Banco Bilbao Vizcaya Argentaria, S.a. · BME:BBVA
Banco Bilbao Vizcaya Argentaria — BBVA — Debt Investor Presentation (May 2021)
64 slides from Banco Bilbao Vizcaya Argentaria's debt investor presentation, May 2021
Slide 1: Fixed Income Presentation 1Q21
Creating Opportunities Fixed Income Presentation 1Q21
Slide 2: Disclaimer
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 buy or invest in securiti
Slide 3: Index
BBVA Creating Opportunities Index O01 About BBVA 02 BBVA's Strengths « Resilient Operating Income 4 Business areas 4 Sound capital position & proven capacity to generate capital 4 Comfortable liquidity position a Funding Plan 4 Digital edge as a competitive advantage 03 Ratings Annex
Slide 4: About BBVA
QO] About BBVA Creating Opportunities
Slide 5: About BBVA
About BBVA BBVA’S GLOBAL PRESENCE MAR.21 Total assets customers 720 €bn 79.8m Ti iox z a countries employees >251. - 122,021 Includes the US business sold to PNC OUR PURPOSE mobile customers 35.7m branches 7,254 1Q21 Fixed Income 5_ DIVERSIFICATION UNDER A DECENTRALIZED MODEL MAR.21 TOTAL ASSETS “)
Slide 6: 1Q21 Top messages
1Q21 Fixed Income 6 1Q21 Top messages Positive core revenue evolution, NII + FEE INCOME (€ constant) despite the challenging environment +O, 5 vs.1020 Strong cost control and leading OPERATING EXPENSES (€ constant) Efficiency Ratio (%) efficiency +1.8% vs. 1920 A 5% incr 4.7% average 12M footprint i
Slide 7: Helping our clients transition towards a more sustainable future
1Q21 Fixed Income 7_ Helping our clients transition towards a more sustainable future: a massive business opportunity OVERDELIVERING ON BBVA’s 2025 PLEDGE €100BN 2025 COMMITMENT 2018 1021 2025 Q #1 EUROPEAN BANK
Slide 8: BBVA's strengths
O02 BBVA‘s strengths Creating Opportunities
Slide 9: Facing the current environment from a position of strength
1Q21 Fixed Income 9_ Facing the current environment from a position of strenght Resilient operating i° income ) Sound capital position eee. and proven capacity to generate capital Comfortable liquidity position Digital edge asa oa competitive advantage
Slide 10: Resilient Operating Income
Resilient Operating Income Creating Opportunities
Slide 11: A proven track record of earnings resilience and low volatility
1Q21Fixed Income 11 A proven track record of earnings resilience and low volatility... SUIS OIG IEEE LIE ...EVEN UNDER STRESSED SCENARIOS OPERATING INCOME... OPERATING INCOME/ RWAS Z EBA STRESS TEST 2018: ADVERSE SCENARIO foreee average, 5) NET ATTRIBUTABLE PROFIT 2018-2020 : (Cumulative € MN) PEER
Slide 12: Continued prudent and proactive risk management
1Q21Fixed Income 12 ..With a continued prudent and proactive risk management... 68 5.8 5.1 54 49 46 NPL Ratio 4140 ~ 39 38 4043 (%) RISK FRAMEWORK A Risk Management Model based on prudence and proactivity 74 70 65 73 77 8! 81 Coverage ratio e261 oo 64 (%) RISK MANAGEMENT GOAL 215 To preserve the Gro
Slide 13: Positive results and double digit profitability in 1Q21
1021 Fixed Income 13 ...leading to positive results and double digit profitability metrics in 1Q21 7 NET ATTRIBUTABLE PROFIT / PROFITABILITY METRICS (€M CURRENT) (%) OE 1,210 1,182 1141 10.0 1,015 7 69 41 0 24 e 636 : 292 ROTE 11.0 e 6.9 78 ; 46 ne 2.8 oT eo 1019 1020' 2920 3020 49207 1021 Mar-20' J
Slide 14: Business Areas
Creating Opportunities BUSINESS Areas
Slide 15: A well-diversified footprint with leadership positioning
1021 Fixed Income 15, A well-diversified footprint with leadership positioning / BREAKDOWN BY BUSINESS AREA TOTAL ASSETS !) 1021 Rest of South Business America 6% 8% ‘al Turkey 9% Spain Mexico’ 60% 17% GROSS INCOME ©) 1021 Rest of South Business America % \_ Spain 14% 32% Turkey ( 16% Mexico 34% (1)
Slide 16: Economic growth strengthening in 2021
Economic growth strengthening in 2021 7 REAL GDP GROWTH (YOY GROWTH; %) “BBVA FOOTPRINT! 54 44 -6.6 2020 202le 2022e TURKEY 2020 202le 2022e TS SPAIN 1Q21 Fixed Income 16 10.8 2020 202le 2022e mm COLOMBIA 5.5 48 5 a a 68 =. © 2020 ~ 202le 9 2022e Source: BBVA Research. (1) GDP weighted by each count
Slide 17: Retail new loan production volumes are picking up
1921 Fixed Income 17. Retail new loan production volumes are picking up / BBVA RETAIL NEW LOAN PRODUCTION = MORTGAGES — CONSUMERLOANS (BASE 100 = FEB.2020) BBVA GROUP @ SPAIN Bs) MEXICO Feb.20Mar.20 Jun.20 Sep.20 Dec.20 Mar.21 Feb.20Mar.20 Jun.20 Sep.20 Dec.20 Mar.21 Feb.20 Mar.20 Jun.20 Sep.20 Dec.
Slide 18: Stabilizing interest rates offer improving prospects for customer spreads
1Q21Fixed Income 18 Stabilizing interest rates offer improving prospects for customer spreads / REFERENCE INTEREST RATES / BBVA CUSTOMER SPREADS (%) (%) T SPAIN Most of the Euribor repricing has already happened EURIBOR 12M 1.85 1.83 e —__ ~~ °~_1.80 178 o—_, 1.76 1.75 Ws], MEXICO Cost of funding re
Slide 19: Spain
[I / Spain Profit & Loss 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 CUSTOME
Slide 20: Mexico
B:) / Mexico Profit & Loss 1921 Net Interest Income 1,366 Net Fees and Commissions 282 Ne: Trading Income 63 Other Income & Expenses 44 Gross Income 1,761 Operating Expenses -622 Operating Income 1138 Impairment on Financial Assets -458 Provisions & other gains (losses) 2 Income Before Tax 682 Incom
Slide 21: Turkey
EH / Turkey Profit & Loss 1921 Net Interest Income 530 Net Fees and Commissions 154 Net Trading Income 126 Other Income & Expenses 24 Gross Income 834 Operating Expenses -265 Operating Income 569 Impairment on Financial Assets 123 Provisions & other gains (losses) 35 Income Before Tax 481 Income Tax
Slide 22: South America
ye / South America Net Attributable AConstant: A Current A Constant Profit 1921 Colombia 48 546.7 488.8 -22.9 Peru 28 10.5 -6.0 12.4 Argentina 6 ns. -29.0 ns. Other? 22 25 8.8 92 South America 104 117.7 48.6 a) (1) Venezuelain currentém (2) Otherincludes BBVA Forum, Venezuela, Paraguay, Uruguay and
Slide 23: Sound capital position
Sound capital positi Creating Opportunities
Slide 24: A proven ability to generate capital, with lower volatility and superior resilience
1021 Fixed Income 24 A proven ability to generate capital, with lower volatility and superior resilience Ability to generate capital Lower volatility Superior resilience under stress CET1 FULLY-LOADED (~%) CET1 RATIO VOLATILITY EBA STRESS TEST 2018: DEC to DEC.20 ) : : (Standard deviation, annual CE
Slide 25: Strong capital generation in the quarter
Strong capital generation in the quarter / CET1 FULLY-LOADED QUARTERLY EVOLUTION (%, bps) 1021 Fixed Income 25 | 34 bps 2 bps 11.73% | | = =— -17 bps -4 ‘bps Dec-20 Results Dividend’ — RWAs® Others? Accrual & (in constant €) AT1 Coupons 14.58% c.600 bps 1 le | Mar-21 Mar-21 4 Pro-forma (1) 40% Payou
Slide 26: Outstanding capital position, well above requirements
1021 Fixed Income 26 Outstanding capital position, well above requirements / CET1 FULLY-LOADED ~ 14.58% 9 11.88% Target range 11.50-12.00% | Minimum requirement 8.59% Mar.21 Mar.21 Pro-Forma / CET1 TARGET TO REQUIREMENT 2 BPS BBVA PEERI PEER 2 PEER 3 PEER 4 PEERS PEER6 PEER 7 PEER 8 (1) Includes the
Slide 27: Lowest SREP requirement among peers
1021 Fixed Income 27 Lowest SREP requirement among peers / CET1 SREP REQUIREMENT / DISTANCE TO MDA BASED ON 2021 REQUIREMENT BBVA MAR.21/ PEERS DEC.20 693 605 521 10.44% 437 9.50% 9.22% 9.04% 9.00% 8.86% 8.86% 865% 8.50% 364 275 R2 CER! (iii PEER3 cen: (I PEERS PeERG (I PEERT (I PEERS (yy PEER 1 PEE
Slide 28: High quality capital
1Q21Fixed Income 28 High quality capital / RWA/ TOTAL ASSETS / LEVERAGE RATIO FL BBVA MAR.21 / PEERS DEC.20 BBVA MAR.21 / EUROPEAN PEERS DEC.20 BBVA a 10°, PEER 1 7.2% PEER 1 37% BBVA es 6 5) PEER 2 37% PEER 2 6.4% PEER 3 35% PEER 3 6.4% PEER4 34% PEER4 5.8% PEER 5 34% PEERS 5.7% PEER6 29% PEER6 5.5
Slide 29: Ample strategic optionality focused on value creation
1021 Fixed Income 29 Ample strategic optionality focused on value creation We will deploy our capital / CET1 FULLY-LOADED (PRO-FORMA, %) In our markets through profitable growth and costs’ reduction 14.58% 13.55% = Increasing shareholders distribution Targeting abuyback' 2021 Dividend Policy 10% 35-
Slide 30: CET1 ratio sensitivity to market movements
cen ratio sensitivity to market movements / TO CURRENCY DEPRECIATION CAPITAL poticy BBVA hedges c./0% of the excess capital (what is not naturally hedged by the ratio) coaL Reduce consolidated CET1 ratio volatility as a result of FX movements P&L BBVA hedges on average between 30%- 50% of foreign su
Slide 31: BBVA Group RWA Distribution
BBVA Group RWA Distribution / TOTAL RWAS FULLY-LOADED MAR.21 354,433 €Mn 18% 17% m Spain 107,872 ™ Mexico 61,981 @™ Turkey 53,252 m™ South America 38,948 ™@ Rest of business 28,436 ™ Corporate Center? 63,945 (1) Credit Valuation Adjustment. (2) _ Includes the RWAs of the USA business sold to PNC 38%
Slide 32: High level of Available Distributable Items (ADIs)
1021 Fixed Income 32 High level of Available Distributable Items (ADIs) / BBVA, S.A.- PARENT COMPANY DEC.20, €BN €6.3Bn a Significant payment capacity from distributable items despite conservative calculation (Share Premium not included) a Supported by sustainable profitability €0.3Bn | ADIs 2020 AT
Slide 33: Comfortable liquidity position
Comfortable liqui position Creating Opportunities
Slide 34: Liquidity ratios well above 100% minimum requirements
1Q21Fixed Income 34 Liquidity ratios well above 100% minimum requirements / BBVA GROUP LIQUIDITY AND FUNDING / BBVA GROUP LIQUIDITY BALANCE METRICS SHEET”) MAR.21 MAR.21 . South Eurozone ®) Mexico Turkey ; America LTD 93% 91% 96% 3) 93% 57% 62% = Deposits LCR 186% 206% 162% >100% = Net Loans to = EC
Slide 35: BBVA guidelines for managing Liquidity & Funding
1921 Fixed Income 35 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 a Parent and subsidiari
Slide 36: Principles of BBVA Group's self-sufficient business model: Multiple Point of Entry
1Q21Fixed Income 36 Principles of BBVA Group's self-sufficient business model: Multiple Point of Entry subsidiaries ( Self-sufficient balance-sheet “ee management y eS 4 Own capital and liquidity management _ . ° (| Market access With its own credit, name and rating (Responsible for doing ibBthess l
Slide 37: Funding Plan
Slide 38: 2021 Funding Plan
1021 Fixed Income 38 2021 Funding Plan BBVA, S.A. redeemable instruments in 2019/21 were Illi. Gas / BBVA, S.A. 2021 2021 Strategy ? called at first reset date (€ bn) Executed (subject to market conditions) ATI We do not foresee any AT1/ T2 public transaction during this year given our solid positio
Slide 39: Broaden geographical diversification of access to market
1Q21Fixed Income 39 Broaden geographical diversification of access to market 7 MEDIUM & LONG-TERM WHOLESALE FUNDING MATURITIES MAR.21, €BN 19.0 73 68 ae EURO 56 49 @ Ability to access € 43.6 bn = P| || = funding markets in all our main - subsidiaries using él 62 16 05 os i a diversified set of _— =
Slide 40: Digital edge as a competitive advantage
Digital edge as a competitive advanta Creating Opportunities
Slide 41: Levering digital capabilities to better serve our customers
1021 Fixed Income 41 Levering digital capabilities to better serve our customers 7 CUSTOMER TRANSACTIONS (MILLION TRANSACTIONS!; 1919-1Q21 CHANGE, %) DIGITALCHANNELS BRANCHES 9 BBVA GROUP 515 +121% 104 95 78 -25% eo o o TH SPAIN 46 +109% ° 2 NOTE: Excludes the US business sold to PNC. / GROUP DIGITA
Slide 42: Customer growth through digital channels
1Q21Fixed Income 42 Customer growth through digital channels All-time record in digital customer acquisition / NEW CUSTOMERS DIGITAL ACQUISITION! Customer acquisition through (CUSTOMERS ACQUIRED THROUGH DIGITAL CHANNELS, ; : THOUSANDS AND % OF TOTAL) cutting-edge solutions 35% Ly 500,000 Aqua cards
Slide 43: Ratings
O3 Ratings Creating Opportunities
Slide 44: BBVA S.A. Ratings
1021 Fixed Income 44 BBVA S.A. Ratings' 74 BBVA LONG TERM 7 BBVA RATINGS BY TYPE OF SENIOR UNSECURED RATINGS INSTRUMENT Moody's S&P Moody's fisted Investment grade Negative outlook sep gave ©} rich tees @® Non Investment Grade Stable outlook vars tees | Note: CB = Covered Bonds, SNP = Senior Non Pre
Slide 45: Annex
Annex « BBVA Group 1021 Profit & Loss a Nil sensitivity to rates movements a ALCO portfolio « Sovereign Exposure by geography a Stages breakdown by business area a EAD to most vulnerable sectors a Loan deferrals classification « Outstanding loan deferrals « Government backed loans @ Book Value of th
Slide 46: 1Q21 Profit & Loss
1021 Fixed Income 46 1Q21 Profit & Loss Change Change 1Q21/1Q20 1Q21/4Q20 BBVA Group Net Interest Income 3,451 -2.3 -14.2 4.4 Net Fees and Commissions 1,133 10.0 0.8 67 Net Trading Income 581 16.1 68 205.9 Other Income & Expenses “11 ns. ns. ns. Gross Income 5,155 0.2 -10.8 9.4 Operating Expenses -2
Slide 47: NII sensitivity to interest rates movements
1021 Fixed Income 47 NIl 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 20% Lo 0% = 15% 5% 5% -15% 0% -20% Euro Mexico Euro Mexico Note: Nil sensitivities calculate
Slide 48: ALCO portfolio
1021 Fixed Income 48 ALCO portfolio / ALCO PORTFOLIO BREAKDOWN BY REGION (€BN)! Amort Cost Fair Value 41.8 44.7 477 (HTC) (HTC&S) = 40 March 2021 (€BN) (€BN) (duration) SouthAmerica 3.2 3.8 101 South America 0.1 3.9 1Ayears . | 6.6 | 90 Mexico : | ©} Mexico 2.5 7.6 3.6years Turkey | 78 | 7.2 6.7 Tur
Slide 49: Sovereign Exposure by geography
Sovereign Exposure by geography “!) Mar.21,€ bn Amortized Cost debt securities J debt securities (HTC&S) (HTC) Spain 17.8 Italy 3.7 Portugal 0.0 Mexico 3.4 USA 0.0 Turkey 3.5 All Others Fair Value 18.5 47 0.0 8.8 3.7 3.1 Trading securities 5.6 2.3 0.7 10.9 0.0 0.1 Non-trading financial assets mandat
Slide 50: Stages breakdown by business area
1021 Fixed Income 50 Stages breakdown by business area / CREDIT RISK BREAKDOWN BY BUSINESS AREA (MAR-21,€ MN) Accumulate BBVA GROUP ampEITATETTS | | SPAIN 5 MEXICO Stage 1 313,416 2,151 Stage 1 167,715 802 Stage 1 49,931 718 Stage 2 36,262 2,457 Stage 2 17,706 806 Stage 2 4.459 483 Stage 1568 8,005
Slide 51: Exposure at default to most vulnerable sectors
1021 Fixed Income 51. Exposure at default to most vulnerable sectors in the current environment / BREAKDOWN BY SECTORS (MAR-21) Leisure | 9,22 Commercial Real Estate 7,02 Developer Real Estate 5,70 Retailers non food 4,83 Air transportation 0,94 Total EAD to the most vulnerable sectors as a % of tot
Slide 52: Loan deferrals classification
Expired deferrals by stages TOTAL DEFERRALS GRANTED o/w expired As of Mar'21 as a % of total loans €BN % of total loans % Stage 1 Stage 2 Stage 3 Total Group (ex-USA) 27.3 8.0% 80% 4.9% 2.4% 0.7% By segment Mortgages 11.2 11.9% 70% 5.9% 1.9% 0.6% Consumer & credit cards 7.3 7.0% 92% 4.0% 1.8% 0.7% S
Slide 53: Outstanding loan deferrals
€bn % of loans Total Group (ex-USA) 5.45 1.60% Spain 4.1 2.0% Mexico 0.0 0.0% Turkey 0.9 2.3% Peru 0.3 1.6% Colombia 0.2 1.6% Argentina 0.0 0.0%
Slide 54: Government backed loans
GROUP (ex USA) SPAIN MEXICO TURKEY ARGENTINA COLOMBIA PERU Loans Weight Loans Weight Loans Weight Loans Weight Loans Weight Loans Weight Loans Weight Households 1.3 0.9% 1.0 1.1% 0.0 0.0% 0.0 0.0% 0.1 4.4% 0.0 0.3% 0.2 3.1% Corporates & SMEs 15.3 10.6% 11.6 14.5% 0.0 0.0% 0.3 1.3% 0.0 1.9% 0.2 5.6%
Slide 55: Book Value of the main subsidiaries
1Q21Fixed Income 55 Book Value of the main subsidiaries ':2 € BN, MAR-21 Mexico LLL) Turkey KEELE, 3.5 Colombia ma 1.3 Peru 1.0 Argentina 0.9 Chile 80.3 Venezuela 10.11 (1) Includes the initial investment + BBVA’s undistributed results + FX impact + other valuation adjustments. The Goodwill associat
Slide 56: Main Subsidiaries Ratings
Main Subsidiaries Ratings | 7 BBVA LONG TERM SENIOR UNSECURED RATINGS BBVA Mexico Garanti BBVA Investment [J AAA/Aaa AAA/Aaa grade AA+/Aal AA+/Aal AA/Aa2 AA/Aa2 AA-/Aa8 AA-/Aa8 AH/AI As/Al A/A2 AVA2 A/A3 A/A3 BEM Moopy’s ff B88+/Beal S&P BBB/Baa2 BBB-/Baa3_| FITCH BBB-/Baa3 Non BB+/Bal BB+/Bal Inves
Slide 57: BBVA Group SREP Requirement and Distance to MDA
T2: 2.38% 0.00% AT1: 1.78% 0.75% 2.50% 0.84% 4.50% 2021 CET1 SREP 2021 Total Capital Requirement SREP Requirement BBVA Group Total capital ratio phased-in Mar.21
Slide 58: Capital Base: BBVA Group & BBVA, S.A.
Capital Base: BBVA Group & BBVA, S.A. PHASED-IN CAPITAL RATIOS MAR.21(%) 20.04 16.1 2.36 Tier 2 6.16 ES 258 Hi 2.34 . BB Additional Tier 1 | Real 12.20 15.10 Mcen BBVA Group BBVA, S.A. CET €43,234m €30,504m ATI €5,721m €5,206m T2 €8,294m €4772m Total Capital Base €57,249m €40,481m RWA € 354,342m € 2
Slide 59: BBVA, S.A. SREP Requirement and Distance to MDA
T2: 2.38% 0.01% AT1: 1.78% 2.50% 0.84% 4.50% 2021 CET1 SREP 2021 Total Capital BBVA, S.A. Total Requirement SREP Requirement capital ratio phased-in Mar.21
Slide 60: Debt Issuances 2018 - 2021
Senior Unsec Aug-19 Jul-24 Aug-24 $ 600 M 2.500% Fixed 3.5% Senior Unsec Jun-18 May-21 Jun-21 $ 1.150 M FRN 3ML+73 bps Senior Unsec Sep-20 - Sep-25 $ 500 M 1.875% Tier 2 Sep-19 Sep-29 Sep-34 $ 750 M 5.875% Tier 2 Jan-18 Jan-28 Jan-33 $ 1,000 M 5.125%
Slide 61: Called notes 2018 - 2021
1021 Fixed Income 61 Called notes — 2018 — 2021 Outstanding currency (M) ATI Apr-I6 Apr-21 €1,000 8.875% Product |Ilssue Date| Redemption Coupon economic call policy BB Caixa Terrassa SPP Preferred Ago-05 Jan-21 £75M 1O0yCMS+0.10% BBVA Intl. Preferred I’ Ct. Maa DOM Jan-21 £312M 3m£+0.875% Uniperson
Slide 62: Turkey - Liquidity & funding sources
1Q21Fixed Income 62 Turkey — Liquidity & funding sources a Solid liquidity position: * Total LTD ratio is at 95.8%, increasing by +2.3 p.p in 1Q21 driven by an increase in TRY LtD * Foreigncurrency loans decreased by USD 0.7 Bn toc. USD 11.9 Bn in 1Q21 * Liquidity ratios above requirements: Liquidit
Slide 63: Outstanding trend in digital sales
Outstanding trend in digital sales (% OF TOTAL SALES YTD, # OF TRANSACTIONS AND PRV') GROUP 65.2 62.5 59.9 UNITS ae 46.6 PRY 40.5 Mar-19 Mar-20 Mar-21 GA TURKEY 79.4 79.0 82.9 e—«—_2, 45.1 45.2 Mar-19 Mar-20 Mar-21 Group exclude USA, Venezuela, Chile and Paraguay. (1) Product Relative Value as a pro
Slide 64: BBVA
BBVA