Banco Bilbao Vizcaya Argentaria, S.a. · BME:BBVA
Banco Bilbao Vizcaya Argentaria — 2Q22 Earnings Presentation
60 slides from Banco Bilbao Vizcaya Argentaria's earnings presentation, Jul 29, 2022
Slide 1: 2Q22 Results
2Q22 Results July 29, 2022
Slide 2: Disclaimer
2Q22 Results 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 decision to buy or inv
Slide 3: BBVA reports another very strong quarter
2Q22 Results 3 BBVA reports another very strong quarter RECURRENT NET ATTRIBUTABLE PROFIT1 CET1 FULLY LOADED (CURRENT €M) (%) +45% +41.5% 12.45% 1,877 MERLIN 11.5-12.0% TARGET RANGE TRANSACTION 1,675 1,294 1,326 REPORTED 8.60% SREP REQUIREMENT 2Q21 1Q22 2Q22 Jun-22 1 EPS (€) 0.18 0.19 0.28 NOTE: In
Slide 4: Improvement especially in South America and Mexico
2Q22 Results 4 Improvement especially in South America and Mexico RECURRENT NET ATTRIBUTABLE PROFIT1 (BUSINESS AREAS CONTRIBUTION TO 2Q22 YOY GROWTH; CURRENT €M) +45% +145 +55 1,877 +414 -29 +54 -56 1,294 2Q21 Spain Mexico Turkey South Rest of Corporate 2Q22 America business Center NAP 2Q221 (€M) 40
Slide 5: Outstanding shareholder value creation and strong profitability metrics
2Q22 Results 5 Outstanding shareholder value creation and strong profitability metrics TBV / SHARE + DIVIDENDS PROFITABILITY METRICS2 (€ / SHARE) (%) TBV / share Dividends / share ROTE +18.4% 14.8 +8.5% 12.0 11.0 7.50 0.31 1 6.92 0.31 1 ROE 6.34 14.1 7.19 10.4 11.4 6.61 6M21 2021 6M22 Jun-21 Mar-22
Slide 6: 2Q22 key messages
2Q22 Results 6 2Q22 key messages EXCELLENT CORE REVENUES CORE REVENUES (NII+FEES) TOTAL LOAN GROWTH 1 +30.0% VS. 2Q21 +12.6% VS. JUN 2021 EVOLUTION AND ACTIVITY GROWTH LEADING EFFICIENCY WITH EFFICIENCY RATIO POSITIVE JAWS 43.9% 6M22 -149 BPS VS. 6M21 STRONG OPERATING INCOME OPERATING INCOME GROWTH
Slide 7: 2Q22 Profit & Loss
2Q22 Results 7 2Q22 Profit & Loss Change Change 2Q22/2Q21 2Q22/1Q22 BBVA Group (€M) 2Q22 % constant % % constant % Net Interest Income 4,602 32.9 31.3 14.6 16.5 Net Fees and Commissions 1,409 21.1 19.2 12.4 13.4 Net Trading Income 516 3.0 2.6 -9.3 -11.0 Other Income & Expenses -432 n.s. n.s. n.s. n.
Slide 8: 6M22 Profit & Loss
2Q22 Results 8 6M22 Profit & Loss Change 6M22/6M21 BBVA Group (€M) 6M22 % constant % Net Interest Income 8,551 26.5 22.9 Net Fees and Commissions 2,650 17.8 14.5 Net Trading Income 1,095 5.5 1.0 Other Income & Expenses -787 n.s. n.s. Gross Income 11,509 15.8 12.2 Operating Expenses -5,054 12.0 9.9 O
Slide 9: Excellent revenue growth driven by strong activity
2Q22 Results 9 Excellent revenue growth driven by strong activity NET INTEREST INCOME1 NET FEES AND COMMISSIONS (CONSTANT €M) (CONSTANT €M) +32.9% +14.6% +21.1% NII growth driven by Fee Income strong activity and growth driven by 4,566 customer spread +12.4% strong 3,610 3,899 3,985 improvement tran
Slide 10: Strong activity and customer spreads in a growing trend
2Q22 Results 10 Strong activity and customer spreads in a growing trend LOAN BOOK GROWTH1 (YOY % CONSTANT €) CUSTOMER SPREADS (%) BBVA GROUP 3.4% 3.6% 1.76% 1.75% 12.6% 1.7% 1.73% SPAIN 1.1% 1.72% 10.4% 1.71% -0.8% 5.9% Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 2Q21 3Q21 4Q21 1Q22 2Q22 1.2% 13.3% 10.59% 8.
Slide 11: Positive jaws and leading efficiency
2Q22 Results 11 Positive jaws and leading efficiency POSITIVE JAWS AND COSTS EFFICIENCY RATIO GROWING BELOW INFLATION (COST-TO-INCOME; %; CONSTANT €) (6M22 YOY, %; CONSTANT €) #1 PEER GROUP RANKING EUROPEAN 2 FOOTPRINT INFLATION1 13.1% 12M AVERAGE 15.8% 12.0% 45.4 43.9 Gross Operating Income Expense
Slide 12: Solid underlying asset quality trends, better than expected
2Q22 Results 12 Solid underlying asset quality trends, better than expected FINANCIAL ASSETS IMPAIRMENTS NPL (CONSTANT €M) (€BN) 772 747 15.7 15.4 15.6 15.5 672 629 694 14.9 2Q21 3Q21 4Q21 1Q22 2Q22 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 COST OF RISK NPL & COVERAGE RATIOS (%, YTD) (%) COVERAGE 77% 80% 7
Slide 13: Strong capital position above our target
2Q22 Results 13 Strong capital position above our target CET1 FULLY-LOADED (%, BPS) +59 bps +19 bps 12.70% -29 bps 12.59% -30 bps - 26 bps 12.45% -18 bps 11.5-12.0% TARGET RANGE 8.60% SREP REQUIREMENT Mar-22 Hyperinflation Corp. Op: Pro-forma Recurrent Dividend RWAs Others 3 Jun-22 accounting Garant
Slide 14: Setting a new record in customer acquisition driven by digital
2Q22 Results 14 Setting a new record in customer acquisition driven by digital, with strong engagement NEW CUSTOMER ACQUISITION1 (BBVA GROUP, MILLION; % ACQUISITION THROUGH DIGITAL CHANNELS) 5.3 4.1 3.6 3.4 CUSTOMER ENGAGEMENT (% OF NEW CUSTOMERS 2.6 CONVERTED TO TARGET CUSTOMERS2 IN 6 DIGITAL MONTH
Slide 15: A unique digital transformation story: outstanding growth with a lean structure
2Q22 Results 15 A unique digital transformation story: outstanding growth with a lean and efficient structure TARGET CUSTOMERS1 AND BRANCHES EVOLUTION (2016=100; % var. vs 2016) +92% SPAIN MEXICO Target Customers +22% Branches -6% -43% 2016 2017 2018 2019 2020 2021 Jun-22 2016 2017 2018 2019 2020 20
Slide 16: More than €100Bn in Sustainable Finance
2Q22 Results 16 More than €100Bn in Sustainable Finance SUSTAINABLE FINANCING (€ BILLION) 200€BN 2025 GOAL 14 €BN Total financed FINANCED IN 2Q22 112€BN 2Q 2018 2019 2020 2021 2022 2023 2024 2025 (1) According to the Dow Jones Sustainability Index 2021. Sharing #1 position in ranking. BBVA, top-rank
Slide 17: We are on the right path to achieve our ambitious long-term goals
2Q22 Results 17 We are on the right path to achieve our ambitious long-term goals COST-TO-INCOME ROTE TBV/ SHARE + DIVIDENDS (%) (%, ANNUALIZED) (YOY %) 45.2 18.4 43.9 14.8 14.0 42.0 12.0 10.1 2021-24 CAGR: 9.0 2021 6M22 ... 2024 2021 6M22 ... 2024 2021 6M22 ... 2024 NEW TARGET CUSTOMERS1 SUSTAINABL
Slide 18: Business Areas
Business Areas
Slide 19: Spain
2Q22 Results 19 Spain PROFIT & LOSS (€M) ACTIVITY (JUN-22) Δ (%) Δ (%) YoY YoY €Bn 297.4 2Q22 vs 2Q21 vs 1Q22 6M22 vs 6M21 +3.0% €Bn 173.3 +3.6% Net Interest Income 904 1.0 5.2 1,763 0.1 Net Fees and Commissions 574 3.9 7.1 1,110 4.6 Net Trading Income 98 37.2 -48.1 288 11.2 Mortgages Demand 68.6 -1
Slide 20: Mexico
2Q22 Results 20 Mexico PROFIT & LOSS (Constant €M) ACTIVITY (JUN-22) YoY (Constant €) Δ Constant (%) Δ Current (%) Δ Constant YoY €Bn 109.1 +10.2% 2Q22 vs 2Q21 vs 1Q22 6M22 vs 6M21 vs 6M21 (%) €Bn 67.1 +13.3% Net Interest Income 1,872 22.4 3.3 3,684 32.9 21.1 Net Fees and Commissions 388 19.1 9.1 74
Slide 21: Turkey
2Q22 Results 21 Turkey PROFIT & LOSS (Constant €M) ACTIVITY (JUN-22) (Constant €; Bank Only) Δ Constant (%) Δ Current (%) €Bn YoY1 2Q22 vs 1Q22 vs 1Q22 6M22 €Bn -3.3% Net Interest Income 696 49.0 34.2 1,163 YoY1 FC 7.4 Net Fees and Commissions 170 35.8 21.8 295 Time -25.4% 9.9 Net Trading Income 231
Slide 22: South America
2Q22 Results 22 South America NET ATTRIBUTABLE PROFIT (Constant €M) ACTIVITY (JUN-22) YoY (Constant €) YoY €Bn 60.8 +11.8% 0 Δ Constant (%) 0 Δ Current (%) Δ Constant €Bn 40.2 +12.1% 2Q22 vs 2Q21 vs 1Q21 6M22 vs 6M21 vs 6M21(%) Colombia 17.6 +25.7% Colombia 78 33.2 9.7 149 44.1 41.2 Colombia +22.9%
Slide 23: 2Q22 Takeaways
2Q22 Takeaways
Slide 24: 2Q22 takeaways
2Q22 Results 24 2Q22 takeaways BBVA delivered another very strong quarter Excellent core revenue evolution mainly driven by strong activity growth Outstanding value creation for our shareholders Significant progress in the execution of our strategy: digitalization, innovation and sustainability On t
Slide 25: Annex
Annex 01 Net Attributable Profit evolution 07 CET1 Sensitivity to market impacts 02 Gross Income breakdown 08 CET1 YTD evolution & RWAs by business Area 03 P&L Accounts by business unit 09 Book Value of the main subsidiaries 04 Customer spread by country 10 TBV per share & dividends evolution 05 Sta
Slide 26: Net Attributable Profit evolution
01 Net Attributable Profit evolution
Slide 27: Net Attributable Profit evolution
2Q22 Results 27 Net Attributable Profit evolution RECURRENT NET ATTRIBUTABLE PROFIT1 (BUSINESS AREAS CONTRIBUTION TO 6M22 GROWTH; CURRENT €M) +38% +702 +40 3,203 +203 +285 -322 -32 2,327 6M21 Spain Mexico Turkey South Rest of Corporate 6M22 America business Center NAP 6M221 (€M) 1,010 1,821 62 413 1
Slide 28: Gross Income breakdown
Q2 Gross Income breakdown Creating Opportunities
Slide 29: Gross Income breakdown
2Q22 Results 29 Gross Income breakdown 6M22 Spain 3,069€M Rest of business 384 €M 3% 26% 12% South America Turkey 1,975 €M 17% 1,342 €M 42% Mexico 4,887 €M Note: Figures exclude Corporate Center.
Slide 30: P&L Accounts by business unit
03 P&L Accounts by business unit Rest of Business Corporate Center Turkey (hyperinflation adjustment) Argentina (hyperinflation adjustment) Colombia Peru
Slide 31: Rest of Business Profit & Loss
2Q22 Results 31 Rest of Business Profit & Loss €M Δ (%) Δ (%) 2Q22 vs 2Q21 vs 1Q22 6M22 vs 6M21 Net Interest Income 80 17.5 6.3 155 10.0 Net Fees and Commissions 65 7.4 16.7 122 -8.0 Net Trading Income 35 -35.2 -48.3 103 -22.2 Other Income & Expenses 1 -85.1 -53.6 4 -77.1 Gross Income 182 -5.0 -10.0
Slide 32: Corporate Center Profit & Loss
2Q22 Results 32 Corporate Center Profit & Loss €M Δ (%) Δ (%) 2Q22 vs 2Q21 vs 1Q22 6M22 vs 6M21 Net Interest Income -26 -30.5 -29.3 -64 -22.0 Net Fees and Commissions -16 -20.4 n.s. -20 -12.5 Net Trading Income -83 n.s. 116.6 -121 n.s. Other Income & Expenses 58 -43.2 n.s. 58 -30.2 Gross Income -68
Slide 33: Turkey hyperinflation adjustment
2Q22 Results 33 Turkey hyperinflation adjustment PROFIT & LOSS1 €M 6M22 Hyperinflation 6M22 2 (reported) adjustment Ex. Hyperinflation Net Interest Income 1,163 110 1,053 Net Fees and Commissions 295 29 266 Net Trading Income 395 38 357 Other Income & Expenses -511 -1,680 1,169 Gross Income 1,342 -1
Slide 34: Argentina hyperinflation adjustment
2Q22 Results 34 Argentina hyperinflation adjustment PROFIT & LOSS1 €M 6M22 Hyperinflation 6M22 2 (reported) adjustment Ex. Hyperinflation Net Interest Income 781 83 698 Net Fees and Commissions 146 13 133 Net Trading Income 66 11 55 Other Income & Expenses -448 -360 -88 Gross Income 545 -253 798 Ope
Slide 35: Colombia Profit & Loss
2Q22 Results 35 Colombia Profit & Loss €M CONSTANT Δ (%) Δ (%) 2Q22 vs 2Q21 vs 1Q22 6M22 vs 6M21 Net Interest Income 224 14.6 2.8 442 11.5 Net Fees and Commissions 26 15.7 1.8 52 17.7 Net Trading Income 27 21.3 8.1 51 75.2 Other Income & Expenses -4 -52.7 19.5 -8 -41.2 Gross Income 273 18.1 3.0 537
Slide 36: Peru Profit & Loss
2Q22 Results 36 Peru Profit & Loss €M CONSTANT Δ (%) Δ (%) 2Q22 vs 2Q21 vs 1Q22 6M22 vs 6M21 Net Interest Income 255 29.2 12.9 480 22.6 Net Fees and Commissions 73 12.1 11.7 139 12.0 Net Trading Income 40 -34.2 17.2 75 -23.4 Other Income & Expenses -9 -24.4 -2.4 -17 -15.1 Gross Income 360 15.2 13.6
Slide 37: Customer Spread by country
04 Customer Spread by country
Slide 38: Customer spreads: quarterly evolution
2Q22 Results 38 Customer spreads: quarterly evolution AVERAGE 2Q21 3Q21 4Q21 1Q22 2Q22 2Q21 3Q21 4Q21 1Q22 2Q22 Spain 1.76% 1.75% 1.73% 1.71% 1.72% Turkey TL 2.88% 3.43% 4.89% 5.22% 6.65% Yield on Loans 1.75% 1.74% 1.73% 1.71% 1.74% Yield on Loans 15.56% 16.26% 16.48% 17.75% 18.60% Cost of Deposits
Slide 39: Customer spreads: YoY evolution
2Q22 Results 39 Customer spreads: YoY evolution AVERAGE 6M21 6M22 6M21 6M22 Spain 1.76% 1.71% Turkey TL 2.70% 6.01% Yield on Loans 1.76% 1.73% Yield on Loans 14.95% 18.22% Cost of Deposits 0.00% -0.02% Cost of Deposits -12.24% -12.21% Mexico MXN 11.00% 11.51% Turkey FC1 4.66% 5.38% Yield on Loans 12
Slide 40: Stages breakdown by business areas
05 Stages breakdown by business areas
Slide 41: Stages breakdown by business area
2Q22 Results 41 Stages breakdown by business area CREDIT RISK BREAKDOWN BY BUSINESS AREA (JUN-22, €M) BBVA Gross Accumulated Gross Accumulated Gross Accumulated SPAIN MEXICO GROUP Exposure impairments Exposure impairments Exposure impairments Stage 1 361,721 2,264 Stage 1 178,843 591 Stage 1 65,636
Slide 42: ALCO Portfolio, NII Sensitivity and LCRs & NSFRs
06 ALCO Portfolio, NII Sensitivity and LCRs & NSFRs
Slide 43: ALCO portfolio
2Q22 Results 43 ALCO portfolio ALCO PORTFOLIO BREAKDOWN BY REGION (€ BN) Amort Cost Fair Value (HTC) (HTC&S) 52.0 54.3 48.7 Jun-22 (€BN) (€BN) (duration) 6.0 6.6 South America 4.1 South America 0.2 6.4 1.0 years 10.5 10.8 Mexico 9.8 Mexico 2.7 8.1 3.0 years 6.6 6.7 7.3 Turkey Turkey 4.1 3.2 4.3 year
Slide 44: NII sensitivity to interest rates movements
2Q22 Results 44 NII sensitivity to interest rates movements ESTIMATED IMPACT ON NII IN THE NEXT 12 MONTHS TO PARALLEL INTEREST RATE MOVEMENTS (TO +100 BPS INTEREST RATES INCREASE) +15-20% +3.9% EURO BALANCE MEXICO SHEET NII sensitivities to parallel interest rates movements calculated as moving aver
Slide 45: Liquidity and funding ratios
2Q22 Results 45 Liquidity and funding ratios BBVA GROUP AND SUBSIDIARIES LCR & NSFR (JUN-22) LCR NSFR Total Group 170% (220%)1 134% Euro 2 200% 125% Mexico 226% 138% Turkey 248% 164% S. America All countries >100% >100% (1) LCR of 170% does not consider the excess liquidity of the subsidiaries outsi
Slide 46: CET1 Sensitivity to market impacts
07 CET1 Sensitivity to market impacts
Slide 47: CET1 Sensitivity to Market impacts
2Q22 Results 47 CET1 Sensitivity to Market impacts1 TO A 10% CURRENCY DEPRECIATION TO A 10% DECLINE IN TELEFONICA’S (JUN-22) SHARE PRICE (JUN-22) MXN -3bps -4 bps TRY -3bps TO +100 BPS MOVEMENT IN THE SPANISH SOVEREIGN BOND (JUN-22) USD +18bps -14 bps (1) CET1 sensitivity considering the FL capital
Slide 48: CET1 YTD evolution & RWAs by business area
08 CET1 YTD evolution & RWAs by business area
Slide 49: Capital YTD Evolution
2Q22 Results 49 Capital YTD Evolution CET1 FULLY-LOADED – BBVA GROUP YTD EVOLUTION (%, BPS) +102 bps 12.75% +4 bps 12.83% -54 bps 12.45% -44 bps -38bps Dec-21 Results Dividend RWAs activity Others (1) Jun-22 Corp. Ops: Garanti, Jun-22 Accrual & (constant €) (excl. Corporate Neon and Merlin AT1 Coupo
Slide 50: Risk-Weighted Assets by business area
2Q22 Results 50 Risk-Weighted Assets by business area Fully-Loaded RWAs Breakdown by business area (€m) Jun-21 Mar-22 Jun-22 Spain 111,975 109,623 109,821 Mexico 62,396 67,626 73,869 Turkey 53,554 49,589 51,055 South America 39,113 46,330 49,641 Argentina 5,548 6,767 7,344 Chile 1,700 1,888 1,939 Co
Slide 51: Book Value of the main subsidiaries
09 Book Value of the main subsidiaries
Slide 52: Book Value of the main subsidiaries
2Q22 Results 52 Book Value of the main subsidiaries(1,2) € BN; JUN-22 Mexico 15.6 Turkey 6.3 Colombia 1.5 Argentina 1.3 Peru 1.2 Chile 0.3 Venezuela 0.1 (1) Includes the initial investment + BBVA’s undistributed results + FX impact + other valuation adjustments. The Goodwill associated to each subsi
Slide 53: TBV per share & dividends evolution
10 TBV per share & dividends evolution
Slide 54: Shareholders' return: TBV per share & dividends evolution
2Q22 Results 54 Shareholders’ return: TBV per share & dividends evolution TBV PER SHARE & DIVIDENDS (€ PER SHARE) TBV Dividends +18.4% 7.50 6.92 1 6.49 6.60 0.31 6.34 1 1 0.08 1 0.31 0.08 7.19 6.61 6.52 6.41 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 (after implementation of IAS29 in Turkey) (1) October 202
Slide 55: Garanti BBVA: wholesale funding
11 Garanti BBVA: wholesale funding
Slide 56: Turkey – Liquidity & funding sources
2Q22 Results 56 Turkey – Liquidity & funding sources SOLID LIQUIDITY POSITION: LIMITED EXTERNAL WHOLESALE Total LTD ratio is at Foreign currency Liquidity ratios above FUNDING NEEDS: 81.3%, decreasing performing loans requirements: Liquidity 6.5 Bn by -0.8 p.p in 2Q22. decreased by USD 0.8 Bn Covera
Slide 57: Digital metrics
12 Digital metrics Digital & mobile customers Digital sales
Slide 58: Outstanding trends in digital and mobile clients
2Q22 Results 58 Outstanding trends in digital and mobile clients DIGITAL CLIENTS MOBILE CUSTOMERS (MILLION CUSTOMERS, %) (MILLION CUSTOMERS, %) +38% +42% 43.5 45.5 36.3 38.5 30.6 33.2 Jun-20 Jun-21 Jun-22 Jun-20 Jun-21 Jun-22 CUSTOMER PENETRATION RATE CUSTOMER PENETRATION RATE 60.6% 65.7% 71.4% 56.0
Slide 59: Leveraging digital capabilities to grow sales through digital channels
2Q22 Results 59 Leveraging digital capabilities to grow sales through digital channels (% OF TOTAL SALES YTD, # OF TRANSACTIONS AND PRV1) GROUP SPAIN MEXICO 70.8 76.7 73.5 67.9 74.3 66.5 63.1 61.8 UNIDS. 58.2 67.4 PRV 60.2 53.5 57.3 51.7 49.9 47.6 46.9 43.2 Jun-20 Jun-21 Jun-22 Jun-20 Jun-21 Jun-22
Slide 60: BBVA
BBVA
Banco Bilbao Vizcaya Argentaria — 2Q22 Earnings Presentation on 6ix