3Q22
Slide 5: Exceptional shareholder value creation and profitability metrics
3Q22 Results 5 Exceptional shareholder value creation and profitability metrics TBV + DIVIDENDS PROFITABILITY METRICS3 (€/SHARE) (%) TBV / share Dividends / share ROTE +20% +3.2% 7.42 7.66 0.352 0.231 6.41 ROE 7.19 7.31 9M21 12M21 9M22 Sep-21 Jun-22 Sep-22 (1) April 2022 dividend per share 0.23 € (gr
Slide 6: 3Q22 key messages
3Q22 Results 6 3Q22 key messages 1 CORE REVENUES (NII+FEES) TOTAL LOAN GROWTH1 OUTSTANDING CORE REVENUES AND ACTIVITY GROWTH +38.4% vs. 3Q21 +15.0% vs. SEP 2021 2 EFFICIENCY RATIO LEADING AND IMPROVING EFFICIENCY WITH POSITIVE JAWS 42.9% 9M22 -249 BPS. vs. 9M21 3 OPERATING INCOME HIGHEST QUARTERLY O
Slide 7: 3Q22 Profit & Loss
3Q22 Results 7 3Q22 Profit & Loss Change Change 3Q22/3Q21 3Q22/2Q22 BBVA Group (€M) 3Q22 % constant % % constant % Net Interest Income 5,261 45.1 40.2 15.3 14.3 Net Fees and Commissions 1,380 17.4 14.7 -1.8 -2.0 Net Trading Income 573 54.5 48.0 14.2 11.2 Other Income & Expenses -358 n.s. n.s. -22.9 -
Slide 8: 9M22 Profit & Loss
3Q22 Results 8 9M22 Profit & Loss Change 9M22/9M21 BBVA Group (€M) 9M22 % constant % Net Interest Income 13,811 32.6 29.0 Net Fees and Commissions 4,030 17.4 14.6 Net Trading Income 1,669 17.4 13.4 Other Income & Expenses -1,145 n.s. n.s. Gross Income 18,366 21.2 17.8 Operating Expenses -7,872 14.5 1
Slide 9: Excellent revenue growth following a remarkable trend
3Q22 Results 9 Excellent revenue growth following a remarkable trend NET INTEREST INCOME1 NET FEES AND COMMISSIONS (CONSTANT €M) (CONSTANT €M) +45% +17% +15.3% -1.8% Outstanding NII Sound fee income growth driven by levered on strong activity and Payments and customer spread transactional improvemen
Slide 10: NII growth levered on activity and improving customer spreads
3Q22 Results 10 NII growth levered on activity and improving customer spreads LOAN GROWTH CUSTOMER SPREAD NET INTEREST INCOME (YOY, CONSTANT €) (%) (YOY, CONSTANT €) SPAIN +6.8% +4.6% +1.1% Sep-21 Sep-22 3Q21 4Q21 1Q22 2Q22 3Q22 3Q21 4Q21 1Q22 2Q22 3Q22 MEXICO +29% +15.1% +0.1% Sep-21 Sep-22 3Q21 4Q
Slide 11: Positive jaws and continue leading efficiency
3Q22 Results 11 Positive jaws and continue leading efficiency POSITIVE JAWS AND COSTS GROWING EFFICIENCY RATIO BELOW INFLATION (COST-TO-INCOME, % CONSTANT €) (9M22 YOY, CONSTANT €) RANKING EUROPEAN FOOTPRINT #1 PEER GROUP2 INFLATION1 16.5% 12M AVERAGE +21.2% +14.5% Gross Operating 9M21 9M22 Income Ex
Slide 12: Solid asset quality trends with improving NPL and coverage ratios
3Q22 Results 12 Solid asset quality trends with improving NPL and coverage ratios FINANCIAL ASSETS IMPAIRMENTS NPL (CONSTANT €M) (€BN) 3Q21 4Q21 1Q22 2Q22 3Q22 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 COST OF RISK NPL & COVERAGE RATIOS (% YTD) (%) COVERAGE NPL Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Sep-21 Dec
Slide 13: Strong capital position above our target
3Q22 Results 13 Strong capital position above our target CET1 FULLY-LOADED (%, BPS) +56 bps -30 bps -16 bps -10 bps 12.45% 12.45% Target Range 11.5%-12.0% SREP Requirement 8.60% Jun-22 Results Dividend RWAs Others1 Sep-22 accrual & AT1 (constant €) coupons (1) Includes, among others, market related
Slide 14: Customer acquisition showing all-time highs driven by digital
3Q22 Results 14 Customer acquisition showing all-time highs driven by digital NEW CUSTOMER ACQUISITION1 (BBVA GROUP, MILLION; % ACQUISITION THROUGH DIGITAL CHANNELS) DIGITAL 54% 7% 9M17 9M18 9M19 9M20 9M21 9M22 (1) Gross customer acquisition through own channels for retail segment. Excludes the US b
Slide 15: Customer journey: new customer acquisition leads to cross-selling and more engagement
3Q22 Results 15 Customer journey: new customer acquisition leads to cross-selling and more engagement SPAIN CASE: CUSTOMER’S ENGAGEMENT JOURNEY1 CUSTOMERS PRODUCT MIX (% OF TOTAL PRODUCTS ACQUIRED) OF NEW CUSTOMERS CONVERTED 71% 6% TO TARGET CUSTOMERS3 IN 6 MONTHS Lending2 +15% 26% 11% Payroll & oth
Slide 16: We increase our Sustainable Business goal to €300Bn
3Q22 Results 16 We increase our Sustainable Business goal to €300Bn SUSTAINABLE BUSINESS COMMITMENT IN (€ Bn) PORTFOLIO ALIGNMENT New goal € 300 Bn 2030 decarbonization goals set in selected CO2 intensive industries REDUCTION IN 2030 Goal in 2021 Power -52% kg CO2e/MWh € 200 Bn € 124 Bn Channeled Au
Slide 17: We are on the right path to achieve our ambitious long-term goals
3Q22 Results 17 We are on the right path to achieve our ambitious long-term goals COST-TO-INCOME ROTE TBV/SHARE + DIVIDENDS (%) (%, ANNUALIZED) (YOY %) 2021-24 CAGR NEW TARGET CUSTOMERS1 SUSTAINABLE BUSINESS (MILLION CUMULATIVE) (€ BILLION, CUMULATIVE SINCE 2018) (1) Target customers refers to those
Slide 18: Business Areas
Business Areas
Slide 19: Spain
3Q22 Results 19 Spain PROFIT & LOSS (€M) ACTIVITY (SEP-22) Δ (%) Δ (%) €Bn YoY YoY 3Q22 vs 3Q21 vs 2Q22 9M22 vs 9M21 +2.7% €Bn Net Interest Income 931 6.8 3.0 2,695 2.3 Net Fees and Commissions 526 -1.8 -8.4 1,635 2.4 +4.6% Net Trading Income 41 n.s. -58.4 329 24.0 Other Income & Expenses 80 22.6 n.
Slide 20: Mexico
3Q22 Results 20 Mexico PROFIT & LOSS (Constant €M) ACTIVITY (SEP-22) (Constant €) €Bn YoY Δ Constant (%) Δ Current (%) Δ Constant (%) €Bn YoY +7.9% 3Q22 vs 3Q21 vs 2Q22 9M22 vs 9M21 vs 9M21 +15.1% Net Interest Income 2,134 29.0 10.8 5,921 38.3 23.9 Mortgages +12.3% Net Fees and Commissions 409 17.8
Slide 21: Turkey
3Q22 Results 21 Turkey PROFIT & LOSS (Constant €M) ACTIVITY (SEP-22) €Bn Δ Constant (%) Δ Current (%) (Constant €; Bank Only) YoY1 FC 3Q22 vs 2Q22 vs 2Q22 9M22 €Bn -4.4% YoY1 Net Interest Income 857 27.7 21.9 1,976 Time Net Fees and Commissions 169 3.0 -2.7 452 -18.5% Net Trading Income 211 -5.1 -10
Slide 22: South America
3Q22 Results 22 South America €Bn NET ATTRIBUTABLE PROFIT ACTIVITY (SEP-22) YoY (Constant €M) (Constant €) +15.0% €Bn YoY Δ Constant (%) Δ Current (%) Δ Constant (%) Colombia +23.6% +14.7% 3Q22 vs 3Q21 vs 2Q22 9M22 vs 9M21 vs 9M21 Colombia 59 8.3 -22.9 207 32.9 29.9 Colombia +23.7% Peru +0.4% Peru 4
Slide 23: Takeaways
Takeaways Advancing in Core Revenue On track to BBVA delivered our strategy: growth driven achieve our another strong Digital, by activity and ambitious quarter sustainability spreads long-term goals and innovation 1 2 3 4
Slide 24: Annex
Annex 01 Net Attributable Profit 08 ALCO portfolio, NII sensitivity evolution and LCRs & NSFRs 02 Gross Income breakdown 09 CET1 Sensitivity to market impacts 03 P&L Accounts by business 10 CET1 YTD evolution & RWAs unit by business area 04 Customer spread by country 11 Book Value of the main subsidi
Slide 25: Net Attributable Profit evolution
01 Net Attributable Profit evolution
Slide 26: Improvement especially in Mexico, South America and Turkey
3Q22 Results 26 Improvement especially in Mexico, South America and Turkey RECURRENT NET ATTRIBUTABLE PROFIT 1 (BUSINESS AREAS CONTRIBUTION TO 3Q22 YOY GROWTH; CURRENT €M) +31% 3Q21 Spain Mexico Turkey South Rest of Corporate 3Q22 America Business Center NAP 3Q22 (€M)1 504 1,143 275 200 55 -336 NAP
Slide 27: Improvement in Spain, Mexico and South America
3Q22 Results 27 Improvement in Spain, Mexico and South America RECURRENT NET ATTRIBUTABLE PROFIT 1 (BUSINESS AREAS CONTRIBUTION TO 9M22 GROWTH; CURRENT €M) +35% 9M21 Spain Mexico Turkey South Rest of Corporate 9M22 America Business Center NAP 9M22 (€M)1 1,514 2,964 336 614 183 -566 NAP growth (YoY)1
Slide 28: Gross Income breakdown
BBVA Creating Opportunities O? Gross Income breakdown
Slide 29: Gross Income breakdown
3Q22 Results 29 Gross Income breakdown 9M22 Rest of business 585 €M Spain South America 3% 4,646€M 3,167 €M 17% 25% Turkey 13% 2,357 €M 42% Mexico 7,754 €M Note: Figures exclude Corporate Center.
Slide 30: P&L Accounts by business unit
03 P&L Accounts by business unit Rest of Business Corporate Center Turkey (hyperinflation adjustment) Argentina (hyperinflation adjustment) Colombia Peru
Slide 31: Rest of Business Profit & Loss
3Q22 Results 31 Rest of Business Profit & Loss €M Δ (%) Δ (%) 3Q22 vs 3Q21 vs 2Q22 9M22 vs 9M21 Net Interest Income 89 26.6 10.9 244 15.6 Net Fees and Commissions 64 23.0 -2.2 186 0.8 Net Trading Income 47 -25.0 33.9 151 -23.1 Other Income & Expenses 1 n.s. 3.1 5 -64.1 Gross Income 201 10.2 10.6 585
Slide 32: Corporate Center Profit & Loss
3Q22 Results 32 Corporate Center Profit & Loss €M Δ (%) Δ (%) 3Q22 vs 3Q21 vs 2Q22 9M22 vs 9M21 Net Interest Income -33 -27.8 26.5 -97 -24.1 Net Fees and Commissions -5 -18.0 -67.4 -25 -13.7 Net Trading Income 41 -59.2 n.s. -80 n.s. Other Income & Expenses 0 -97.8 -99.6 59 -38.1 Gross Income 3 -95.5
Slide 33: Turkey hyperinflation adjustment
3Q22 Results 33 Turkey hyperinflation adjustment PROFIT & LOSS 1 €M 9M22 Hyperinflation 9M22 (reported) adjustment (2) Ex.Hyperinflation Net Interest Income 1,976 197 1,778 Net Fees and Commissions 452 50 403 Net Trading Income 591 65 526 Other Income & Expenses -662 -2,060 1,398 Gross Income 2,357 -1,
Slide 34: Argentina hyperinflation adjustment
3Q22 Results 34 Argentina hyperinflation adjustment PROFIT & LOSS 1 €M 9M22 Hyperinflation 9M22 (reported) adjustment (2) Ex.Hyperinflation Net Interest Income 1,394 251 1,143 Net Fees and Commissions 222 38 184 Net Trading Income 125 28 98 Other Income & Expenses -813 -669 -145 Gross Income 927 -352 1
Slide 35: Colombia Profit & Loss
3Q22 Results 35 Colombia Profit & Loss €M CONSTANT Δ (%) Δ (%) 3Q22 vs 3Q21 vs 2Q22 9M22 vs 9M21 Net Interest Income 214 9.7 -3.4 652 10.9 Net Fees and Commissions 27 29.9 3.5 78 21.6 Net Trading Income 29 48.6 8.9 80 64.6 Other Income & Expenses -9 -9.0 109.8 -17 -27.5 Gross Income 261 15.7 -3.4 793
Slide 36: Peru Profit & Loss
3Q22 Results 36 Peru Profit & Loss €M CONSTANT Δ (%) Δ (%) 3Q22 vs 3Q21 vs 2Q22 9M22 vs 9M21 Net Interest Income 284 25.6 9.4 773 23.7 Net Fees and Commissions 69 0.8 -6.9 211 8.0 Net Trading Income 44 58.8 7.0 120 -5.5 Other Income & Expenses -8 -20.2 -7.8 -26 -16.8 Gross Income 389 24.5 6.2 1,078 1
Slide 37: Customer Spread by country
04 Customer Spread by country
Slide 38: Customer spreads: quarterly evolution
3Q22 Results 38 Customer spreads: quarterly evolution AVERAGE 3Q21 4Q21 1Q22 2Q22 3Q22 3Q21 4Q21 1Q22 2Q22 3Q22 Spain 1.75% 1.73% 1.71% 1.72% 1.85% Turkey TL 3.43% 4.89% 5.22% 6.65% 9.00% Yield on Loans 1.74% 1.73% 1.71% 1.74% 1.93% Yield on Loans 16.26% 16.48% 17.75% 18.60% 20.92% Cost of Deposits
Slide 39: Customer spreads: YoY evolution
3Q22 Results 39 Customer spreads: YoY evolution AVERAGE 9M21 9M22 9M21 9M22 Spain 1.76% 1.76% Turkey TL 2.96% 7.16% Yield on Loans 1.75% 1.80% Yield on Loans 15.42% 19.26% Cost of Deposits 0.00% -0.04% Cost of Deposits -12.46% -12.09% Mexico MXN 11.06% 11.65% Turkey FC1 4.66% 5.77% Yield on Loans 12
Slide 40: Stages breakdown by business areas
05 Stages breakdown by business areas
Slide 41: Stages breakdown by business areas
3Q22 Results 41 Stages breakdown by business areas CREDIT RISK BUSINESS BREAKDOWN BY AREA (SEP-22, € M) Gross Accumulated Gross Accumulated Gross Accumulated BBVA GROUP Exposure impairments SPAIN Exposure impairments MEXICO Exposure impairments Stage 1 375,164 2,203 Stage 1 180,094 519 Stage 1 72,17
Slide 42: Sound portfolios in main geographies
06 Sound portfolios in main geographies
Slide 43: Sound portfolios in main geographies
3Q22 Results 43 Sound portfolios in main geographies SPAIN MEXICO TURKEY RETAIL BANKING CONSUMER FC LOANS 85% of consumer loans origination given to 70% of consumer loans origination given to -60% Deleverage 2015 strategy since “payroll” clients “payroll” clients 70% of Project Finance loans have FC
Slide 44: Covid-related loans backed by State guarantees
07 Covid-related loans backed by State guarantees
Slide 45: Covid-related loans backed by State guarantees
3Q22 Results 45 Covid-related loans backed by State guarantees € bn; SEP-22 GROUP SPAIN (2) MEXICO TURKEY (3) ARGENTINA COLOMBIA PERU Loans Weight Loans Weight Loans Weight Loans Weight Loans Weight Loans Weight Loans Weight Households 1.4 0.9% 1.3 1.3% 0.0 0.0% 0.0 0.0% 0.0 1.1% 0.0 0.3% 0.1 1.4% C
Slide 46: ALCO Portfolio, NII Sensitivity and LCRs & NSFRs
08 ALCO Portfolio, NII Sensitivity and LCRs & NSFRs
Slide 47: ALCO Portfolio
3Q22 Results 47 ALCO Portfolio ALCO PORTFOLIO BREAKDOWN BY REGION (€ BN) Amort Cost Fair Value (HTC) (HTC&S) Sep-22 (€BN) (€BN) (duration) South America 0.3 6.8 0.7 years Turkey 5.2 3.2 4.3 years Mexico 3.7 8.6 2.7 years Euro 15.7 14.3 4.5 years Spain 12.2 6.0 (1) Italy 3.2 4.5 Rest 0.3 3.8 (1) Figu
Slide 48: NII sensitivity to interest rates movements
3Q22 Results 48 NII sensitivity to interest rates movements ESTIMATED IMPACT ON NII IN THE NEXT 12 MONTHS TO PARALLEL INTEREST RATE MOVEMENTS (TO +100 BPS INTEREST RATES INCREASE, %) +c.15% +3.8% EURO BALANCE MEXICO SHEET Note: NII sensitivities to parallel interest rates movements calculated as mov
Slide 49: Liquidity and funding ratios
3Q22 Results 49 Liquidity and funding ratios BBVA GROUP AND SUBSIDIARIES LCR & NSFR (SEP-22) LCR NSFR Total Group 166% (215%)1 134% Euro 2 198% 125% Mexico 190% 140% Turkey 274% 168% S. America All countries >100% >100% (1) LCR of 166% does not consider the excess liquidity of the subsidiaries outsi
Slide 50: CET1 Sensitivity to market impacts
09 CET1 Sensitivity to market impacts
Slide 51: CET1 Sensitivity to Market Impacts
3Q22 Results 51 CET1 Sensitivity to Market Impacts1 TO A 10% CURRENCY DEPRECIATION TO A 10% DECLINE IN TELEFONICA’S (SEP-22) SHARE PRICE (SEP-22) MXN -4bps -2 bps TRY -5bps TO +100 BPS MOVEMENT IN THE SPANISH SOVEREIGN BOND (SEP-22) USD +19bps -12 bps (1) CET1 sensitivity considering the FL capital
Slide 52: CET1 YTD evolution & RWAs by business area
10 CET1 YTD evolution & RWAs by business area
Slide 53: Capital YTD evolution
3Q22 Results 53 Capital YTD evolution CET1 FULLY-LOADED – BBVA GROUP YTD EVOLUTION (%, BPS) (1) (1) Includes, among others, minority interests, market related impacts, the final adjustment related to the SBB program and the credit in OCIs that offsets the debit in P&L due to the hyperinflation account
Slide 54: Risk-weighted assets by business area
3Q22 Results 54 Risk-weighted assets by business area Fully-Loaded RWAs Breakdown by business area (€m) Sep-21 Jun-22 Sep-22 Spain 108,750 108,913 108,733 Mexico 61,240 73,869 80,491 Turkey 55,233 51,055 53,435 South America 40,870 49,641 51,484 Argentina 6,181 7,344 7,574 Chile 1,603 1,939 2,164 Co
Slide 55: Book Value of the main subsidiaries
11 Book Value of the main subsidiaries
Slide 56: Book Value of the main subsidiaries
3Q22 Results 56 Book Value of the main subsidiaries(1,2) € BN; SEP-22 Mexico 16.9 Turkey 6.9 Colombia 1.5 Argentina 1.5 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 subsi
Slide 57: TBV per share & dividends evolution
12 TBV per share & dividends evolution
Slide 58: Shareholders' return: TBV per share & dividends evolution
3Q22 Results 58 Shareholders’ return: TBV per share & dividends evolution TBV PER SHARE & DIVIDENDS (€ PER SHARE) TBV Dividends +19.5% (1) (1) (1) (after implementation of IAS29 in Turkey) (1) April 2022 dividend per share (0.23€) and October 2022 dividend per share (0.12€)
Slide 59: Garanti BBVA: wholesale funding
13 Garanti BBVA: wholesale funding
Slide 60: Turkey - Liquidity & funding sources
3Q22 Results 60 Turkey - Liquidity & funding sources SOLID LIQUIDITY POSITION: Total LTD ratio is at Foreign currency Liquidity ratios above LIMITED EXTERNAL 77.5%, decreasing by performing loans requirements: Liquidity WHOLESALE -3.8 p.p in 3Q22. decreased by USD 1.3 Bn Coverage Ratio (EBA) of FUND
Slide 61: Digital metrics
14 Digital metrics Digital & mobile customers Digital sales
Slide 62: Outstanding trends in digital and mobile clients
3Q22 Results 62 Outstanding trends in digital and mobile clients DIGITAL CUSTOMERS MOBILE CUSTOMERS (MILLION CUSTOMERS, %) (MILLION CUSTOMERS, %) +39% +44% CUSTOMER PENETRATION RATE CUSTOMER PENETRATION RATE 62.0% 67.0% 72.6% 57.7% 63.7% 69.6% Note: data excludes USA, Paraguay and Chile.
Slide 63: Leveraging digital capabilities to grow sales through digital channels
3Q22 Results 63 Leveraging digital capabilities to grow sales through digital channels (% OF TOTAL SALES YTD, # OF TRANSACTIONS AND PRV1) GROUP SPAIN MEXICO UNITS PRV TURKEY COLOMBIA PERU Note: Group excludes USA, Venezuela, Chile, Paraguay. (1) Product Relative Value as a proxy of lifetime economic
Slide 64: Slide 64