Banco Bilbao Vizcaya Argentaria, S.a. · BME:BBVA
Banco Bilbao Vizcaya Argentaria — Debt Investor Presentation (April 2020)
49 slides from Banco Bilbao Vizcaya Argentaria's debt investor presentation, Apr 1, 2020
Slide 1: Fixed Income Presentation 4Q19
Creating Opportunities Fixed Income Presentation 4Q19 &
Slide 2: Disclaimer
Fixed Income Presentation 4019 Ail Disclaimer This document is only provided for information purposes and does not constitute, nor shouldit 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 dec
Slide 3: Index
BBVA Creating Opportunities Index 01 About BBVA & Financial Highlights 02 BBVA’s Strengths Diversified Footprint Sound Asset Quality Solid Capital Position Strong Liquidity & Funding Structure Leading Transformation Strategy Annex 03 Funding Plan 04 Ratings
Slide 4: About BBVA & Financial Highlights
Creating Opportunities OQ] About BBVA & Financial Highlights
Slide 5: About BBVA
About BBVA BBVA'S GLOBAL PRESENCE bec.19 € 699 bn 78.1-mn assets customers 32.1 mn digital customers 30 126,973 7,744 countries employees branches DEFINED STRATEGIC PATH Strategic Priorities © New standard in Optimal capital ‘1 customer - allocation Our Purpose “To bring the age experience of opport
Slide 6: 2019 Highlights
2019 Highlights O01 Robust core revenue growth 02 Further improvement in best-in- class efficiency 03 Sound risk indicators 04 Strong capital position 05 Outstanding delivery on shareholder value creation O06 Ahead of the curve in digital transformation Note: For a better understanding of the financ
Slide 7: BBVA's Strengths
Creating Opportunities Q2 BBVA’s Strengths
Slide 8: BBVA's Strengths leading to superior earnings and profitability
Fixed Income Presentation 4019 AES BBVA’s Strengths leading to superior earnings and profitability a Diversified footprint a Strong liquidity & funding structure a Sound asset quality a Leading transformation strategy a Solid capital position RESILIENCE AND LOW EARNINGS VOLATILITY HIGH PROFITABILITY
Slide 9: Diversified Footprint
iting Opportunities Diversified Footprint
Slide 10: BBVA Footprint
EZ+UK BBVA Footprint Colombia #4 Peru #2 Argentina #3 10.3% 20.4% 8.1%
Slide 11: Spain / US segment performance
growth in most profitable retail segments. positive performance of commercial activity more than offset by lower ALCO contribution and IFRS16 impact. Significant recovery in 4Q19, thanks to CIB and asset management fees. continue to go down. CoR in line with expectations.
Slide 12: Mexico segment performance
at low single digit, driven by the commercial portfolio. +3.7% YoY, and mix improvement. Flat in line with expectations. QoQ decrease explained by lower rates. with flat operating expenses in 2019. CoR within the 80-90bps guidance.
Slide 13: Turkey / South America performance
in a lower GDP growth context. the main P&L driver, supported by loan growth. (+7% excl. FX), driven by retail. Gaining share in consumer loans (+212 bps YoY) and mortgages (+26 bps YoY). growth accelerated in 4Q thanks to CIB. maintained, despite best in class efficiency. at 301bps, in line with ex
Slide 14: Turkey segment performance
13.3 11.7 6.6 10.1 12.4 12.9 4.6 to 10% YoY. FC loans continue to shrink, in line with expectations. (+302 bps QoQ) due to lower deposit costs. flat in 2019, despite the lower contribution from CPI- linkers (-469 €m vs. 2018). (15.5%). 207 bps, significantly below 250 bps.
Slide 15: South America and Rest of Eurasia performance
Bottom line growth >25%, supported by activity, positive jaws and lower impairments. high-single digit growth in revenues more than offsetting the increase in provisions, due to releases in 2018. positive contribution thanks to NII growth (due to securities portfolios) and NTI (Prisma).
Slide 16: Sound Asset Quality
iting Opportunities Sound Asset Quality
Slide 17: Sound Risk Indicators
Fixed Income Presentation 4019 ANA Sound Risk Indicators NPL Ratio 51 08 58 (%) 43 41 40 © 5449 46 soe Risk Framework 8 A Risk Management Model based on prudence and proactivity . 92 4 a tage ratio 57 62 61 72 60 64 74 49 65 7327 0 Risk Management Goal To preserve the Group’s solvency, Cost of Risk
Slide 18: Solid Capital Position
iting Opportunities Solid Capital Position
Slide 19: Solid capital position and ability to generate capital
tion 4019 AE BBVA Group: Solid capital position and ability to generate capital FL CAPITAL RATIOS CET1FL Fixed Income Present DEC.19 (%) YTD EVOLUTION (%, bps) +40 bps 15.42% +136 bps P: V Tier 2 2.06% | AT] 1.62% 1 11.74% ° 11.34% -59bps a = +5 bps +ipbps - 34 bps -25 bps CET1 11.74% 7 Dec-18 Net D
Slide 20: Low earnings volatility and ability to generate capital
Fixed Income Presentation 4Q19 y 20 Low earnings volatility and ability to generate capital allow for lower capital needs PRE-PROVISION PROFIT® / NET LOANS BBVA 12M19 / EUROPEAN PEERS 9M19 PRE-PROVISION PROFIT / RWAS BBVA 12M19 / EUROPEAN PEERS 9M19 BBVA 3.3% Peer 1 44% Peer 1 2.9% Peer 2 4.3% ch, N
Slide 21: European peers comparison
EUROPEAN PEERS SEP.19 EUROPEAN PEERS SEP.19
Slide 22: Risk-Weighted Asset Distribution
Risk-Weighted Asset Distribution TOTAL RWAS FULLY- LOADED DEC.19 364,943 €Mn 29% m™ Spain 104,925 m USA 65,170 m™ Mexico 59,299 m Turkey 56,642 m South America 45,674 m@ Rest of Eurasia 17,975 ™ Corporate Center 15,259 it Valuation Adjustment. 34% IRB Models CVAM 0.5% FX Risk 1.0% Trading Act. Risk
Slide 23: 2020 SREP Requirement
T2: 2.0% 0.02% AT1: 1.5% 0.75% 2.50% 1.50% 4.50% 2020 CET1 SREP 2020 Total Capital Requirement SREP Requirement BBVA Group Total capital ratio phased-in Dec.19
Slide 24: Lowest SREP requirement among peers
Fixed Income Presentation 4019 42M Lowest SREP requirement among peers CET1 SREP REQUIREMENT - FL DISTANCE TO MDA VS FULLY-LOADED SREP REQUIREMENT (BASED ON 2020 REQUIREMENT) BBVA DEC.19 / EUROPEAN PEERS SEP.19 11.59% wo 108% 10.02% 9.92% 9,849 % 9.92% 9.84% 9.70% 9.70% 9 35% 9.27% 276 258 248 2a7 1
Slide 25: High level of Available Distributable Items (ADIs)
Fixed Income Presentation 4019 ail High level of Available Distributable Items (ADIs) BBVA, S.A. (PARENT COMPANY) DEC.19, € Bn a Significant €9.2Bn payment capacity from distributable items BBVA, S.A. despite conservative ADIs: calculation (Share Premium not included) a Supported by sustainable prof
Slide 26: FX Hedging policy
FX Hedging policy CAPITAL POLICY BBVA hedges c.70% of the excess capital (what is not naturally hedged by the ratio) GOAL ~—_ Reduce consolidated CET1 ratio volatility as a result of FX movements CET1 FL Ratio Sensitivity to a 10% depreciation of EM currencies (Dec.19) APPROX -4 bps MXN -2 bps TRY F
Slide 27: ALCO Portfolio Breakdown by Region
ALCO PORTFOLIO BREAKDOWN BY REGION (DEC.19) 1.4% (1) Figures excludes SAREB senior bonds (€4.6bn as of Dec-18, €4.6bn as of Sep-19 and €4.5bn as of Dec-19) and High Quality Liquid Assets portfolios (€3bn as of Dec-18, €11.7bn as of Sep-19 and €11.1bn as of Dec-19) .
Slide 28: Strong Liquidity & Funding Structure
Creating Opportunities Strong Liquidity & Funding Structure
Slide 29: Guidelines for managing Liquidity & Funding
Fixed Income Presentation 4Q19 (Zl BBVA guidelines for managing Liquidity & Funding a Self-sufficient subsidiaries from a liquidity point of view, with robust supervision and control by parent company a Retail profile of BBVA Group balance sheet with limited dependence on wholesale funding
Slide 30: Self-sufficient business model principles
Fixed Income Presentation 4019 RIO] Principles of BBVA Group's self-sufficient business model: Multiple Point of Entry ° Subsidiage@i™ oo oe ° Self-sufficient bala’ “8 management (om coraat Decentralized | ‘Market access with its credit, name and rating gr N) O d e | (Responsible for doing business
Slide 31: Financial and liquidity soundness
Financial and liquidity soundness BBVA GROUP LIQUIDITY BALANCE SHEET “ (DEC.19) | | = Deposits = Net Loans to Customers #ECB = Fixed Assets & = Funding M&L/T Others Bom ms% = Financial Assets | 12% m Equity & Others 29% 15% = Funding S/T mm 6% Assets Liabilities (1) Management liquidity balance shee
Slide 32: Leading Transformation Strategy
iting Opportunities Leading Transformation Strategy
Slide 33: Progress on digitization of clients
Fixed Income Presentation 4019 ARKIN Impressive progress on the digitization of our clients and value proposition DIGITAL CUSTOMERS MILLION, % YOY GROWTH MOBILE CUSTOMERS MILLION, % YOY GROWTH x2.1 Vv 2015 2016 2017 2018 2019 PENETRATION, ACUMM., % 328) 3m) >) s2n) 57>, x3.2 Vv 2015 2016 2017 2018 2
Slide 34: Funding Plan
Creating Opportunities Q3 Funding Plan
Slide 35: Keep optimizing total capital and funding structure
Fixed Income Presentation 4019 ARKIN Keep optimizing our total capital and funding structure BBVA, S.A. 2020 YTD 2020 Funding Plan €bn Issued (subject to market conditions) * The potential 1st call option of the 2016 € 1 Bn NC5 ATI -- Maintain both AT1 could be pre-financed buckets Tier 2 1 fulfille
Slide 36: Broaden geographical diversification of access to market
Fixed Income Presentation 4019 EI Broaden geographical diversification of access to market MEDIUM & LONG-TERM WHOLESALE FUNDING MATURITIES (DIC.19; € BN) 18.0 7.0 EURO 64 61 57 43.2 1: € 43260 | | | | Ability to access USA funding markets al € 3.1bn 02 10 O7 0.0 2 all our main 33 subsidiaries MEXICO
Slide 37: Ratings
Creating Opportunities O4 Ratings
Slide 38: BBVA, S.A. Ratings
Fixed Income Presentati BBVA, S.A. Ratings” BBVA LONG TERM BBVA RATINGS BY TYPE OF INSTRUMENT SENIOR UNSECURED RATINGS Moody's Fitch DBRS Investment grade Senior BBB (H) BBB BBB(L) Non BB (A) Investment BB Grade Note: CB = Covered Bonds, SNP = Senior Non Preferred (1) Arating is not a recommendation
Slide 39: Annex
BBVA Creating Opportunities Annex BBVA Group 2019 Profit & Loss Risk Indicators by business areas Book Value of the main subsidiaries Capital Base: BBVA Group & BBVA, S.A. BBVA, S.A. SREP Requirement and Distance to MDA Called notes — 2018/2020YTD Debt Issuances — 2018/2020YTD Main Subsidiaries Rati
Slide 40: BBVA Group 2019 Profit & Loss
Note: Figures Corporate Center
Slide 41: Risk Indicators by business areas
Risk Indicators by business areas NPLratio (%) BBVA Group Spain The United States Mexico Turkey Argentina Peru Colombia Rest of Eurasia (%) BBVA Group Spain The United States Mexico Turkey Argentina Peru Colombia Rest of Eurasia 1.01 0.08 0.87 2.98 1.99 449 150 1.66 0.05 3.8 44 ml 24 70 34 4] 5.3 1.
Slide 42: Book Value of the main subsidiaries
(1) Includes the initial investment + BBVA’s undistributed results + FX impact + other valuation adjustments. The Goodwill associate to each subsidiary has been deducted from its Book Value. (2) Turkey includes the Garanti Group.
Slide 43: Capital Base: BBVA Group & BBVA, S.A.
Capital Base: BBVA Group & BBVA, S.A. “) PHASED-IN CAPITAL RATIOS DEC.19 (%) BTier2 Bi Additional Tier 1 Mcem CET1 AT] T2 Total Capital Base RWA © Both BBVA Group & BBVA, S.A. ratios exclude the 20.81 Mm 1.75 15,92 HB 264 2.28 Mm 166 11.98 1.42 BBVA Group BBVA, S.A. € 43,653m € 33,589 m €6,048m €5,4
Slide 44: BBVA, S.A. SREP Requirement and Distance to MDA
T2: 2.0% 0.03% AT1: 1.5% 2.50% 1.50% 4.50% 2020 CET1 SREP 2020 Total Capital BBVA, S.A. Total Requirement SREP Requirement capital ratio phased-in Dec.19
Slide 45: Called notes 2018 - 2020YTD
Called notes — 2018 — 2020YTD Fixed Income Presentation 4019 ZBI BBVA follows Product Issue Date Redemption Outstanding Coupon an economic currency (M) : BBVA call policy Caixa d'Estalvis de Sabadell Tier 2 Jun-09 May-19 € 4.88 3ME + 5.25% Tier 2 Apr-14 Apr-19 € 1,500 3.50% AT1 Feb-14 Feb-19 € 1,500
Slide 46: Debt Issuances 2018 - 2020YTD
Debt Issuances 2018 — 2020YTD Product Issue Date Call Date ~—Maturity Nominal Coupon en Tier 2 Jan-20 Jan-25 Jan-30 € 1,000 M 1.000% SNP Jan-20 - Jan-27 €1.250M 0.500% sP Nov-19 - Nov-26 € 1.000 M 0.375% SNP Oct-19 - Oct-24 €1.000M 0.375% ATI Aug-19 Mar-25 Perp $ 1,000 M 6.500% 519 ‘SNP Jun-19 - Jun
Slide 47: Main Subsidiaries Ratings
Main Subsidiaries Ratings “ LONG TERM SENIOR UNSECURED RATINGS BBVA Mexico Investment grade Non Investment Grade BBVA USA Garanti BBVA BBVA Argentina AAA/Aaa AAA/Aaa AAA/Aaa AAA/Aaa AAt/Aal AA+/Aal AAt/Aal AA+/Aal AA/Aa2 AA/Aa2 AA/Aa2 AA/Aa2 AA-/Aa3 AA/Aa3 AA/Aa3 AA-/Aa3 A+/Al A+/Al A+/Al A+/Al A/AZ
Slide 48: Sovereign Exposure by geography
Sovereign Exposure by geography ’) DEC.19, € bn Spain Italy Portugal Mexico USA Turkey All Others a GE 6 Fixed Income Presentation 4019 iil Sovereign Trading Short Amortized Cost debt securities HTC 12.5 3.1 0.0 1.6 5.7 Al Fair Value debt securities HTC&S: 12.4 1.3 0.0 6.4 85 3.7 2.2 0.5 12.8 0.2 0.
Slide 49: Creating Opportunities
Creating Opportunities Fixed Income Presentation 4Q19 &
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