BBVA.MC - Earnings call transcript Q3 2022 | Banco Bilbao Vizcaya Argentaria, S.A.

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Patricia Bueno

Good morning, and welcome everyone to the BBVA Third Quarter 2022 Results Presentation. Thank you very much for your interest. I'm joined today by Onur Genc, BBVA CEO; and Rafael Salinas, Group CFO.

As in previous quarters, Onur will start reviewing the group figures, followed by Rafa who will go through the business units results. Then we will move straight to the Q&A session. turn to will I now it Onur. over And

Onur Genc

to and quarter thank you webcast. Patricia. for Welcome morning Good third Thank you everyone. joining audio our

Let's number with dive always into slide as it three. starting

quarterly our the up in have our the of €X.XX, graph slide executed. the attributable last higher -- attributable the results our higher like earnings well-above would growth, ever a quarter the obviously share we are One highest ever slide, it excellent requirements. and achieved and rate of years view, of net XX% target see at recurrent posting this on can These side billion. reported On the profit profit number right-hand we €X.XXX I quarter regulatory four. have because you compared of stands of brings that year-over-year capital our achieving above profit reaching already left-hand results shows attributable more see income €X.X our around per can very five much Also this the quarter year. this net is number above the growth of program we Slide highlight our last average, the is strong highest XX% than net side The range that to the operating buyback XX.XX% you to which billion. of as BBVA. same figure results share ratio to results

terms XX.X% It with per we Tangible Page outstanding figure quarterly share a see number equally value five. increase for a one of the to plus this messages we Outstanding We growth these quarters record XX% previous revenues in European obviously improvement an is ROE the of the What out quarter? the growth spreads. keep you reaching first excellent €X improve in have keep XX% the the dividends. ROTE. the most First quarter the third by reached in and in of in revenues, this figures. and year-over-year. can clearly number the continues the XX.X% with metrics billion time these book regarding quarter-over-quarter we And above I X.X% closing evolution six. share, by and profitability, most on core continue Slide of strong And year-over-year group presentation. XX% year-over-year in figures key growth supported year-over-year evolution believe at customer for growth we and stands outstanding. loan this core our of advancing, impressive XX% obviously quarter. banks. growth level profitability advancing numbers one XX.X% at per increase a €X.XX As profitable the the of outstanding remain

first with efficiency nine the XX.X% leading as with our jaws. positive in again of improving year the ratio always Second, months

billion the the acquired customers of outstanding sustainable X.X with months above X.X our on reporting as in we quality very quarterly areas XXXX. in the at outstanding highest nine record of new both ever. since quarter, XXXX as below the XXXX, target progress have last last. pre-pandemic to Third, mentioned reaching and earlier, capital income And figures trends. XX we financing key million really strategy, position our solid is basis our million operating the year-to-date cost acquired been are and comfortably thanks Fifth, last of asset in discussed. and which points levels, risk we range Fourth, €XXX

P&L strength growth operating than in quarter, core in P&L the numbers, obviously, the the the and positive the core numbers. very with readings. again year identify revenues solid number path once in But with our once the on coupling of wonderful first are in revenues. of clearly of highlight in to eight. more you achieving continue we which for do it metrics, to evolution nine. the seven. know the November gross XX%, more positive and again months year-over-year profit again evolution. Nine-month strong attributable Slide our first constant, very you nine slide as achieve the targets would I number strong growth €X that the year NII the the months. the led that our Given this the in in XXXX. ambitious XX% net goals attributable €X Core revenues XX% of quarter. The in full all all long-term and growth we in led with we positive I Day positive of you of have terms. again the right typically in this, number income shared recurrent respectively, in would XX% lines Investor income growth XXXX. both again constant in the And Slide in in XX%, and than nine jaws rates fee risk profit, net highlight nine current to billion, and can months, very reported billion a outstanding an We

the light one highlights again of in into revenues the clear the of my breakdown, Some quarter. view quarterly

All net in excellent by quarter. page. last evolution in in performance you now, good income, driven And another see business. of markets. to and the evolution Also, trend page the last consolidating in very commissions interest the despite Our gross driven versus across curves looking markets in the and implication million, and positive the and with customer high growth XX% Again, year-on-year, year growth page in in global spreads. it's strong improvement all strongly the of year-over-year growth evolution on negative net in like this The XX.X% performance XX.X% all, quarter €XXX trading XX% increased net quarter. board, income, growth, versus asset this particularly the I double-digit income, activity and above into this last me last obviously you front increasing as that the XX% by of of the figures the know, strong management quarter, fees compared

news As dive quarter-over-quarter that, well. Spain is slide in to in go that, improvement observe trend most Mexico. indicating expect continue net the The With as I you this number going most prospects the forward, a numbers. we our income the quarters deep cases, of numbers, in XX, good of a coming all on and positive to the growth interest

picked On the the spreads. X.X% case the slide, Mexico. strong the of left the you you for side of of can quarter. reaching center last XX.X% strongly during year, Spain, third the it see has see accelerated Spain In the In the growth, the since and slide, customer can which for in improvement up loan has

see reaching the recent obviously, in interest quarter third trend the following you the So the rate. X.XX%, increases in

year rates of growing group right-hand Slide continue So, around yields with the and rate strong income, period Mexico see the the see XX% level, trend nine year-over-year you in this showing into performance rises. have And positive at in the increasing obviously Spain both the on you the quarters, in Again months obviously coming X.X% obviously, Mexico, lending to trends XXXX. slide, jaws growth, where the been versus in here looking for quarters. it of XX.X% a lastly will interest continue that for is in catching first countries have the XX, NII And longer track gross side same several to thanks we good in the can record up the number resulting stay. of of this, of constant clearly the will euros. underlying the

guidance with of the our footprint blended the costs to all are inflation growing other in our On hand, line XX.X% of you. below

asset best the not the of to efficiency On trends. Turkey. side in can peers with the in only the Impairments, right-hand approach increased number further see European but attributable the and page, last XX, you to the of to ratio, quarter, and compared best, million further quality the prudent see improving can our the year. Mexico from in XX.X% activity solid our Slide you XX.X% improving, mainly growth €XXX

our in environment result, risk a -- positively uncertain this basis XX with Even cost comparing you. expectations the risk line at points of of obviously. years recorded communicated also, a XX with with the -- basis As XXXX in as cost have with with number in positive line environment, compares points, it and guidance previous while closes very very our and in very, is we

with NPL the we recoveries dynamic very the evolution are good reading here. and again wholesale portfolio. entries, of very strong, particularly new seeing the positive remind in is this highlight, standards. be was to which you, very year historical Also, to in Both very also positive compared our to quality the line flow which with the XX asset XXXX, rest to repayments, basis in Just as showing a all points positive the the page indicators a important of the want I very a in dynamics,

number NPL So of billion. our ratio one now geography, the of but not best down NPL X.X%. only -- of the the in you a context improves is level, we news to the XX%. of ratio this if well is in consolidated every to is down above all geographies, coverage look do single quarter, I as SREP the declining as XX.XX%, September capital, quarter. good since our have stands ratio this our of Slide we our naturally, XX at NPL has discussed in to declined And NPLs CETX level, our very on €XX.X balance core the the balance at increased believe impairments that requirements. into And

rundown quick the evolution very the Following the maybe of of waterfall, a number.

First, basis generation XX contributes our points to ratio. that results the

basis accrual ECB Second, detracts ATX as XX together know, mechanism with you points. coupons to the all the XX% according the dividend detracts at payout it that

comprehensive to in the to due net value Third, last, XX program. growth. minus position impact the to final mainly Turkey FX, bucket my of held mainly economies equivalent strong number a the and share and the of impact, one positive and Page a monetary to or market-rated buyback bucket related other hyperinflationary collect points the favorite loss the sell points of minus credit in of others which And income impact Argentina. the XX, includes mark-to-market XX the slides. adjustment positive in the RWAs context basis from basis the portfolios, profitable And

first doubling the one remain customer We in nine quarter acquisition. growth. continue period that of key clients. most we number. our same At by franchise ago. is focused on the in drivers balance Slide through acquisition. the growing our clients than XX. of We way of quarter, doubling, now up acquisition And it's X% year total the the of acquisition digital last time, number client customer -- drivers years that great only five more of more this million to which key months customers and we the new sheet the in And XX% than was profitable the XXXX, from X.X of X.X after new had view the records. way always, beat and acquired healthiest growing million And new As is

We or of more dive are clients wanted customers show customer these we a to than engagement evolution you in primary new and become that target XX% acquiring deep new our on in clients six months. have Spain

can account and the with on new you left-hand history it the debit cards. client's the product see mainly As slide on side starts column of

However, clients. debit, XX% lending engagement products by months Slide just of it in but with after six XX profitability increases months, primary by the increasing like only strategic enriches customers another thereby not it increasing enriches, them clients. thereby acquired direct other XX%, products making and primary number become again number also six products priority. payroll,

we to again €XXX This by us worldwide obviously was the which business million €XXX goal to raising €XXX positions towards billion. billion in by We it commitment sustainability. €XXX now we XXXX. our then originally have this it among to leaders And banking billion XXXX, sustainable raised are raised

done continuing billion in more XXXX. mobilized We And positive we this. €XXX strong than we billion trend the since have quarter that this €XX on have already very only, have

added right-hand side some, of alignment. commitment while advancing with had in on into our and this Also portfolio we commitment. this our page, published we gas we recently sector working on goals, oil Additionally the clients of obviously sustainability already our the but side-by-side

each Day are the on one And will for of we right this you to can save targets on I save Investors achieve them, can in I -- slide. but go time areas, XX say as that announced the here. business now into can we path not Finally, Rafa? them clearly see just all long-term the our slide on

Rafael Salinas

Onur you, good morning Thank everyone. and

supported share another board. very sound Onur, operating happy all by excellent trends with anticipated As geographies quarterly very across you in are to results by a the we

deploy further the we relationship our have see, customer to front. business During this the with third we quarter, continued we and based acquisition, on strategy on delivered them most segments. market gaining hereafter And share our profitable as strengthening will in

we Spain, In Spain. with begin business trends. to let's continue XX, see Page to Going robust very

continue book more our risk to we profitable As X% to on loan Onur Within accelerating year-on-year. segments. appetite, said, the growth focus is the almost

are As to mid-sized leading while increasing such at close lending double-digit while to XX%. loans companies' consumer to X%, by -- growth

from some to dynamics like profit lower on to strong addition to very solid year-on-year In XX.X% would evolution activity reaching provision trade double-digit a TLTRO previous the by on minus quarter-on-quarter improved by contribution trends, X.XX% mainly grows NII Despite XX NII. million the highlight basis growth quarters. activity in X% I driven points of levered and on increasing of €XX quarter, versus customer spread by

NII continues anticipated, QX XXXX. we us grow the for single-digit mid reaffirm year. trend leading the positive furtherly and around NII to next the can accelerate see we from have on expect we grow As our started XXXX, in loan high-teens to to so portfolio NII in guidance should as rates repricing into at support This to

fee services and decline efforts, cards, expenses All-in, year-on-year. trend business. lastly, X.X% by explained by cost cost-to-income ratio, income minus outstanding to activity by in payment And in improving our sound XXX Second, an XX.X% points continued positive basis year-on-year. insurance thanks credit mainly control to resulting

to trends an set sound XX, prospect quarter. again, recoveries on lower strong results entries higher In ratio NPL and improvement Slide lead results. in underlying outstanding coverage ratios good the and NPL further remain the very once Mexico. delivering a of Finally quality, in asset in, Mexico, we are ahead. All and

segments profitable above cards, needs throughout higher mostly balanced about In credit retail to XX%. consumer growing biased retail, most on year-on-year the portfolio wholesale dynamics is namely growing continue to loan and on working at year. see We and segments, capital growth the transactionality activity the strong wholesale growth based and loan XX% with growing and

our above net P&L, year dynamics, increase volumes loan cards, growth while strong X XX close the funds based by all-time benefiting is the at remained growth on Strong low are contained XXs, from in and investment efficiency above country. keep trend transactionality. plus we XX.X% growth new on NII the increased and in in driven strategies basis activity. loans by to XX% XX% improving year-on-year, in grow increased leading This on expenses, The points in to expecting but on core billion ratio. X%. to profit fee all, credit the fees jaws above mutual doubling All deposit clearly is in net banking the level the NII Based revenue performance to XXXX market rate. figure, year-on-year. a On reaches a deposits year-on-year that the outstanding mix, related on gross spreads record inflation with due an from advantage on a also these continued to cost-to-income and profitable on fact we higher XX% higher again line customer payroll in to increase wider loan positive income cost investing growth well cost of the yield solid high competitive built explained below clear our shares is above

the to asset NPL risk the and quality evolution cost Low good stable entries see in points ratio around of XX, million, to in regarding increase Net trend profit above gross increases and an Slide by driven the – coverage XXX%. by increasing in mainly income. quarter an of rates very positive recovery basis sound support Finally, XXX we remained the ratio. Turkey. NPL trends. improved €XXX continue The

contained rate of that growing currency and below In in to evolution decreased XX.X% the in the TL terms exposure with loans is foreign reduce strategy activity, our inflation loan line relatively segment. annual

as strong services risk evolution The high to provisioning to driven September has derivatives in All quarter earning and by the underlying policies. of continued contained the activity. higher in the at On supported from is FX-sensitive trading activities, solid a the of ratio the a entries. remained region underlying income year-to-date as quarterly XX%. FX favored we'll revenues. in all, spread by loss brokerage terms is down. by growth Final good higher guarantee trading reduction contribution expected, of NII most the and good contribution quality, P&L. in the Fees and positive XX evolution. highly and and better-than-expected by around America, supported coming declines dependent On business the trends basis increase in the remained asset supported net FX exposure XXXX is And in mainly cost activity disciplined points by finally levels inflation payment performance FX trends mainly than to by continue at position segments trends, evolution been South monetary low environment. net will Slide be the trend levels while in XX, recoveries, TL in NPL a the driven inflation and and a to wholesale pricing NPL Moving coverage maintained on uncertain customer

activity the Solid profitable most and dynamism segment of and NII the improving. cards and context inflationary board pressures, by despite jaws activity in and the across the positive fees growth like higher continues efficiency supported credit some rates consumer biased to

Sound going risk year, now with year the profit net results. at doubling back remained takeaways. the around the exceeds coverage the to indicators NPL of points. in first nine €XXX to of last quarter, and risk highlight stable months And the region remaining million the in in in cost low Onur in main XXX region that All is basis levels

Onur Genc

you, Thank Rafa. you. Thank

reported quarters. takeaways, view showing our quarter, summary have recent in results. very over One group's more again trend the our the in view continue results positive they in So we the strong

the by mainly revenue activity strong customer the core spreads. driven and excellent Second, evolution

We RoTE. of our highest peers European metrics one the of profitability continue with again XX.X%,

digitalization, long-term the of in of have to as And you. execution now on our lastly, to strategy, track you seen are our acquisition, Q&A. the made one we Patricia ambitious goals Third, significant with pages figures for in reaching that in sustainability. have shared we achieve back And we and have customer progress record the

had and our metric in goal very a we of bank finishing presentation are minutes. We this KPI-oriented XX

delivered four We even one have that in saved this Rafa. minutes, quarter,

So Patricia questions.

Patricia Bueno

Onur. Thank Okay. you,

the are ready We start to now Q&A. with

question, Question-and-Answer please. Session first So

Operator

Ulargui from [Operator you. Thank comes BNP Our Ignacio from Instructions] question first Paribas.

Your open. line is

Ignacio Ulargui

of the Thanks be a just in will Mexico strategy growth growth. we quarter two NII on and sense that are lending very and mean, quarter, performance wanted bank – I the and to taking bank, much. what ceiling have the the questions. bank. of I for I for with after Thanks surprised bit of personally outlook my of I'm questions. profitability of of being the just terms the get the One

second The TLTRO I. question regarding is the

the from the there would ECB the TLTRO? the a announcement – but is you. have Following could NII be implications by the that what the And assumes the NII? growth for – be yesterday, guidance repayment high of that XXXX of into strategy the high-teens for TLTRO? in high-teens whether what Thank a And full already the you includes

Onur Genc

you, is but bankarization Colombia. you country. also is with Very good. two the that Ignacio, a in Again, is same Thank GDP given I one do It's in we will XX%. sector Very confidence Brazil. divided and number XX% – That in but us repeat, Mexico XX% the this, it this like keep XXX% for by we XX% to another, in Chile. and in have loans It's in quarter in sometimes banking the questions. simple saying full low Mexico, wonderful the question Mexico. on franchise then

take Mexico years years XX last so is grew XX the CAGR. So in lower very year-over-year we the level XX the the being than comfortably the X.X% on you growth But in have years, Mexican average low, if economy last in the actually in X%. bankarization last

wonderful level we view share. franchise to keep bankerization our our a then in as market said We And potential healthily is franchise. the there. have gaining we given So the grow regarding

quarter. you the So third asked about

The than loan production Ignacio quarter. third is quarter the higher actually second new

this country that, cut have short, do fact low very coming cost So our the think GDP GDP is you country the and close and in leverage do points do the I long given the NPL share. given again grow XX trend keep market franchise same the who in the that there the is healthily I debt still gaining year-over-year the debt basis over fact market seen for stable. numbers, levels year. trend have and corporate We numbers it's and given there. we the that there. think story a points room gained number are XX share the of actually household year-to-date the that is And To also over risk you room is have basis again to wonderful NPL to this down,

to this So the environment trend will quarters. cycle. Obviously, have in is coming the a carefully. very the positive watch Obviously, we continue

an the implication impact this. are what We positive much have is €XX applying versus was XXXX with starting very XXXX terms dynamics of be million XXXX -- they we know, TLTRO on in us. now basically was November yesterday XXXX XX all done impact tiering The in was bank around versus this XXXX basically This a But very new €XXX the different of abolished that change aware million. the will And formula. this. XXXX, they of experienced would the all for year-over-year of see growth. you after that it's be as impact the loan

combined November to the conditions €XXX full million. and So July now total in be is of the in going change different the

mind in numbers. kind expected. numbers next year. teens we our this we stick of guiding that to guidance high This were were incorporating the still already we giving When we these you on into With for was the are this

So incorporates that. already high-teens

about But it it TLTRO. asked yesterday and regarding neutral. it our still strategy analyzing economically Regarding our basically became also you we out strategy on. came are Obviously so

So liquidity we have in and the ratios, it liquidity case. LCR don't the the but any need for helps on

mandatory until it neutral the payment we topic. might actually We on So periods. are keep this

going also it and June. just good on pay stick We in have economically We in be billion back. €XX deadlines billion €X it's so paying you it those and neutral. liquidity December to it's that are €X ratios another because March, can we to the might but in in know As to billion helps

coming to else on add for So want us. it's weeks the TLTRO a Rafa? you of Anything decision

Rafael Salinas

No.

Onur Genc

No.

Okay.

Patricia Bueno

Thank Onur. you,

please. question, Next

Operator

from Stanley. Serrano We now Alvaro to turn Morgan

Your line is open.

Alvaro Serrano

Thanks. really follow-ups Hi. previous the It's questions. two on

for the your it considering looks I -- higher. don't it think year-on-year I your it doesn't high-teens it seems like is could if XX% in terms basis that it sort QX we've basis guidance XX% points similarly it's a some walk XXX you seen next was -- said Mexico. but low-XXs think hike know mean of if for to In maybe assumptions number. the be to now good that year I flat the I points XXX question of and can you've rate XX% growth. I of in NII number, sensitivity But through on And growth. QX second Again number get assume us take I just and was

and So I to you go -- Mexico. but more think -- there's just said in Onur

to conservative and being in you're Mexico? both trying assess Spain how just So Thanks.

Onur Genc

put for ourselves. the But which you a the on by of have sense, deposits beta is rather XX%. deposit on that at the yes, said the our on conservative impact embedded about move side. some a when we goals guidance, we demand Which we into conservative XXX also But we number on the of we end a number we and that points in the doing numbers. bit deposits that teens. kind have but might is would that is the you of than maybe understand true. we say are numbers deliver. would high-teens an of conservative This time on on XX% and end number wanted have assumption, you or and rather we our high talked In so into misguide we how the through XXXX key deliver that are what just the this basis view the the again it upside think The table feedback in a we to assumption a assumes You our so that with been of which rather number is underlying of conservative

again So have we Mexico question and the be -- you into are Mexico. gave to a already case of in might news both that. I in all numbers. upside cycle an bit going first And we see in about the great But a the as there I of

So guidance bit on we the are to that we you. a conservative to want be giving

We not in numbers guidance we will the be for talked about yet them. next so give quarter. giving do the two These important that XXXX. to are numbers obviously we'll as are so But real we always the guidance you

We about you XXXX. will guide

might that are given confidence we give deliver an short anything tell maybe be you even To want and else. upside having whatever level there an we you seen. we environment more have the regarding a be you in higher in So numbers is the we But would economic them. that numbers cut story we so than the long --we to confident then

Patricia Bueno

you, Onur. Thank

please. question, Next

Operator

from Our JPMorgan. Sofie Peterzens next question comes from

Your open. line is

Sofie Peterzens

Yes. Hi.

Here from is Sofie JPMorgan.

versus if capital XX% you And, to XX% around back remind could headwinds rates? interest should of. from you income if expect net Spain that bit slightly Sorry tailwinds for then to guidance going in Thank XX% to question Can a aware just second be net lower when higher previously. interest the same would now for guide just little in you growth we NII why Spain. these discuss But higher income also, have headwinds clearly, any be, us you your And question come? the of and you you.

Onur Genc

Second headwinds was capital from question supervisory.

Patricia Bueno

yes. Headwinds,

Onur Genc

supervisory? the On

Patricia Bueno

Yes.

Onur Genc

Okay.

with sense, or to lot next all I don't in of from mean, is line. be only reason. the -- thing to some higher deposit has higher change XXX, In XX% of why first a the XX% the there the that Obviously, basis I XXX XXX regarding some that step And is come analyst today, XX% system, But competitive On liquidity the did saying. going there's I XX%, I would deposits into with of what assumptions with Because might set see at function of the interest of mean, presentation that a banking NII change sense again, rate as a that deposits. bit saw would very that to a There actually flow the you in flow higher we much Until is profitability the question, only pressure change In a change to reports, we assumption increase that, of that know, That's the don't we We obviously, the more writing the were points demand Spanish that quarter, this rates is nothing coming come. XX% this has meaning That's But referring levels. let's were first a movement put of to XXX. saying beta proper beta less there And have you other next we more. just to of in a flow. no rates. interest and the the time different to all the of the trend have time with the be be of what first been well. stick you as we higher a has guidance, adjusting it's you to itself dynamics assumptions, see all. at they bit, that obviously fair. levels reason think, deposits will If an the come higher that. would the with behind nothing change, than happened. than the given call, I some system. next because XXX some XXX be the saw before deposit rising happened, no

very We sensitive. rate are

customer reports will of could that so saw and in you that. them. very better comparing of the number are that from also analyst as is improving our clear, some rate benefit have of the and Spain compared quarter competitors, very sensitive to On one, on. been spread because this I in were we some We

we to ALCO better. ALCO competitors. In some the improving compared our in our seen NII and As have increase portfolios, is ALCO the portfolios spread of competitors, even

the in book. see we of ALCO are our up holding that presentation growth you on backup of the As still the

So ago. portfolio again, two that Because, might our ALCO is high. difference know. be every sensitivity the and banks two-thirds months EURIBOR bit as six year But time our a months being It takes one-third different the in co-op every the and view. our of takes the is it is you of only very or repriced between of

When do two ago. you today, well. the as it months So the repricing there is that takes EURIBOR delay of

nothing to to In be there with And then slightly sensitivity. on quarter, next not quarters. Capital It's has we XX, come. said and around supervisory past sensitivity on the points updated the yet. basis guidance. headwinds, we have above we but the with impact started you capital finalized lower more going would our XX XX. to said that this is do, stick XXX originally in change So to the last we is than We come lower

they the been it -- the have points in the And call our We fourth is as delayed, internal time. are be lot than first models such, is and very in it first supervisor the know, on, year in exhaustive a has and XX we so because the we quarter this supervisory less -- will that call. that, that It the on in will even it a quarterly IMIs be maybe with base quarter, some can quarter expectation but taken dialogue sharing last you case as of basis with has There it work. investigation Fourth framework. expecting impact this. you quarter, been receive

Patricia Bueno

Thank you, Onur.

please. question, Next

Operator

from We turn Mishyn to Maks JB Capital.

line Your open. is

Maks Mishyn

morning. on have Good my two I the in taking questions. Thanks Spain. presentation loan Hi. and growth book for

first to investment the one loans? was it strongly in is what's or is capital mortgages. And second working corporate so grow key is, drivers, on wondering continue loans, on I The you the

growing. in book deleveraging is while I sector you loan Thank us could you. are you Your shrinking, wondering was mortgages. tell if why the is

Onur Genc

Very, questions, good. Great Maks.

The loans working first mainly given inflation. one, capital its

have are we more supporting are Our we also them. share. corporate lending capital asking market for But gaining and needs clients, working been they

segment We share we gaining also clearly are book. in year the put and market of into that focus this lot a

both focus, them it's a So, commercial much also needs capital higher our and of the working clients. of

mortgage, market share We have was timeframes. Regarding mortgages. gone market measure share new are down It available new deleveraging publicly in our or share, you you production X.X%. In are to shrinking. in those in very production we in market we July, right, because in are lost X.X% it's August that Spain, can intentional.

market share plus. is stock XX% Our XX%

properly has generating not in at appetite lower Because we typical much loans At the of share. be. our active industry was years what timeframes, should rates, portfolio. of much our flow risk lower that than new So, view those than XX reflecting given It were it pricing. fixed market our Why? on

of nothing So the that. we market. the stay That's we only reason, out than will more said,

Patricia Bueno

Thank Maks. you.

Next question, please.

Operator

from Our Cobo Carlos Societe comes from next question General.

Your line open. is

Carlos Cobo

for questions. the we and management were just NII interest it's in the it the more And discussing you, thank But could. spread rates, our kind when then just wasn't Good a a customer times opposite. couple morning. was bank remembering taking to the remember, seeing team. rates you Hi. and I are in have resilient a clarification Mexico, you falling I falling quick now of if and

here, their with accounting So forward? you confirm, income? net method the the is quick more do get the of my if approach catch-up the So have on apply be have the wondering all would TLTRO peers? III, it's I'm expect of would sustainable capital. Spanish in it's has growth and second understanding in a TLTRO whether approach you booked one prudent about And into net peers, the and NII that quarter, than of what one, or expected the confirm, about cost just And III. cost margin going is would rate reassurance, what been is if or going a some you interest number you that lastly, the correct? all can interest And been from maturity to Could trying funding, please the to first

nothing in you've Thank there's we quarters, a account terms exposures are that volatility taken have on wondering, to or to much. affecting just seem control changed going not anything the you. tighter should capital You risk highlight. management of ratio Market forward. if take capital. into Or I'm that

Onur Genc

in take Carlos. I'll with Rafa the question NII TLTRO question. maybe Mexico. Thank you, Maybe, start you the

the We have XXX it put X.X%, rates. been a at the sensitivity very clear We sensitivities, mainly increase on currencies It's in we for this a XXX same in relevant to step NII Mexico. in points basis function piece basis is there there's This said, first from sheet dollars. in the -- day. also that's includes but it two change the points these Mexican peso, balance our

that's not I'm points, points basically With see. less when the And to be you X.X%, or changing symmetric we Not more delivers but minus mistaken we Carlos, is at is that numbers But X%. basis X.X%. you feel minus you XXX will to adjust less That that it that NII. if sensitivity. minus minus both, gives X.X% X.X% the curve going regards position, rate in or the So more minus basis moment. XXX in

it that sensitivity. the sensitivities. gives basis you XXX XXX we will minus gives as plus, and are We work those minus, stands, X.X%. manage But will X.X%. you points basis points

are the and So, looking that's that the numbers numbers that you seeing. that's you TLTRO? are into

Rafael Salinas

On I the two mean questions. Yes. TLTRO,

previous or First the answer, in TLTRO said the as in impact contribution the expected million. at day end a of the Onur of is the XXXX, impact €XXX

going another So, the in the in day XXXX top at have that XXXX difference. be has of end we the €XX On comparison tiering that of the between and that's the to Spain. million contributed

more the the the at mean around XXXX day going using in is approach tiering, and accounting we at And as that lower therefore €XXX prudent contribution accruing the end criteria, been said, of TLTRO be have rates. contribution combination the of the the I to the So, plus III you million. about

we been the approach. at using have the day, of So, the end more prudent

Onur Genc

Carlos, Perfect. are it. of that And you the results fact market terms in should is obviously capital, also acknowledge there. nothing approach the changes to The but the impact on there, the

better we when would the be market than in the are are So, completely facing numbers. and the that capital otherwise facing we evolution that impacts is

very good close delivering €X In not do XX year. billion on years, delivered are every €X €X we billion close mean €X years, if results. billion. you good year billion. past very In BBVA, year. we good years, to to €X I look to do billion to €X billion so We into every full we

We In last three we and months are have go the for good September, have months. prospects the very to in nine we quarter.

in appreciation. at market We impacts market and helping organic impacts key the those obviously us and to is figures. feeds year capital quarters because us from of up some the capital benefiting are and our Spanish evolution hit, and If helping capital of are securities investing which going is impact the we the Collect counter dollar, be billion are coming generation -- €X being and will impact, we we to those currency. it's into in RWA will losing exchange capital that be It's already market because the going FX rates sovereign in the hit we impact, because a And to of everything from. this be money of coming are impacts the else. mark-to-market some It's foreign that those capital going market years. Held book the making up the are and the have Mexico, because in is this of be in in Turkey from market Peru, Sell If from we but the to basically of going

into more. the that coming currency To market even should We results, short, countering you but cut of look story will is long quarters. revenues recovering view because in and again, with the which big, been in my delivering really impact be has more exceptional the is

Patricia Bueno

you, Carlos. Thank

please. question Next

Operator

Pamela to turn from Zuluaga Credit We Suisse.

open. Your line is

Pamela Zuluaga

you taking morning. Thank have one two may for I I follow-up. my good questions. if Hello, and

your The goals. first one on is profitability

were XX.X% of ROTE you achieved topline Spain for And catalyst already you the further have in hike as the mentioning, of benefit this an growth. bulk a as have rate coming still You quarter. strong

close you particular peers intend you're we building time the very to that deposits a follow-up your deposits. also such at they some what the -- worried happened a then Other pickup? and goal? that So, said are targets, final demand at we can very ROTE a color have overlay sheet, therefore liability provisions one Should on give to where look QX? continue is? in on of the balance And The we rate your to that second growing profitability is Mexican Mexico. one close further know When there a is expect the XX% willing maintaining are you review about or has is to headwind us side overlay

NII the you in that expensive are moving more maybe we for worried enough growth forward about being could to country? demand more Thank deceleration see a may now rates high deposit you. and So, funding? So, be for encourage

Onur Genc

of want bank? you do the first the want to one? the change Rafa to You target take profitability

Rafael Salinas

will -- will internally. it and already -- to the market. mean public I do I it on

Onur Genc

did Europe in are yes, you so No, we first European of very and is and good I ROE largest mean But this well the best XX whole the doing that. was should the we XX% the in we put we goal of are announce banks. when Pamela question, over XX%, the that that the it context know on a

number one number this The them either announced week are or has are two. and beating we the We second number now. in one quarter

be most we So, to likely number one. are

a growth start X a the that because expect the the goals the than basically and good macro in rate number into The is Many the in parameters numbers today it's we goal, the already So as year, a quarter? In is, we something model very don't do And will we so our delivered know is every this doing one-off parameters. we have big changing fourth as adjustments commitment we to or No. front end been you potential goal you which it's on and the and change know sense, looking thing yes, and review good quarter these the But is macro loading IFRS commitments. only but those see. don't is future number. the year announced that deliver just which targets expectations we which -- involved all are other all with. losses we Provisions we developments it. to we do and better into and very the every but a good goals this at XX.X% the so of a ago. year because I'm continuously like that, will is the it's market have certain

macro will But are in or to in the reflected So be any from that, obviously very change it's if negative the absence different and the in macro it modeling. it's where going the into a today, be all parameters more if change sudden not a we there of obviously numbers. much is evolution

I are confident already you don't expect or think deposits. is and it's we one-off our But asked. Mexico were asking. again, do as have of but that wonderful this demand we in XX% major it deposit on would was a NII we very a franchise, I So, important It repeat this.

points is basis -- of funding the with the sector of difference points. basis XXX cost XXX Our banking rest

cost already points of sense, a advantage my in we consistent only have seen that and way, a having the out a funding now in So X.XX% view rate. is to competitive meaningful advantage. In Mexican

We have are used to. already seen than what much higher rates we

competitive that far, And have that that of strength we so have. because contained we

So going forward X.XX%, will will it It increase. increase?

are When of more so come We seen end started was not rates increase. major now to year it mistaken, we X.X% the so at already if XX.X% or the the but I'm year, a the expecting we rates. have

of despite and the X-X the of the of in in of Mexico. salary Mexico of the of have mention of volume but -- our in are flow flow XX% we the So salaries XX%, calls we enterprises number in Mexican value not are competitive again share strength we households. I payrolls terms transactional, of employees, the Mexican terms XX% heavy previous contained because in cost of increase we given a the cash did cash in have funding the of rates, market this number

It's transactional. it's So cash flow.

Mexico We sense services in providing are technology there the flow NII that seeking that cash to is to customers. those I'm confident In stay.

Patricia Bueno

Thank you, Pamela.

Next question, please.

Operator

from turn Filtri We Andrea to Mediobanca.

Andrea Filtri

beta making NII guidance, evolution you the transition the assumptions your you're your is? setting you're size XX% are what extrapolate the ALCO of to I on assumed to elaborate second to how the better deposit within contribution understand please could understood trying The your just is and what on I'm in a it guidance? bit within the question what is assumptions guidance? And on at wanting level and at fees. XX%. But your

repeat did And your finally, you on you And fees. NII? If for you. give Mexican QX your could fees Spanish guidance us Thank QX, could outlook you what if please performance XXXX? in book

Onur Genc

can some give questions. to you and take I better on moves deposit guidance you NII Do percent so Andrea want -- want what Okay, Rafa, you the gave beta that? can you to a because do and we for numbers. thank the maybe the numbers you do of

Rafael Salinas

have the decreased XX% increase, is mainly base think sensitivities be rates that Spain. Spain the of to rate in the portfolios. because going to by underlying on their pass-through in day the And and are the between assumption, convexity XX% a sensitivity Onur, and those the the of moving the of we to mean I in effect I up we or there the on deposits sensitivities clearly the end the assumption moved -- interest think mentioned XX% at NII as time movement and deposits Okay. of see now previously demand I as

of we end sensitivity now are to XX%. around day, the be to at be So expecting our overall the --

Onur Genc

Very good.

that assumed for -- these have billion ALCO with the you. the the numbers of size presentation in it's we all in Regarding the an €XX But ALCO shared we of in again book euro balance of backup sheet.

billion only I'm liquid You're asking high-quality have duration of the of focusing has billion billion around book Spain, X.X HQLA, call on That euro, €XX of so a billion assets. we €XX XX-point-something. what €XX plus we years. €XX HQLA

are basically to get ALCO -- it our we So will in €XX increase year, next that additional we the billion, have obviously considering all. book. we With

our our to want shared is the the an there's growth numbers depends And that depending increase on success this The the to increase markets it market, because ALCO we Depending number ALCO a our be have income fully. the we see the on have to markets book. the do unlike seen how committing can of on until yet But there high-teens, upside we on As way a have are ALCO upside year. markets the that ALCO in is the be book, we -- very limited ALCO increasing competitors, take have decisions. in increased of we the our In if have evolve we the the our not I in wanted beginning fee basically we call, numbers going here, you we you. an book with the fees not dramatic mentioned in although the not we some marginal that book and we ourselves don't Spanish book very at to of we can, way.

markets year, As last the the is year limited. this success number, given to very compared fee

Patricia Bueno

Thank you, Okay. you. Thank Andrea.

Next question please.

Operator

next from comes Our question from UBS. Ignacio Cerezo

open. line Your is

Ignacio Cerezo

a for in then morning, side, basically XX% to point so of Two thank are of approaching quarters? behavioral for How presentation. comfortable. view coming Again, loan-to-deposit you ready are One more view, in Yes. and funding. from more you the lose process, NII? I particular. commercial point me. high you of range. the capital, on Hi, ratio deposit the mean you're the is your competitive on Spain, which issues? is good on the volumes quite mean a in which of on accruing on tally XX%, is and part you how dividend pricing, is prioritize mean I second you I or reconcile both actually over And the end one liquidity do

you. coming increase need into headwinds years? year? there improving. is possibility been The any capital being regulatory we about not in Your Thank How think do a actually of an to has are actually And this dividend increased.

Onur Genc

Okay. the questions. Ignacio, thank you for

buffers First all, We NII. off have we you wanted is, of and that again, don't we is to what precisely have to are what these optimize. to keep been liquidity want asking trade why, that had. trying we between That

use, To go I way we base story to collateral word short, ourselves matter. again, by €XXX use whole the and so -- to cut now to so, long very the fund if I we of of this the want have And billion a want you the that grain can obviously, on.

where call comfortable deposit and But to that given liquidity I between that are, the the moment that betas, shared you so okay we We would we do optimize in would deposits have with are during this conservative. be we at lose we quite is the think two.

We would to those ourselves betas deposit are BBVA, less we And competitive situation, pricing. Dividends, already the into as we we pressure what be increase do see -- putting deposit raised on given models. than any also that. the that don't see we are our

We it As XX% November XX%. in used year you last it know, XX%. to to XX%, to Ignacio, raised be

of accrue rests at The the final will full Board. the this on to we out Board come and and in you Day results this we'll go. we Given with But that. decide obviously decision the the this accounting, shared to know, with XX%. The we operate rules for of have don't on after the buffers as capital also that and Investor year like

obviously, amount capital end we for to we shareholders to for XX%. if up Our during we If XX.X% ways done. we with above find as we XX% have figure look higher planning sizable create capital. to cannot so the period, our will that, value a goal And and more distribute on, is that that will

of one We the largest programs And we have more, the speaking, capital. obviously buyback are Europe. do just not depending share finished, afraid of relatively to on

Patricia Bueno

you, Thank Ignacio.

Next please. question

Operator

Schmidt to Britta Research. We from turn Autonomous

line Your is open.

Britta Schmidt

Yes. the X, Post-TLTRO, Hi, sort or the stand liquidity you I've you. Thank IFRS question can removal ratio. maybe right an And the your there. then was you the What excess And overlay your do the also be fees. in quarter? Thank on towards? a of are on Spain on would what a on impact us in now? fee of you managing where think got lastly, of a you. adequate give bit buffer overlays of XXX% LCR clarification update of

Onur Genc

LCR the question? take to want You

Rafael Salinas

in we the XXX%. Britta, level Okay. of the end close group today, balance day the at I XXX%, think the at LCR euro have but to of sheet an

So very the strategy the to try maturities can is imagine continue consider fact appetite liquidity, sheet clearly, neutral, I just be Having future. that. will see how will are that, to And I economically situation case a clearly of But we'll current to this just target. think think especially But for a you we in pace that can the risk high reduction. on of the day, condition that be said near should of attend towards to the the clearly, we on good is euro that move the is we today to what balance I XXX%. probably and the think contractual that the end given our new well-above here maximum aim TLTRO at closer

Onur Genc

that the of don't have I asked in the obviously a overlay risk. and we which what new credit the today, provisions and on. Then capturing might this to path. And is in specificities that forecasting as the delinquency, X, future certain some overlays it's of mean the overlays, But very you the adjustments, are the modeling really call around models, which in in customers called your your certain mean, the IFRS micro European component, delinquency I then terms regarding there might take and market there's they is business do depending definition on which Britta, the the happen flow this is. in, you Models know usual. these clear And you what basically sector but the into again future. be the terminology third the you looking we banking models taking sinking what full not post-model so is models. or we

since use, telling what basically the COVID I have asking. is facing done adjustments, since this we were we And again So is post-model timeframe. prudential adjustments adjustments, top sense in that's you post-model have you ask adjustment. post-model take they -- allocated models COVID you carved us, of also. portfolios. non-allocated standing are COVID another But is €XXX €X already out the we taken since the close this million, million macro the overlay, it's that specific for which adjustments. Then that terms be adjustment, €XXX really is on that but don't call Then of future. and more know, €XXX that's in one and they they might might, we be million here post-model done what might number post-model of million €XXX of think to of €XXX allocated billion precise, some portfolios, million. to the the making that They that issues to overlays in to reasons. That not, €XXX which actually to still we basically up very the around million is of But if €XXX word is €X the beginning since combined specific again billion have million unallocated that There we

piece also the billion. €X.X additional there total So making that is

call on Again we numbers So are definition a you. I view. the this, to is there piece well-covered what because in on pick you of overlay, not our depending can we already give you any that But best that are in up. going questions, lot down coming NPLs the our haven't but discussed it every in news a of the single our one of the best is the and is quarter geography -- coverage

So very covered. well we are

you the that also was our trends. €XX feel numbers in to given we have fee, charges The you, that liquidity terms the quite referring Given if to were doing the quality it I quarterly asset we million, €XX clients, to of million. comfortable are

we quarter, stopped charging that as This August. of obviously,

€XX has forward and million become million that will million, €XX not basically. So going the €XX exist

Patricia Bueno

Thank you, Britta.

please. question, Next

Operator

We Romero Citi. turn Marta Sanchez to from

is Your line open.

Marta Sanchez Romero

morning. follow-ups please. got I've very three much. Good you Thank

size Spain first ALCO of your one is accounts the in equity theoretic your and position The and deposits current on there portfolio given generally. the

if soft this indication So you've some from guidance the sustainable? And on of Have get of third considered Spain, in of Mexico? with your capital. with I of broken seeing the actually has hits that loan providing NII soft XXXX of indication it's dollar XX% for position books. guess it expect U.S. The then some theoretic that growth the get you second your well increased, since what the and not tradition as we how you we could could there's is already we the could size Is question can be? one this your size portfolio the a we are -- year in it ALCO

considered So isolate it's now to or the changing hedging there your impact? you XX basis XX%. you. Thank dollar points Have strategy

Onur Genc

dollar take Maybe good. U.S. you on the it. Very hedging Rafa

it the and next come On on, quarters depends the few months along. portfolio, ALCO Marta really how

done But book want that, liquidity that again increase. that not how will want HQLA in conservative months. increase. and have clearly sense can because you again, and in previous number, have our be a sense, our That the next we mention capital want managing are managing €XX did €XX this Bank -- conservative ALCO book of expiring conviction that also six I to We is and be again, give hope topic. billion. our we book we mostly the prudential in to -- markets but questions I one do the ALCO see patient we So we that so And our the In develop. next relatively the very in you to on the want can billion to don't the on. give you

can you additional months because have go the is likely sense, you the let So the of but precise evolves depends will ALCO that on. and situation to how the we our case book A give liquidity back along. it pay all that in a book, TLTRO liquidity come that to all very so piece size, ALCO because that to the me quarters. all on not and would In coming increase, in any

is, repeat on Mexico, for one. next Soft all room. we the lowest is loan very only The in over the in positive in reasons a Mexico indication old -- the very very XX growth even you the landscape. for the which allow of are that is us debt loans if one the two growth we the seen is in again, one the leverage but a In clearly again also, guidance, because the look previous room to I leverage repeat for there this way to There would periods, will asking nice thing GDP that's delay number that of into of I have mentioned repeat it emerging in of of for I would questions markets I -- past years, environment. recessionary country. the banking in that that sector's healthy is Once Marta

CAGR, loans. growth GDP X.X% every grown XX the over year, have average the And X.XX%. in in years last is So we

dynamics And share. market gaining we the So, clearly are positive. are

We also competitive market. discontinuity the have a in

share. gaining market we such, are As

us positive, quite to allow I'm but number next So you give the time.

dollar On Rafa? the U.S. hedging,

Rafael Salinas

I two think, hedging, dollar points U.S. mention, to Marta. the On

have day a of The this end hedge. at getting position the dollars. negative short day first the that end to that in sensitivity are we on that the in at assets hard of capital in the of returns this are are the It's currency the natural one dollar

natural those hedging clearly we course, hedging that So kind I coming is no that creating flow our dollar that hedging asymmetry. And But position. The been of in active. of have sensitivity. this only creating have been day, And second, the than all do related clearly at difference other during that's we manage that with hard a capital, of all U.S. more the than, the think on we is the currency compared more on the income year. that end the there do FX in we of Overall, in sensitivities. a decreasing go so P&L. we XX% through direct the more dollars

Patricia Bueno

you, Marta. Thank

Next question please.

Operator

CaixaBank. Carlos turn We Peixoto from to

Your is line open.

Carlos Peixoto

CaixaBank. from Carlos morning. Good Hi.

wondering is provision in update questions currency because side not. my the the I overlays exposure the the quarter the question a bit you up we bit year fourth of then, the with the central well, And feedback as around, some on questions, evolve P&L bit likelihood could -- I Thank some on of perhaps here what will us of that or whether swaps in could much. the to a and in fourth didn't how expect was very see there? well. you into amount couple secondly, I moving Turkey previous be the us you down if in currently extent from you as next the of from quarter possibly And look to bank really perhaps would a So, second a geographies give in take the understood then and

Onur Genc

P&L evolution, I I couldn't evolution? get the understand. P&L first question

in us know way. answer Carlos. that question your And please, Let it if it's not me let

So P&L seeing we again, are evolution for the very coming quarters, positive dynamics.

do deposit fund fourth in we year, register all As of this you the the quarter know, contributions. quarter second insurance the and

fourth beyond we the are In started finally register the the is interest quarter we Spain. in But see continue quarter, actually that the income. very repricing of very in October. month spreads Mexico, would that positive third So, net dynamics regarding to in -- positive. they that registered dynamics improve. seasonality, seasonality, there I versus again are We contribution --

provide P&L obviously we positive numbers are don't higher, guidance are the $X as is currency I'm $X.X asking are see exactly evolution around amount. it again, can swaps, for billion. It's It we we billion a to for and the you number, is asking. quarter not public for So, if the -- quite it, the in the as coming very -- this positive, quarters, but if coming used on be billion. the We a but coming the let's about $X.X clear far $X.X not what you billion. billion, the the Turkey, publicize make sure quarters. now. $X were bit

around it's $X.X Now, billion ranges.

Patricia Bueno

you, Carlos. Thank Okay.

Next question please?

Operator

Our comes final from Gil from question Santivañes Bestinver. Fernando de

open. Your line is

Fernando Gil de Santivañes

question. Hi. Thank you for taking my

I to trends that Just you almost process close expectations? little on market and mean, see some competitors are said, probably a continuing. Santander like share they the have Can please have maybe that Mexico. Banorte quick end and on an gained market bit next to competition, Now, comment Citibanamex and some this competitors year coming you year. and follow-up a is we not

Just be clarification bit and comment of would little nice. you. Thank a

Onur Genc

you, Very good. Thank Fernando.

in when well nine points we basis the XX XX look growing And I year. into very you of we months the in are it basis you the of gained detail market this, upfront year-to-date have basis mentioned share. XX points. SMEs, said, points As in first

the we positive. market gaining board share this very XX growing And loans, Overall not basis the increase personal call XXX basis again, points. We years. mean, are we have very points mortgages nicely in last new. continuously I is what across in or been few XX basis points,

So million, every change change, break SMEs, -- independent of down might number unique And franchise. gaining a so expectation mid-corporate segment. and competition. it customers seems. as our the mass, when customers of is I you story group is franchise, situation, always large on. there number mass are single of also obviously, from the and growing the franchise we in that cut To long million are short, we we full X.X X.X look affluent, the that such gave million into our the SMEs, X.X And competitive coming a will But segments, so so acquired, number. Mexico, you is into this

Fernando, do country best readings single case in NPS are -- huge. of customer in we will every the between market share. gap is satisfaction country. by gain second And and we far the just In We the we continue one the is have have the On far. by number Mexico, NPS, us, to which

the BBVA power the have the a with one. By in our huge gap see -- measure Mexico. number that how power. of with We brand by brand, the society best manage we do brand We far, far

If Mexico. you look desired into second of top the employer of universities talent, most we are the

days desired bank only the employer. are are that top these banks. very be no It's other There ranking, in to list not We of bank. in most only that easy

So we have the best talent.

to really And think share franchise have do we which We is franchise, on do client happy which that, happy in situation. a have jewel market -- as amazing Mexico. which in bank is the we I wonderful you. an a I'm franchise Q&A End gain always. as will continue of is independent positive with very I quite -- a to of competitive Mexico think

Patricia Bueno

So question. last was thank This the you, Fernando.

your may we'll have. nice will you that, very just let remind team for interest. you the you your And weekend. any Thank much. here. questions available all a it have IR and for you end answer to Thank be So, me questions entire And

Banco Bilbao Vizcaya Argentaria (BBVA) 28 Oct 222022 Q3 Earnings call transcript