36 slides from Banco Bilbao Vizcaya Argentaria's debt investor presentation, March 2012
Slide 1: BBVA, better placed in the current environment
BBVA, better placed in the current environment March 2012 1
Slide 2: Disclaimer
Disclaimer This document is only provided for information purposes and does not constitute, nor must 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 securities
Slide 3: Contents
Contents 1 BBVA overview 2 Why BBVA is better placed in the current challenging environment? 3 Conclusions 3
Slide 4: A Group with global presence
A Group with global presence Europe (10) • Spain • France • Germany • Italy • Portugal North America (2) • U.K. • USA • Belgium • Mexico • Russia • Switzerland Central America (3) • Turkey • Cuba • Puerto Rico Asia - Pacific (7) • Panama • Australia • South Korea South America (10) • China • Argenti
Slide 5: A customer-centric global retail bank
A customer-centric global retail bank … Total Assets (€ bn) 598 Net attributable profit (€ bn) (*) 4.0 ROE (%) (*) 10.6 Cost to income (%) 48.4 Core Capital (%) 10.3 (*) Ex US impairment Figures as of December 2011 5
Slide 6: … and leading franchises in all geographies
… and leading franchises in all geographies Loans Deposits Ranking Spain 12% 10% 2nd Mexico 31% 27% 1st South America 11% 10% 2nd USA (Sunbelt) Rank 4th (7% Market share) Eurasia 15 % stake (7th) China (Citic Bank) Turkey (Garanti Bank) 25 % stake (1st) Ranking by deposits (except for China, by asse
Slide 7: Balanced business portfolio
Balanced business portfolio Total revenues by geography* Attributable Profit by geography* BBVA Group BBVA Group (%) (%) EurAsia EurAsia 9% Spain Spain Mexico 19% 31% 25% 27% Mexico 32% 5% USA 11% 22% 18% South USA America South America Emerging 55% Emerging 65% Developed 45% Developed 35% 7 * Data
Slide 8: Solid and recurrent results during the crisis
Solid and recurrent results during the crisis Net attributable profit Net attributable profit European peers aggregate* BBVA (€bn) (€mn) Resilient growth vs. industry roller coaster 8 * European peers aggregate: BARCL, BNPP, CASA, CMZ, CS, DB, HSBC, ISP, LBG, RBS , SAN, SG, UBS and UCI.
Slide 9: Contents
Contents 1 BBVA overview 2 Why BBVA is better placed in the current challenging environment? 3 Conclusions 9
Slide 10: Sources of concern affecting European banks
Sources of concern affecting European banks 1 Regulation 2 Capital 3 Liquidity 4 Risk 5 Earnings 6 Business model 10
Slide 11: Increasing regulatory pressures: fragmentation
Regulation Increasing regulatory pressures: fragmentation Example: Capital ratios BIS III 19% capital ratio What about RWAs? CRD4? 17-20% capital ratio depending on the A real business model commitment? Risk of loosing global regulatory consistency – domestic issues may prevail 11
Slide 12: Substantial capacity to generate capital
Capital Substantial capacity to generate capital ... Core capital ratio (Basel II) BBVA Group 1,1 (%) 2,3 - 1.6 - 0.5 10 .3% 3,3 5.8% +21bp quarterly average Dec. 0 7 Organic Capital Conv. M&A Other Dec. 11 generation increase* Preferred transactions** Core capital: € 16bn Shares Core capital: €34 b
Slide 13: BBVA will clearly meet EBA recommendations
BBVA will clearly meet EBA recommendations EBA proforma core capital ratio BBVA Group (%) Stable dividend policy 0.4 8,7% 1,6% 7,1% Sep. 11 Latest qtr Dec. 11 Buffer €6.3bn -€5.3bn €1bn 0.3% EBA gap, which we will easily close before compliance deadline 13
Slide 14: High quality capital with low leverage
Capital High quality capital with low leverage RWAs / Total Assets, % (1) Leverage ratio, % (1) BBVA 48 Peer 1 47 Peer 2 45 Peer 3 41 Peer 4 41 Peer 5 36 Peer 6 33 Peer 7 31 Peer 8 30 Peer 9 29 Peer 10 29 Peer 11 27 Peer 12 26 Peer 13 25 Peer14 23 (1) Last data available Peer Group: BARCL, BNPP, CAS
Slide 15: Small balance sheet with the largest deposit base
Liquidity Small balance sheet with the largest deposit base …Assets Total Customer deposits / Total Assets BBVA Group vs. Peer Group BBVA Group vs. Peer Group (Sep2011, € bn) (sep2011, %) Peer 1 2.282 BBVA 48 Peer 2 2.0 31 Peer 1 47 Peer 3 1.926 Peer 2 45 Peer 4 1.875 Peer 3 41 Peer 5 1.741 Peer 4 4
Slide 16: Solid liquidity of euro balance sheet
Liquidity Solid liquidity of euro balance sheet 1 Lower funding needs due to the retail nature of the business 2 Reduced liquidity needs given natural deleveraging of the System Full access to wholesale €13bn of issuances in 2011 3 markets €2.0 bn senior debt issue in Feb-12 Lowest redemptions in 20
Slide 17: Risk: very stable indicators
Risk Risk: very stable indicators NPA ratios (%) Spain Mexico BBVA Group South America USA 17
Slide 18: Spanish Banking System: Main goals of the Reform
Risk Spanish Banking System: Main goals of the Reform To improve confidence and access to capital 1 markets by the Spanish banking sector To reactivate real estate market and credit supply to 2 the economy To trigger the final round of Spanish system 3 consolidation Likely to improve Spanish system
Slide 19: Developers over Domestic Lending
Risk BBVA has a manageable exposure to Spanish Real Estate Limited exposure to developers* Developers over Domestic Lending 30% Peer 8 25% 20% Perr 7 Peer 6 Peer 9 Peer2 Peer 5 15% Peer4 10% Peer 3 BBVA 5% Peer 1 0% 0% 2% 4% 6% 8% 10% Foreclosed and purchased assets over domestic lending BBVA exposu
Slide 20: BBVA: Limited impact of new provisions
Risk BBVA: Limited impact of new provisions RE Exposure: € 21.2 Bn Problematic Assets: € 12.8 Bn Provisions after RD: € 6.4 Bn 2012 P&L net Impact of new Developers 14.2 provisions: €1.4 Bn Substandard 2.1 NPLs 3.7 € 4 Bn Generic 0 .6 Substandard 0 .7 NPLs 1.9 Foreclosed 7.0 Foreclosed 7.0 assets as
Slide 21: BBVA real estate exposure as of December 31st, 2011
BBVA real estate exposure as of December 31st, 2011 Others and with Housing under Finished TOTAL Land personal development housing Exposure guarantee TOTAL REAL ESTATE (€ Bn) 6.8 2.8 10 .1 1.5 21.2 Performing Real Estate developers 1.6 1.6 4.6 0 .6 8.4 Problematic Loans and Assets 5.2 1.2 5.5 0 .9 1
Slide 22: Increase of problematic real estate assets coverage
A high increase of problematic real state assets coverage after the implementation of the new rule Real state assets coverage (%) Current coverage New R.D. coverage 62 55 50 47 42 37 31 28 28 23 Land Housing under Finished housing Others (1) Total exposure development (1) Others and with personal gu
Slide 23: Resilient earnings despite highly complex scenarios
Earnings Resilient earnings despite highly complex scenarios … Net attributable profit BBVA Group (€m) -12.8% • Mexico & South America: growth 4.60 6 • Spain: resilience and opportunity 4.0 15 €3bn after USA • USA: transformation impairment 2010 2011 • Eurasia: growing contribution We maintain our a
Slide 24: Supported by a suitable diversified portfolio
Earnings … Supported by a suitable diversified portfolio Net atributable profit by geographical areas (Bn euros) CAGR 11-09 -30% +9% +17% +47% +70% 24
Slide 25: A robust business model
Business model A robust business model Retail focused business model, well balanced geographically Decentralized management of liquidity and capital Conservative risk culture Resilient earnings stream supporting strong capital base 25
Slide 26: Rating downgrades mainly linked to sovereign decisions
Rating downgrades mainly linked to sovereign decisions … Dec-10 Today S&P: AA / Moody’s: Aa2 / Fitch: S&P: A / Moody’s: Aa3 / Fitch: A AA- Dec-10 Dec-11 Resilient trend in Net Att. profit 4.6 bn 4.0 bn (1) complex environment NPA ratio 4.1% 4.0% Improving from Dec-10 Risk premium 1.3% 1.2% Improving
Slide 27: Markets recognizing the value of BBVA's franchise
… but the markets is recognizing the value of BBVA’s franchise Market Cap. (1) Price / Tangible book value (1) BBVA Group vs. Peer Group Peer 1 1,27 Peer 1 122 Peer 2 1,15 Peer 2 57 BBVA 1,0 5 Peer 3 44 Peer 3 1,0 4 Peer 4 41 Peer 4 0 ,79 Peer 5 37 Peer 5 0 ,74 Peer 6 35 Peer 6 0 ,70 BBVA 33 Peer 7
Slide 28: Contents
Contents 1 BBVA overview 2 Why BBVA is better placed in the current challenging environment? 3 Conclusions 28
Slide 29: Conclusions: BBVA resilient in any scenario
Conclusions: BBVA resilient in any scenario and able to absorb the impact of the new regulation Strong position to comply regulatory Capital requirements Liquidity Comfortable position entering 2012 Risk Stable indicators Earnings Resilient and diversified Business A robust business model model 29
Slide 30: Annex
BBVA Annex
Slide 31: BBVA: a diversified funding structure
BBVA: a diversified funding structure Outstanding wholesale funding €85 bn ST funding (1) 10 % Other LT 1% Senior debt Preferred + 25% subordinated 7% Securitisations 9% Covered bonds 49% Last data available 31 (1) € CP + US CP + promisory notes
Slide 32: BBVA's M/LT wholesale funding maturities
BBVA’s M/LT wholesale funding maturities Total outstanding (€bn) 22 17 13 11 7 20 12 20 13 20 14 20 15 >20 15 Covered bonds (€bn) Senior debt (€bn) 17 9 8 7 6 3 4 3 3 2 20 12 20 13 20 14 20 15 >20 15 20 12 20 13 20 14 20 15 >20 15 Last data available 32
Slide 33: Public sector covered bonds and collateral information
Public sector covered bonds and collateral information COLLATERAL DESCRIPTION GEOGRAPHIC BREAKOUT Total amount of cedulas hipotecarias (mill €) 18.191 Total portfolio 25.207 OC% 139% Rest 18% (1) Catalonia 23% No loans 9.711 WA Interest Rate (in %): 2,71% NPL ratio 0,16% Breakout by type of institut
Slide 34: Mortgage cover bonds and collateral information
Mortgage cover bonds and collateral information COLLATERAL DESCRIPTION GEOGRAPHIC DISTRIBUTION Total "cedulas hipotecarias" (mill €) 44.701 Total mortgage loans 75.475 Eligible portfolio (mill €) 56.048 OC (%) 169% Rest 14% Catalonia OC (over eligible pool) (%) 125% 18% Number of loans 708.637 Seaso
Slide 35: Cover pool breakdown
Cover pool breakdown RESIDENTIAL MORTGAGE POOL COMMERCIAL MORTGAGE POOL Residential mortgages Commercial mortgages Total mortgage loans (ex securitisations) mill € 55.014 Total mortgage loans (ex securitisations) mill € 20.460 Number of loans 662.952 Number of loans 45.685 Average Loan (€) 80.859 Av
Slide 36: BBVA, better placed in the current environment
BBVA, better placed in the current environment March 2012 36