Banco Bilbao Vizcaya Argentaria, S.a. · BME:BBVA
Banco Bilbao Vizcaya Argentaria — Q3 2020 Earnings Presentation
66 slides from Banco Bilbao Vizcaya Argentaria's earnings presentation, Oct 31, 2020
Slide 1: 3Q20 Results
3Q20 Results October 30th, 2020
Slide 2: Disclaimer
3Q20 Results 2 October 30th 2020 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 deci
Slide 3: Solid profit evolution, strong capital position and stable tangible book value per share
3Q20 Results 3 October 30th 2020 Solid profit evolution, strong capital position and stable tangible book value per share in this challenging environment NET ATTRIBUTABLE PROFIT CET1 FULLY LOADED TBV/SHARE (€M CURRENT) (%) (€/Share) +4.1% vs 3Q19 in constant € 11.52% 1,225 +30bps 1,141 5.87 -0.5% 5.
Slide 4: Top messages of the quarter
3Q20 Results 4 October 30th 2020 Top messages of the quarter 1 Continue to prove resiliency OPERATING INCOME (€ constant) in Pre-Provision Profit +13.5% vs.3Q19 2 Very strong cost control OPERATING EXPENSES (€ constant) and efficiency -3.8% vs.3Q19 3 Risk indicators improving COST OF RISK (YtD) and
Slide 5: 3Q20 Profit & Loss
3Q20 Results 5 October 30th 2020 3Q20 Profit & Loss Change 3Q20/3Q19 BBVA Group (€m) 3Q20 % % constant Net Interest Income 4,109 -8.1 5.5 Net Fees and Commissions 1,143 -10.2 -0.8 Net Trading Income 372 6.0 13.3 Other Income & Expenses 38 69.8 n.s. Gross Income 5,663 -7.5 5.0 Operating Expenses -2,5
Slide 6: 9M20 Profit & Loss
3Q20 Results 6 October 30th 2020 9M20 Profit & Loss Change 9M20/9M19 BBVA Group (€m) 9M20 % % constant Net Interest Income 12,763 -4.9 4.7 Net Fees and Commissions 3,444 -8.0 -1.3 Net Trading Income 1,479 65.5 83.7 Other Income & Expenses 22 76.6 n.s. Gross Income 17,708 -2.0 7.4 Operating Expenses
Slide 7: Robust gross income growth
3Q20 Results 7 October 30th 2020 Robust gross income growth NET INTEREST INCOME NET FEES AND COMMISSIONS (€M CONSTANT) (€M CONSTANT) + 5.5% - 0.8% +4.9% +4.2 % +12.9 % 1,201 1,211 1,197 1,192 Solid growth in a 1,056 Significant 4,144 4,315 4,225 4,166 4,372 challenging increase in the environment qu
Slide 8: Activity recovery in the quarter
3Q20 Results 8 October 30th 2020 Activity recovery in the quarter BBVA TOTAL CARD+POS CONSUMPTION1 (% YOY, 7D CUMULATIVE) SPAIN MEXICO USA 20.00% 20% 20.00% 0.00% 0% 0.00% -20.00% -20% -20.00% -40.00% -60.00% -40% -40.00% 28 Apr. 28 Apr. 7 Jan. 2020 2 Mar.2020 31 Jan. 24 Feb. 26 Aug. 26 Aug. 25 Jul.
Slide 9: Signs of recovery in retail segments
3Q20 Results 9 October 30th 2020 Signs of recovery in retail segments BBVA RETAIL NEW LOAN PRODUCTION MORTGAGES CONSUMER (FEB-20 = 100) SPAIN MEXICO USA TURKEY PERU COLOMBIA
Slide 10: Very strong cost control and efficiency
3Q20 Results 10 October 30th 2020 Very strong cost control and efficiency OPERATING EXPENSES GROUP OPERATING JAWS EFFICIENCY RATIO (€M CONSTANT) (9M20 YOY, %; € CONSTANT) (%; € CONSTANT) - 3.8% -438 bps 63.6% INFLATION 2,798 50.0% 2,691 4.4% 45.6% 3.4% Average 12m -2.4% 3Q19 3Q20 Core Operating 12M1
Slide 11: Risk indicators improving and within expectations
3Q20 Results 11 October 30th 2020 Risk indicators improving and within expectations FINANCIALASSETS IMPAIRMENTS NPLs (€M CONSTANT) (€BN) 2,418 - €0.9 bn 1,618 17.1 16.7 16.4 16.2 1,048 16.0 1,039 1,039 3Q19 4Q19 1Q20 2Q20 3Q20 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 COST OF RISK NPL & COVERAGE RATIOS (%)
Slide 12: Deferrals' payment evolution better than expected
3Q20 Results 12 October 30th 2020 Deferrals’ payment evolution better than expected TOTAL LOAN DEFERRALS EXPIRED LOAN DEFERRALS 2ND DEFERRALS BREAKDOWN GRANTED PAYMENT BEHAVIOR (YTD SEP. 30, 2020; %) (YTD SEP. 30, 2020; %) (YTD SEP. 30, 2020; %) More than half are related to mortgages 2% Restructuri
Slide 13: Strong capital generation
3Q20 Results 13 October 30th 2020 Strong capital generation CET1 FULLY-LOADED CET1 PHASED-IN QUARTERLY EVOLUTION (%, bps) SEP-20 +30 bps +293 bps above minimum requirement 11.99% 29 bps 12 bps 11.52% 11.22% -11 bps +340 bps Regulatory distance to MDA 1 Jun-20 Results FX and HTC&S Others Sep-20 net o
Slide 14: Leveraging digital capabilities to better serve our clients
3Q20 Results 14 October 30th 2020 Leveraging digital capabilities to better serve our clients in this context MOBILE CUSTOMERS APP INTERACTIONS GROUP DIGITAL SALES MILLION CUSTOMERS, % QUARTERLY SERVICING TRANSACTIONS 1 YTD, % (3Q20 VS 3Q19) UNITS +13.9 % 32.8 63.6% 57.7% 28.8 5x VALUE- PRV2 47.9% 4
Slide 15: Leading digital capabilities
3Q20 Results 15 October 30th 2020 Leading digital capabilities BANKING APP MARKET SHARE E-COMMERCE MARKET SHARE (%) (%) 22.2% 38.7% PEER 1 21.4% PEER 1 23.9% PEER 2 14.7% PEER 2 13.1% PEER 3 14.4% PEER 3 5.4% PEER 4 12.5% PEER 4 4.6% PEER 5 10.9% BBVA ranked #1 in DIY1 PEER 5 3.4% PEER 6 6.6% 90% PE
Slide 16: Business Areas
BBVA Business Areas
Slide 17: Spain
3Q20 Results 17 October 30th 2020 Spain ACTIVITY (SEP-20) YtD YtD Profit & Loss +3.3% Δ (%) Δ (%) +0.0% (€m) 3Q20 vs 2Q20 vs 3Q19 9M20 vs 9M19 YoY €Bn Net Interest Income 882 -4.1 -1.8 2,675 0.5 YoY 256.6 +4.6% Net Fees and Commissions 441 0.3 -0.2 1,349 4.8 €Bn Net Trading Income 51 -50.7 74.4 217
Slide 18: USA
3Q20 Results 18 October 30th 2020 USA ACTIVITY (SEP-20) (€ CONSTANT) YtD Profit & Loss Δ Constant (%) Δ Current Δ Constant YtD +13.1% (€m constant) 3Q20 vs 2Q20 vs 3Q19 9M20 vs 9M19 (%) vs 9M19 (%) +3.3% YoY Net Interest Income 599 4.8 2.2 1,708 -5.8 -5.5 YoY €Bn Net Fees and Commissions 174 11.4 4.
Slide 19: Mexico
3Q20 Results 19 October 30th 2020 Mexico ACTIVITY (SEP-20) (€ CONSTANT) YtD Profit & Loss YtD Δ Constant (%) Δ Current Δ Constant +11.2% (€m constant) 3Q20 vs 2Q20 vs 3Q19 9M20 vs 9M19 (%) vs 9M19 (%) +2.6% Net Interest Income 1,392 11.1 1.6 4,036 -12.2 -0.4 YoY YoY €Bn Net Fees and Commissions 267
Slide 20: Turkey
3Q20 Results 20 October 30th 2020 Turkey ACTIVITY (SEP-20) (€ CONSTANT; BANK ONLY) Profit & Loss Δ Constant (%) Δ Current Δ Constant (€m constant) 3Q20 vs 2Q20 vs 3Q19 9M20 vs 9M19 (%) vs 9M19 (%) Net Interest Income 774 7.8 37.9 2,218 9.3 31.0 YtD Net Fees and Commissions 143 39.6 -8.1 391 -28.5 -1
Slide 21: South America
3Q20 Results 21 October 30th 2020 South America ACTIVITY (SEP-20) (€ CONSTANT) YtD Net Attributable Profit 0 1 Δ Constant (%) 1 Δ Current Δ Constant YtD +18.1% (€m constant) 3Q20 vs 2Q20 vs 3Q19 9M20 vs 9M19 (%) vs 9M19 (%) +12.0% Colombia 56 42.0 -7.7 103 -48.1 -40.6 YoY Peru 45 1,638.5 -15.3 76 -5
Slide 22: Final Remarks
BBVA Final Remarks
Slide 23: Final Remarks: Expected 2021 trends
3Q20 Results 23 October 30th 2020 Final Remarks Expected 2021 trends Strong Operating Income growth, in a difficult environment, driven by core According to our current revenue growth and very strong cost macro expectations: control Core revenue growth in Significant improvement in Risk constant eur
Slide 24: Annex
Annex 01 Net Attributable Profit evolution 09 ALCO Portfolio, NII Sensitivity and LCRs & NSFRs 02 Gross Income breakdown 10 CET1 Sensitivity to market impacts 03 P&L Accounts by business unit 11 CET1 YTD & RWAs by business area 04 Customer Spread by country 12 Book Value of the main subsidiaries 05
Slide 25: Net Attributable Profit evolution
01 Net Attributable Profit evolution
Slide 26: Net Attributable Profit evolution
3Q20 Results 26 October 30th 2020 Net Attributable Profit evolution €M BUSINESSES -1,473€m 3,667 -402 -625 277 2,069 -360 186 -6 -140 -528 9M19 FX Spain USA Mexico Turkey Rest of South America Corp. Center 9M20 Effect Eurasia YoY (%) -58.7 -75.8 -30.5 58.6 -6.1 -30.1 (constant €) Note: excluding BBV
Slide 27: Gross Income breakdown
Q2 Gross Income breakdown Creating Opportunities
Slide 28: Gross Income breakdown
3Q20 Results 28 October 30th 2020 Gross Income breakdown 9M20 Spain 4,382 €m Rest of Eurasia 388 €m 25% 2% USA 13% 2,374 €m South America 14% 2,441 €m 16% Turkey 2,866 €m 30% Mexico 5,231 €m Note: Figures exclude Corporate Center.
Slide 29: P&L Accounts by business unit
03 P&L Accounts by business unit Rest of Eurasia Corporate Center Colombia Peru
Slide 30: Rest of Eurasia – Profit & Loss
3Q20 Results 30 October 30th 2020 Rest of Eurasia – Profit & Loss Profit & Loss Δ (%) Δ (%) (€m) 3Q20 vs 2Q20 vs 3Q19 9M20 vs 9M19 Net Interest Income 56 2.1 23.5 159 21.9 Net Fees and Commissions 34 -19.0 -6.0 117 10.8 Net Trading Income 27 -37.1 -20.5 105 11.9 Other Income & Expenses 3 -4.3 -22.4
Slide 31: Corporate Center – Profit & Loss
3Q20 Results 31 October 30th 2020 Corporate Center – Profit & Loss Profit & Loss Δ (%) Δ (%) (€m) 3Q20 vs 2Q20 vs 3Q19 9M20 vs 9M19 Net Interest Income -33 18.7 -45.4 -103 -46.7 Net Fees and Commissions -15 -43.5 -14.6 -50 -19.1 Net Trading Income -9 n.s. n.s. 175 n.s. Other Income & Expenses -15 n.
Slide 32: Colombia – Profit & Loss
3Q20 Results 32 October 30th 2020 Colombia – Profit & Loss Profit & Loss Δ (%) Δ (%) (€m constant ) 3Q20 vs 2Q20 vs 3Q19 9M20 vs 9M19 Net Interest Income 194 -1.3 6.0 587 7.8 Net Fees and Commissions 22 84.6 16.2 51 -13.2 Net Trading Income 28 15.7 153.7 57 30.0 Other Income & Expenses -7 265.4 n.s.
Slide 33: Peru – Profit & Loss
3Q20 Results 33 October 30th 2020 Peru – Profit & Loss Profit & Loss Δ (%) Δ (%) (€m constant ) 3Q20 vs 2Q20 vs 3Q19 9M20 vs 9M19 Net Interest Income 211 7.0 -5.1 620 -5.3 Net Fees and Commissions 65 45.3 12.1 160 -4.3 Net Trading Income 46 32.0 7.7 116 -5.0 Other Income & Expenses -7 -6.4 32.8 -21
Slide 34: Customer spread by country
04 Customer spread by country
Slide 35: Customer spreads: quarterly evolution
3Q20 Results 35 October 30th 2020 Customer spreads: quarterly evolution AVERAGE 3Q19 4Q19 1Q20 2Q20 3Q20 3Q19 4Q19 1Q20 2Q20 3Q20 Spain 2.00% 1.99% 1.96% 1.92% 1.89% Turkey TL 4.10% 7.12% 7.46% 7.30% 6.05% Yield on Loans 2.05% 2.02% 1.99% 1.93% 1.89% Yield on Loans 18.56% 16.46% 14.58% 13.22% 12.17%
Slide 36: Customer spreads: YTD evolution
3Q20 Results 36 October 30th 2020 Customer spreads: YTD evolution YTD AVERAGE 9M19 9M20 9M19 9M20 Spain 1.99% 1.92% Turkey TL 3.12% 6.88% Yield on Loans 2.05% 1.94% Yield on Loans 18.89% 13.24% Cost of Deposits -0.06% -0.01% Cost of Deposits -15.77% -6.36% USA 4.06% 3.65% Turkey FC1 5.14% 5.01% Yiel
Slide 37: Outstanding loan commitments to non-financial corporations
05 Outstanding loan commitments to non-financial corporations
Slide 38: Outstanding loan commitments to non-financial corporations
3Q20 Results 38 October 30th 2020 Outstanding loan commitments to non-financial corporations BREAKDOWN BY BUSINESS AREAS (SEP-20) € bn USA 1 26.1 Spain 19.6 Eurasia 16.6 Turkey 2.3 Mexico 2.3 South America 1.7 Total Group 68.5 (1) USA includes € 15.4 billion of loan commitments in the NY branch.
Slide 39: Stages breakdown by business areas
06 Stages breakdown by business areas
Slide 40: Stages breakdown by business area
3Q20 Results 40 October 30th 2020 Stages breakdown by business area CREDIT RISK BREAKDOWN BY BUSINESS AREA (SEP-20, €M) Gross Accumulated Gross Accumulated Gross Accumulated BBVA GROUP SPAIN USA Exposure impairments Exposure impairments Exposure impairments Stage 1 366,943 2,778 Stage 1 171,184 880
Slide 41: EAD to most vulnerable sectors in the current environment
07 EAD to most vulnerable sectors in the current environment
Slide 42: Exposure at default to most vulnerable sectors
3Q20 Results 42 October 30th 2020 Exposure at default to most vulnerable sectors in the current environment BREAKDOWN BY SECTORS (SEP-20) bn € Leisure1 11.25 Developer Real Estate 6.22 Retailers non food 5.46 Upstream & Oilfield services 2, 3 4.18 Air & Marine transportation 2.35 Total EAD to the mo
Slide 43: Outstanding loan deferrals & loans backed by State guarantees
08 Outstanding loan deferrals & loans backed by State guarantees
Slide 44: Prudent deferrals' classification and proactive provisioning
3Q20 Results 44 October 30th 2020 Prudent deferrals’ classification and proactive provisioning Expired deferrals by stages TOTAL DEFERRALS GRANTED o/w expired (January-Sepember 20) as a % of total loans €BN % of total loans % Stage 1 Stage 2 Stage 3 Total Group 35.6 8.90% 62% 4.00% 1.30% 0.20% By se
Slide 45: Outstanding loan deferrals
3Q20 Results 45 October 30th 2020 Outstanding loan deferrals OUTSTANDING DEFERRALS MATURITY PROFILE (SEP-20) OUTSTANDING AMOUNT (SEP-20, € BN) €Bn % of loans TOTAL BBVA GROUP (€13.7 bn) 9.4 Total Group 13.7 3.4% 2.5 Spain 4.4 2.1% 0.9 1.6 Mexico 3.5 7.0% 3.1 3.5 0.3 USA 0.9 1.7% 1.2 0.1 2.8 0.3 Turk
Slide 46: Government backed loans
3Q20 Results 46 October 30th 2020 Government backed loans (data in € bn) GROUP SPAIN MEXICO USA TURKEY ARGENTINA COLOMBIA PERU Loans Weight Loans Weight Loans Weight Loans Weight Loans Weight Loans Weight Loans Weight Loans Weight Households 1.2 0.7% 0.8 0.8% 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.1 6.0% 0.0
Slide 47: ALCO Portfolio, NII Sensitivity and LCRs & NSFRs
09 ALCO Portfolio, NII Sensitivity and LCRs & NSFRs
Slide 48: ALCO portfolio
3Q20 Results 48 October 30th 2020 ALCO portfolio ALCO PORTFOLIO BREAKDOWN BY REGION (€ BN) 56.9 Amort Cost Fair Value 51.6 55.2 (HTC) (HTC&S) 3.8 3.9 September 2020 (€BN) (€BN) (Duration) South America 3.3 7.1 7.9 Mexico 4.9 South America 0.1 3.8 1.0 years 8.0 7.1 Turkey 8.6 Mexico 2.3 5.7 2.3 years
Slide 49: NII sensitivity to interest rates movements
3Q20 Results 49 October 30th 2020 NII sensitivity to interest rates movements ESTIMATED IMPACT ON NII IN THE NEXT 12 MONTHS TO PARALLEL INTEREST RATE MOVEMENTS (%) NII SENSITIVITY TO +100 BPS NII SENSITIVITY TO -100BPS 20% 0% 15% -5% 10% -10% 5% -15% 0% -20% Euro USA Mexico Euro USA Mexico Note: NII
Slide 50: Liquidity and funding ratios
3Q20 Results 50 October 30th 2020 Liquidity and funding ratios BBVA GROUP AND SUBSIDIARIES LCR & NSFR (SEP-2020) BBVA GROUP Euro USA Mexico Turkey S. America LCR 159% (196%1) 198% 144% 2 191% 164% All countries >100% NSFR 127% 120% 124% 136% 144% All countries >100% (1) LCR of 159% does not consider
Slide 51: CET1 sensitivity to market impacts
10 CET1 sensitivity to market impacts
Slide 52: CET1 Sensitivity to Market impacts
3Q20 Results 52 October 30th 2020 CET1 Sensitivity to Market impacts1 TO A 10% DECLINE IN THE PRICE OF TELEFONICA SHARE PRICE (SEP-20) TO A 10% CURRENCY DEPRECIATION - 1.9bps (SEP-20) MXN -4bps TRY -3.6bps TO +100 BPS MOVEMENT IN THE USD +9bps SPANISH SOVEREIGN BOND (SEP-20) - 15bps (1) CET1 sensiti
Slide 53: CET1 YTD & RWAs by business area
11 CET1 YTD & RWAs by business area
Slide 54: Capital YTD Evolution
3Q20 Results 54 October 30th 2020 Capital YTD Evolution CET1 FULLY-LOADED – BBVA GROUP YTD EVOLUTION (%, BPS) -22 bps 56 bps 11.74% -8 bps 11.52% -42 bps -28 bps Dec-19 Net AT1 FX and Others1 Sep-20 Earnings coupons HTC&S (1) Includes mainly RWAs evolution in constant euros.
Slide 55: Risk-Weighted Assets by business areas
3Q20 Results 55 October 30th 2020 Risk-Weighted Assets by business areas Fully-Loaded RWAs Breakdown by business area (€m) Sep-20 Jun-20 Sep-19 Spain 107,046 109,625 105,856 USA 63,021 66,889 65,902 Turkey 50,131 57,190 58,521 Mexico 53,443 54,947 57,454 South America 40,087 44,015 45,284 Argentina
Slide 56: Book Value of the main subsidiaries
12 Book Value of the main subsidiaries
Slide 57: Book Value of the main subsidiaries
3Q20 Results 57 October 30th 2020 Book Value of the main subsidiaries1,2 € BN, SEP-20 Mexico 9.9 USA 7.8 Turkey 3.6 Colombia 1.2 Perú 1.1 Argentina 0.9 Chile 0.3 Venezuela 0.1 (1) Includes the initial investment + BBVA’s undistributed results + FX impact + other valuation adjustments. The Goodwill a
Slide 58: TBV per share and dividends evolution
13 TBV per share and dividends evolution
Slide 59: Shareholders' return: TBV per share and dividends
3Q20 Results 59 October 30th 2020 Shareholders’ return: TBV per share and dividends TBV PER SHARE & DIVIDENDS (€ PER SHARE) -3.9% 6.35 6.37 6.04 6.13 6.10 0.10 0.26 0.26 0.26 DIVIDENDS 6.27 TBV/SHARE 5.87 5.84 5.78 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20
Slide 60: Garanti BBVA: wholesale funding
14 Garanti BBVA: wholesale funding
Slide 61: Turkey – Liquidity & funding sources
3Q20 Results 61 October 30th 2020 Turkey – Liquidity & funding sources Solid liquidity position: • Total LTD ratio is at 96%, decreasing by 6.1 pp in 3Q20, due to significant growth in FC deposit (+8.7%). • Foreign currency loans decreased by USD 0.3 bn to c. USD 12.6 bn in 3Q20. • Liquidity ratios
Slide 62: Argentina: hyperinflation adjustment
15 Argentina: hyperinflation adjustment
Slide 63: Argentina hyperinflation adjustment
3Q20 Results 63 October 30th 2020 Argentina hyperinflation adjustment Profit & Loss 9M20 Hyperinflation 9M20 (€m) (reported) adjustment Ex. Hyperinflation Net Interest Income 612 52 560 Net Fees and Commissions 101 6 95 Net Trading Income 69 5 64 Other Income & Expenses -217 -170 -47 Gross Income 56
Slide 64: Digital sales breakdown
16 Digital sales breakdown Creating Opportunities
Slide 65: Outstanding trend in digital sales
3Q20 Results 65 October 30th 2020 Outstanding trend in digital sales (% OF TOTAL SALES YTD, # OF TRANSACTIONS AND PRV 1) UNITS PRV GROUP SPAIN USA 63.6 57.9 57.6 50.0 51.7 UNITS 44.0 36.4 47.9 24.7 27.3 41.9 44.6 42.4 36.3 PRV 31.6 33.4 24.2 22.6 Sep-18 Sep-19 Sep-20 Sep-18 Sep-19 Sep-20 Sep-18 Sep-
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Banco Bilbao Vizcaya Argentaria — Q3 2020 Earnings Presentation on 6ix