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BBVA

2020

    Financial performance

    Outstanding results in a challenging environment

    Solid operating income growth (up 11.7% at constant exchange rates) and a very strong cost control

    NET ATTRIBUTABLE PROFIT

    (€ MILL)

    EFFICIENCY RATIO

    (At constant exchange rates)


    (1) Excluding the goodwill impairment in the United States, registered in 2019 and 2020 and the net capital gain from the bancassurance operation with Allianz in 2020.

    Focus on shareholder value creation

    Sale of BBVA USA: LARGE SIZE TRANSACTION AT A VERY ATTRACTIVE PRICE

    (1) Exchange rate €/USD 1.20.

    BBVA USA sale will generate €8.5Bn in capital (2)

    EXTRAORDINARY DISTRIBUTIONS

    Targeting a buyback of around 10% of the ordinary shares, after the closing of BBVA USA transaction (3)

    (2) CET1 fully-loaded generation based on post-deal figures.

    (3) Any potential repurchase of shares would, at the earliest, take place after the expected close of the BBVA USA transaction in mid 2021, and the ECB recommendation on distribution to shareholders has been lifted.. Any decision on a repurchase of ordinary shares would (i) require certain shareholders resolutions and supervisors approval and the lifting on the ECB recommendation on distributions to shareholders, and (ii) take into consideration share prices, among other factors.

    2020 DIVIDEND (4)

    5.9

    € cents/ share
    (gross) in cash

    (4) Maximum allowed according to the ECB recommendation, subject to shareholders approval. If approved, it would be paid in April 2021.

    INTENTION TO RECOVER THE DIVIDEND POLICY (5): CLEAR, SUSTAINABLE AND PREDICTABLE

    35-40% pay-out

    100% in cash

    Payments in October 2021 and in April 2022

    (5) Once the restrictions are lifted (expected in September 2021) and subject to the approval of shareholders and supervisors.

    BBVA Group main data

    Consolidated Figures 31-12-20 ∆% 31-12-19 31-12-18
    Balance sheet (millions of euros)
    Total assets 736,1765.5697,737675,675
    Loans and advances to customers (gross) 378,139 (4.5) 396,012 386,225
    Deposits from customers 409,122 6.1 385,686 375,970
    Total customer funds 512,068 3.8 493,488 474,085
    Total equity 50,020 (8.9) 54,925 52,874
    Income statement (millions of euros)
    Net interest income 16,801 (7.3) 18,124 17,511
    Gross income 22,974 (6.1) 24,463 23,667
    Operating income 12,219 (2.7) 12,561 11,965
    Net attributable profit or (loss) (1) 3,084 (36.1) 4,830 4,703
    The BBVA share and share performance ratios
    Number of shares (millions) 6,668 - 6,668 6,668
    Share price (euros) 4.04 (19.0) 4.98 4.64
    Earning per share (euros) (1)(2) 0.41 (38.9) 0.66 0.64
    Book value per share (euros) 6.70 (8.5) 7.32 7.12
    Tangible book value per share (euros) 6.05 (3.6) 6.27 5.86
    Market capitalization (millions of euros) 26,905 (19.0) 33,226 30,909
    Yield (dividend/price; %) (3) 4.0 5.2 5.4
    Significant ratios (%)
    ROE (net attributable profit or (loss)/average shareholders' funds +/- average accumulated other comprehensive income) (1) 6.9 9.9 10.2
    ROTE (net attributable profit or (loss)/average shareholders' funds excluding average intangible assets +/- average accumulated other comprehensive income) ( (1) 7.8 11.9 12.5
    ROA (Profit or (loss) for the year/average total assets) (1) 0.53 0.82 0.81
    RORWA (Profit or (loss) for the year/average risk-weighted assets - RWA) (1) 1.07 1.57 1.56
    Efficiency ratio 46.8 48.7 49.4
    Cost of risk 1.51 1.02 0.99
    NPL ratio 4.0 3.8 3.9
    NPL coverage ratio 81 77 73
    Capital adequacy ratios (%)
    CET1 fully-loaded 11.73 11.74 11.34
    CET1 phased-in (4) 12.15 11.98 11.58
    Total ratio phased-in (4) 16.46 15.92 15.71
    Other information
    Number of clients (millions) 80.7 3.6 77.9 74.6
    Number of shareholders 879,226 0.6 874,148 902,708
    Number of employees 123,174 (3.0) 126,973 125,627
    Number of branches 7,432 (4.0) 7,744 7,963
    Number of ATMs 31,000 (5.1) 32,658 32,502

    General note: as a result of the interpretation issued by the International Financial Reporting Standards Interpretations Committee (IFRIC) regarding the collecting of interests of written-off financial assets for the purpose of IFRS 9, those collections are presented as reduction of the credit allowances and not as a higher interest income, recognition method applied until December 2019. Therefore, and in order to make the information comparable, the information of the 2019 and 2018 income statements has been restated.

    (1) Excluding the net capital gain from the bancassurance transaction in 2020 and BBVA Chile in 2018 and the goodwill impairments in the United States registered in 2020 and 2019.

    (2) Adjusted by additional Tier 1 instrument remuneration.

    (3) Calculated by dividing shareholder remuneration over the last twelve months by the closing price of the period.

    (4) Phased-in ratios include the temporary treatment on the impact of IFRS 9, calculated in accordance with Article 473 bis amendments of the Capital Requirements Regulation (CRR), introduced by the Regulation (EU) 2020/873.

    Financial performance in 2020

    Robust operating income growth

    Operating income

    +11.7%

    vs. 2019

    (At constant exchange rates)

    Further improvement in best-in-class efficiency

    EFFICIENCY RATIO

    46.8%

    342 basis points improvement

    vs. 2019

    (At constant exchange rates)

    Risk indicators impacted by COVID-19

    NPL RATIO

    4.0%

    +17 basis points

    vs. 2019

    NPL COVERAGE RATIO

    81%

    +488 basis points

    vs. 2019

    COST OF RISK

    1.51%

    +49 basis points

    vs. 2019

    Strong capital position

    CET1 fully-loaded (1)

    14.58%

    (1) Pro-forma: including the positive impact from the sale of BBVA USA.

    Leading profitability metrics

    ROTE (2)

    7.8%

    ROE (2)

    6.9%

    (2) Excluding the goodwill impairment in the United States and the net capital gain from the bancassurance operation with Allianz.

    Consolidated Income Statement. BBVA Group (Millions of euros) 2020 ∆% ∆% at constant
    exchange rates    		 2019
    Net interest income 16,801 (7.3) 3.6 18,124
    Net fees and commissions 4,616 (8.3) (0.4) 5,033
    Net trading income 1,692 22.3 37.6 1,383
    Other operating income & expenses (135) 76.2 46.3 (77)
    Gross income 22,974 (6.1) 4.5 24,463
    Operating expenses (10,755) (9.6) (2.6) (11,902)
    Operating income 12,219 (2.7) 11.7 12,561
    Impairment on financial assets (5,908) 45.1 67.3 (4,073)
    Provisions or reversal of provisions and other gains / (losses) (1,085) 40.6 51.4 (772)
    Profit /(loss) before tax 5,225 (32.3) (21.9) 7,716
    Income tax (1,385) (32.5) (22.4) (2,053)
    Profit/(loss) after tax 3,840 (32.2) (21.7) 5,663
    Goodwill impairment in the United States and corporate operations (1) (1,780) 35.0 35.0 (1,318)
    Profit/(loss) for the year 2,060 (52.6) (42.6) 4,345
    Non-controlling interests (756) (9.3) 13.0 (833)
    Net attributable profit/(loss) 1,305 (62.9) (55.3) 3,512
    Net attributable profit/(loss) excluding the goodwill impairment in the United States and corporate operations (1) 3,084 (36.1) (27.2) 4,830

    General note: as a result of the interpretation issued by the International Financial Reporting Standards Interpretations Committee (IFRIC) regarding the collecting of interests of written-off financial assets for the purpose of IFRS 9, those collections are presented as reduction of the credit allowances and not as a higher interest income, recognition method applied until December 2019. Therefore, and in order to make the information comparable, the information of the 2019 income statements has been restated.

    (1) Include the net capital gain from the sale to Allianz the half plus one share of the company created to jointly develop the non-life insurance business in Spain, excluding the health insurance line.

    Business areas

    GEOGRAPHIC DIVERSIFICATION

    General note: excluding the Corporate Center.

    For more information, please click on each area

    Spain (1)
    €5,554M
    -1.8%
    The United States (2)
    €3,152M
    -0.0%
    Mexico (2)
    €7,017M
    -0.5%
    Turkey (2)
    €3,573M
    +26.0%
    South America (3)
    €3,225M
    +1.7%
    Rest of Eurasia (1)
    €510M
    +12.3%
    Corporate & Investment
    Banking (3)
    €3,135M
    +15.1%

    Spain

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    €5,554M

    -1.8%

    Millions of euros. Year-on-year changes.

    Highlights

    • Activity growth driven by corporate and investment banking operations and government support programs.
    • Risk indicators contained.
    • Improved efficiency ratio, driven by controlled operating expenses.
    • Net attributable profit affected by the level of impairment on financial assets.

    Results

    Net interest income
    3,553
    -0.4%
    Gross income
    5,554
    -1.8%
    Operating income
    2,515
    +4.7%
    Net attributable profit
    606
    -56.3%

    ACTIVITY (1)

    Year on year changes. Balances as of 31-12-2020

    Performing loans and advances to customers under management
    +0.8%
    Customers funds under management
     
    +8.1%

    (1) Performing loans under management excluding repos. Total customer funds under management are made up of the sum of customer deposits under amanagement excluding repos plus mutual funds, pension funds and other off balance-sheet funds.

    RISKS

    NPL coverage ratio
    60%
    67%
    NPL ratio
    4.4%
    4.3%
    Cost of risk
    0.08%
    0.67%
    DEC 19
    DEC 20

    The United States

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    €3,152M

    -0.0%

    Millions of euros. Year-on-year changes at constant exchange rate.

    Highlights

    • Agreement with PNC for the sale of BBVA USA and other companies of BBVA Group with activities related to this banking business in the country.
    • Flat lending activity and strong increase in customer deposits in the year.
    • Positive evolution of fees and commissions and net trading income.
    • Net attributable profit impacted by the Fed rate reduction and the significant increase in the impairment on financial assets line.

    Results

    Net interest income
    2,284
    -2.6%
    Gross income
    3,152
    -0.0%
    Operating income
    1,281
    +4.4%
    Net attributable profit
    429
    -25.5%

    ACTIVITY (1)

    Year on year changes at constant exchange rate. Balances as of 31-12-2020

    Performing loans and advances to customers under management
    -0.0%
    Customers funds under management
     
    +13.1%

    (1) Performing loans under management excluding repos. Total customer funds under management are made up of the sum of customer deposits under amanagement excluding repos plus mutual funds, pension funds and other off balance-sheet funds.

    RISKS

    NPL coverage ratio
    101%
    84%
    NPL ratio
    1.1%
    2.1%
    Cost of risk
    0.88%
    1.18%
    DEC 19
    DEC 20

    Mexico

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    €7,017M

    -0.5%

    Millions of euros. Year-on-year changes at constant exchange rate.

    Highlights

    • Slight deceleration of activity, impacted by the macroeconomic environment.
    • Solid liquidity position.
    • Controlled expenses and strength of the gross income.
    • Net attributable profit affected by the significant increase in the impairment on financial assets line.

    Results

    Net interest income
    5,415
    -0.7%
    Gross income
    7,017
    -0.5%
    Operating income
    4,677
    -1.1%
    Net attributable profit
    1,759
    -25.8%

    ACTIVITY (1)

    Year on year changes at constant exchange rate. Balances as of 31-12-2020

    Performing loans and advances to customers under management
    -1.0%
    Customers funds under management
     
    +10.0%

    (1) Performing loans under management excluding repos. Total customer funds under management are made up of the sum of customer deposits under amanagement excluding repos plus mutual funds, pension funds and other off balance-sheet funds.

    RISKS

    NPL coverage ratio
    136%
    122%
    NPL ratio
    2.4%
    3.3%
    Cost of risk
    3.01%
    4.02%
    DEC 19
    DEC 20

    Turkey

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    €3,573M

    +26.0%

    Year-on-year changes at constant exchange rate.

    Highlights

    • Significant credit growth driven by Turkish lira loans. Strong growth in foreign currency demand deposits.
    • Reduction in the NPL ratio year-to date.
    • Outstanding performance of the net interest income and fees and commissions and efficiency ratio improvement.
    • Double digit growth in the main income statement margins.

    Results

    Net interest income
    2,783
    +25.2%
    Gross income
    3,573
    +26.0%
    Operating income
    2,544
    +35.6%
    Net attributable profit
    563
    +41.0%

    ACTIVITY (1)

    Year on year changes at constant exchange rate. Balances as of 31-12-2020

    Performing loans and advances to customers under management
    +25.9%
    Customers funds under management
     
    +28.9%

    (1) Performing loans under management excluding repos. Total customer funds under management are made up of the sum of customer deposits under amanagement excluding repos plus mutual funds, pension funds and other off balance-sheet funds.

    RISKS

    NPL coverage ratio
    75%
    80%
    NPL ratio
    7.0%
    6.6%
    Cost of risk
    2.07%
    2.13%
    DEC 19
    DEC 20

    South America

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    €3,225M*

    +1.7%

    Millions of euros. Year-on-year changes at constant exchange rates.

    Highlights

    • Argentina: good perfomance of the net interest income and fees and commissions.
    • Colombia: strong operating income due to higher income generation from the net interest income and net trading income. Controlled expenses growing under the inflation.
    • Peru: net interest income impacted by the drop in official rates and customer support measures.

    Results

    Net interest income
    2,701
    +0.9%
    Gross income
    3,225
    +1.7%
    Operating income
    1,853
    +0.8%
    Net attributable profit
    446
    -22.6%

    ACTIVITY (1)

    Year on year changes at constant exchange rates. Balances as of 31-12-2020

    Performing loans and advances to customers under management
    +12.6%
    Customers funds under management
     
    +22.5%

    (1) Performing loans under management excluding repos. Total customer funds under management are made up of the sum of customer deposits under amanagement excluding repos plus mutual funds, pension funds and other off balance-sheet funds.

    RISKS

    NPL coverage ratio
    100%
    110%
    NPL ratio
    4.4%
    4.4%
    Cost of risk
    1.88%
    2.36%
    DEC 19
    DEC 20

    Rest of Eurasia

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    €510M

    +12.3%

    Millions of euros. Year-on-year changes.

    Highlights

    • Activity affected by the loans amortizations made during the second half of the year.
    • Contained risk indicators.
    • Increased net interest income, fees & commissions and net trading income.
    • Reduction of operating expenses.

    Results

    Net interest income
    214
    +22.4%
    Gross income
    510
    +12.3%
    Operating income
    225
    +39.8%
    Net attributable profit
    137
    +7.6%

    ACTIVITY (1)

    Year on year changes. Balances as of 31-12-2020

    Performing loans and advances to customers under management
    -3.8%
    Customers funds under management
     
    -1.2%

    (1) Performing loans under management excluding repos. Total customer funds under management are made up of the sum of customer deposits under amanagement excluding repos plus mutual funds, pension funds and other off balance-sheet funds.

    RISKS

    NPL coverage ratio
    98%
    100%
    NPL ratio
    1.2%
    1.1%
    Cost of risk
    0.02%
    0.18%
    DEC 19
    DEC 20

    Corporate & Investment Banking

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    €3,135M

    +15.1%

    Millions of euros. Year-on-year changes at constant exchange rates.

    Highlights

    • Good performance of customer activity, which is reflected in net interest income and fees and commissions.
    • Good evolution of net trading income.
    • Leadership position in green and sustainable loans.
    • Net attributable profit affected by the significant increase in the impairment on financial assets line.

    Results

    Gross income
    3,135
    +15.1%
    Operating income
    2,143
    +25.1%
    Net attributable profit
    877
    -3.8%

    ACTIVITY (1)

    Year on year changes at constant exchange rates. Balances as of 31-12-2020

    Performing loans and advances to customers under management
    +1.6%
    Customers funds under management
     
    +31.5%

    (1) Performing loans under management excluding repos. Total customer funds under management are made up of the sum of customer deposits under amanagement excluding repos plus mutual funds, pension funds and other off balance-sheet funds.

    CLIENT´S REVENUE

    € Mill. Year-on-year changes at constant exchange rates
    2,950
    +14%
    Wholesale banking
    recurrent business (2)
    94%
    of revenues given by our relations with clients.

    (2) Client´s revenue / Gross income.

    (1) Gross income. Year-on-year changes.
    (2) Gross income. Year-on-year changes at constant exchange rate.
    (3) Gross income. Year-on-year changes at constant exchange rates.