Banco Bilbao Vizcaya Argentaria, S.a. · BME:BBVA
Banco Bilbao Vizcaya Argentaria — Q3 2019 Earnings Presentation
50 slides from Banco Bilbao Vizcaya Argentaria's earnings presentation, Oct 31, 2019
Slide 1: BBVA Creating Opportunities 3Q19 Results
BBVA Creating Opportunities 3Q19 Results October 31st, 2019
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: Outstanding value creation and strong capital position
Outstanding value creation and strong capital position 1,154 3Q18 4Q18 1Q19 2Q19 3Q19 Sep-18 Sep-19 Note: The hyperinflation impact in Argentina recorded in 3Q18 has been allocated on a monthly basis in the first nine 9 monthsof 2018 impacting 1Q18,2Q18 and 3Q18 P&L and balance sheet figures. 3Q18 f
Slide 4: 3Q19 Highlights
3Q19 Highlights 01 Robust growth in core revenues Nil (€constant) + 3.2% VS.3Q18 FEES (€constant) “E 3.4% VS.3Q18 02 Excellent operating income growth and efficiency OPERATING INCOME 9.3 % vs. 3Q18 (€ const. COST TO INCOME (YTD) 48 . “7% -75 bps vs. 12M18 (€ const 03 Sound risk indicators NPL RATIO
Slide 5: 3Q19 Profit & Loss
3Q19 Profit & Loss BBVA Group(€m) 3Q19 Change 3Q19/3Q18 % % constant Net Interest Income 4,488 4.1 3.2 Net Fees and Commissions 1,273 8.5 6.4 Net Trading Income 351 65.5 76.1 Other Income & Expenses 22 -41.3 -69.1 Gross Income 6,135 6.9 5.9 Operating Expenses -2,946 4.2 2.2 Operating Income 3,189 9.
Slide 6: 9M19 Profit & Loss
9M19 Profit & Loss BBVA Groupccm) 9M19 Change 9M19/9M18 % % constant Net Interest Income 13,475 6.3 7.1 Net Fees and Commissions 3,743 3.4 3.8 Net Trading Income 893 2.6 3.9 Other Income & Expenses 13 -90.2 -89.7 Gross Income 18,124 4.8 5.5 Operating Expenses -8,820 2.9 3.2 Operating Income 9,304 6.
Slide 7: Excellent operating income growth and efficiency
Excellent operating income growth and efficiency GROUP OPERATING JAWS (9M YoY (%); (€ CONSTANT)) GROUP OPERATING INCOME (YoY (%); (€M CONSTANT))—+7.9% 9,304 63.5% Core Operating Revenues expenses Average
Slide 8: Sound risk indicators
Sound risk indicators FINANCIAL ASSETS IMPAIRMENTS (€M CONSTANT) + 17.6% COST OF RISK (YTD (%)) 0.91% 1.02% 1.06% 0.91% 1.01% 3Q18 4Q18 1Q19 2Q19 3Q19 NPLs (€BN)—0.6 €bn 17.1 Sep-18 Dec-18 Mar-19 Jun-19 NPL& COVERAGE RATIOS (%) 73% 73% 74% 75% 75% COVERAGE 4.1% NPL 3.9% 3.9% 3.8% 3.9% Sep-18 Dec-18
Slide 9: Strong capital position
Strong capital position CET1 FULLY-LOADED—BBVA GROUP QUARTERLY EVOLUTION (%, BPS) +4 bps 11.52% 1 34 bps -17 bps -8 bps -5 bps 11.56% 1 â– Jun-19 Net Earnings Dividends & ATI coupons RWAs (constant Euros) Others1 â– Sep-19 (1) Others includes market related impacts such as FX impact, mark to market
Slide 10: Outstanding delivery on shareholder value creation
Outstanding delivery on shareholder value creation BBVA European Peer Group Average 2018 figures include BBVA Chile recurrent operations (sale closed on July 6th) European Peer Group: BARC. BNPP. CASA, CS. CMZ. DB. HSBC. ISP. LBG. RBS. SAN. SG. UBS. UCG. European Peer Group figures as of Jun-19. BBV
Slide 11: Leading digital transformation
Leading digital transformation
Slide 12: Transformation boosting digital sales and client acquisition
Transformation boosting digital sales and client acquisition DIGITAL SALES (% OF TOTAL SALES YTD, # OF TRANSACTIONS AND PRV1) First bank in Spain providing full digital onboarding for SMEs targeting more than 650K potential new clients Figures have been restated in order to includecredit card relate
Slide 13: The impact of transformation: Mexico (Sep-17 vs Sep-19)
The impact of transformation: Mexico 1 1 (Sep-17 vs Sep-19) iri GROWTH Acquiring more clients and increasing sales ENGAGEMENT Resulting in higher client satisfaction and retention 2.lMn ACTIVE INCREMENTAL CLIENTS NPS #iQ BBVA 1% NETWORK FTEs YTD SALES GROWTH (9M17/9M19 PRV) ATTRITION RATE (INDEX) +1
Slide 14: The impact of transformation: Mexico (Sep-17 vs Sep-19)
The impact of transformation: Mexico &:1 (Sep-17 vs Sep-19) iy GROWTH Acquiring more clients and increasing sales ACTIVE INCREMENTAL +2.1 Mn CLIENTS: YTD SALES GROWTH (9M17/9M19 PRV) +149 E2E omi7 M19 we ENGAGEMENT Resulting in higher client satisfaction and retention NPS #1Q BBVA ATTRITION RATE (IN
Slide 15: Spain Profit & Loss
Profit & Loss (€m) 3Q19 A (%) vs 3Q18 9M19 A(%) vs 9M18 Net Interest Income 913 -1.1 2,721 -1.9 Net Fees and Commissions 442 5.2 1,287 1.3 Net Trading Income 30 -28.2 121 -62.5 Other Income & Expenses 105 21.1 177 42.5 Gross Income 1,489 1.3 4,307 -4.2 Operating Expenses -813 -2.1 -2.441 -3.0 Operat
Slide 16: USA Profit & Loss
USA Profit & Loss (€m constant) 3Q19 ^Constant vs3Q18(%) 9M19 A Constant vs9M18(%) v A Current S9M18(%) Net Interest Income 588 -2.8 1,813 2.4 8.9 Net Fees and Commissions 167 10.2 489 2.5 9.0 Net Trading Income 58 176.3 139 88.0 99.8 Other Income & Expenses 3 n.s. 2 n.s. n.s. Gross Income 816 5.6 2
Slide 17: Mexico Profit & Loss
Profit & Loss (€m constant) 3Q19 ^Constant vs3Q18(%) 9M19 A Constant vs9M18(%) A Current vs9M18(%) Net Interest Income 1,554 4.0 4,599 6.5 11.9 Net Fees and Commissions 330 3.8 952 0.6 5.7 Net Trading Income 106 91.1 241 15.4 21.3 Other Income & Expenses 19 -61.2 121 -12.5 -8.0 Gross Income 2,008 4.
Slide 18: Turkey Profit & Loss
Profit & Loss (€m constant) 3Q19 AConstant vs 3Q18 (%) 9M19 AConstant vs9M18(%) A Current vs9M18(%) Net Interest Income 672 -8.4 2,029 6.0 -7.9 Net Fees and Commissions 186 18,2 547 22.3 6.2 Net Trading Income 0 -99.0 -65 n.s. n.s. Other Income & Expenses 7 -48.2 37 -16.6 -27.6 Gross Income 866 -6.8
Slide 19: South America Net Attributable Profit
<S) South America Net Attributable Profit (€m constant) 3Q19 A Constant1 A Constant1 vs9M18(%) v A Current s 9M18 (%) vs3Q18(%) 9M19 Colombia 69 29.9 198 18.4 12.2 Peru 55 28.5 153 17.8 22.8 Argentina 52 850.6 117 n.s. n.s. Other2 34 20.4 100 10.0 5.3 South America 211 61.8 569 62.0 45.0 (1) Venezue
Slide 20: South America Net Attributable Profit
© South America Net Attributable Profit " cst 3Q19 153 9MI9 59h it Colombia 6 299° 9822 Peru 55 285 153 78 228 Argentina 2 8506 «7s. ns, Other? 34 204 100 10.0 53 South America zn 618569 62.0 45.0 CO ces VA Verna Pa KEY RATIOS CUSTOMER SPREAD (%) COST OF RISK YTD (%) 678 679 195 187 6.64 166 = = 670
Slide 21: Excellent 3Q results driven by our unique and diversified footprint
Excellent 3Q Results driven by our unique and diversified footprint and business model Operating income growing at nearly double-digit, with continuous improvement in efficiency Risk indicators in line with expectations Strong capital position with CET1 FL within the target range Outstanding deliver
Slide 22: Annex
BBVA Creating Opportunities Annex 01 Customer spread by 06 country 05 ALCO Portfolio, Nil Sensitivity and LCRs&NSFRs
Slide 23: Customer spread by country
01 Customer spread by country
Slide 24: Customer spreads: Quarterly evolution
Customer spreads: Quarterly evolution 3Q18 4Q18 1Q19 2Q19 3Q19H â– 3Q18 4Q18 1Q19 2Q19 3Q19 Spain 1.93% 1.95% 1.96% 1.99% 2.00% Turkey TL 4.02% 1.12% 2.50% 2.72% 4.10% Yield on Loans 2.01% 2.03% 2.04% 2.06% 2.05% Yield on Loans 17.19% 18.98% 19.02% 19.09% 18.56% Cost of Deposits -0.08% -0.08% -0.07%
Slide 25: Customer spreads: YTD evolution
Customer spreads: YTD evolution 9M18 9M19 Spain 1.94% 1.99% Yield on Loans 2.01% 2.05% Cost of Deposits -0.07% -0.06% USA 3.94% 4.06% Yield on Loans 4.49% 5.00% Cost of Deposits -0.55% -0.94% Mexico MXN 11.91% 11.73% Yield on Loans 14.23% 14.52% Cost of Deposits -2.32% -2.79% Mexico FC1 4.03% 4.27%
Slide 26: Customer spreads: YTD evolution
Customer spreads: YTD evolution oMIg = OM19. omg. omg) Spain 194% 1.99% Turkey TL 466% 3.12% Yield on Loans 201% 2.05% Yield on Loans 1567% 18.89% Cost of Deposits 0.07% 0.06% Cost of Deposits 11.01% 15.77% USA 3.94% 4.06% Turkey FC 437% 5.14% Yield on Loans 449% 5.00% Yield on Loans 6.81% 7.27% Cos
Slide 27: Gross Income breakdown 9M19
Gross Income breakdown 9M19 (CONSTANT €) Spain 5,912 €m
Slide 28: Net Attributable Profit evolution
Net Attributable Profit evolution
Slide 29: Group Net Attributable Profit
Group—Net Attributable Profit (€M) BUSINESSES +126 €m 4,323 23 33 42 -65 -27 -98 -42 â– I -740 3,667 9M18 BBVA Chile FX Effect Spain USA YoY (%) -2.5 -17.0 (constant €) Mexico Turkey Rest of Eurasia South Corp. Center America (w/o BBVA Chile) 1.7 -10.0 69.1 62.0 9M19 BBVA Creating Opportunities
Slide 30: P&L accounts by business unit
04 P&L accounts by business unit Rest of Eurasia Corporate Center Colombia Peru Argentina
Slide 31: Rest of Eurasia Profit & Loss
Rest of Eurasia—Profit & Loss Profit & Loss (€m) 3Q19 A (%) vs 3Q18 9M19 A (%) vs 9M18 Net Interest Income 46 5.9 130 3.6 Net Fees and Commissions 36 4.1 105 -7.6 Net Trading Income 33 48.9 94 21.4 Other Income & Expenses 3 301.7 9 1,006.9 Gross Income 119 17.2 338 6.4 Operating Expenses -71 -4.3 -2
Slide 32: Corporate Center Profit & Loss
Corporate Center- Profit & Loss Profit & Loss (€m) 3Q19 A (%) vs3Q18 9M19 A (%) vs 9M18 Net Interest Income -61 -11.1 -193 -6.5 Net Fees and Commissions -17 -2.0 -61 22.9 Net Trading Income 20 n.s. -53 -44.1 Other Income & Expenses -14 482.9 0 n.s. Gross Income -72 -43.2 -308 -2.2 Operating Expenses
Slide 33: Colombia Profit & Loss
Colombia—Profit & Loss Profit & Loss (€m constant) 3Q19 A (%) vs 3Q18 9M19 oo £ <i 85 > Net Interest Income 210 6.9 623 4.9 Net Fees and Commissions 22 5.0 67 0.9 Net Trading Income 13 -15.9 51 18.3 Other Income & Expenses 3 25.7 12 1.4 Gross Income 247 5.4 753 5.2 Operating Expenses -91 4.1 -270 1.
Slide 34: Colombia Profit & Loss
Colombia - Profit & Loss Profit & Loss Net Interest Income 210 . 623 Net Fees and Commissions 22 : 67 Net Trading Income 13 51 Other Income & Expenses 8 12 Gross Income 247 i 753 Operating Expenses -91 -270 Operating Income 156 Y 483 Impairment on Financial Assets “41 -159 Provisions & other gains (
Slide 35: Argentina Profit & Loss
Argentina—Profit & Loss Profit & Loss (€m) 9M19 (reported) Hyperinflation adjustment 9M19 Ex. Hyperinflation Net Interest Income 742 88 654 Net Fees and Commissions 103 12 91 Net Trading Income 214 33 181 Other Income & Expenses -301 -248 -53 Gross Income 758 -115 873 Operating Expenses -337 -54 -28
Slide 36: ALCO portfolio, NII Sensitivity, LCRs & NSFRs
05 ALCO portfolio, Nil Sensitivity, LCRs&NSFRs
Slide 37: ALCO portfolio
ALCO portfolio ALCO PORTFOLIO BREAKDOWN BY REGION (CBN) 55.4 South America â– 2.6 Mexico 5 5.6 T i I 7.3 Turkey 50.8 51.6 USA |114 Sep-18 Jun-19 Sep-19 September Amort Cost I Fair Value Fair Value 2019 (HTC) 1 (HTC&S) duration (€ Bn) (€ Bn) South America 0.1 3.2 1.6 years Mexico 0.8 4.1 1.4 years Tu
Slide 38: NII sensitivity to interest rates movements
Nil sensitivity to interest rates movements ESTIMATED IMPACT ON Nil IN THE NEXT 12 MONTHS TO PARALLEL INTEREST RATE MOVEMENTS (%) Note: Nil sensitivities calculated using our dynamic internal model with balance sheets as of Aug-19 (Sep-19 for USA). Euro Nil sensitivity to upward rates includes manag
Slide 39: Liquidity and funding ratios
Liquidity and funding ratios BBVA GROUP AND SUBSIDIARIES LCR & NSFR BOTH SIGNIFICANTLY ABOVE THE 100% REQUIREMENTS AT A GROUP LEVEL AND IN ALL BANKING SUBSIDIARIES SEP-19 1 BBVA Group Euro USA Mexico Turkey S. Amer. LCR 127%(152% ) 144% 144% 135% 174% well >100% NSFR 122% 115% 114% 129% 150% well >1
Slide 40: Garanti wholesale funding
Garanti wholesale funding FC liquidity buffers 0 Short Term Swaps 0 Unencumbered FC securities 0 FC Reserves under ROM 0 Money Market Placements
Slide 41: Turkey Liquidity & funding sources
Turkey—Liquidity & funding sources Solid liquidity position: • Improved Total LTD ratio to 96%, decreasing by 2.2 p.p. in 3Q19, driven by improvement both in TRY LTD and Foreign Currency LTD. • Foreign currency loans decreased (-7%) to c. USD 13.1 Bn in 3Q19 • Liquidity ratios above requirements: Li
Slide 42: Capital and RWAs
Capital and RWAs Capital YTD RWAs by business area
Slide 43: Capital YTD evolution
Capital YTD evolution CET1 FULLY-LOADED—BBVA GROUP YTD EVOLUTION (%, BPS) +103 bps 11.34% I Dec-18 -24 bps n.56% Net Earnings Dividend accrual & AT1 Coupons RWAs (constant Euros) Regulatory1 2 impacts Reg. Equivalence Argentina Others Sep-19
Slide 44: Risk-Weighted Assets by business area
Risk-Weighted Assets by business area Breakdown by business area and main countries (€m) Fully-Loaded RWAs Sep-19 Jun-19 Sep-18 Spain 105,866 107,285 107,990 USA 65,902 62,383 62,721 T urkey 58,521 57,551 52,822 Mexico 57,454 55,919 54,498 South America 45,284 43,995 41,578 Argentina 6,070 6,435 7,0
Slide 45: Book Value of the main subsidiaries
08 Book Value of the main subsidiaries
Slide 46: Book Value of the main subsidiaries
Book Value of the main subsidiaries1,2 € BN, SEP 19 (1) Includes the initial investment + BBVA’s undistributed results + FX impact + other valuation adjustments. The Goodwill associate to each subsidiary has been deducted from its Book Value. (2) Turkey includes the Garanti Group.
Slide 47: Book Value of the main subsidiaries
Book Value of the main subsidiaries1,2 € BN, SEP 19 MMR USA 2 EIEIO, Tukey 4.4 Colombia 1.4 Simi Peru 1.1 [7 Argentina 0.8 mill Chile 0.3 m Venezuela 0.1 1 (Inet jesiment + BBVA's uncistributed results + FX imp ation acjustments. The Goodwill associate to eat
Slide 48: Outstanding trend in digital sales across the board
Outstanding trend in digital sales across the board (% of total sales YtD, # of transactions and PRV1) GROUP SPAIN USA2 Sep-17 Sep-lS Sep-19 Sep-17 Sep-18 Sep-19 Sep-17 Sep-18 Sep-19 ® SOUTH AMERICA Sep-17 Sep-18 Sep-19 Sep-17 Sep-18 Sep-19 Figures have been restated in order to include credit card
Slide 49: Outstanding trend in digital sales across the board
Outstanding trend in digital sales across the board (% of total sales YtD, # of transactions and PRV') GROUP = SPAIN 1.7 so9 589 a0 32 3 8 267 46.1 units 448 34.9 PRY 34.3 al 200 ‘Sep-17 Sep-18 Sep-19 Sep-17 Sep-18 Sep-19 Wi MEXICO (a TURKEY 55.1 25 847 423 43.6 286 Gq ee 14.5 397 Sep-17 Sep-18 Sep-
Slide 50: Signature
SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Banco Bilbao Vizcaya Argentaria, S.A. Date: October 31, 2019 By: /s/ María Ángeles Peláez Morón Name: Ma
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