46 slides from Banco Bilbao Vizcaya Argentaria's earnings presentation, Jul 27, 2017
Slide 1: 2Q17 Results
2Q 2017 Results July 27th 2017 / 1 2Q17 Results July, 27th 2017
Slide 2: Disclaimer
2Q 2017 Results July 27th 2017 / 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: Continued Strength in the 2nd Quarter
2Q 2017 Results July 27th 2017 / 3 Continued Strength in the 2nd Quarter Net Attributable Profit CET1 fully-loaded – BBVA Group Quarterly evolution (€m) Quarterly evolution (%) 1,199 1,123 1,107 +38 bps 965 11.00% 10.90% 11.01% 11.10% 678 10.72% 2Q16 3Q16 4Q16 1Q17 2Q17 Jun.16 Sep.16 Dec.16 Mar.17 J
Slide 4: 2Q17 Highlights
2Q 2017 Results July 27th 2017 / 4 2Q17 Highlights Core revenues Cost control Sound asset growth quality Net Gross Gross Operating Cost of interest income Income Expenses risk (Quarterly, %, €) income vs. Op. and fees Expenses (€ constant) +9.3% (YtD, %, € constant) +7.8% +2.2% 0.94% vs. 2Q16 vs. 6M
Slide 5: 2Q17 Profit & Loss
2Q 2017 Results July 27th 2017 / 5 2Q17 Profit & Loss Change 2Q17/2Q16 BBVA Group (€m) 2Q17 % % constant Net Interest Income 4,481 6.4 10.0 Net Fees and Commissions 1,233 3.7 6.7 Net Trading Income 378 -53.9 -51.0 Other Income & Expenses 244 8.6 -2.8 Gross Income 6,336 -1.7 1.3 Operating Expenses -3
Slide 6: 1H17 Profit & Loss
2Q 2017 Results July 27th 2017 / 6 1H17 Profit & Loss Change 1H17/1H16 BBVA Group (€m) 1H17 % % constant Net Interest Income 8,803 5.2 9.6 Net Fees and Commissions 2,456 4.5 8.0 Net Trading Income 1,069 -9.1 -2.4 Other Income & Expenses 390 13.7 -1.7 Gross Income 12,718 4.0 7.8 Operating Expenses -6
Slide 7: Earnings - Gross Income
2Q 2017 Results July 27th 2017 / 7 Earnings - Gross Income Net Interest Income Net Fees and Commissions (€m constant) +9.6% (€m constant) vs 1H16 +8.0% +10.0% +6.7% vs 1H16 4,473 4,067 4,168 4,324 4,330 1,155 1,181 1,224 1,232 1,152 +3.3% +0.7% Growing Growth trend quarter by maintained in quarter a
Slide 8: Operating Expenses
2Q 2017 Results July 27th 2017 / 8 Operating Expenses Group Operating Jaws 1H17 vs. 1H16 Ex-CNCB YTD (%); (€ constant) 11.3% (€ constant) 15.0% Inflation Developed 8.7% 7.2% -4.8% 1.5% 7.0% 7.8% Gross Income SPAIN* 6.9% 5.9% Gross Income 7.2% ex NTI 6.3% 6.4% Operating Expenses USA 1.4% 1.9% 3.8% 6.
Slide 9: Earnings - Operating Income
2Q 2017 Results July 27th 2017 / 9 Earnings - Operating Income Quarterly Evolution 1H17 vs. 1H16 (€m constant) (€ constant) +13.9% vs 1H16 - 0.0% SPAIN BANKING ACTIVITY -0.1% 3,263 3,144 3,145 2,892 2,976 USA +19.9% MEXICO +14.0% -3.7 % TURKEY +12.6% SOUTH AMERICA +9.4% 2Q16 3Q16 4Q16 1Q17 2Q17 Good
Slide 10: Risk Indicators
2Q 2017 Results July 27th 2017 / 10 Risk Indicators Total Impairments (Financial Assets and RE) NPLs (€m constant) (€bn) -9.8 % - 2.4 € bn 1,121 1,050 1,011 24.8 981 1,009 24.3 23.6 23.2 +0.2% 22.4 - 0.8 € bn 2Q16 3Q16 4Q16 1Q17 2Q17 2Q16 3Q16 4Q16 1Q17 2Q17 Cost of risk NPL & Coverage ratios YTD (%
Slide 11: Capital Ratios
2Q 2017 Results July 27th 2017 / 11 Capital Ratios CET1 fully-loaded – BBVA Group High quality capital QoQ Evolution (%, bps) (%) CET1 RWAs/ Total Assets phased-in +9 bps 11.76% 28 bps 53% #1 11.01% 11.10% 31% - 11 bps -8 bps Leverage ratio fully-loaded % CET1 FL Net Earnings Dividend Others* % CET1
Slide 12: Delivering on our Transformation
2Q 2017 Results July 27th 2017 / 12 Delivering on our Transformation
Slide 13: Customer Experience Improvements in 2Q17
2Q 2017 Results July 27th 2017 / 13 Customer Experience Improvements in 2Q17 • Virtual voice assistant Products & Functionalities - MIA (Turkey) Relationship Model • EstarSeguros (Spain) • Open Market Digital MIA- Mobile Interactive Loans (USA) Assistant (Turkey) • BBVA Plan- Financial • Garanti Mob
Slide 14: Digital Customers BBVA Group
2Q 2017 Results July 27th 2017 / 14 Digital Customers BBVA Group Digital Customers (Mn, %penetration) +22% 19.9 18.1 16.3 50% tipping Jun 16 Dec 16 Jun 17 point in digital PENETRATION 33% 36% 39% customers achieved Mobile Customers (Mn, %penetration) TURKEY VENEZUELA +42% CHILE 14.5 12.3 10.2 Jun 16
Slide 15: Digital Sales
2Q 2017 Results July 27th 2017 / 15 Digital Sales (% of total sales YtD, # of transactions) GROUP SPAIN USA 22.2 24.7 17.1 22.2 16.8 19.4 Dec-16 Jun-17 Dec-16 Jun-17 Dec-16 Jun-17 Exponential growth in all franchises MEXICO TURKEY SOUTH AMERICA 16.0 31.0 22.5 11.9 15.4 25.2 Dec-16 Jun-17 Dec-16 Jun-
Slide 16: Business Areas
2Q 2017 Results July 27th 2017 / 16 Business Areas
Slide 17: Spain Banking Activity – Profit & Loss
2Q 2017 Results July 27th 2017 / 17 Spain Banking Activity – Profit & Loss Change (%) Change (%) Spain Banking Activity 2Q17 vs 2Q17 vs 1H17 vs 2Q17 1H17 (€m) 2Q16 1Q17 1H16 NII excluding CIB remains stable in Net Interest Income 929 -5.4 -0.6 1,865 -3.9 1H. Lower contribution from CIB due Net Fees
Slide 18: Spain Banking Activity – Activity & Spreads
2Q 2017 Results July 27th 2017 / 18 Spain Banking Activity – Activity & Spreads Activity (jun-17) Customer Spread (%) YtD YtD -0.4% +1.2% € bn YoY € bn YoY 168.4 -4.4% 233.7 +2.5% Yield on loans Others 3.9 -18.4% Others 5.1 -55.0% Public Sector 18.0 -15.3% Off-balance 58.9 +10.4% 2.12 2.13 2.10 2.03
Slide 19: Spain Banking Activity - Key Ratios
2Q 2017 Results July 27th 2017 / 19 Spain Banking Activity - Key Ratios 47.0 Efficiency Risk Indicators (%, €) 37. 0 27. 0 55.8 Coverage ratio 54.5 54.4 53.4 51.0 17.0 60% 10.5 53% 53% 6.1 4.0 7.0 -4.0 -4.4 NPL ratio -3.0 6.0% 5.8% 5.7% -13. 0 6M16 9M16 12M16 3M17 6M17 Cost-to-income ratio Cost Evol
Slide 20: Non Core Real Estate - Highlights
2Q 2017 Results July 27th 2017 / 20 Non Core Real Estate - Highlights Net exposure Net attributable profit (€bn) -14.2% (€m) -12.1% 10.2 1.1 9.3 2Q16 3Q16 4Q16 1Q17 2Q17 Other RE 8.8 assets 0.6 0.6 RE owned -48.5% assets 5.3 5.0 Foreclosed 4.9 -7.5% Assets -94 -108 -82 -109 RE developer 3.8 3.7 loan
Slide 21: USA – Profit & Loss
2Q 2017 Results July 27th 2017 / 21 USA – Profit & Loss Change (%) Change (%) USA 2Q17 vs 2Q17 vs 1H17 vs 2Q17 1H17 (constant €m) 2Q16 1Q17 1H16 Net Interest Income 572 19.1 8.7 1,098 13.6 Net Fees and Commissions 167 0.6 -3.1 338 7.6 Strong growth in core revenues, Net Trading Income 23 -52.3 -27.6
Slide 22: USA – Activity & Spreads
2Q 2017 Results July 27th 2017 / 22 USA – Activity & Spreads Activity (jun-17) Customer Spread (constant €) (%) YtD YtD -1.7% -4.9% € bn YoY € bn YoY 56.6 -3.1% 55.5 -4.3% Yield on loans 3.92 4.12 Public Sector 4.5 2.0% 3.75 10.5 -21.7% 3.66 3.70 Time Deposits 3.81 Other 3.57 Commercial 29.7 -3.5% 3
Slide 23: USA - Key Ratios
2Q 2017 Results July 27th 2017 / 23 USA - Key Ratios Efficiency Risk Indicators (%, constant €) 13. 0 68.1 68.1 68.1 Coverage ratio 107% 105% 64.2 64.4 8.0 90% 2.8 2.5 1.8 3.0 1.4 1.6% NPL ratio -1.0 -2.0 1.3% 1.3% -7.0 6M16 9M16 12M16 3M17 6M17 Cost of Risk 0.5% 0.5% 0.4% (YtD) Cost-to-income ratio
Slide 24: Mexico – Profit & Loss
2Q 2017 Results July 27th 2017 / 24 Mexico – Profit & Loss Change (%) Change (%) Mexico 2Q17 vs 2Q17 vs 1H17 vs 2Q17 1H17 (constant €m) 2Q16 1Q17 1H16 Net Interest Income 1,353 9.9 2.3 2,676 9.2 Excellent top line growth thanks to core Net Fees and Commissions 306 11.4 6.1 595 11.7 revenues (NII and
Slide 25: Mexico – Activity & Spreads
2Q 2017 Results July 27th 2017 / 25 Mexico – Activity & Spreads Activity (jun-17) Customer Spread (constant €) (%) YtD YtD +2.4% +3.7% € bn YoY € bn YoY 49.6 Yield on loans +8.8% 67.0 +5.6% 12.30 12.10 Others 0.5 +8.9% 3.2 11.36 11.49 11.83 Others -4.7% Public Sector 3.8 +1.3% Mutual Funds 17.9 +2.2
Slide 26: Mexico - Key Ratios
2Q 2017 Results July 27th 2017 / 26 Mexico - Key Ratios Efficiency Risk Indicators 23.0 (%, constant €) 18.0 36.2 36.2 35.4 128% 33.6 34.2 126% 13. 0 Coverage ratio 121% Inflation 8.9 7.9 6.3% 7.2 8.0 4.2 4.3 3.0 2.5% NPL ratio 2.3% 2.3% -2.0 6M16 9M16 12M16 3M17 6M17 Cost-to-income ratio Cost Evolu
Slide 27: Turkey – Profit & Loss
2Q 2017 Results July 27th 2017 / 27 Turkey – Profit & Loss Change (%) Change (%) Turkey 2Q17 vs 2Q17 vs 1H17 vs 2Q17 1H17 (constant €m) 2Q16 1Q17 1H16 Net Interest Income 800 16.0 -1.5 1,611 21.3 Net Fees and Commissions 181 3.0 5.6 352 8.4 Net Trading Income 24 -75.2 n.s. 9 -91.6 Other Income & Exp
Slide 28: Turkey – Activity & Spreads
2Q 2017 Results July 27th 2017 / 28 Turkey – Activity & Spreads Activity (jun-17) Customer Spread (constant €) YtD YtD (%) +8.0% +8.0% € bn YoY € bn YoY 55.8 +19.7% 51.1 +13.6% Mutual & 3.9 Customer Spread TRY Pension Funds +25.0% Business 33.9 +22.1% Banking 5.85 5.93 5.64 5.57 5.19 Time Deposits 3
Slide 29: Turkey - Key Ratios
2Q 2017 Results July 27th 2017 / 29 Turkey - Key Ratios 40. 0 Efficiency Risk Indicators 35.0 (%, constant €) 30.0 135% 25.0 40.8 Coverage ratio 128% 128% 38.7 39.1 39.8 38.4 Inflation 20.0 10.9% 11.5 15. 0 11.4 7.7 NPL ratio 2.7% 2.6% 2.5% 7.9 6.5 10.0 5.0 0. 0 6M16 9M16 12M16 3M17 6M17 Cost of Ris
Slide 30: South America – Profit & Loss
2Q 2017 Results July 27th 2017 / 30 South America – Profit & Loss Change (%) Change (%) South America 2Q17 vs 2Q17 vs 1H17 vs 2Q17 1H17 (constant €m) 2Q16 1Q17 1H16 Net Interest Income 829 12.8 5.1 1,617 10.3 Net Fees and Commissions 179 10.9 3.6 352 15.3 Good growth in core revenues (NII Net Tradin
Slide 31: South America – Activity & Spreads
2Q 2017 Results July 27th 2017 / 31 South America – Activity & Spreads Activity (jun-17) Customer Spread (constant €) YtD YtD (%) +1.2% +3.7% YoY € bn YoY Argentina € bn 46.1 +6.4% 57.3 +10.8% 16.43 15.84 15.81 15.59 14.78 Peru Others 3.2 +5.6% Others 11.8 +12.6% 7.37 7.17 7.13 6.98 6.98 Peru 12.9 -
Slide 32: South America – Key Ratios
2Q 2017 Results July 27th 2017 / 32 South America – Key Ratios Efficiency Risk Indicators (%, constant €) 46.3 47.9 46.2 Coverage ratio 111% 45.8 46.0 30.0 96% 94% 25.0 Inflation 10.2% 20.0 16.0 15.8 15.4 NPL ratio 3.3% 3.5% 15. 0 10.5 11.4 2.7% 10.0 5.0 1.5% 1.5% 0. 0 1.1% Cost of Risk 6M16 9M16 12
Slide 33: 2Q17 Key Takeaways
2Q 2017 Results July 27th 2017 / 33 2Q17 Key Takeaways 1. Excellent 1H results, solid trends strengthened Growth in core revenues Costs control Low cost of risk Solid capital generation 2. Delivering on our transformation: Best mobile app in the world 3. Creating value for the shareholder
Slide 34: Annex
2Q 2017 Results July 27th 2017 / 34 Annex
Slide 35: Gross Income - Breakdown
2Q 2017 Results July 27th 2017 / 35 Gross Income - Breakdown 6M17 Spain 3,195 €m Rest of Eurasia 256 €m 25% 2% USA 12% 1,468 €m South America 2,252 €m 18% 16% Turkey 1,998 €m 28% Mexico 3,507 €m Note: Spain includes the areas Banking activity in Spain and Non Core Real Estate. Figures exclude Corpor
Slide 36: Group – Net Attributable Profit
2Q 2017 Results July 27th 2017 / 36 Group – Net Attributable Profit (€m) BUSINESSES +423 €m 152 120 2,306 105 114 1,832 50 16 -12 -2 -69 1H16 €m FX Banking Non core USA Turkey Rest of Mexico South Corporate 1H17 €m Effect activity RE Eurasia America Center Spain YoY (%) 8.0 -7.6 62.4 39.3 -2.1 16.4
Slide 37: Total Spain – Profit & Loss
2Q 2017 Results July 27th 2017 / 37 Total Spain – Profit & Loss Change (%) Change (%) Total Spain 2Q17 vs 2Q17 vs 1H17 vs 2Q17 1H17 (€m) 2Q16 1Q17 1H16 Net Interest Income 951 -4.7 0.7 1,896 -4.4 Net Fees and Commissions 401 7.3 4.4 785 3.0 Net Trading Income 94 -70.1 -58.3 318 -18.4 Other Income &
Slide 38: Non Core Real Estate - Profit & Loss
2Q 2017 Results July 27th 2017 / 38 Non Core Real Estate - Profit & Loss Change (%) Change (%) Non Core Real Estate 2Q17 vs 2Q17 vs 1H17 vs 2Q17 1H17 (€m) 2Q16 1Q17 1H16 Net Interest Income 22 40.3 129.1 31 -24.7 Net Fees and Commissions 0 -70.0 -79.5 2 -1.1 Net Trading Income 0 n.s. n.s. 0 n.s. Oth
Slide 39: Rest of Eurasia - Profit & Loss
2Q 2017 Results July 27th 2017 / 39 Rest of Eurasia - Profit & Loss Change (%) Change (%) Rest of Eurasia 2Q17 vs 2Q17 vs 1H17 vs 2Q17 1H17 (€m) 2Q16 1Q17 1H16 Net Interest Income 49 11.0 8.4 95 10.7 Net Fees and Commissions 41 -14.4 2.3 82 -9.5 Net Trading Income 31 -10.6 -35.0 80 33.9 Other Income
Slide 40: Corporate Centre - Profit & Loss
2Q 2017 Results July 27th 2017 / 40 Corporate Centre - Profit & Loss Change (%) Change (%) Corporate Center 2Q17 vs 2Q17 vs 1H17 vs 2Q17 1H17 (€m) 2Q16 1Q17 1H16 Net Interest Income -80 -27.4 -26.8 -190 -22.3 Net Fees and Commissions -43 -4.1 771.0 -47 -14.1 Net Trading Income 30 -67.5 -85.8 244 172
Slide 41: Capital Base
2Q 2017 Results July 27th 2017 / 41 Capital Base Evolution of phased-in capital ratios Evolution of fully-loaded capital ratios (%) (%) 15.1 15.3 15.5 15.0 15.2 14.7 Tier 2 2.3 2.4 2,3 Tier 2 2.4 2.2 2.5 Additional Tier 1 0.7 1.2 0,7 1.7 Additional Tier 1 1.6 1.5 CET1 12.2 11.6 12,2 CET1 10.9 11.0 1
Slide 42: Risk-Weighted Assets by Business Area
2Q 2017 Results July 27th 2017 / 42 Risk-Weighted Assets by Business Area Phased-in RWA Breakdown by business area and main countries (€m) Dec-16 Mar-17 Jun-17 Banking activity in Spain 113,194 110,862 107,754 Non core Real Estate Activity 10,870 10,776 10,298 United States 65,492 64,847 60,653 Turk
Slide 43: Shareholder’s Return: TBV per Share and Dividends
2Q 2017 Results July 27th 2017 / 43 Shareholder’s Return: TBV per Share and Dividends TBV per Share & Remuneration Shareholder (€ per Share) 6.03 5.96 5.81 0.08 0.21 0.08 YTD Accumulated Dividends 5.88 5.82 5.73 TBVpS Dec-16 Mar-17 Jun-17
Slide 44: ALCO Porfolio
2Q 2017 Results July 27th 2017 / 44 ALCO Porfolio ALCO Portfolio breakdown by region (€ bn) € 61.5 bn € 58.8 bn € 55.6 bn South America 2.9 South America 3.3 South America 3.3 Mexico 5.9 Mexico 6.1 Mexico 5.6 USA 11.4 11.3 USA USA 10.9 Turkey 10.5 Turkey 10.2 Turkey 10.3 Euro (1) 30.8 Euro (1) Euro
Slide 45: Customer Spreads
2Q 2017 Results July 27th 2017 / 45 Customer Spreads Average (€) 2Q16 3Q16 4Q16 1Q17 2Q17 2Q16 3Q16 4Q16 1Q17 2Q17 Spain 1.76% 1.84% 1.82% 1.83% 1.83% Chile 3.90% 3.61% 3.54% 3.69% 4.11% Yield on Loans 2.12% 2.13% 2.10% 2.03% 2.01% Yield on Loans 7.19% 6.60% 6.37% 6.36% 6.66% Cost of Deposits -0.36%
Slide 46: 2Q17 Results
2Q 2017 Results July 27th 2017 / 46 2Q17 Results July, 27th 2017