Banco Bilbao Vizcaya Argentaria, S.a. · BME:BBVA
Banco Bilbao Vizcaya Argentaria — 2Q20 Earnings Presentation
67 slides from Banco Bilbao Vizcaya Argentaria's earnings presentation, Apr 30, 2020
Slide 1: Creating Opportunities: 2020 Results
Creating Opportunities 2020 Results July 30%, 2020
Slide 2: Disclaimer
2Q20 Results July 30"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 decision to
Slide 3: Our priorities remain unchanged in response to the COVID-19 crisis
2020 Results AE July 302020 Our priorities remain unchanged in response to the COVID-19 crisis Protect the health Wy and safety of our employees, clients and the community Continue to provide | OPEN | an essential service to the economies where we operate Offer financial support to our clients Bank
Slide 4: Our digital capabilities led to a competitive advantage
2Q20 Results Ay July 302020 Our digital capabilities led to a competitive advantage in this context Differential capabilities key to successfully serve our clients through digital and remote channels Ability and agility to deliver valuable tools and functionalities in the current environment INTERAC
Slide 5: Resilient Pre-Provision Profit and strong capital generation
2Q20 Results JE July 302020 Resilient Pre-Provision Profit and strong capital generation in a challenging environment / NET ATTRIBUTABLE PROFIT = / CET1 FULLY LOADED 7 OPERATING INCOME (€M CURRENT) (%) (€M CURRENT) +17.6% i: +0.7% | ncn oe -49.5% — +38 "] 2,945 2,967 11.22% | | lj 10.84% | 2019 2020
Slide 6: Top messages of the quarter
Top messages of the quarter Proven resilience in Pre-Provision Profit Very strong cost control and efficiency Risk indicators improving and within expectations Strong evolution of capital ratios OPERATING INCOME (€ constant) +17.6% vs.2019 OPERATING EXPENSES (€ constant) -4,9% vs.2019 COST OF RISK (
Slide 7: 2Q20 Profit & Loss
2Q20 Profit & Loss BBVA Group Change 2Q20/2Q19 2Q20 Results July 302020 Net Interest Income Net Fees and Commissions Net Trading Income Other Income & Expenses Gross Income Operating Expenses Operating Income Impairment on Financial Assets Provisions and Other Gains and Losses Income Before Tax Inco
Slide 8: 1H20 Profit & Loss
1H20 Profit & Loss Change 1H20/1H19 2Q20 Results July 302020 BBVA Group Net Interest Income 8,653 Net Fees and Commissions 2,301 Net Trading Income 1,107 Other Income & Expenses -16 Gross Income 12,045 Operating Expenses -5512 Operating Income 6,533 Impairment on Financial Assets -4,146 Provisions a
Slide 9: Robust gross income growth
Robust gross income growth / NET INTEREST INCOME (€M CONSTANT) [ + 2.0% | 4,268 4446 4358 4,295 Gove 4,211 performance despite rates and retail activity decline 2Q19 3Q19) 4Q19 1020 = 2Q20 / NET TRADING INCOME (€M CONSTANT) _— + 419.7% ——7 NTI performance A475 581 526 _ positively 363 impacted by po
Slide 10: Very disciplined cost management and leading efficiency indicators
2Q20 Results Ay July 302020 Very disciplined cost management and leading efficiency indicators / OPERATING EXPENSES / GROUP OPERATING JAWS / EFFICIENCY RATIO (€M CONSTANT) (6M20 YoY (%); € CONSTANT) (%;€ CONSTANT) -389 bps -4.9% 64.5% 2971 50.5% 2,815 2,857 2,834 2678 INFLATION 49.7% ‘ 4.7% 3.2% Ave
Slide 11: Risk indicators improving and within expectations
27s A Risk indicators improving and within expectations / FINANCIAL ASSETS IMPAIRMENTS / NPLs (€M CONSTANT) (€BN) 2,481 - €0.3 bn | 1,665 Provision 7 16. 17.1 16.7 2019 3Q19 4Q19 1920 2020 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 / COST OF RISK / NPL & COVERAGE RATIOS (%, QUARTERLY) (%) 2.57% 86% 85% 75%
Slide 12: Extraordinary provisioning based on revised growth estimates
2050 Ma Extraordinary provisioning based on revised growth estimates Macro scenarios by region LINES REPRESENT GDP LEVELS ACCORDING TO CURRENT AND PREVIOUS RANGE FORECASTS —RangeApr.20 = Range Jul.20 (2019=100); NUMBERS REPRESENT GDP ANNUAL GROWTH ® / GLOBAL a / EUROZONE @= / USA a : =3.1 -11.0 2019
Slide 13: Impairments breakdown by business area
20500 Me Impairments breakdown by business area / IMPAIRMENTS BREAKDOWN / COST OF RISK BREAKDOWN (€M CONSTANT, 2Q20) (%, CURRENT ANNUALIZED, 1H20) RECURRENT COVID-19 TOTAL RECURRENT TOTAL Impairments — Impairments” Impairments Impairments — Impairments 2019 TZ SSpain 159 64 223 0.35% 1.00% 0.18% @ U
Slide 14: Strong evolution of capital ratios
oe Al Strong evolution of capital ratios / CET1 FULLY-LOADED QUARTERLY EVOLUTION (%, bps) +263 bps aboveminimum | +38 bps requirement 11.22% 10.84% 17 bps 6 bps 14 bps 3 bps _ _ — | -2 bps | Mar-20 Net Earnings ATI RWAs FX and HTC&S Others” Jun-20 coupons (€constant) © Includes CRR new supporting fa
Slide 15: Business Areas
BBVA Business Areas
Slide 16: Spain
= | Spain Profit & Loss Net Interest Income Net Fees and Commissions Net Trading Incame Other Incame & Fxpenses Gross Income Operating Fxpenses Operating Income Impairment on Financial Assets Provisions & other gains (losses) Income Before Tax Income Tax Net Attributable Profit / KEY RATIOS CUSTOMER
Slide 17: USA
2Q20 Results A July 302020 / ACTIVITY (JuN-20) (CONSTANT €) YtD Net Interest Income YoY €Bn Yor Net Fees and Commissions €Bn 75.7 +17.9% Net Trading Income 69.2 +12.7% Other Income & Expenses Gross Income Operating Expenses Operating Income Impairment on Financial Assets Mortgages 14.0 -15% Consumer
Slide 18: Mexico
i-} | Mexico Net Interest Income Net Fees and Commissions Net Trading Income Other Income & Expenses Gross Income Operating Expenses Operating Income Impairment on Financial Assets Provisions & other gains (losses) Income Before Tax Income Tax Net Attributable Profit / KEY RATIOS CUSTOMER SPREAD (%)
Slide 19: Turkey
Coverage NPL ratio COR (vtD) Net Interest Income 762 1,534 27.6 Net Fees and Commissions 109 264 175 Net Trading Income 64 127 ns, Other Income & Expenses "1 32 21.6 Gross Income 945 1,957 31.3 Operating Expenses -270 . -562 6.6 Operating Income 675 42.0 1,394 44.8 Impairment on Financial Assets -23
Slide 20: South America
» | South America Net Attributable Profit Colombiz Peru Argentina Other* South America (1) Venezuela in currentm. (2) Other includes BBVA Forum, Venezuela, Paraguay, Uruguay and Bolivia, / KEY RATIOS CUSTOMER SPREAD (%) Constant! 7 1H20__vs 2920 _v 1H20 40 48 58.2 3 95.1 32 “66.7 39 ns 43 ns. 13 b/d
Slide 21: Final Remarks
BBVA Final Remarks
Slide 22: Final Remarks
Final Remarks Resilient Operating Income, proving a successful crisis management and our differential digital capabilities. eT aT at Very strong cost control and efficiency improvement. cEKAAAAY Significant improvement in indicators for the quarter, following the frontloading provisions in 1Q20. Sol
Slide 23: Appendix
BBVA Creating Opportunities Appendix O01 Net Attributable Profit evolution 02 Gross Income breakdown 03 P&L Accounts by business unit 04 Customer Spread by country 05 Newretail production breakdown 06 Outstanding loan commitments to non-financial corporations O07 Stages breakdown by business areas 0
Slide 24: Net Attributable Profit evolution
O1 Net Attributable Profit evolution Creating Opportunities
Slide 25: Net Attributable Profit evolution
2020 Results (oy Net Attributable Profit evolution / €M BUSINESSES -1,553€m 2,442 a 246 | -646 | A 285 278 | 16 7 928 7 7 . | 512 “143 6M19 FX Spain USA Mexico Turkey Restof | SouthAmerica Corp. Center 6M20 Effect Eurasia Yov (%) 881 -916 439 63 19.6 47.3 (constant €) Note: excluding BBVA USA 1920 g
Slide 26: Gross Income breakdown
Q2 Gross Income breakdown Creating Opportunities
Slide 27: Gross Income breakdown
Gross Income breakdown / 6M20 Spain 2,900 €m Rest of Eurasia 268 €m 24% oo USA South A 13% 1,607 €m outh America 9, 1,664€m @ 1°” 16% # Turkey 1,957 €m 30% Mexico 3,550 €m Note: Figures exclude Corporate Center. 2Q20 Results July 302020
Slide 28: P&L Accounts by business unit
QOS P&L Accounts by business unit Rest of Eurasia Corporate Center Colombia Peru Creating Opportunities
Slide 29: Rest of Eurasia — Profit & Loss
Rest of Eurasia — Profit & Loss Profit & Loss 2Q20 Results July 302020 Net Interest Income Net Fees and Commissions Net Trading Income Other Income & Expenses Gross Income Operating Expenses Operating Income Impairment on Financial Assets Provisions & other gains (losses) Income Before Tax Income Ta
Slide 30: Corporate Center — Profit & Loss
Corporate Center — Profit & Loss Profit & Loss A (%) A(%) 2920 vs 2Q19 1H20 vs IH19 Net Interest Income -28 -54.2 -69 -47.3 Net Fees and Commissions -26 -9.2 =315 -20.9 Net Trading Income 5 -108.1 185 ns. Other Income & Expenses 36 31.7 18 32.5 Gross Income “12 -90.3 98 ns. Operating Expenses -197 -
Slide 31: Colombia — Profit & Loss
2020 Results JE Colombia — Profit & Loss Profit & Loss A (%) A(%) 2Q20 vs 2Q19 1H20 vs 1H19 Net Interest Income 202 9.2 403 8.8 Net Fees and Commissions 12 -40.4 29 -27.5 Net Trading Income 25 55.9 30 -12.0 Other Income & Expenses -2 ns. -3 ns. Gross Income 237 6.3 459 1.2 Operating Expenses -76 -2.
Slide 32: Peru — Profit & Loss
Peru — Profit & Loss Profit & Loss 2Q20 Net Interest Income 204 Net Fees and Commissions 46 Net Trading Income 36 Other Income & Expenses 8 Gross Income 278 Operating Expenses -107 Operating Income 170 Impairment on Financial Assets -140 Provisions & other gains (losses) -23 Income Before Tax 8 Inco
Slide 33: Customer spread by country
04 Customer spread country Creating Opportunities
Slide 34: Customer spreads: quarterly evolution
a as A Customer spreads: quarterly evolution / AVERAGE 2Q19 3Q19 + 4Q19 1920 2920 2919 3Q19 4Q19 1920 2920 Spain 1.99% 2.00% 1.99% 196% 192% Turkey TL 2.72% 410% 7.12% 7.46% 7.30% Yield on Loans 2.06% 2.05% 7.02% 1.99% 1.93% Yield on Loans 19.09% 18.56% 16.46% 14.58% 13.22% Cost of Deposits 0.06% —
Slide 35: Customer spreads: YTD evolution
2020 Res July 30"202 Customer spreads: YTD evolution / YTD AVERAGE Spain 1.98% 1.94% Turkey TL 2.61% 7.37% Yield on Loans 2.05% 1.96% Yield on Loans 19.05% 13.87% Cost of Deposits -0.07% -0.02% Cost of Deposits -16.44% -6.50% USA 4.13% 3.65% Turkey FC! 5.07% 5.10% Yield on Loans 5.04% 4.27% Yield on
Slide 36: New retail production breakdown
Q5 New retail productio breakdown Creating Opportunities
Slide 37: New retail production breakdown
2 as A New retail production breakdown (BASE 100; FEB-2020) @ MORTGAGES @ CONSUMER T[ SPAIN Bs} MEXICO & USA 00% 25% 300% su 100% 200% 75% 200% 50% 100% 25% 25% 0% 0% 0% Feb-20 Mar-20 Apr-20 May-20. Jun-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 fay TURKEY By PERU me CO
Slide 38: Outstanding loan commitments to non-financial corporations
OQ6 Outstanding loan commitments to non-financial corporations Creating Opportunities
Slide 39: Loan commitments by region
€ bn USA1 25.9 Spain 19.9 Eurasia 16.6 Turkey 2.4 South America 2.2 Mexico 2.1 Total Group 69.2
Slide 40: Stages breakdown by business areas
Q/ Stages breakdown by business areas Creating Opportunities
Slide 41: Stages breakdown by business area
Stages breakdown by business area / CREDIT RISK BREAKDOWN BY BUSINESS AREA (JUN-20,€M) BBVA GROUP. Stage | 391,486 2,591 Stage 2 38,752 2,857 Stage 3 16,385 8,549 Bs Mexico Stage1 47,618 762 Stage 2 4,959 461 Stage 3 1,194 752 ‘ah COLOMBIA Stage 11,148 126 Stage 2 1,120 183 Stage 3 688 446 Stage | 1
Slide 42: EAD to most vulnerable sectors in the current environment
08 EAD to most vulnerable sectors In the current environment Creating Opportunities
Slide 43: Exposure at default to most vulnerable sectors
Exposure at default to most vulnerable sectors in the current environment / BREAKDOWN BY SECTORS (JUN-20) Leisure’ 11.61 Developer Real Estate 6.38 Retailers non food 5.78 Upstream & Oilfield services” ° 4.96 Air & Marine transportation 2.45 Total EAD to the most vulnerable sectors 31.19 (1) Include
Slide 44: Loan Deferrals & Government backed loans
O9 Loan Deferrals & Government backed loans Creating Opportunities
Slide 45: Deferrals breakdown
2Q20 Result July 302021 Deferrals breakdown (data in € billion) GROUP BBVA SA‘ MEXICO TURKEY *~’ ARGENTINA COLOMBIA Mortgages 8.9% 18 2.3% 3.5 33.4% 15 13.8% 04 16.2% 0.0 37.1% 1 43.2% 10 31.4% Rest of Households 87 12.5% O07 29% 3.1 23.5% 0.6 5.8% 14 14.9% 04 27.9% 4 2/.2% 1.0 35.4% Corporates and
Slide 46: Outstanding loan deferrals
Outstanding loan deferrals 2Q20 Results #7 July 302020 / MATURITY PROFILE OF OUTSTANDING LOAN DEFERRALS: BREAKDOWN BY PRODUCT Outstanding amount (€ bn) Mortgages RestotHouscholds a ees Corporates and SMEs Others [J m<3months m3-6months m>6months Note: Residual maturity as of June 30th, Note: data br
Slide 47: Government backed loans
2Q20 Results #7 July 302020 Government backed loans (data in € billion) BBVA SA © MEXICO TURKEY “ ARGENTINA COLOMBIA Households 09 0.5% 0.6 0.6% 0.0 0.0% 0.0 0.0% 00 0.0% o1 5.6% 0.0 0.1% 02 2.8% Corporates and SMEs 12.8 6.9% 7.6 87% 0.0 0.0% 28 8.7% 09 3.3% 0.0 1.5% 01 3.0% 15 14.7% Other 01 0.1% 0
Slide 48: ALCO Portfolio, NII Sensitivity and LCRs & NSFRs
10 ALCO Portfolio, NIl Sensitivity and LCRs & NSFRs Creating Opportunities
Slide 49: ALCO portfolio
a as Aa ALCO portfolio / ALCO PORTFOLIO BREAKDOWN BY REGION (€ BN) Amort Cost Fair Value 50.8 543 55.2. ‘Cost Fal Valu South America mm 3.0 i ae | 7 June 2020 (€BN) (€BN) — (duration) Mexico Mf 5.0 79 80 South America 0.1 3.7 1.Oyears Turkey Bs a” ; S Mexico 2.3 4.8 1.9years 12.4 | Turkey 4.2 3.8 3.
Slide 50: NII sensitivity to interest rates movements
a as Al 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 -IOOBPS 15% 0% 10% 5% = = 5% o 10% 0% -15% Euro USA Mexico Euro USA Mexico Note: NIl sensitivities calculated usi
Slide 51: Liquidity and funding ratios
eC as Al Liquidity and funding ratios / BBVA GROUP AND SUBSIDIARIES LCR & NSFR RATIOS (JUN-2020) BBVA GROUP Euro USA Mexico Turkey S. America LCR 159% (191%!) 198% 144% 2 169% 142% All countries >100% NSFR 124% 118% 120% 132% 144% All countries >100% de the Eurozone. If these liquid assets are consi
Slide 52: CET1 sensitivity to market impacts
1] CET1 sensitivity to market impacts Creating Opportunities
Slide 53: CET1 Sensitivity to Market impacts
205 Mae CET1 Sensitivity to Market impacts! / TOA10% DECLINE IN THE PRICE OF TELEFONICA SHARE PRICE (JUN-20) / TOA 10% CURRENCY DEPRECIATION — - 2 Obps MXN -3bps TRY -3bps / TO +100 BPS MOVEMENT IN THE PANISH SOVEREIGN BOND USD +Qbps SPANIS so GN BO - 13bps (1) CET1 sensitivity considering the FL ca
Slide 54: CET1 YTD & RWAs by business area
12 CETI1YTD& RWAs by business area CET1YTD RWAs by Business Area Creating Opportunities
Slide 55: Capital YTD Evolution
Capital YTD Evolution / CET1 FULLY-LOADED —- BBVA GROUP YTD EVOLUTION (%, BPS) 11.74% nal . ‘0 — = -6 bps Dec-19 Net Earnings ATI coupons (Includes CRR new supporting factor on SMEs and infrastructures. )Includes, among others, minority interests. 2Q20 Results (EE July 302020 -52 bps -45 bps = -33 b
Slide 56: Risk-Weighted Assets by business areas
2Q20 Results a July 302020 Risk-Weighted Assets by business areas Fully-Loaded RWAs Breakdown by business area (€m) -2 M 20 Jun-19 Spain 109,625 110,929 107,274 USA 66,889 68,765 62,383 Turkey 57,190 59,163 57,551 Mexico 54,947 53,522 55,919 South America 44,015 44,876 43,995 Argentina 6,354 6,910 6
Slide 57: Book Value of the main subsidiaries
13 Book Value of the main subsidiaries Creating Opportunities
Slide 58: Book Value of the main subsidiaries
2020 Results oy Book Value of the main subsidiaries'-2 € BN, JUN-20 Mexico 4 WAEERETITTTITTTTITETTTTTTETTLTTETETELLLELELE USA 8.1 CELE, Tukey 3.9 Colombia 1.2 [7 Peru 1.1 Argentina 0.9 Hill Chile O.3 8 Venezuela 0,1 | (1) Includes the initial investment + BBVA’s undistributed results + FX impact + o
Slide 59: TBV per share and dividends evolution
14 TBV per share and dividends evolution Creating Opportunities
Slide 60: Shareholders' return: TBV per share and dividends
Shareholders’ return: TBV per share and dividends / TBV PER SHARE & DIVIDENDS (€ PER SHARE) too +0. 5% dl 6.35 6.37 6.04 0.10 0.26 0.26 TM owipenns TBV/SHARE 5.87 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 2Q20 Results July 302020
Slide 61: Garanti BBVA: wholesale funding
15 Garanti BBVA: wholesale funding Creating Opportunities
Slide 62: Turkey — Liquidity & funding sources
2Q20 Results (7m July 302020 Turkey — Liquidity & funding sources a Solid liquidity position: * Total LTD ratio is at 102%, increasing by 7.2 pp in 2Q20, mainly driven by increase in TRY Currency LTD. * Foreigncurrency loans decreased by USD 0.3 Bn toc. USD 13.3 Bn in 2Q20. « Liquidity ratios above
Slide 63: Argentina: hyperinflation adjustment
16 Argentina: hyperinflation adjustment Creating Opportunities
Slide 64: Argentina hyperinflation adjustment
Argentina hyperinflation adjustment Profit & Loss 1H20 Hyperinflation (reported) adjustment Net Interest Income 442 24 Net Fees and Commissions 66 2 Net Trading Income 49 3 Other Income & Expenses -150 -114 Gross Income 406 -86 Operating Expenses -216 -22 Operating Income 190 -108 Impairment on Fina
Slide 65: Digital sales breakdown
17 Digital sales breakdown Creating Opportunities
Slide 66: Outstanding trend in digital sales
Outstanding trend in digital sales (% OF TOTAL SALES YTD, # OF TRANSACTIONS AND PRV') GROUP 63.2 57.0 8 UNITS ee a PRV aaa 30.1 Jun-18 Jun-19 Jun-20 Bl MEXICO 61.2 54.2 40.8 50.6 42.5 26.5 Jun-18 Jun-19 Jun-20 Group and South America figur (1) Product Relative Val lude Venezuela, Chile and Paraguay
Slide 67: BBVA
BBVA
Banco Bilbao Vizcaya Argentaria — 2Q20 Earnings Presentation on 6ix