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

Banco Bilbao Vizcaya Argentaria — Q2 2023 Earnings Presentation

59 slides from Banco Bilbao Vizcaya Argentaria's earnings presentation, Jul 28, 2023

  1. Slide 1: 2Q23 Results

    2Q23 Results July 28, 2023

  2. Slide 2: Disclaimer

    2Q23 Results 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 or inv

  3. Slide 3: BBVA reports another very strong quarter

    2Q23 Results 3 BBVA reports another very strong quarter RECURRENT NET ATTRIBUTABLE PROFIT1 CET1 FULLY LOADED (CURRENT €M) (%) +11% +10% 12.99% Target Range 11.5%-12.0% MERLIN TRANSACTION 1,633 SREP Requirement REPORTED 8.76% 2Q22 1Q23 2Q23 Jun-23 EPS (€)1 0.29 0.30 0.33 NOTE: In the presentation, 20

  4. Slide 4: Outstanding shareholder value creation and profitability metrics

    2Q23 Results 4 Outstanding shareholder value creation and profitability metrics TBV + DIVIDENDS PROFITABILITY METRICS3 1 (€ / SHARE ) (%) TBV / share Dividends / share ROTE +15% +2.3% 8.08 8.27 7.19 0.432 0.432 ROE 7.65 7.84 6M22 2022 6M23 Jun-22 Mar-23 Jun-23 (1) Total number of shares considered: 6

  5. Slide 5: 2Q23 Profit & Loss

    2Q23 Results 5 2Q23 Profit & Loss Change Change 2Q23/2Q22 2Q23/1Q23 BBVA Group (€M) 2Q23 % constant % % constant % Net Interest Income 5,768 37.5 25.5 9.4 2.2 Net Fees and Commissions 1,470 11.2 4.1 7.9 2.1 Net Trading Income 334 -12.5 -35.2 3.2 -23.7 Other Income & Expenses1 -383 -58.7 -23.7 -58.2 -

  6. Slide 6: 6M23 Profit & Loss

    2Q23 Results 6 6M23 Profit & Loss Change 6M23/6M22 BBVA Group (€M) 6M23 % constant % Net Interest Income 11,410 39.2 33.6 Net Fees and Commissions 2,909 12.9 9.4 Net Trading Income 773 -18.8 -29.5 1 Other Income & Expenses -944 -25.2 7.8 Gross Income 14,148 35.2 23.9 Operating Expenses -5,938 21.6 18

  7. Slide 7: Excellent revenue growth following a remarkable trend

    2Q23 Results 7 Excellent revenue growth following a remarkable trend NET INTEREST INCOME NET FEES AND COMMISSIONS (CONSTANT €M) (CONSTANT €M) +38% +11% +9.4% +7.9% Outstanding NII Sound fee income growth driven by levered on activity and Payments, Asset customer spread Management and improvement tra

  8. Slide 8: Core revenues growth levered on activity and improving customer spreads

    2Q23 Results 8 Core revenues growth levered on activity and improving customer spreads LOAN GROWTH CUSTOMER NET INTEREST NET FEES AND (YOY, CONSTANT €) SPREAD INCOME COMMISSIONS (%) (YOY, CONSTANT €) (YOY, CONSTANT €) SPAIN +51% -3% +15.0% +5.7% +4.0% +5.0% Consumer + Mid-sized 2Q22 1Q23 2Q23 2Q22 1

  9. Slide 9: Positive jaws and strong improvement in efficiency

    2Q23 Results 9 Positive jaws and strong improvement in efficiency POSITIVE JAWS EFFICIENCY RATIO (6M23 YOY, CONSTANT €) (COST-TO-INCOME, % CONSTANT €) FOOTPRINT INFLATION1 19.1% 12M AVERAGE +35.2% +21.6% Gross Operating Income Expenses 6M22 6M23 (1) Weighted by operating expenses and excluding Venezu

  10. Slide 10: Stable asset quality and within guidance

    2Q23 Results 10 Stable asset quality and within guidance FINANCIAL ASSETS IMPAIRMENTS NPL (CONSTANT €M) (€BN) 2Q22 3Q22 4Q22 1Q23 2Q23 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 COST OF RISK NPL & COVERAGE RATIOS (%, YTD) (%) COVERAGE 2019 at 1.04% NPL Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Jun-22 Sep-22 Dec-22

  11. Slide 11: New share buy-back program levered in our solid capital position

    2Q23 Results 11 New share buy-back program levered in our solid capital position CET1 FULLY-LOADED CET1 (%, BPS) PRO-FORMA3 12.67% +58 bps -31 bps -26 bps 13.13% -15 bps 12.99% Target Range 11.5%-12.0% SREP Requirement2 8.76% Mar -23 Results Dividend RWAs Others1 Jun -23 accrual & AT1 (constant €) c

  12. Slide 12: Excellent customer acquisition driven by digital

    2Q23 Results 12 Excellent customer acquisition driven by digital NEW CUSTOMERS1 (BBVA GROUP, MILLION; % ACQUISITION THROUGH DIGITAL CHANNELS) DIGITAL 65% TOTAL DIGITAL 11% 6M18 6M19 6M20 6M21 6M22 6M23 (1) Gross customer acquisition through own channels for retail segment. Excludes the US business s

  13. Slide 13: Advancing in our clear commitment to sustainability

    2Q23 Results 13 Advancing in our clear commitment to sustainability SUSTAINABLE BUSINESS (€ Bn) New target BY CLIENT (2022) 300 €Bn YoY growth €33Bn +30% €19 Bn channeled in Revised target 2Q23 (2021) €5.1Bn Retail +78% €26Bn €169 Bn 200 €Bn €2.9Bn Channeled since 2018 €4,7Bn €10.4Bn Enterprises +12

  14. Slide 14: We have a positive impact on society

    2Q23 Results 14 We have a positive impact on society BBVA GROUP LOAN GROWTH1 (Jun-23, YOY, CONSTANT €) +8.4 % INCLUSIVE GROWTH FINANCING 70,000 263,000 70,000 7.4 €Bn MOBILIZED IN 6M23 FAMILIES BOUGHT SMEs AND LARGER THEIR HOME2 SELF - EMPLOYED CORPORATES BOOSTED THEIR INVESTED IN BUSINESS2 GROWTH3

  15. Slide 15: We expect strong performance in our ambitious long-term goals

    2Q23 Results 15 We expect strong performance in our ambitious long-term goals COST-TO-INCOME ROTE1 TBV + DIVIDENDS (%) (%, ANNUALIZED) (€/SHARE, %) YoY CAGR HIGH 2021-6M23 TEENS 19.3 MID TEENS CAGR SLIGHT 15.1 IMPROVEMENT 2021-24 CAGR NEW TARGET CUSTOMERS2 SUSTAINABLE BUSINESS (MILLION CUMULATIVE) (

  16. Slide 16: Business Areas

    Business Areas Creating Opportunities

  17. Slide 17: Spain

    2Q23 Results 17 Spain PROFIT & LOSS (€M) Δ (%) Δ (%) ACTIVITY (JUN-23) €Bn YoY YoY 2Q23 vs. 2Q22 vs. 1Q23 6M23 vs. 6M22 +2.7% Net Interest Income 1,360 50.9 15.0 2,544 44.7 €Bn Net Fees and Commissions 557 -2.9 4.0 1,093 -1.5 -1.4% Net Trading Income 98 -0.2 -18.1 218 -24.4 Other Income & Expenses -

  18. Slide 18: Mexico

    2Q23 Results 18 Mexico PROFIT & LOSS (CONSTANT €M) ACTIVITY (JUN-23) YoY (CONSTANT €) €Bn YoY Δ Constant (%) Δ Current (%) Δ Constant (%) +11.1% €Bn +7.3% 2Q23 vs. 2Q22 vs. 1Q23 6M23 vs. 6M22 vs. 6M22 Net Interest Income 2,622 24.1 -0.7 5,264 42.8 26.6 Mortgages +9.2% Demand Net Fees and Commissions

  19. Slide 19: Turkey

    2Q23 Results 19 Turkey PROFIT & LOSS (CURRENT €M) ACTIVITY (JUN-23) Δ Current (%) Δ Current (%) (CONSTANT €; BANK ONLY) €Bn YoY1 2Q23 vs 2Q22 vs 1Q23 6M23 vs. 6M22 Net Interest Income 354 -46.5 -43.5 980 -15.0 FC -22.3% Net Fees and Commissions 113 -31.6 -34.2 285 -5.6 Time -60.8% €Bn YoY1 Net Tradi

  20. Slide 20: South America

    2Q23 Results 20 South America NET ATTRIBUTABLE PROFIT ACTIVITY (JUN-23) (CONSTANT €M) (CONSTANT €) €Bn €Bn YoY YoY Δ Constant (%) Δ Current (%) Δ Constant (%) -9.5% +11.2% 2Q23 vs. 2Q22 vs. 1Q23 6M23 vs. 6M22 vs. 6M22 Colombia 53 -22.1 27.8 95 -37.7 -27.8 Colombia +4.7% Peru 53 -19.2 -7.3 111 -5.4 -

  21. Slide 21: Takeaways

    2Q23 Results 21 Takeaways BBVA delivered another very strong quarter Excellent core revenues evolution on the back of activity growth and higher spreads Delivering exceptional value creation for all our stakeholders: shareholders, clients, employees and society at large Continuous progress in the ex

  22. Slide 22: Annex

    Annex 01 Net Attributable Profit 08 CET1 Sensitivity to market evolution impacts 02 Gross Income breakdown 09 CET1 YTD evolution & RWAs by business area 03 P&L Accounts by business 10 Book Value of the main unit subsidiaries 04 Customer spread by country 11 TBV per share & dividends evolution 05 Stag

  23. Slide 23: Net Attributable Profit evolution

    01 Net Attributable Profit evolution

  24. Slide 24: Business Areas Contribution to Group's NAP 2Q23 yoy growth

    2Q23 Results 24 Business Areas Contribution to Group's NAP 2Q23 yoy growth NET ATTRIBUTABLE PROFIT1 (BUSINESS AREAS CONTRIBUTION TO 2Q23 YOY GROWTH; CURRENT €M) +11% 2Q22 Spain Mexico Turkey South Rest of Corporate 2Q23 America Business Center NAP 2Q23 (€M) 690 1,330 248 183 121 -540 NAP growth (YoY

  25. Slide 25: Business Areas Contribution to Group's NAP 6M23 yoy growth

    2Q23 Results 25 Business Areas Contribution to Group's NAP 6M23 yoy growth NET ATTRIBUTABLE PROFIT1 (BUSINESS AREAS CONTRIBUTION TO 6M23 YOY GROWTH; CURRENT €M) +23% 6M22 Spain Mexico Turkey South Rest of Corporate 6M23 America Business Center NAP 6M23 (€M) 1.231 2,614 525 367 212 -1.072 NAP growth

  26. Slide 26: Gross Income breakdown

    BBVA Creating Opportunities Gross Income breakdown

  27. Slide 27: Gross Income breakdown

    2Q23 Results 27 Gross Income breakdown 6M23 (€M, %) Rest of business 566 €M Spain South America 4% 3,630€M 2,415 €M 16% 24% Turkey 10% 1,480 €M 46% Mexico 6,774 €M Note: Figures exclude Corporate Center.

  28. Slide 28: P&L Accounts by business unit

    03 P&L Accounts by business unit Rest of Corporate Turkey Argentina Colombia Peru Business Center (hyperinflation (hyperinflation adjustment) adjustment)

  29. Slide 29: Rest of Business - Profit & Loss

    2Q23 Results 29 Rest of Business - Profit & Loss PROFIT & LOSS (€M) Δ (%) Δ (%) 2Q23 vs 2Q22 vs 1Q23 6M23 vs 6M22 Net Interest Income 146 83.8 28.9 260 67.5 Net Fees and Commissions 64 -2.7 -7.1 132 8.9 Net Trading Income 96 172.1 25.1 173 67.3 Other Income & Expenses -1 n.s. n.s. 0 -90.9 Gross Incom

  30. Slide 30: Corporate Center - Profit & Loss

    2Q23 Results 30 Corporate Center - Profit & Loss PROFIT & LOSS (€M) Δ (%) Δ (%) 2Q23 vs 2Q22 vs 1Q23 6M23 vs 6M22 Net Interest Income -80 204.4 33.0 -140 120.0 Net Fees and Commissions -26 61.1 n.s. -30 48.9 Net Trading Income -337 n.s. 30.7 -595 n.s. Other Income & Expenses 38 -33.9 234.0 50 -15.2 G

  31. Slide 31: Turkey - hyperinflation adjustment

    2Q23 Results 31 Turkey - hyperinflation adjustment PROFIT & LOSS (€M) 6M23 Hyperinflation 6M23 (reported) (1) adjustment (2) Ex.Hyperinflation Net Interest Income 980 -206 1,186 Net Fees and Commissions 285 -66 351 Net Trading Income 394 -94 489 Other Income & Expenses -180 -878 698 Gross Income 1,480

  32. Slide 32: Argentina - hyperinflation adjustment

    2Q23 Results 32 Argentina - hyperinflation adjustment PROFIT & LOSS (€M) 6M23 Hyperinflation 6M23 (reported) (1) adjustment (2) Ex.Hyperinflation Net Interest Income 1,300 -38 1,338 Net Fees and Commissions 137 -11 148 Net Trading Income 94 -8 102 Other Income & Expenses -726 -566 -160 Gross Income 805

  33. Slide 33: Colombia - Profit & Loss

    2Q23 Results 33 Colombia - Profit & Loss PROFIT & LOSS (€M CONSTANT) Δ (%) Δ (%) 2Q23 vs 2Q22 vs 1Q23 6M23 vs 6M22 Net Interest Income 173 -10.3 -1.5 349 -8.3 Net Fees and Commissions 30 33.7 22.0 55 22.7 Net Trading Income 26 12.0 -23.6 59 34.3 Other Income & Expenses -3 150.1 n.s. -1 33.8 Gross Inc

  34. Slide 34: Peru - Profit & Loss

    2Q23 Results 34 Peru - Profit & Loss PROFIT & LOSS (€M CONSTANT) Δ (%) Δ (%) 2Q23 vs 2Q22 vs 1Q23 6M23 vs 6M22 Net Interest Income 317 22.4 3.5 624 27.6 Net Fees and Commissions 74 -1.1 -0.3 148 4.5 Net Trading Income 45 10.7 -5.2 93 22.7 Other Income & Expenses -9 3.1 -31.3 -22 25.1 Gross Income 427

  35. Slide 35: Customer Spread by country

    04 Customer Spread by country

  36. Slide 36: Customer spreads: quarterly evolution

    2Q23 Results 36 Customer spreads: quarterly evolution AVERAGE 2Q22 3Q22 4Q22 1Q23 2Q23 2Q22 3Q22 4Q22 1Q23 2Q23 Spain 1.72% 1.85% 2.21% 2.75% 3.12% Turkey TL 6.65% 9.00% 7.19% 3.92% 0.81% Yield on Loans 1.74% 1.93% 2.42% 3.11% 3.64% Yield on Loans 18.60% 20.92% 18.67% 16.84% 16.50% Cost of Deposits

  37. Slide 37: Customer spreads: YtD evolution

    2Q23 Results 37 Customer spreads: YtD evolution AVERAGE 6M22 6M23 6M22 6M23 Spain 1.71% 2.93% Turkey TL 6.01% 2.16% Yield on Loans 1.73% 3.38% Yield on Loans 18.22% 16.66% Cost of Deposits -0.02% -0.45% Cost of Deposits -12.21% -14.49% 1 Mexico MXN 11.51% 12.64% Turkey FC 5.38% 8.55% Yield on Loans

  38. Slide 38: Stages breakdown by business areas

    05 Stages breakdown by business areas

  39. Slide 39: Stages breakdown by business areas

    2Q23 Results 39 Stages breakdown by business areas CREDIT RISK BUSINESS BREAKDOWN BY AREA (JUN-23, € M) Gross Accumulated Gross Accumulated Gross Accumulated BBVA GROUP Exposure impairments SPAIN Exposure impairments MEXICO Exposure impairments Stage 1 386,711 2,107 Stage 1 173,820 426 Stage 1 82,04

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

    06 Exposure to Covid-related loans and Commercial Real Estate

  41. Slide 41: Exposure to Covid-related loans backed by State guarantees and Commercial Real Estate

    2Q23 Results 41 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 JUN’23) (GROUP’s CRE EAD, %, AS OF JUN’23) 10.4 Bn€1 0.8 Bn€ c.9.6 Bn€ 2 of which of which 60% Retail 58% Retail c

  42. Slide 42: ALCO Portfolio, NII Sensitivity and LCRs & NSFRs

    07 ALCO Portfolio, NII Sensitivity and LCRs & NSFRs

  43. Slide 43: ALCO Portfolio

    2Q23 Results 43 ALCO Portfolio ALCO PORTFOLIO BREAKDOWN BY REGION (€ BN) Amort Cost Fair Value (HTC) (HTC&S) (duration Jun-23 (€BN) (€BN) incl. hedges) South America 0.3 6.3 1.2 years Turkey 5.7 2.4 3.3 years Mexico 7.1 10.2 2.1 years Euro 21.9 13.6 2.6 years (1) Spain 15.8 6.7 Italy 3.2 4.2 Rest 2.

  44. Slide 44: NII sensitivity to interest rates movements

    2Q23 Results 44 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% +2.5% EURO BALANCE MEXICO(2) (+1.6% for MXN SHEET BALANCE SHEET) (1) NII sensitivities to parallel interes

  45. Slide 45: Liquidity and funding ratios

    2Q23 Results 45 Liquidity and funding ratios BBVA GROUP AND SUBSIDIARIES LCR & NSFR (JUN-23) LCR NSFR Loan To Total Group 189% / 148%1 132% Deposits BBVA, S.A. 174% 123% 89% Mexico 180% 136% 99% 2 Turkey 228% 175% 76% S. America 96%3 All countries >100% >100% (1) Using a more restrictive criterion o

  46. Slide 46: CET1 Sensitivity to market impacts

    08 CET1 Sensitivity to market impacts

  47. Slide 47: CET1 Sensitivity to market impacts

    2Q23 Results 47 CET1 Sensitivity to market impacts1 TO A 10% CURRENCY DEPRECIATION 2 TO A 10% DECLINE IN TELEFONICA’S (JUN-23) SHARE PRICE (JUN-23) MXN -9bps -3 bps TRY -3bps TO +100 BPS MOVEMENT IN THE SPANISH SOVEREIGN BOND (JUN-23) USD +18bps -10 bps (1) CET1 sensitivity considering the FL capita

  48. Slide 48: CET1 YTD evolution & RWAs by business area

    9 CET1 YTD evolution & RWAs by business area

  49. Slide 49: Capital YtD evolution

    2Q23 Results 49 Capital YtD evolution CET1 FULLY-LOADED – BBVA GROUP YTD EVOLUTION (%, BPS) 1 2 (1) Includes the reversal of the NPL backstop deduction (+19 bps) in January 2023, resulting in a P2R increase of +21 bps. (2) Includes, among others, minority interests, market related impacts, regulator

  50. Slide 50: Risk-weighted assets by business area

    2Q23 Results 50 Risk-weighted assets by business area Fully-Loaded RWAs Breakdown by business area (€M, current) Jun-22 Mar-23 Jun-23 Spain 108,913 116,550 116,767 Mexico 73,869 78,316 85,111 Turkey 51,055 58,683 50,672 South America 49,641 47,341 50,144 Argentina 7,344 7,910 7,309 Chile 1,939 2,367

  51. Slide 51: Book Value of the main subsidiaries

    10 Book Value of the main subsidiaries

  52. Slide 52: Book Value of the main subsidiaries

    2Q23 Results 52 Book Value of the main subsidiaries1,2 € BN; JUN-23 Mexico 18.6 Turkey 6.1 Colombia 1.6 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 subsidi

  53. Slide 53: TBV per share & dividends evolution

    11 TBV per share & dividends evolution

  54. Slide 54: Shareholders' return: TBV per share & dividends evolution

    2Q23 Results 54 Shareholders’ return: TBV per share & dividends evolution TBV PER SHARE & DIVIDENDS1 (€ PER SHARE) TBV Dividends +15.1% 2 2 2 2 (1) 2022 figures restated for IFRS17. Including the deduction of the whole Share Buy Back program. (2) October 2022 dividend per share paid (0.12€) and April

  55. Slide 55: MREL

    Creating Opportunities MREL

  56. Slide 56: Sound MREL position

    2Q23 Results 56 Sound MREL position POSITION AS OF JUN-23 (% RWA1) MREL REQUIREMENT2 + CBR SUBORDINATION REQUIREMENT + CBR 28.05% 24.78% 22.90% CBR: 3.32% 16.82% CBR: 3.32% MREL 21.46% Subordination 13.50% 3 3 M-MDA Buffer 326 bps (6.8€bn) Subordination Buffer 607 bps (12.6€bn) Note: Preliminary Dat

  57. Slide 57: Digital metrics

    BBVA Creating Opportunities Digital metrics

  58. Slide 58: Digital metrics mobile customers & digital sales

    2Q23 Results 58 Digital metrics mobile customers & digital sales MOBILE CUSTOMERS DIGITAL SALES - UNITS (MILLION CUSTOMERS, %) % OF TOTAL SALES YTD, # OF TRANSACTIONS) +38% DIGITAL SALES - PRV2 % OF TOTAL SALES YTD, PRV) CUSTOMER PENETRATION RATE1 62.2% 68.5% 72.0% Note: data excludes USA, Paraguay

  59. Slide 59: BBVA

    BBVA

Banco Bilbao Vizcaya Argentaria — Q2 2023 Earnings Presentation on 6ix