48 slides from Banco Bilbao Vizcaya Argentaria's debt investor presentation, Aug 1, 2023
Slide 1: 2Q23 Fixed Income Presentation
2Q23 Fixed Income Presentation
Slide 2: Disclaimer
2Q23 Fixed Income 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 BBVA. Any decision to buy or invest in securities in relat
Slide 3: About BBVA: 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 JUNE 2023 2023 Net attributable profit 6M23 CET 1 FL 3,878 M€ 12.99% 0 Total Assets 762,456 M€ Loans and advances to Deposits from customer - gross customers 380,949M€ 402,344M€ Branches Employees Active customers 6,008 119,070 69.6 M DIGITAL CAP
Slide 6: 1) Leading franchises in attractive markets
2Q23 Fixed Income 6 1) Leading franchises in attractive markets STRONG POSITION Pre-Provision Profit 1 1 2 Loan Market Share (%) Ranking Market Share (%) Spain 13.4% #3 19.3% Mexico 24.6% #1 33.0% Turkey 19.0% #2 29.5% Colombia 11.2% #4 7.8% Peru 20.5% #2 22.7% (1) Latest available market share. Rank
Slide 7: 2) Well diversified business model
2Q23 Fixed Income 7 2) Well diversified business model DIVERSIFICATION UNDER A PROFITABLE BUSINESS MIX DECENTRALIZED MODEL TOTAL ASSETS1 LOANS AND ADVANCES TO CUSTOMERS (JUN-23) (PERFORMING LOANS UNDER MANAGEMENT EX-REPOS) 7% Rest of Business JUN-23 9% South America 21% CIB 25% Mortgages 45% 8% Turke
Slide 8: 4) Proving track record of solid financial returns
2Q23 Fixed Income 8 4) Proving track record of solid financial returns STRONG PRE-PROVISION PROFIT OUTSTANDING PROFITABILITY AND BEST-IN-CLASS EFFICIENCY PRE-PROVISION PROFIT/RWA EFFICIENCY RATIO ROTE 2019-6M23, % 2019-6M23, % 2019-6M23, % 1 1 2019 2020 2021 2022 6M23 2019 2020 2021 2022 6M23 2019 20
Slide 9: 3) Capturing value from digitalization
2Q23 Fixed Income 9 3) 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 UNITS 65% TOTAL PVR DIGITAL 11% 6M18 6M19 6M20 6M21 6M22 6M23
Slide 10: 5) Solid fundamentals
2Q23 Fixed Income 10 5) Solid fundamentals SOUND ASSET COMFORTABLE LIQUIDITY STRONG CAPITAL QUALITY METRICS NPL Ratio CET 1 FULLY-LOADED (%) (%) Coverage Ratio NSFR Group (%) 12.99% 132% Target range 11.5-12.0% Cost of Risk YtD(%) LCR Group CET1 Requirement 8.76% 189%1 2019 2020 2021 2022 Jun-23 Pru
Slide 11: 6) Strong ESG Credentials
2Q23 Fixed Income 11 6) Strong ESG Credentials SUSTAINABLE BUSINESS SOCIAL GOVERNANCE Sustainable Business Community Commitment Directors Sustainable Business 300 €bn 2018-2025 550 €mn investment 2021-2025 % Female 40% Goal: 40% Directors at least target 2021-2022: 2018-JUN’23: % Independent 67% Goa
Slide 12: Advancing in our clear commitment to sustainability
2Q23 Fixed Income 12 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 Enterprise
Slide 13: We expect strong performance in our ambitious long-term goals
2Q23 Fixed Income 13 We expect strong performance in our ambitious long-term goals COST-TO-INCOME ROTE1 TBV/SHARE + DIVIDENDS (%) (%, ANNUALIZED) (%) YoY CAGR HIGH 2021-6M23 TEENS 19.3 MID TEENS 15.1 SLIGHT IMPROVEMENT 2021-24 CAGR NEW TARGET CUSTOMERS2 SUSTAINABLE BUSINESS (MILLION CUMULATIVE) (€ B
Slide 14: 2Q23 Results
Creating Opportunities 2Q23 Results
Slide 15: BBVA reports another very strong quarter
2Q23 Fixed Income 15 BBVA reports another very strong quarter RECURRENT NET ATTRIBUTABLE PROFIT (CURRENT €M) 1 EXCELLENT CORE REVENUES GROWTH LEVERED +11% ON ACTIVITY AND IMPROVING CUSTOMER SPREAD +10% 2 IMPROVING EFFICIENCY WITH POSITIVE JAWS 3 MERLIN TRANSACTION 1,633 STABLE ASSET QUALITY METRICS,
Slide 16: 2Q23 Profit & Loss
2Q23 Fixed Income 16 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 -
Slide 17: Excellent revenue growth following a remarkable trend
2Q23 Fixed Income 17 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 improveme
Slide 18: Core revenues growth levered on activity and improving customer spreads
2Q23 Fixed Income 18 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
Slide 19: Stable asset quality and within guidance
2Q23 Fixed Income 19 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 D
Slide 20: Spain
2Q23 Fixed Income 20 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 & Expen
Slide 21: Mexico
2Q23 Fixed Income 21 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 Commis
Slide 22: Turkey
2Q23 Fixed Income 22 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
Slide 23: South America
2Q23 Fixed Income 23 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 -
Slide 24: Capital & Liquidity
Creating Opportunities Capital & Liquidity
Slide 25: A high quality and resilient capital
2Q23 Fixed Income 25 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 JUN-23/PEERS MAR-23 BBVA J
Slide 26: Strong capital position with CET1 above our target
2Q23 Fixed Income 26 Strong capital position with CET1 above our target CET1 FULLY-LOADED AT1 AND TIER 2 FL BUCKETS (% BPS) JUN-23 (%) CET1 PRO-FORMA3 -31 bps 12.67% +58 bps 2.43% -26 bps 13.13% -15 bps 12.99% 2.02% 1.82% Target Range 1.78% 11.5%-12.0% SREP Requirement2 8.76% Mar-23 Results Dividend
Slide 27: One of the lowest SREP requirement among peers and comfortable MDA distance
2Q23 Fixed Income 27 One of the lowest SREP requirement among peers and comfortable MDA distance BBVA, GROUP CET1 REQUIREMENT AND DISTANCE TO MDA BBVA JUN-23/ PEERS-MAR-23 Distance to MDA2 378 bps 16.79% T2 11.70% 13.01% 10.96% AT13 10.55% T2 9.60% 9.47% 9.43% 8.76%1 9.07% 8.93%8.87% 8.76% AT1 8.48%
Slide 28: Capital position in BBVA, S.A. well above requirement
2Q23 Fixed Income 28 Capital position in BBVA, S.A. well above requirement BBVA, S.A. REQUIREMENT AND DISTANCE TO MDA Distance to MDA2 17.92% JUN-23 506 bps €10.6 Bn T2 12.07% AT13 T2 AT1 7.91% 1 CCyB1 CCB CET 1 Pillar 2R CET 1 Pillar 1 CET1 Total Total Capital Ratio Requirement Requirement June ‘23
Slide 29: Sound MREL position
2Q23 Fixed Income 29 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: Preliminar
Slide 30: Liquidity ratios well above 100% minimum
2Q23 Fixed Income 30 Liquidity ratios well above 100% minimum Ample quality collateral BBVA GROUP LIQUIDITY BALANCE SHEET1 BBVA GROUP LIQUIDITY AND FUNDING METRICS JUN-23 JUN-23 Mexico Turkey South BBVA S.A.2 America LTD 89% 99% 76%3 96% LCR 174% 180% 228% >100% 59% 65% NSFR 123% 136% 175% >100% LCR
Slide 31: Limited wholesale funding maturities in all geographies
2Q23 Fixed Income 31 Limited wholesale funding maturities in all geographies DEBT OUTSTANDING BY PRODUCT MEDIUM & LONG-TERM WHOLESALE FUNDING JUN-23, € BN MATURITIES JUN-23, € BN Others1 Senior Preferred EURO 10.3 € 48.2 bn 17% 18.7 31% T2 / TOTAL MEXICO Subordinated 16% 9.4 € 61bn € 6.9 bn 10% 15%
Slide 32: 2023 Funding Plan
2Q23 Fixed Income 32 2023 Funding Plan BBVA, S.A. 2023 2023 Strategy1 €BN Executed (subject to market conditions) AT1 € 1 bn Dynamic management of the capital stack structure. We might keep our common approach to pre-financing upcoming calls. Tier 2 € 0.75 bn SNP € 1 bn Senior Debt and CBs potential
Slide 33: All Ratings Agencies assign BBVA a rating on the single A space
2Q23 Fixed Income 33 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 34: Annex
Annex 01 BBVA Group 6M23 Profit & Loss 07 Capital Base: BBVA Group & BBVA S.A. 02 NII sensitivity to interest rate 08 CET1 Sensitivity to market movements impacts 03 ALCO Portfolio 09 Group RWA breakdown 04 Customer spreads: 10 Debt Issuances 2021-2023 quarterly evolution 11 Called notes 2018-2023 05
Slide 35: BBVA Group 6M23 Profit & Loss
2Q23 Fixed Income 35 BBVA Group 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 Other Income & Expenses1 -944 -25.2 7.8 Gross Income 14,148 35.2 23.9 Operating Expense
Slide 36: NII sensitivity to interest rates movements
2Q23 Fixed Income 36 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) SHEET (+1.6% for MXN BALANCE SHEET) (1)NII sensitivities to parallel in
Slide 37: ALCO Portfolio
2Q23 Fixed Income 37 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 Re
Slide 38: Customer spreads: quarterly evolution
2Q23 Fixed Income 38 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 Depo
Slide 39: Stages breakdown by business areas
2Q23 Fixed Income 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
Slide 40: Exposure to Covid-related loans and Commercial Real Estate
2Q23 Fixed Income 40 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% Ret
Slide 41: Capital Base BBVA Group & BBVA, S.A.
2Q23 Fixed Income 41 Capital Base BBVA Group & BBVA, S.A. CAPITAL RATIOS JUN-23 (%) 17.92 16.79 T2 AT11 CET1 BBVA Group BBVA, S.A. CET 1 € 45,153 m € 27,040 m AT1 € 6,171 m € 5,841 m T2 € 7,021 m € 4,459 m Total Capital Base € 58,344 m € 37,340 m RWA € 347,488 m € 208,417 m With effect from January
Slide 42: CET1 Sensitivity to Market Impacts
2Q23 Fixed Income 42 CET1 Sensitivity to Market Impacts1 TO A 10% CURRENCY DEPRECIATION2 TO A 10% DECLINE IN TELEFONICA’S (JUN-23) SHARE PRICE (JUN-23) MXN -9bps -3 pbs TRY -3bps TO +100 BPS MOVEMENT IN THE SPANISH SOVEREIGN BOND (JUN-23) USD +18bps -10 bps (1) CET1 sensitivity considering the FL ca
Slide 43: Group RWA breakdown
2Q23 Fixed Income 43 Group RWA breakdown TOTAL RWA BREAKDOWN PHASED-IN ❖ Optimizing Capital Allocation is part of BBVA’S Strategic Priorities ❖ Limited usage of internal models in Credit Risk RWAs, mitigating potential impacts from future regulatory requirements. Note 1: Credit Valuation Adjustment.
Slide 44: Debt Issuances 2022 - 2023 YTD
2Q23 Fixed Income 44 Debt Issuances 2022 - 2023 YTD BBVA, S.A. PRODUCT ISSUE DATE CALL DATE MATURITY NOMINAL CURRENCY COUPON AT1 Jun-23 Dec-28 Perp € 1,000 M 8.375% T2 Jun-23 Jun-Sep 28* Sep-33 € 750 M 5.75% SP May-23 May-25 May-26 € 1,000 M 4.125% CB Jan-23 - Jul-27 € 1,500 M 3.125% SNP Jan-23 Jan-
Slide 45: Called notes 2018 - 2023 YTD
2Q23 Fixed Income 45 Called notes 2018 - 2023* YTD BBVA follows an economic call policy OUTSTANDING PRODUCT ISSUE DATE REDEMPTION COUPON CURRENCY (M) BBVA, S.A. AT1 May-17 May-22 € 500 5.875% BBVA, S.A. AT1 Apr-16 Apr-21 € 1,000 8.875% Caixa Terrassa SPP Preferred Ago-05 Jan-21 € 75 10yCMS+0.10% BBV
Slide 46: Main Subsidiaries ratings
2Q23 Fixed Income 46 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 47: Book Value of the main subsidiaries
2Q23 Fixed Income 47 Book Value of the main subsidiaries1,2 € BN; JUN-23 Mexico 18.6 Turkey 6.1 Argentina 1.4 Colombia 1.6 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 su
Slide 48: BBVA
BBVA