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Fixed income market 16 Jun 2017

BBVA publishes presentation for fixed income investors

The BBVA Group released today a new presentation for fixed income analysts and investors. The presentation will be updated on a quarterly basis.  The document offers detailed information about BBVA Group’s fundamentals and strategy in a number of fields of relevance for the market, with a special focus on credit quality, as well as the BBVA Group’s liquidity and capital adequacy position.

As customary in the banking sector, BBVA will release this presentation or a quarterly basis, containing relevant information for investors at large, but especially for fixed income investors and analysts. The purpose of the presentation is to provide easy access to information already released by BBVA in other public documents by gathering it in a single document.  The presentation is structured into seven chapters.

  1. The first chapter summarizes the main strengths and more relevant aspects of BBVA Group during the first quarter: growth in recurring revenues, cost control, decline in loan-loss provision, solid asset quality, strength of capital ratios and detail of most relevant corporate operations completed in the quarter.
  2. The second chapter focuses on the balanced diversification of BBVA’s business, which encompasses a number of leading franchises with huge growth potential in developed and emerging markets. It also details the quarter’s main relevant aspects in terms of profit and activity for each one of the Group’s core business areas.
  3. The next chapter focuses on credit quality, making reference to BBVA’s risk profile, based on prudence and proactiveness. This approach translates into the solid performance of key indicators (NPL ratio, coverage and risk premium).
  4. As regards capital adequacy, chapter four offers a detailed breakdown of the group’s solid capital position (with ratios that comfortably exceed regulatory requirements), capital generation capacity (based on high recurrence of results) and the high quality of said capital.
  5. The fifth chapter reflects BBVA’s vision about the MREL (‘Minimum Required Eligible Liabilities’) requirement for European banks, regarding which some issues remain open. Once all the details of the requirement are finalized, BBVA will focus on migrating non-eligible instruments towards others that can be computed as MREL.
  6.  Other set of key indicators for the fixed income market, liquidity-related indicators, are covered in the sixth chapter of the presentation. In BBVA’s business model considers a decentralized approach to liquidity management: self-sufficient franchises, without liquidity transfers from the holding company to subsidiaries or between subsidiaries. The presentation also emphasizes BBVA’s comfortable liquidity position, with LCR ratios above the regulatory minimum in the main geographies in which it operates. On the other hand, due to BBVA’s retail banking nature, deposits represent one of its key sources of funding, thus reducing its dependence from wholesale markets. Additionally, the group has easy access to the key capital markets in which it operates. Finally, the presentation details the institution’s ratings assigned by the main agencies.
  7. To conclude, the document focuses on BBVA’s purpose: to bring the age of opportunity to everyone.  This strategy has inspired the company’s six strategic priorities: Setting a new standard in customer experience, driving digital sales, new business models, optimizing capital allocation, leading in efficiency and attracting world-class talent.

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