Banco Bilbao Vizcaya Argentaria, S.a. · BME:BBVA
Banco Bilbao Vizcaya Argentaria — Debt Investor Presentation (February 2024)
49 slides from Banco Bilbao Vizcaya Argentaria's debt investor presentation, Feb 1, 2024
Slide 1: 4Q23 Fixed Income Presentation
4Q23 Fixed Income Presentation
Slide 2: Disclaimer
4Q23 Fixed Income 2 Disclaimer This document is only provided for information purposes and is not intended to provide financial advice and, therefore, does not constitute, nor should it be interpreted as, an offer to sell, exchange or acquire, or an invitation for offers to acquire securities issued
Slide 3: 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
Slide 4: BBVA investment case
Creating Opportunities BBVA investment case
Slide 5: About BBVA
About BBVA FINANCIAL HIGHLIGHTS BBVA’s GLOBAL PRESENCE DECEMBER 2023 2023 Net attributable profit 12M23 CET 1 FL 8,019 M€ 12.67% 0 Total Assets 775,558 M€ Loans and advances to Deposits from customer - gross customers 388,912M€ 413,487M€ Branches Employees Active customers 5,949 121,486 71.5 M DIGITA
Slide 6: 1) Leading franchises in attractive markets
4Q23 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 19.8% Mexico 24.7% #1 43.3% Turkey 18.3% #2 26.9% Peru 21.1% #2 23.7% Colombia 11.4% #4 8.3% (1) Latest available information. Ranki
Slide 7: 2) Well diversified business model
4Q23 Fixed Income 7 2) Well diversified business model DIVERSIFICATION UNDER A PROFITABLE BUSINESS MIX DECENTRALIZED MODEL TOTAL ASSETS1 LOANS AND ADVANCES TO CUSTOMERS (DEC-23) (PERFORMING LOANS UNDER MANAGEMENT EX-REPOS) 8% Rest of Business DEC-23 8% South America 21% CIB 25% Mortgages 45% 8% Turke
Slide 8: 3) Proven track record of solid financial returns
4Q23 Fixed Income 8 3) Proving track record of solid financial returns STRONG PRE-PROVISION PROFIT OUTPERFORMING OUR PEERS ON AND BEST-IN-CLASS EFFICIENCY PROFITABILITY PRE-PROVISION PROFIT/RWA EFFICIENCY RATIO ROTE 2019-2023, % 2019-2023, % 2019-2023, % 2019 2020 2021 2022 2023 2019 2020 2021 2022 2
Slide 9: 4) Capturing value from digitalization
4Q23 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% 13 2018 2019 2020 2021 2022 20
Slide 10: 5) Solid fundamentals
4Q23 Fixed Income 10 5) Solid fundamentals SOUND ASSET COMFORTABLE LIQUIDITY STRONG CAPITAL QUALITY METRICS NPL Ratio CET 1 FULLY-LOADED (%) (%) Coverage Ratio NSFR Group (%) 12.67% 131% Target range 11.5-12.0% Cost of Risk YtD(%) LCR Group CET1 Requirement 8.78%1 193%2 Dec-22 Mar-23 Jun-23 Sep-23 D
Slide 11: 6) Strong ESG Credentials
4Q23 Fixed Income 11 6) Strong ESG Credentials SUSTAINABLE BUSINESS SOCIAL GOVERNANCE Sustainable Business Channeling Positive impact on society Directors Sustainable Loan growth2 +7.6 % Business 300 €bn 2018-2025 (DEC-23. YOY, CONSTANT €) % Female 40% Goal: 40% Directors at least goal 140,000 550,0
Slide 12: Advancing in our clear commitment to sustainability
4Q23 Fixed Income 12 Advancing in our clear commitment to sustainability SUSTAINABLE BUSINESS ANNUAL GROWTH COMMITMENT IN PORTFOLIO (CLIMATE CHANGE AND INCLUSIVE GROWTH) ALIGNMENT YoY growth € 70 Bn +39% REDUCTION IN 2030 €206 Bn Channeled since 2018 Retail +43% Power -52% kg CO2e/MWh € 50 Bn Auto 9
Slide 13: We continue on our path to success regarding our ambitious 2021-2024 goals
4Q23 Fixed Income 13 We continue on our path to success regarding our ambitious 2021-2024 goals COST-TO-INCOME ROTE1 TBV + DIVIDENDS (%) (%, ANNUALIZED) (€/SHARE, %) CAGR 2021-2023 HIGH TEENS MID TEENS CAGR SLIGHT IMPROVEMENT 2021-24 CAGR NEW TARGET CUSTOMERS2 SUSTAINABLE BUSINESS (MILLION CUMULATIV
Slide 14: 2023 Results
Creating Opportunities 2023 Results
Slide 15: Net Attributable Profit sets a new record
4Q23 Fixed Income 15 Net Attributable Profit sets a new record RECURRENT NET ATTRIBUTABLE PROFIT1 (CURRENT €M) +22% vs. 2022 8,019 6,621 5,069 4,830 4,627 3,084 2017 2018 2018 2019 2019 2020 2021 2020 2022 2021 2022 2023 +26% Reported NAP (€M) 5,324 3,512 1,305 4,653 6,420 8,019 vs 2022 (1) Recurrent
Slide 16: 2023 key financial messages
4Q23 Fixed Income 16 2023 key financial messages 1 CORE REVENUES (NII+FEES) TOTAL LOAN GROWTH1 STRONG CORE REVENUES AND ACTIVITY GROWTH +27.0% vs. 2022 +7.6% vs. Dec. 2022 2 LEADING AND IMPROVING EFFICIENCY RATIO EFFICIENCY WITH POSITIVE 41.7% -370 BPS. vs. 2022 JAWS 3 SOLID ASSET QUALITY TRENDS, NPL
Slide 17: 2023 Profit & Loss
4Q23 Fixed Income 17 2023 Profit & Loss Change 2023/2022 BBVA Group (€M) 2023 % constant % Net Interest Income 23,089 29 21 Net Fees and Commissions 6,288 21 17 Net Trading Income 2,183 32 13 1 Other Income & Expenses -2,018 -5 19 Gross Income 29,542 30 19 Operating Expenses -12,308 20 15 Operating I
Slide 18: Core revenues growth levered on activity and higher spreads
4Q23 Fixed Income 18 Core revenues growth levered on activity and higher spreads LOAN GROWTH CUSTOMER SPREAD CORE REVENUES (YOY, CONSTANT €) (%) (YOY, CONSTANT €M) SPAIN +32% +5.4% +5.9% +3.6% Consumer + Mid-sized Credit Cards companies 4Q22 3Q23 4Q23 4Q22 1Q23 2Q23 3Q23 4Q23 MEXICO +12% +0.9% +19.0
Slide 19: Asset quality metrics aligned with our expectations
4Q23 Fixed Income 19 Asset quality metrics aligned with our expectations FINANCIAL ASSETS IMPAIRMENTS NPL (CONSTANT €M) (€BN) 4Q22 1Q23 2Q23 3Q23 4Q23 Dec-22 Mar-23 Jun-23 Sep-23 Dec-23 COST OF RISK NPL & COVERAGE RATIOS (%, YTD) (%) COVERAGE NPL Dec-22 Mar-23 Jun-23 Sep-23 Dec-23 Dec-22 Mar-23 Jun-
Slide 20: Spain
4Q23 Fixed Income 20 Spain PROFIT & LOSS (€M) Δ (%) Δ (%) ACTIVITY (DEC-23) €Bn YoY YoY 4Q23 vs. 4Q22 vs. 3Q23 12M23 vs. 12M22 +1.7% Net Interest Income 1,567 44.2 3.8 5,620 48.9 €Bn Net Fees and Commissions 561 7.7 10.0 2,164 0.4 -0.9% Net Trading Income 100 50.8 10.4 409 3.4 Other Income & Expense
Slide 21: Mexico
4Q23 Fixed Income 21 Mexico PROFIT & LOSS (CONSTANT €M) ACTIVITY (DEC-23) (CONSTANT €) Δ Constant (%) Δ Current (%) Δ Constant (%) €Bn YoY YoY 4Q23 vs. 4Q22 vs. 3Q23 12M23 vs. 12M22 vs. 12M22 +10.6% €Bn +13.2% Net Interest Income 2,847 9.5 1.1 11,054 31.9 19.5 Net Fees and Commissions 592 25.1 -0.1
Slide 22: Turkey
4Q23 Fixed Income 22 Turkey PROFIT & LOSS (CURRENT €M) ACTIVITY (DEC-23) Δ Current (%) Δ Current (%) (CONSTANT €; BANK ONLY) €Bn YoY1 4Q23 vs 4Q22 vs 3Q23 12M23 vs. 12M22 -12.3% Net Interest Income 288 -55.8 -52.2 1,869 -28.4 FC €Bn YoY1 -56.4% Net Fees and Commissions 369 166.4 7.0 998 65.9 Time Ne
Slide 23: South America
4Q23 Fixed Income 23 South America NET ATTRIBUTABLE PROFIT ACTIVITY (DEC-23) (CURRENT €M) (CONSTANT €) Δ Current (%) Δ Current (%) €Bn €Bn YoY YoY -9.3% 4Q23 vs. 4Q22 vs. 3Q23 12M23 vs. 12M22 +8.1% Colombia 41 77.6 111.6 156 -35.5 Colombia +11.1% Peru 48 29.4 10.0 203 -1.2 Colombia +5.1% Argentina -
Slide 24: 2024 Outlook
4Q23 Fixed Income 24 2024 Outlook GROUP Net Attributable Profit to SPAIN MEXICO continue to grow in 2024 Loans (eop): Flattish, Loans (eop): growth at outperforming the market double digit NII: growth at mid single digit NII: grow at high single digit, ROTE at high teens, above Fees: slight growth sl
Slide 25: Capital & Liquidity
Creating Opportunities Capital & Liquidity
Slide 26: A high quality and resilient capital
4Q23 Fixed Income 26 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 DEC-23/PEERS SEP-23 BBVA D
Slide 27: Solid capital position with CET1 above our target
4Q23 Fixed Income 27 Solid capital position with CET1 above our target CET1 FULLY-LOADED AT1 AND TIER 2 FL BUCKETS (%, BPS) DEC-23 (%) -6bps 2.43% 2 +57 bps -32 bps 2.25% -36 bps 12.73% +5 bps 12.67% 1.82% 2 Target Range 1.66% 11.5%-12.0% SREP Requirement 8.78% 2 Sep -23 Results Dividend RWAs accrua
Slide 28: One of the lowest SREP requirement among peers with a comfortable MDA distance
4Q23 Fixed Income 28 One of the lowest SREP requirement among peers with a comfortable MDA distance BBVA, GROUP CET1 REQUIREMENT AND DISTANCE TO MDA BBVA DEC-23/ PEERS-SEP-23 Distance to MDA 3 355 bps 16.58% T2 12.00% 11.16% 13.03% 2 10.83% AT1 T2 9.79% 9.76% 9.53% 9.30% 9.29% 8.82% 8.78% 8.52% 8.78
Slide 29: Capital position in BBVA, S.A. well above requirement
4Q23 Fixed Income 29 Capital position in BBVA, S.A. well above requirement BBVA, S.A. REQUIREMENT AND DISTANCE TO MDA Distance to MDA2 17.38% DEC-23 428 bps €9.3 Bn T2 12.10% AT1 T2 AT1 7.94% 1 CCyB 1 CCB CET 1 Pillar 2R CET 1 Pillar 1 CET1 Total Capital Total Capital Ratio Requirement 2023 Requirem
Slide 30: Sound MREL position
4Q23 Fixed Income 30 Sound MREL position POSITION AS OF DEC-23 (% RWA1) MREL REQUIREMENT 2 + CBR SUBORDINATION REQUIREMENT + CBR 26.36% 21.84% 24.81% CBR: 3.35% 16.85% CBR: 3.35% MREL 21.46% Subordination 13.50% 3 3 M-MDA Buffer 154 bps (3.3€bn) Subordination Buffer 499 bps (10.7€bn) (1) Position as
Slide 31: Liquidity ratios well above 100% minimum
4Q23 Fixed Income 31 Liquidity ratios well above 100% minimum Ample quality collateral BBVA GROUP LIQUIDITY BALANCE SHEET1 BBVA GROUP LIQUIDITY AND FUNDING METRICS DEC-23 DEC-23 Mexico Turkey South BBVA S.A.2 America LTD 87% 95% 76%3 97% LCR 178% 192% 212% >100% 60% 67% NSFR 120% 140% 178% >100% LCR
Slide 32: Limited wholesale funding maturities in all geographies
4Q23 Fixed Income 32 Limited wholesale funding maturities in all geographies DEBT OUTSTANDING BY PRODUCT MEDIUM & LONG-TERM WHOLESALE FUNDING DEC-23, € BN MATURITIES DEC-23, € BN Others1 Senior Preferred EURO 11.2 € 46.7 bn 19% 16.3 27% T2 / TOTAL Subordinated 17% MEXICO 59.3 € 7.4 bn 10.1 10% 15% A
Slide 33: 2024 Funding Plan
4Q23 Fixed Income 33 2024 Funding Plan c. €8-9 bn. Oriented to meet both 2024 maturities and regulatory requirements. Subject to Balance Sheet and liquidity evolution. BBVA, S.A. 2024 2024 Strategy1 €BN Executed (subject to market conditions) AT1 - Dynamic and efficient management of the capital stac
Slide 34: All Ratings Agencies assign BBVA a rating on the single A space, with stable outlook
4Q23 Fixed Income 34 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 (
Slide 35: Annex
Annex 01 BBVA 4Q23 Profit & Loss 07 Capital Base: BBVA Group & BBVA S.A. 02 NII sensitivity to interest rate 08 CET1 Sensitivity to market impacts movements 03 ALCO Portfolio 09 Group RWA breakdown 04 Customer spreads: YtD 10 Debt Issuances 2023-2024 YTD evolution 11 Called notes 2018-2024 YTD 05 Sta
Slide 36: 4Q23 Profit & Loss
4Q23 Fixed Income 36 4Q23 Profit & Loss Change Change 4Q23/4Q22 4Q23/3Q23 BBVA Group (€M) 4Q23 % constant % % constant % Net Interest Income 5,246 19 -2 0 -18 Net Fees and Commissions 1,694 36 28 11 1 Net Trading Income 753 231 180 45 14 Other Income & Expenses -255 -40 -42 -71 -69 Gross Income 7,438
Slide 37: NII sensitivity to interest rates movements
4Q23 Fixed Income 37 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, %) +c.5 % +2.3% EURO BALANCE MEXICO(2) (+1.6% for MXN SHEET BALANCE SHEET) (1) NII sensitivities to parallel int
Slide 38: ALCO Portfolio
4Q23 Fixed Income 38 ALCO Portfolio ALCO PORTFOLIO BREAKDOWN BY REGION (€ BN) Amort Cost Fair Value (HTC) (HTC&S) (duration Dec-23 (€BN) (€BN) incl. hedges) South America 0.2 4.5 1.5 years Turkey 6.2 2.3 3.7 years Mexico 6.7 11.5 2.5 years Euro 26.0 12.7 2.4 years (1) Spain 20.0 6.0 Italy 3.2 4.1 Re
Slide 39: Customer spreads: YtD evolution
4Q23 Fixed Income 39 Customer spreads: YtD evolution AVERAGE 12M22 12M23 12M22 12M23 Spain 1.87% 3.15% Turkey TL 7.19% 0.90% Yield on Loans 1.95% 3.77% Yield on Loans 19.08% 21.05% Cost of Deposits -0.08% -0.61% Cost of Deposits -11.89% -20.15% 1 Mexico MXN 11.79% 12.60% Turkey FC 6.21% 9.01% Yield
Slide 40: Stages breakdown by business areas
4Q23 Fixed Income 40 Stages breakdown by business areas CREDIT RISK BUSINESS BREAKDOWN BY AREA (DEC-23, € M) Gross Accumulated Gross Accumulated Gross Accumulated BBVA GROUP Exposure impairments SPAIN Exposure impairments MEXICO Exposure impairments Stage 1 392,528 2,142 Stage 1 168,863 471 Stage 1
Slide 41: Exposure to Covid-related loans backed by State guarantees and Commercial Real Estate
4Q23 Fixed Income 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 DEC-23) (GROUP’s CRE EAD, %, AS OF DEC-23) 8.7 Bn€1 0.4 Bn€ c.10 Bn€ 2 of which of which 65% Retail 56% Retai
Slide 42: Capital Base BBVA Group & BBVA, S.A.
4Q23 Fixed Income 42 Capital Base BBVA Group & BBVA, S.A. CAPITAL RATIOS DEC-23 (%) 17.38 16.58 T2 AT1 CET1 BBVA Group BBVA, S.A. CET 1 € 46,104 m € 26,512 m AT1 € 6,033 m € 5,715 m T2 € 8,182 m € 5,461 m Total Capital Base € 60,320 m € 37,688 m RWA € 363,916 m € 216,890 m Note: Preliminary Data Wit
Slide 43: CET1 Sensitivity to market impacts
4Q23 Fixed Income 43 CET1 Sensitivity to market impacts1 TO A 10% CURRENCY DEPRECIATION 2 TO A 10% DECLINE IN TELEFONICA’S (DEC-23) SHARE PRICE (DEC-23) MXN -9bps -2 bps TRY -4bps TO +100 BPS MOVEMENT IN THE SPANISH SOVEREIGN BOND (DEC-23) USD +17bps -10 bps (1) CET1 sensitivity considering the FL c
Slide 44: Group RWA breakdown
4Q23 Fixed Income 44 Group RWA breakdown TOTAL RWA BREAKDOWN PHASED-IN 51% IRB Models ▰ Optimizing Capital Allocation is part of BBVA’S Strategic Priorities 0.4% CVA ▰ Limited usage of internal 0.9% FX Risk 88.1% Credit Risk models in Credit Risk RWAs, mitigating potential impacts 3.4% Trading Act R
Slide 45: Debt Issuances 2023 - 2024 YTD
4Q23 Fixed Income 45 Debt Issuances 2023 - 2024 YTD BBVA, S.A. PRODUCT ISSUE DATE CALL DATE MATURITY NOMINAL CURRENCY COUPON T2 Jan-24 Feb-31 Feb-36 € 1,250 M 4,875% SP Jan-24 - Jan-34 € 1,250 M 3.875% 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-2
Slide 46: Called notes 2018 - 2024 YTD
4Q23 Fixed Income 46 Called notes 2018 - 2024 YTD BBVA follows an economic OUTSTANDING call policy PRODUCT ISSUE DATE REDEMPTION COUPON CURRENCY (M) BBVA, S.A. T2 Feb-19 Feb-241 € 750 2.575% 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 A
Slide 47: Main Subsidiaries ratings
4Q23 Fixed Income 47 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
Slide 48: Book Value of the main subsidiaries
4Q23 Fixed Income 48 Book Value of the main subsidiaries1,2 € BN; DEC-23 Mexico 21.3 Turkey 6.7 Colombia 1.8 Peru 1.4 Argentina 1.1 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
Slide 49: BBVA
BBVA
Banco Bilbao Vizcaya Argentaria, S.A. (BBVA) — Debt Investor Presentation (February 2024) on 6ix