Fixed Income Presentation 2Q18
Fixed Income Presentation / 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 invest in securities in relation to a specific issue must be made solely and exclusively on the basis of the information set out in the pertinent prospectus filed by the company in relation to such specific issue. No one who becomes aware of the information contained in this report should regard it as definitive, because it is subject to changes and modifications. This document contains or may contain forward looking statements (in the usual meaning and within the meaning of the US Private Securities Litigation Reform Act of 1995) regarding intentions, expectations or projections of BBVA or of its management on the date thereof, that refer to or incorporate various assumptions and projections, including projections about the future earnings of the business. The statements contained herein are based on our current projections, but the actual results may be substantially modified in the future by various risks and other factors that may cause the results or final decisions to differ from such intentions, projections or estimates. These factors include, without limitation, (1) the market situation, macroeconomic factors, regulatory, political or government guidelines, (2) domestic and international stock market movements, exchange rates and interest rates, (3) competitive pressures, (4) technological changes, (5) alterations in the financial situation, creditworthiness or solvency of our customers, debtors or counterparts. These factors could cause or result in actual events differing from the information and intentions stated, projected or forecast in this document or in other past or future documents. BBVA does not undertake to publicly revise the contents of this or any other document, either if the events are not as described herein, or if such events lead to changes in the information contained in this document. This document may contain summarised information or information that has not been audited, and its recipients are invited to consult the documentation and public information filed by BBVA with stock market supervisory bodies, in particular, the prospectuses and periodical information filed with the Spanish Securities Exchange Commission (CNMV) and the Annual Report on Form 20-F and information on Form 6-K that are filed with the US Securities and Exchange Commission. Distribution of this document in other jurisdictions may be prohibited, and recipients into whose possession this document comes shall be solely responsible for informing themselves about, and observing any such restrictions. By accepting this document you agree to be bound by the foregoing restrictions.
Fixed Income Presentation / 3 Index 01 04 Asset Quality 07 Liquidity & Funding About BBVA BBVA’s Strengths & 02 05 08 Ratings Capital 1H18 Financial Highlights 06 09 03 Transformation Strategy Diversified Footprint MREL APPENDIX BBVA Group 1H18 Profit & Loss Debt Issuances – 2017/2018YTD Risk Indicators by Areas Amortized notes – 2017/2018YTD Capital Base: BBVA Group & BBVA S.A. BBVA, S.A.: 2018 Issuances BBVA, S.A.: 2018 SREP Requirement and distance to MDA MREL framework
Fixed Income Presentation / 4 01 About BBVA
Fixed Income Presentation / 5 About BBVA BBVA’s global presence Well diversified & self-sufficient subsidiaries Jun.18 Total Assets (1) Gross Income (1) Jun.18 1H18 Developed € 690 Bn 75 mn 25 mn Markets Developed Emerging Emerging 64% Markets Markets Markets assets customers digital customers 62% 38% 36% Leading franchises in Developed (Spain, USA) and Emerging >30 131,784 8,141 Markets (Mexico, Turkey and South America). countries employees branches Decentralized model: Self-sufficient subsidiaries responsible for their own capital and liquidity management. No liquidity transfers. (1) Percentage excludes the Corporate Center Committed with climate change and Defined strategic path sustainable development Our Purpose Six Strategic Priorities BBVA’s Pledge 2025 Green finance New standard in Optimal capital Sustainable € 100 customer allocation “To bring the infrastructure and Billion experience agribusiness age MOBILIZED Drive digital Unrivaled of opportunity Financial inclusion & From 2018 to 2025 sales efficiency entrepreneurship to everyone” New business A first class Sustainable Development Goals Bond Framework models workforce recently announced
Fixed Income Presentation / 6 02 BBVA’s Strengths & 1H18 Financial Highlights
Fixed Income Presentation / 7 Fixed Income Presentation / 7 BBVA’s Strengths Diversified footprint Resilience and Low Earnings Volatility ( € bn, current, %) 4.2% Pre-provision 3.8% 3.7% 3.7% Prudent risk profile 3.5% 3.4% (1) profit / RWAs 3.3% 3.2% 3.0% 3.0% 2.8% 12.8 12.3 11.9 11.9 11.1 11.4 10.6 10.5 10.4 10.2 Sound capital and 6.1 liquidity position Pre-provision profit Provisions and -1.6 impairments -3.0 -4.0 (2) -4.1 -4.6 Delivering on our -5.2 -4.8 on non-financial -6.1 -6.3 -7.0 assets transformation -9.1 strategy 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 1H18 (1) Annualized Pre-provision profit for comparison purposes; (2) Excluding Telefónica one off impairment ( € -1,123Mn) Profit generation all through the crisis years
Fixed Income Presentation / 8 1H18 Highlights Core revenues growth Cost control Increasing results Core Operating Core +9.8% revenues Expenses +29.5% Net revenues 11.1 Group Net +9.8% +2.9% 2,649 interest vs. Op. 10.1 2,046 Attributable income Expenses vs. 1H17 vs. 1H17 Profit and fees (YtD, € constant) ( € Mn, constant) ( € Bn, constant) 49.2 % Efficiency ratio -82 bps 1H17 1H18 vs. 12M17 1H17 1H18 ( € constant) Sound asset quality (1) Strong capital & liquidity ratios (1) Delivering on our transformation (1) Digital sales (4) 39% 4.4% NPL CET1 FL LCR (3) LEVERAGE RATIO (Proforma (2) ) (BBVA Group) (Fully-loaded) Cost of Risk 0.82% 127 % 6.4 % Mobile customers 11.4 % 20.7 m (YtD) Coverage 71% NPS in 6 countries #1 (Spain, Mexico, Turkey, Perú, Paraguay, Uruguay) (1) Data as of 2Q18; (2) Data proforma includes +55 bps from corporate transactions (sale of BBVA Chile and RE Assets to Cerberus); (3) Liquidity Coverage Ratio; (4) % of total sales in Jun.18, # of transactions
Fixed Income Presentation / 9 03 Diversified Footprint
Fixed Income Presentation / 10 Well diversified footprint with high growth prospects Breakdown by Business Area Higher Growth Prospects 2018e GDP growth (YoY, %) Total Assets Jun.18 Rest of Corporate TURKEY USA (4) SPAIN Eurasia Center +3.8% South 3.2% 2.7% +3.7% +2.9% America 10.2% MEXICO Turkey (1) +2.6% Spain € 690 bn 10.6% 2.8 48.4% 64% (2) 2.5 1.9 1.7 Developed (6) BBVA Footprint South America Markets Mexico Footprint (5) Eurozone + UK 13.7% US +1.8% 11.2% 2018 2019 Source: BBVA Research (4) USA Sunbelt GDP growth; (5) South America Footprint excludes Venezuela (6) BBVA’s footprint GDP growth: weighted by each country contribution to Group’s Gross Income. Gross Income (3) Leadership positioning 1H18 Rest of Eurasia Market share(in %) and ranking (7) South 1.8% America Spain (1) 17.9% 24.7% SPAIN #3 USA (Sunbelt) #4 MEXICO #1 13.7 % 6.0 % 22.9 % € 12.1 bn 38% Turkey US Developed 15.7% 11.7% Markets TURKEY #2 S.AMERICA (ex Brazil) #1 Mexico 11.0 % 10.3 % 28.2% (7) Loans’ market shares except for USA (Deposits). Spain based on BoS (May.18) and ranking (Mar.18) by AEB and CECA; (1) Includes Banking activity in Spain and Non Core Real Estate; (2) Excludes Corporate Center; (3) Mexico data as of May.18 (CNBV); S. America (May.18), ranking considering main peers in each country; USA : SNL (Jun.17) Percentages exclude the Corporate Center (1H18 Gross Income of € -196Mn) considering Texas and Alabama; Turkey : BRSA performing loans; market share among commercial banks (Jun.18) and ranking (only considers private banks) as of Mar.18
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