3Q 2017 Results October 27 th 2017 / 1 3Q17 Results October, 27 th 2017
3Q 2017 Results October 27 th 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 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.
3Q 2017 Results October 27 th 2017 / 3 Solid growth trend continued in the 3 rd Quarter Net Attributable Profit CET1 fully-loaded – BBVA Group Quarterly evolution ( € m) Quarterly evolution (%) 1,199 1,107 1,143 965 11.10% 11.20% 11.00% 10.90% 11.01% 678 Sep.16 Dec.16 Mar.17 Jun.17 Sep.17 3Q16 4Q16 1Q17 2Q17 3Q17
3Q 2017 Results October 27 th 2017 / 4 3Q17 Highlights Core revenues Cost control Sound asset growth quality Gross Net Cost of Gross Operating income risk interest Income Expenses (Quarterly, %, € ) vs. Op. income Expenses and fees +7.2% +9.7% +1.8% 0.93% (YtD, %, ( € constant) € constant) vs. 9M16 vs. 3Q16 vs. 9M16 Strong capital Delivering on our Creating value generation transformation for the shareholder + 4.8% TBV/Share CET1 YtD Digital sales +25 % + Fully- Sep-17 1 0.30 Shldrs. Shareholders 0.08 loaded remun. remuneration 5.79 5.73 TBVpS +10 bps Mobile customers 16 m Sep-17 vs. Jun.17 Dec-16 Sep-17 (1) % of total sales YtD, # of transactions
3Q 2017 Results October 27 th 2017 / 5 3Q17 Profit & Loss Change 3Q17/3Q16 BBVA Group (€m) 3Q17 % % constant Net Interest Income 4,399 2.1 9.8 Net Fees and Commissions 1,249 3.4 9.5 Net Trading Income 347 -39.9 -36.1 Other Income & Expenses 195 88.3 42.9 Gross Income 6,189 -0.1 6.2 Operating Expenses -3,075 -4.4 1.3 Operating Income 3,115 4.5 11.5 Impairment on Financial Assets -976 -2.8 2.4 Provisions and Other Gains and Losses -157 -40.0 -40.9 Income Before Tax 1,981 15.5 25.6 Income Tax -550 18.2 32.6 Net Income 1,431 14.5 23.1 Non-controlling Interest -288 0.9 18.6 Net Attributable Profit 1,143 18.5 24.4 Recurrent and strong results
3Q 2017 Results October 27 th 2017 / 6 9M17 Profit & Loss Change 9M17/9M16 BBVA Group (€m) 9M17 % % constant Net Interest Income 13,202 4.2 9.5 Net Fees and Commissions 3,705 4.2 8.4 Net Trading Income 1,416 -19.2 -13.3 Other Income & Expenses 585 31.1 8.9 Gross Income 18,908 2.6 7.2 Operating Expenses -9,386 -1.7 1.8 Operating Income 9,522 7.2 13.1 Impairment on Financial Assets -2,917 -6.3 -2.7 Provisions and Other Gains and Losses -589 -10.9 -13.8 Income Before Tax 6,015 17.8 27.0 Income Tax -1,670 20.6 33.4 Net Income 4,345 16.7 24.6 Non-controlling Interest -896 -3.1 11.2 Net Attributable Profit 3,449 23.3 28.7 Recurrent and strong results
3Q 2017 Results October 27 th 2017 / 7 Earnings - Gross Income Net Interest Income Net Fees and Commissions ( € m constant) ( € m constant) + 9.5% + 8.4% vs vs 9M16 +9.5% +9.8 % 9M16 4,517 4,411 4,267 4,273 4,115 1,278 1,210 1,217 1,167 1,140 Double-digit Positive trend +5.0 % +2.4 % growth rate maintained 3Q16 4Q16 1Q17 2Q17 3Q17 3Q16 4Q16 1Q17 2Q17 3Q17 Net Trading Income Gross Income ( € m constant) ( € m constant) + 7.2% vs 9M16 CNCB +6.2% CNCB disposal: disposal: +204 € m +75 € m 686 5,976 6,111 6,323 6,239 6,345 558 476 Lower ALCO Supported 373 356 sales vs 3Q16 by core +1.7 % revenues 3Q16 4Q16 1Q17 2Q17 3Q17 3Q16 4Q16 1Q17 2Q17 3Q17
3Q 2017 Results October 27 th 2017 / 8 Operating Expenses Group Operating Jaws 9M17 vs. 9M16 YtD (%); ( € constant) ( € constant) 15.0% Inflation Developed Average 12m 9.3% Gross Income 7.2% -5.5% 1.9% 8.6% SPAIN * 6.9% ex NTI 6.3% 8.8% Gross Income 7.7% 7.2% 6.2% 6.2% 2.0% Operating Expenses USA 1.6% 5.2% 2.0% 1.8% 1.5% 9M16 12M16 3M17 6M17 9M17 Emerging Efficiency Ratio +4.9% ( € constant) 5.2% MEXICO 64.8% +8.8% 10.0% 52.3% 52.1% TURKEY 49.6% 11.6% SOUTH AMERICA +10.8% -251 bps 9M16 12M16 9M17 Av. European Peer Group (**) (*) Spain includes banking and non core real-estate activities (**) European Peer Group: BARC, BNPP, CASA, CS, CMZ, DB, HSBC, ISP, LBG, RBS, SAN, SG, UBS, UCI. Figures as of June 2017. Transformation leading to efficiency gains
3Q 2017 Results October 27 th 2017 / 9 Earnings - Operating Income Quarterly Evolution 9M17 vs. 9M16 ( € m constant) ( € constant) + 13.1% vs 9M16 +11.5% -3.0% BANKING ACTIVITY IN SPAIN 3,188 3,230 3,104 2,859 2,947 +22.5% USA +13.5% MEXICO +2.7 % +15.5% TURKEY +15.0% SOUTH AMERICA 3Q16 4Q16 1Q17 2Q17 3Q17 Double-digit operating income growth
3Q 2017 Results October 27 th 2017 / 10 Risk Indicators Total Impairments (Financial Assets and RE) NPLs ( € m constant) ( € bn) - 3.4 € bn +0.2 % 24.3 23.6 23.2 22.4 1,042 1,044 975 1,001 999 20.9 +4.3% - 1.5 € bn 3Q16 4Q16 1Q17 2Q17 3Q17 3Q16 4Q16 1Q17 2Q17 3Q17 Cost of risk NPL & Coverage ratios YtD (%) (%) 72% 72% 71% 71% 70% 1.0% 0.9% 0.9% 0.9% 0.9% Cost of risk & RE Coverage assets impairments 5.1% 0.9% 0.9% 0.9% 0.9% 4.9% NPL Cost of risk 4.8% 0.8% 4.8% 4.5% 3Q16 4Q16 1Q17 2Q17 3Q17 3Q16 4Q16 1Q17 2Q17 3Q17 NPL ratio at 2012 levels
3Q 2017 Results October 27 th 2017 / 11 Capital Ratios CET1 fully-loaded – BBVA Group High quality capital QoQ Evolution (%, bps) (%) CET1 RWAs/ Total Assets phased-in +10 bps 11.88% 31 bps #1 53% 11.20% 11.10% 31% -12 bps -9 bps Leverage ratio fully-loaded #1 6.7% % CET1 FL Net Earnings Dividend Others % CET1 FL 4.9% (Jun.17) accrual (Sep.17) European Peer Group Average European Peer Group: BARC, BNPP, CASA, CS, CMZ, DB, HSBC, ISP, LBG, RBS, SAN, SG, UBS, UCI. European Peer Group figures as of June 2017. BBVA figures of September 2017 Sound capital position
3Q 2017 Results October 27 th 2017 / 12 Delivering on our Transformation
3Q 2017 Results 3Q 2017 Results October 27 th 2017 / 13 October 27 th 2017 / 13 Customer Experience Improvements in 3Q17 • Virtual voice assistant Products & Functionalities Relationship Model - MIA (Turkey) Voice biometrics • Tuyyo (USA) • Bconomy (Spain) authentication (Turkey) • Integrated CRM • New app design (Spain) Cloud based customer Commercial Segment integrated position (Spain) • Insurance one-click management (USA) • Transportation Card (Mexico) online payment (Turkey) • Savings goals (Peru) • Online Transfer Delivering Services Enrollment & • ATM’s cash withdrawals solutions to our theft micro insurance Payees (USA) (Colombia) customers • Virtual spending • Collective Savings - pockets (Mexico) Tandapp (Mexico) • Trading equity structured products • Money Deposit with QR (Turkey) online (USA- CIB)
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