Banco Bilbao Vizcaya Argentaria, S.a. · BME:BBVA
Banco Bilbao Vizcaya Argentaria — BBVA — Debt Investor Presentation (May 2019)
51 slides from Banco Bilbao Vizcaya Argentaria's debt investor presentation, May 2019
Slide 1: Fixed Income Presentation 1Q19
Fixed Income Presentation 1Q19
Slide 2: Disclaimer
Fixed Income Presentation 1Q19 / 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 de
Slide 3: Index
Index 01 About BBVA 06 MREL & Funding Plan 02 BBVA’s Strengths & 06 Liquidity & Funding Financial Highlights 03 Diversified Footprint 07 Ratings 04 Asset Quality 08 Transformation Strategy 05 Capital Annex BBVA Group 1Q19 Profit & Loss Debt Issuances – 2017/2019YTD Risk Indicators by business areas
Slide 4: About BBVA
Creating Opportunities QO] About BBVA
Slide 5: About BBVA
Fixed Income Presentation 1Q19 5 About BBVA BBVA’S GLOBAL PRESENCE Mar.19 DIVERSIFICATION UNDER A DECENTRALIZED MODEL Total Assets(1) Gross Income(1) Mar.19 1Q 19 Developed € 691 bn 75.7 mn 28.4 mn Emerging Markets Markets 67% Emerging Markets Developed Markets assets customers digital customers 33%
Slide 6: BBVA's Strengths & Financial Highlights
02 BBVA’s Strengths & Financial Highlights
Slide 7: BBVA's strengths
Fixed Income Presentation 1Q19 7 BBVA’s strengths Resilience and Low Earnings Volatility (€ bn, current, %) 4.2% Pre-provision 3.7% 3.8% 3.7% (2) 3.2% 3.3% 3.0% 2.8% 3.0% 3.5% 3.5% 3.5% profit / RWAs Diversified footprint 12.3 12.8 10.5 11.9 10.6 11.1 11.4 11.9 12.0 Sound asset quality 10.2 10.4 Str
Slide 8: 1Q19 Highlights
Fixed Income Presentation 1Q19 8 1Q19 Highlights CORE REVENUE GROWTH EFFICIENCY IMPROVEMENT SOLID RESULTS Core Core Operating +8.0% revenues revenues Expenses Net 5.6 Group 1,290 +8.0% +3.7% 5.2 1,164 interest vs. Op. Net 1,001 income Expenses Attributable (€ constant) vs. 1Q18 vs. 1Q18 and fees Pro
Slide 9: Diversified Footprint
iting Opportunities Q3 Diversified Footprint
Slide 10: Unique footprint with high growth prospects
Fixed Income Presentation 1Q19 10 Unique footprint with high growth prospects Breakdown by Business Area Higher Growth Prospects GDP growth (YoY, %) Total Assets(1) Mar.19 South Rest of America Eurasia 2.3 8% 3% 1.6 Turkey 1.3 BBVA Footprint 10% 67% 1.1 Developed €691 bn Spain Markets Eurozone + UK
Slide 11: Spain
Fixed Income Presentation 1Q19 11 Spain Activity (Mar-19) YtD YtD +0.2% +0.0% Profit & Loss YoY €bn YoY Δ (%) Δ (%) €bn (€m) 1Q19 vs 1Q18 vs 4Q18 166.8 +1.8% 245.5 +4.3% Net Interest Income 882 -4.9 -4.5 Net Fees and Commissions 414 0.3 0.6 Net Trading Income 108 -35.2 -47.3 Mortgages 74.1 -3.0% Dem
Slide 12: USA Activity (Mar-19) Key Ratios
Fixed Income Presentation 1Q19 12 USA Activity (Mar-19) YtD YtD -0.9% +0.1% Profit & Loss Δ Constant Δ Current Δ Constant (constant €) YoY €bn YoY (€m) 1Q19 vs 1Q18 (%) vs 1Q18 (%) vs 4Q18 (%) €bn 65.2 Net Interest Income 615 8.4 17.4 0.0 61.4 YoY +1.5% +6.6% Net Fees and Commissions 151 -5.7 2.1 1.
Slide 13: Mexico Activity (Mar-19) Key Ratios
Fixed Income Presentation 1Q19 13 YtD YtD Mexico Activity (Mar-19) +0.1% +0.9% (constant €) Profit & Loss Δ Constant Δ Current Δ Constant €bn YoY €bn YoY (€m) 1Q19 vs 1Q18 (%) vs 1Q18 (%) vs 4Q18 (%) 53.0 +8.6% 72.1 +6.5% Net Interest Income 1,500 7.8 13.9 -0.8 Net Fees and Commissions 300 1.2 6.9 -
Slide 14: Turkey Activity (Mar-19) Key Ratios
Fixed Income Presentation 1Q19 14 Turkey Activity (Mar-19) (constant €, Bank only) Profit & Loss Δ Constant Δ Current Δ Constant (€m) 1Q19 vs 1Q18 (%) vs 1Q18 (%) vs 4Q18 (%) YoY1 YtD YoY1 Net Interest Income 695 20.2 -7.7 -26.2 -0.6% YtD FC -8.2% Net Fees and Commissions 194 25.8 -3.4 10.2 +7.9% Ne
Slide 15: South America Activity (Mar-19) Key Ratios
Fixed Income Presentation 1Q19 15 South America Activity (Mar-19) YtD YtD +1.3% +3.9% Net Attributable Profit Δ Constant Δ Current Δ Constant (constant €) (1) (€m) 1Q19 vs 1Q18 (%) vs 1Q18 (%) vs 4Q18 (%) (1) €bn YoY2 €bn YoY2 -0.5% +7.5% +12.2% Colombia 58 -5.0 -6.4 21.2 35.4 49.8 Peru 43 15.1 21.3
Slide 16: Asset Quality
Creating Opportunities O4 Asset Quality
Slide 17: Sound Risk Indicators
Fixed Income Presentation 1Q19 17 Sound Risk Indicators NPL Ratio 5.1 6.8 5.8 5.4 Risk Framework 4.3 4.1 4.0 4.9 (%) 2.3 4.6 3.9 3.9 A Risk Management Model based on prudence and proactivity 92 Coverage ratio 62 72 64 74 70 73 74 57 61 60 65 (%) Risk Management Goal To preserve the Group’s solvency,
Slide 18: Capital
Creating Opportunities Q5 Capital
Slide 19: Group's sound capital position and ability to generate capital
Fixed Income Presentation 1Q19 19 Group’s sound capital position and ability to generate capital FL Capital Ratios CET1 FL Mar.19 (%)(1) YtD Evolution (%, bps) +1 bps 15.38% +12 bps Tier 2 2.23% 33 bps 11.34% 11.23% 11.35% AT 1 1.81% -6 bps -11 bps -15 bps CET 1 11.35% Dec-18 IFRS16 Dec.18 Net Divid
Slide 20: Low earnings volatility and ability to generate capital allow for lower capital needs
Fixed Income Presentation 1Q19 20 Low earnings volatility and ability to generate capital allow for lower capital needs Pre-provision profit / Net Loans Pre-provision profit / RWAs 12M18 European peers / 3M19 BBVA 12M18 European peers / 3M19 BBVA (1) BBVA 3.3% Peer 1 4.4% Peer 1 2.9% Peer 2 4.3% In
Slide 21: High quality capital
Fixed Income Presentation 1Q19 21 High quality capital RWAs/ Total Assets Fully-Loaded Leverage Ratio Dec.18 European peers / Mar.19 BBVA, % Dec.18 European peers / Mar.19 BBVA, % BBVA 52 #1 BBVA 6.4 #1 Peer 1 45 Peer 1 6.3 Peer 2 41 Peer 2 5.6 Peer 3 39 Peer 3 5.5 Peer 4 37 Peer 4 5.4 Peer 5 35 Pee
Slide 22: Risk-Weighted Assets distribution
Fixed Income Presentation 1Q19 22 Risk-Weighted Assets distribution TOTAL RWAs Fully Loaded Mar.19 (€Mn) 361,173 €Mn Optimizing Capital 30% 33% IRB Models Allocation is one of 4% CVA (1) 0.4% BBVA’s Strategic 4% FX Risk 0.6% Priorities Trading Act. Risk 3.2% 18% 13% Operational Risk 10.5% Credit Ris
Slide 23: Capital ratios well above requirements
Fixed Income Presentation 1Q19 23 Capital ratios well above requirements 2019 SREP Requirement and distance to MDA at Group level Mar.19 DISTANCE TO MDA(1) 232 bps 15.18% Well above 2019 Total Capital and CET1 12.76% €8.4 Bn T2: 2.03%(3) SREP requirements AT1: 1.57%(2) T2: 2.0% 9.26% CCyB 0.01% AT1:
Slide 24: BBVA has the lowest SREP requirement among peers
Fixed Income Presentation 1Q19 24 BBVA has the lowest SREP requirement among peers CET1 SREP Requirement - FL Distance to MDA vs Fully Loaded SREP requirement (based on 2019 requirement) Dec.18 European peers / Mar.19 BBVA 11.82% 10.61% 427 10.07% 9.85% 9.83% 9.70% 9.53% 9.33% 9.26% 297 209 200 169
Slide 25: High level of Available Distributable Items (ADIs)
Fixed Income Presentation 1Q19 25 High level of Available Distributable Items (ADIs) BBVA, S.A. (Parent Company) Dec.18, € Bn Significant € 9.1 Bn payment capacity from distributable items BBVA, S.A. despite conservative ADIs: calculation (Share Premium not c. 30x included) 2018 AT1 coupons Supporte
Slide 26: FX Hedging policy
Fixed Income Presentation 1Q19 26 FX Hedging policy Capital P&L POLICY BBVA hedges c.70% of the excess POLICY BBVA hedges on average between 30%-50% capital (what is not naturally hedged by the ratio) of foreign subsidiaries expected net attributable profit GOAL Reduce Consolidated CET1 ratio GOAL R
Slide 27: ALCO & Equity HTC&S Portfolio
Fixed Income Presentation 1Q19 27 ALCO & Equity HTC&S Portfolio ALCO Portfolio breakdown by region (Mar.19, € Bn) € 52.4 Bn 2.9 South America o.w. HTC Portfolio breakdown 6.4 Mexico (Mar.19, € Bn) 8.2 Turkey USA Others Diversified portfolio € 21.0 Bn 6% 17% across BBVA’s 11.9 USA Spain footprint Tur
Slide 28: MREL & Funding Plan
Creating Opportunities O06 MREL & Funding Plan
Slide 29: MREL requirement
Fixed Income Presentation 1Q19 29 MREL requirement 15.08% 28.04% Total requirement of Total requirement liabilities and own of European funds of European Resolution Group in Resolution Group(1) terms of RWA(2) Requirements binding on 1st January, 2020 (1) BBVA resolution group consists on BBVA, S.A.
Slide 30: 2019 Funding plan
Fixed Income Presentation 1Q19 30 2019 Funding plan GOALS: MREL • Keep AT1 and T2 layers endowed • Preserve compliance with MREL requirements More than 90% MREL eligible FUNDING PLAN FOR 2019: instruments are subordinated • Hybrid instruments: keep buckets fulfilled, considering maturities and poten
Slide 31: Liquidity & Funding
Creating Opportunities Q7 Liquidity & Funding
Slide 32: Liquidity & Funding
Fixed Income Presentation 1Q19 32 Liquidity & Funding Self-sufficient Retail profile of Parent and Ample high quality subsidiaries from BBVA Group subsidiaries proven collateral available, a liquidity point of balance sheet ability to access the compliant with view, with robust with limited wholesal
Slide 33: Decentralized model
Fixed Income Presentation 1Q19 33 Principles of BBVA Group’s self-sufficient business model: Multiple Point of Entry Advantages Subsidiaries Medium term orientation / Self-sufficient balance-sheet consistent with retail banking management Improves risk assessment: imposes Decentralized Own capital a
Slide 34: Financial soundness based on the funding of lending activity
Fixed Income Presentation 1Q19 34 Financial soundness based on the funding of lending activity BBVA Group Liquidity balance sheet (1) BBVA Group Liquidity & Funding metrics (Mar.19) (Mar.19) Euroz.(2) USA Mexico Turkey S. Amer LTD(3) 101% 94% 105% 99% (5) 96% 62% 62% Deposits well LCR 144% 145% (4)
Slide 35: Broaden geographical diversification of access to market
Fixed Income Presentation 1Q19 35 Broaden geographical diversification of access to market MEDIUM & LONG-TERM WHOLESALE FUNDING MATURITIES (MAR.19; € BN) EURO USA MEXICO 19.7 € 40.8 bn € 3.1 bn € 7.1 bn 2.6 6.0 7.0 4.9 1.0 3.2 1.5 1.3 1.5 0.5 0.7 0.7 0.2 0.2 2019 2020 2021 2022 >2022 2019 2020 2021
Slide 36: Turkey – Liquidity & Funding Sources
Fixed Income Presentation 1Q19 36 Turkey – Liquidity & Funding Sources Solid liquidity position: • Improved LTD ratio to 99%, decreasing by 1 p.p. in 1Q19, mainly driven by the continued improvement in the Foreign Currency LTD by c.5 p.p. to 61% • Stable Foreign currency loans in 1Q19 • Liquidity ra
Slide 37: Ratings
Creating Opportunities 08 Ratings
Slide 38: BBVA Group Ratings by Agency
Fixed Income Presentation 1Q19 38 BBVA Group Ratings by Agency(1) BBVA Long Term Issuer / Senior BBVA Ratings by type of instrument Unsecured Ratings Moody’s S&P Fitch DBRS Scope Investment Aaa AAA AAA AAA CB AAA CB Moody’s Stable outlook (Aug. 29th, 2018) A3 grade Aa1 CB AA+ AA+ AA (H) AA+ Aa2 AA C
Slide 39: Transformation Strategy
iting Opportunities O9 Transformation Strategy
Slide 40: Digital Customers – BBVA Group
Fixed Income Presentation 1Q19 40 Digital Customers – BBVA Group Digital Sales Digital Customers Mobile Customers (% of total sales YtD, (Mn, % growth) (Mn, % growth) # of transactions and PRV*) +47% +25% UNITS +28% +17% 57 24.4 48 28.4 PRV 24.2 19.5 28 43 32 19.0 13.3 17 Mar-17 Mar-18 Mar-19 Mar-17
Slide 41: Annex
Annex BBVA Group 1Q19 Profit & Loss Risk Indicators by business areas Capital Base: BBVA Group & BBVA, S.A. BBVA, S.A.: 2019 SREP Requirement and distance to MDA Debt Issuances – 2017/2019YTD Called notes – 2017/2019YTD BBVA 2018 Green Bond Report
Slide 42: BBVA Group 2018 Profit & Loss
Fixed Income Presentation 1Q19 42 BBVA Group 2018 Profit & Loss Change 1Q19/1Q18 Net Attributable Profit breakdown (%, 1Q19) BBVA Group (€m) 1Q19 % % constant Net Interest Income 4,420 5.8 9.5 Net Fees and Commissions 1,214 -0.6 2.6 Net Trading Income 426 8.7 13.5 Other Income & Expenses 8 -90.8 -89
Slide 43: Risk Indicators by Areas
Fixed Income Presentation 1Q19 43 Risk Indicators by Areas NPL ratio NPL coverage ratio (%) (%) Mar.18 Dec.18 Mar.19 Mar.18 Dec.18 Mar.19 BBVA Group 4.5 3.9 3.9 BBVA Group 73 73 74 Spain (2) 6.6 5.1 4.9 Spain 59 57 58 The United States 1.2 1.3 1.4 The United States 98 85 85 Mexico 2.1 2.1 2.0 Mexico
Slide 44: Capital Base: BBVA Group & BBVA, S.A.
Fixed Income Presentation 1Q19 44 Capital Base: BBVA Group & BBVA, S.A.(1) PHASED-IN CAPITAL RATIOS FULLY-LOADED CAPITAL RATIOS MAR.19 (%) MAR.19 (%) 21.01 1.28 20.85 Tier 2 15.18 2.55 Tier 2 1.50 14.90 2.47 2.03 Additional Tier 1 1.57 Additional Tier 1 2.02 1.53 17.19 16.88 11.58 11.35 CET1 CET1 BB
Slide 45: Capital ratios well above requirements
Fixed Income Presentation 1Q19 45 Capital ratios well above requirements 2019 SREP REQUIREMENT AND DISTANCE TO MDA AT A PARENT COMPANY LEVEL (BBVA, S.A.) MAR. 2019 DISTANCE TO MDA(1) 21.01% 793 bps T2: 1.28%(3) 12.03% €15.7 Bn Well above 2019 AT1: 2.55%(2) Total Capital and 8.53% T2: 2.0% CET1 SREP
Slide 46: Debt Issuances – 2018 - 2019YTD
Fixed Income Presentation 1Q19 46 Debt Issuances – 2018 - 2019YTD Nominal Product Issue Date Call Date Maturity Coupon ISIN currency AT1 Mar-19 Mar-24 Perp € 1,000 M 6.000% ES0813211010 SNP Feb-19 - Feb-24 € 1,000 M 1.125% XS1956973967 Tier 2 Feb-19 Feb-24 Feb-29 € 750 M 2.575% XS1954087695 AT1 Sep-
Slide 47: 1Q19 Issuances
Fixed Income Presentation 1Q19 47 1Q19 Issuances BBVA BBVA BBVA AT1 EUR 1 bn PNC5 6% Tier 2 10NC5 EUR 750 M 2.575% SNP EUR 1 bn 1.125% This is the first AT1 transaction of The first BBVA T2 under Spanish The first BBVA SNP under Spanish the year of 2 scheduled for the year Law issued through our GMT
Slide 48: Called notes – 2017 - 2019YTD
Fixed Income Presentation 1Q19 48 Called notes – 2017 - 2019YTD Issue Outstanding Product Redemption Coupon ISIN Date currency (M) BBVA follows Tier 2 Apr-14 Apr-19 € 1,500 3.50% XS1055241373 an economic AT1 Feb-14 Feb-19 € 1,500 7.00% XS1033661866 call policy BBVA, S.A. AT1 May-13 May-18 $ 1,500 9.
Slide 49: Green bond report linked to inaugural Green Bond SNP issuance
Fixed Income Presentation 1Q19 49 Green bond report linked to inaugural Green Bond SNP issuance Reporting The first SDGs Bond report includes the following information: First SDGs Bond Report is available Allocation of proceeds in each Green Eligible Category on BBVA’s website within 12 months from
Slide 50: Qualifying eligible assets selected for BBVA's Inaugural Green Bond
Fixed Income Presentation 1Q19 50 Qualifying eligible assets selected for BBVA’s Inaugural Green Bond Environmental impact of the green bond Impact indicators(1) Use of the proceeds raised Impact in tons of CO2eq Electrical energy Generated (in million euros) avoided (GWh/year) SDGs Renewable Energy
Slide 51: Fixed Income Presentation 1Q19
Fixed Income Presentation 1Q19