Banco Bilbao Vizcaya Argentaria, S.A. · BME:BBVA
Banco Bilbao Vizcaya Argentaria — 2Q19 Earnings Presentation
51 slides from Banco Bilbao Vizcaya Argentaria's earnings presentation, Jul 31, 2019
Slide 1: 2Q19 Results
Creating Opportunities 2019 Results” July 31st, 2019
Slide 2: Disclaimer
2Q19 Results 2 July 31st 2019 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 decisio
Slide 3: Outstanding value creation and strong capital position
2Q19 Results 3 July 31st 2019 Outstanding value creation and strong capital position NET ATTRIBUTABLE PROFIT TBV/SHARE + DIVIDENDS CET1 FULLY-LOADED (€M) (€/SH.) (%) Absorbing +12.6% vs Jun18 -24 bps from TRIM + IFRS16 +18bps +6.9% 1,787 BBVA 11.52% Chile sale 633 1,245 1,278 6.26 1,164 0.16 1,001 D
Slide 4: 2Q19 Highlights
2Q19 Results 4 July 31st 2019 2Q19 Highlights 01 Robust core revenue growth NII + FEES (€ constant) +8.7% vs. 2Q18 02 Further improvement in COST TO INCOME best-in-class efficiency 49.0% -41 bps vs. 12M18 (€ constant) 03 Sound risk indicators NPL RATIO COVERAGE RATIO CoR 3.84% 75% 0.91% -57 bps vs.
Slide 5: 2Q19 Profit & Loss
2Q19 Results 5 July 31st 2019 2Q19 Profit & Loss Change 2Q19/2Q18 BBVA Group (€m) 2Q19 % % constant Net Interest Income 4,566 9.0 10.4 Net Fees and Commissions 1,256 2.5 3.0 Net Trading Income 116 -56.5 -58.2 Other Income & Expenses -18 n.s. n.s. Gross Income 5,920 4.2 5.1 Operating Expenses -2,952
Slide 6: 1H19 Profit & Loss
2Q19 Results 6 July 31st 2019 1H19 Profit & Loss Change 1H19/1H18 BBVA Group (€m) 1H19 % % constant Net Interest Income 8,987 7.4 9.9 Net Fees and Commissions 2,470 1.0 2.8 Net Trading Income 542 -17.7 -16.6 Other Income & Expenses -10 n.s. n.s. Gross Income 11,989 3.7 6.0 Operating Expenses -5,874
Slide 7: Robust core revenue growth
2Q19 Results 7 July 31st 2019 Robust core revenue growth NET INTEREST INCOME NET FEES AND COMMISSIONS (€M CONSTANT) (€M CONSTANT) +10.4% +3.0% +4.2% +4.0% Very strong 1,261 Robust fee 1,224 1,215 1,231 1,209 4,470 4,704 4,406 4,581 growth in generation 4,151 CPI most of in the Linkers geographies qu
Slide 8: Further improvement in best-in-class efficiency
2Q19 Results 8 July 31st 2019 Further improvement in best-in-class efficiency GROUP OPERATING JAWS GROUP OPERATING INCOME EFFICIENCY RATIO (1H YOY (%); (€ CONSTANT)) (YOY (%); (€M CONSTANT)) (%; € CONSTANT) 64.7% INFLATION +8.2% 6.3% Average 12m 6,115 -41 bps 50.2% 5,652 8.3% 49.4% 49.0% 3.9% Core O
Slide 9: Sound risk indicators
2Q19 Results 9 July 31st 2019 Sound risk indicators FINANCIAL ASSETS IMPAIRMENTS NPLs (€M CONSTANT) (€BN) Flat - 2.6 -0.6 -25.6 % 1,333 19.3 17.7 17.1 17.3 1,022 1,018 16.7 759 758 2Q18 3Q18 4Q18 1Q19 2Q19 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 COST OF RISK NPL & COVERAGE RATIOS (%) (%) 1.36% 71% 73% 73
Slide 10: Strong capital position
2Q19 Results 10 July 31st 2019 Strong capital position CET1 FULLY-LOADED - BBVA GROUP QUARTERLY EVOLUTION (%, BPS) +17 bps 35 bps 5 bps 6 bps 11.52% 11.35% -16 bps -13 bps Mar-19 Net Dividends & AT1 TRIMs Reg.Equivalence Others* Jun-19 Earnings coupons Argentina (*) Others includes RWAs evolution an
Slide 11: Outstanding delivery on shareholder value creation
2Q19 Results 11 July 31st 2019 Outstanding delivery on shareholder value creation TBV PER SHARE & DIVIDENDS LEADING PROFITABILITY METRICS (€ PER SHARE) (%) +12.6% ROTE 12.4% +2.7% 8.0% 6.20 6.36 5.80 5.96 0.26 DIVIDENDS 5.65 0.26 0.10 0.10 BBVA European 6.10 Peer Group Average 5.94 5.86 ROE 5.70 10.
Slide 12: Growing in digital and mobile customers, leading to an outstanding trend in digital sales
2Q19 Results 12 July 31st 2019 Growing in digital and mobile customers, leading to an outstanding trend in digital sales DIGITAL CUSTOMERS MOBILE CUSTOMERS DIGITAL SALES (% OF TOTAL SALES YTD, MILLION, % YOY GROWTH MILLION, % YOY GROWTH # OF TRANSACTIONS AND PRV1) 58.1 Units 49.8 +28% +17% +45% +25%
Slide 13: Digital transformation: a competitive advantage for BBVA
2Q19 Results 13 July 31st 2019 Digital transformation: a competitive advantage for BBVA CUSTOMER GROWTH CUSTOMER ENGAGEMENT AND ADVICE OPEN BANKING: PARTNERSHIP WITH UBER SELF-DRIVEN ACCOUNT Self-configuration of rules help clients manage their finances • Paycheck savings • Minimum and maximum balan
Slide 14: The impact of transformation: Spain
2Q19 Results 14 July 31st 2019 The impact of transformation: Spain Two years change (Jun’17 vs Jun’19) BBVA Spain has grown its customer base. It has also increased client satisfaction and retention by using a more efficient relationship model, which has lowered operating expenses GROWTH ENGAGEMENT
Slide 15: Business Areas
Creating Opportunities Business Areas
Slide 16: Spain
2Q19 Results 16 July 31st 2019 Spain YtD YtD Activity (Jun-19) +0.7% -0.3% Profit & Loss Δ (%) Δ (%) (€m) 2Q19 vs 2Q18 1H19 vs 1H18 YoY €Bn YoY Net Interest Income 927 0.1 1,808 -2.4 €Bn 167.5 +0.8% +2.2% Net Fees and Commissions 432 -1.5 846 -0.6 244.8 Net Trading Income -16 n.s. 92 -67.4 Other Inc
Slide 17: USA
2Q19 Results 17 July 31st 2019 USA Activity (Jun-19) YtD -1.6% YtD -1.8% (constant €) Profit & Loss Δ Constant Δ Constant Δ Current YoY (€m constant) 2Q19 vs 2Q18 (%) 1H19 vs 1H18 (%) vs 1H18 (%) €Bn YoY Net Interest Income 599 2.0 1,217 5.2 12.6 €Bn 63.1 +1.3% Net Fees and Commissions 168 3.7 320 -
Slide 18: Mexico
2Q19 Results 18 July 31st 2019 Mexico Activity (Jun-19) YtD +2.6% YtD +6.2% (constant €) Profit & Loss ΔConstant Δ Constant Δ Current (€m constant) 2Q19 vs 2Q18 (%) 1H19 vs 1H18 (%) vs 1H18 (%) YoY YoY €Bn Net Interest Income 1,532 7.8 3,042 7.8 14.9 €Bn 75.4 +5.8% Net Fees and Commissions 319 -3.0
Slide 19: Turkey
2Q19 Results 19 July 31st 2019 Turkey Activity (Jun-19) Profit & Loss Δ Constant Δ Constant Δ Current (constant €; Bank only) (€m constant) 2Q19 vs 2Q18 (%) 1H19 vs 1H18 (%) vs 1H18 (%) YoY1 YoY1 Net Interest Income 686 10.3 1,353 15.0 -10.4 YtD Net Fees and Commissions 174 23.1 360 24.5 -2.9 -8.4%
Slide 20: South America
2Q19 Results 20 July 31st 2019 South America Activity (Jun-19) YtD +2.3% YtD +4.2% (constant €) YoY Net Attributable Profit Δ Constant 1 Δ Constant 1 €Bn YoY Δ Current €Bn 49.5 +11.5% (€m constant) 2Q19 vs 2Q18 (%) 1H19 vs 1H18 (%) vs 1H18 (%) 35.4 +6.3% Colombia 73 33.2 130 13.1 8.2 14.2 +2.9% Peru
Slide 21: Final Remarks
Creating Opportunities Final Remarks
Slide 22: Excellent 2Q Results
22 Excellent 2Q Results driven by our unique and diversified footprint and business model Robust core revenues with double-digit growth in Net Interest Income Best-in-class efficiency with continuous improvement in our operating jaws Sound risk indicators with very positive evolution in the year Str
Slide 23: Annex
Annex 01 Customer spread by 06 ALCO Portfolio, NII Sensitivity country and LCRs & NSFRs 02 Gross Income breakdown 07 Garanti: wholesale funding 03 Net Attributable Profit 08 Capital and APRs by business evolution area 04 P&L Accounts by 09 Book Value of the main business unit subsidiaries 05 Argenti
Slide 24: Customer spread by country
01 Customer spread by country
Slide 25: Customer spreads: Quarterly evolution
2Q19 Results 25 July 31st 2019 Customer spreads: Quarterly evolution AVERAGE 2Q18 3Q18 4Q18 1Q19 2Q19 2Q18 3Q18 4Q18 1Q19 2Q19 Spain 1.94% 1.93% 1.95% 1.96% 1.99% Turkey TL 5.18% 4.02% 1.12% 2.50% 2.72% Yield on Loans 2.01% 2.01% 2.03% 2.04% 2.06% Yield on Loans 15.14% 17.19% 18.98% 19.02% 19.09% Co
Slide 26: Customer spreads: YTD evolution
2Q19 Results 26 July 31st 2019 Customer spreads: YTD evolution YTD AVERAGE 1H18 1H19 1H18 1H19 Spain 1.94% 1.98% Turkey TL 5.06% 2.61% Yield on Loans 2.01% 2.05% Yield on Loans 14.86% 19.05% Cost of Deposits -0.07% -0.07% Cost of Deposits -9.80% -16.44% USA 3.92% 4.13% Turkey FC1 4.31% 5.07% Yield o
Slide 27: Gross Income breakdown
Creating Opportunities Q2 Gross Income breakdown
Slide 28: Gross Income breakdown
2Q19 Results 28 July 31st 2019 Gross Income breakdown 1H19 (CONSTANT €) Spain 2,818 €m Rest of Eurasia 220 €m 23% 2% USA 13% 1,615 €m South America 1,994 €m 16% 14% Turkey 1,677 €m 32% Mexico 3,901 €m Note: Figures exclude Corporate Center.
Slide 29: Net Attributable Profit evolution
03 Net Attributable Profit evolution
Slide 30: Group – Net Attributable Profit
2Q19 Results 30 July 31st 2019 Group – Net Attributable Profit (€M) BUSINESSES +38 €m 2,536 170 2,442 8 -65 -8 -58 -12 -8 -114 -5 1H18 BBVA Chile FX Spain USA Mexico Turkey Rest of South Corp. Center 1H19 Effect Eurasia America (w/o BBVA Chile) YoY (%) -1.7 -27.8 0.6 -2.8 -8.1 72.4 (constant €)
Slide 31: P&L accounts by business unit
04 P&L accounts by business unit Rest of Eurasia Corporate Center Colombia Peru
Slide 32: Rest of Eurasia - Profit & Loss
2Q19 Results 32 July 31st 2019 Rest of Eurasia - Profit & Loss Profit & Loss Δ (%) Δ (%) (€m) 2Q19 vs 2Q18 1H19 vs 1H18 Net Interest Income 45 13.2 84 2.2 Net Fees and Commissions 33 -17.7 69 -12.7 Net Trading Income 34 201.7 60 10.2 Other Income & Expenses 4 n.s. 6 n.s. Gross Income 116 28.0 220 1.
Slide 33: Corporate Center - Profit & Loss
2Q19 Results 33 July 31st 2019 Corporate Center- Profit & Loss Profit & Loss Δ (%) Δ (%) (€m) 2Q19 vs 2Q18 1H19 vs 1H18 Net Interest Income -61 -12.8 -132 -4.1 Net Fees and Commissions -29 16.3 -44 36.6 Net Trading Income -67 96.2 -74 27.8 Other Income & Expenses 28 -35.0 13 -65.7 Gross Income -129
Slide 34: Colombia - Profit & Loss
2Q19 Results 34 July 31st 2019 Colombia - Profit & Loss Profit & Loss Δ (%) Δ (%) (constant €m) 2Q19 vs 2Q18 1H19 vs 1H18 Net Interest Income 209 5.1 418 3.8 Net Fees and Commissions 24 2.0 46 -0.9 Net Trading Income 18 29.2 38 37.3 Other Income & Expenses 2 -55.8 10 -3.3 Gross Income 252 5.2 512 5.
Slide 35: Peru - Profit & Loss
2Q19 Results 35 July 31st 2019 Peru - Profit & Loss Profit & Loss Δ (%) Δ (%) (constant €m) 2Q19 vs 2Q18 1H19 vs 1H18 Net Interest Income 228 12.5 448 13.7 Net Fees and Commissions 59 2.2 114 3.9 Net Trading Income 43 16.4 83 11.4 Other Income & Expenses -5 -12.3 -11 31.2 Gross Income 326 11.4 633 1
Slide 36: Argentina: hyperinflation adjustment
05 Argentina: hyperinflation adjustment
Slide 37: Argentina hyperinflation adjustment
2Q19 Results 37 July 31st 2019 Argentina hyperinflation adjustment Profit & Loss 1H19 Hyperinflation 1H19 (€m) (reported) adjustment Ex. Hyperinflation Net Interest Income 526 35 492 Net Fees and Commissions 86 5 81 Net Trading Income 178 17 161 Other Income & Expenses -215 -179 -35 Gross Income 575
Slide 38: ALCO portfolio, NII Sensitivity, LCRs & NSFRs
06 ALCO portfolio, NII Sensitivity, LCRs & NSFRs
Slide 39: ALCO portfolio
2Q19 Results 39 July 31st 2019 ALCO portfolio ALCO Portfolio breakdown by region (€ BN) Amort Cost Fair Value Fair Value 56.8 52.4 50.8 June 2019 (HTC) (HTC&S) duration South America 3.5 2.9 3.0 (€ bn) (€ bn) 5.1 6.4 5.0 South Mexico 0.1 2.9 1.5 years 8.6 8.2 8.1 America Turkey Mexico 0.8 4.2 1.6 ye
Slide 40: NII sensitivity to interest rate movements
2Q19 Results 40 July 31st 2019 NII sensitivity to interest rate movements Estimated impact on NII in the next 12 months to parallel interest rate movements (%) NII sensitivity to +100bps NII sensitivity to -100bps 15% 0% 10% -5% 5% -10% 0% -15% Euro USA Mexico Euro USA Mexico Note: NII sensitivities
Slide 41: Liquidity and Funding Ratios
2Q19 Results 41 July 31st 2019 Liquidity and Funding Ratios BBVA Group and Subsidiaries LCRs & NSFRs Both significantly above the 100% requirements at a Group level and in all banking subsidiaries Jun-19 BBVA Group Euro USA Mexico Turkey S. Amer. LCR 132% (163%1) 155% 144% 2 147% 187% well >100% NSF
Slide 42: Garanti wholesale funding
07 Garanti wholesale funding
Slide 43: Turkey – Liquidity & Funding Sources
2Q19 Results 43 July 31st 2019 Turkey – Liquidity & Funding Sources Solid liquidity position: • Improved Total LTD ratio to 98%, decreasing by 1.5 p.p. in 2Q19, driven by TRY Currency LTD improvement by c. 6 p.p. to 142.5% • Foreign currency loans decreased slightly (-2%) to c. USD 14 Bn in 2Q19 • L
Slide 44: Capital and RWAs
08 Capital and RWAs Capital YTD RWAs by Business Area
Slide 45: Capital YtD Evolution
2Q19 Results 45 July 31st 2019 Capital YtD Evolution CET1 FULLY-LOADED – BBVA GROUP YTD EVOLUTION (%, BPS) +18 bps +69 bps + 5 bps 11.52% 11.34% - 32 bps - 24 bps - 1 bps Dec-18 Net Dividend accrual Regulatory Argentina Others** Jun-19 Earnings & AT1 Coupons impacts* Regulatory Equivalence (*) Regul
Slide 46: Risk-Weighted Assets by business area
2Q19 Results 46 July 31st 2019 Risk-Weighted Assets by business area Fully-Loaded RWAs Breakdown by business area and main countries (€m) jun-19 mar-19 jun-18 Spain 107,486 107,581 108,070 USA 62,383 65,217 61,454 Turkey 57,551 58,526 58,770 Mexico 55,919 54,831 50,648 South America 43,995 44,970 55
Slide 47: Book Value of the main subsidiaries
09 Book Value of the main subsidiaries
Slide 48: Book Value of the main subsidiaries
2Q19 Results 48 July 31st 2019 Book Value of the main subsidiaries1,2 JUN 19 (€ BN) Mexico 10.4 USA 7.6 Turkey 4.0 Colombia 1.3 Peru 1.0 Argentina 0.9 Chile 0.3 Venezuela 0.1 (1) Includes the initial investment + undistributed results + FX impact + other valuation adjustments. The Goodwill associate
Slide 49: Digital sales breakdown
Creating Opportunities 10 Digital sales breakdown
Slide 50: Digital sales: outstanding trend across the board
2Q19 Results 50 July 31st 2019 Digital sales: outstanding trend across the board (% of total sales YtD, # of transactions and PRV1) UNITS PRV GROUP SPAIN USA2 28.0 49.4 22.9 58.1 42.6 49.8 17.8 25.6 30.5 24.9 43.8 21.3 UNITS 43.8 33.0 PRV 33.0 13.6 18.2 18.7 Jun-17 Jun-18 Jun-19 Jun-17 Jun-18 Jun-19
Slide 51: BBVA
BBVA
Banco Bilbao Vizcaya Argentaria — 2Q19 Earnings Presentation on 6ix