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Banco Bilbao Vizcaya Argentaria 6-K 2016

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6-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 6-K

 

 

REPORT OF FOREIGN ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of February, 2016

Commission file number: 1-10110

 

 

BANCO BILBAO VIZCAYA ARGENTARIA, S.A.

(Exact name of Registrant as specified in its charter)

BANK BILBAO VIZCAYA ARGENTARIA, S.A.

(Translation of Registrant’s name into English)

 

 

Calle Azul, 4

28050 Madrid

Spain

(Address of principal executive offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F  x            Form 40-F  ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes  ¨            No   x

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes  ¨            No   x

 

 

 


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02.03.2016

January – December 2015

Results: BBVA earned €2.64 billion (+0.9%); excluding corporate operations, net income was €3.75 billion, up 43.3%

 

  Record income: Gross income for the full year and for the fourth quarter reached a new record: €23.68 billion (up 10.9% y-o-y) and €6.15 billion (up 6.6% on the same period last year), respectively

 

  Risks: BBVA Group’s NPL ratio improved to 5.4% at year-end vs. 5.8% in 2014, with coverage ratio of 74%

 

  Capital: BBVA’s CET1 ratio fully-loaded was 10.3% at the end of 2015 following a solid evolution in the last quarter. It rose 57 basis points from October to December

 

  Transformation: Digital banking is making further gains in terms of customer satisfaction and digital sales. At the end of the year 19.2% of new consumer credits in Spain were sold through digital channels. In Mexico this figure was 29.6%

The BBVA Group’s net profit in 2015 came to €2.64 billion, slightly more than the previous year (up 0.9%). Without currency effects net attributable profit was up 4.4%. Excluding corporate operations in 2015, net income from ongoing operations was €3.75 billion, up 43.3% over 2014.

BBVA Group Executive Chairman Francisco González said, “In 2015 BBVA showed its enormous ability to generate earnings in a complex environment, while moving ahead decisively in its transformation. We face 2016 with optimism.”

BBVA confirmed its ability to generate record gross income in an environment of historically low interest rate in currencies such as the euro or the dollar. Other key factors driving earnings were the improved risk premium (1.06% at year-end) and the reduction in loan-loss and real-estate provisions in Spain.

 

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Net interest income in 2015 rose 8.7% to €16.43 billion, an increase of 21.5% at constant exchange rates. Growth was aided by buoyant business that helped to offset pressure on customer spreads due to low interest rates.

Gross income set new records for the fourth quarter and the full year. For the last three months of 2015 it came to €6.15 billion (up 6.6% y-o-y). The corresponding figure for the entire year rose 10.9% to €23.68 billion (up 15.7% before currency effects). In the last quarter of 2015 the bank accounted for all the contributions to the Spanish Deposit Guarantee Fund and the Resolution Fund in the account of the Spanish banking activity. The contributions accounted for a negative charge of €291 million. Furthermore in 2015 the income statement did not contain dividends from CNCB or the results derived from the equity method of CIFH.

 

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Costs grew 12.5% (15.8% at constant exchange rates) mainly because of corporate operations in 2015. Nonetheless these operations have generated considerable potential cost synergy for the Group, which could lead to cost reductions and improvements in efficiency. In fact, BBVA continues to enjoy very competitive levels of efficiency (52%), compared to the average of its European peer group (63.8%).

As a result operating income in 2015 grew at almost double digits (9.2%) to €11.36 billion. At constant exchange rates the increase was 15.6%.

Excluding corporate operations in 2015, net attributable profit from ongoing operations came to €3.75 billion, rising 43.3% compared to 2014. Corporate operations in 2015 included: the sale of the Group’s entire stake in CIFH and 6.34% of CNCB; the badwill generated by the integration of Catalunya Banc and the effect of valuing the initial 25.01% stake in Garanti at fair value, following BBVA’s purchase of an additional 14.89% in the Turkish bank. Lastly, the Group’s net attributable profit in 2015 came to €2.64 billion, an increase of 0.9% y-o-y.

 

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The bank’s risk indicators continued to improve. The NPL ratio continued to drop, ending the year at 5.4% vs. 5.8% a year earlier. The coverage ratio improved to 74% compared to December 2014 (64%).

Capital adequacy remained solid. The phased-in CET1 ratio rose to 12.1% (compared to 11.7% at the end of Q3) and CET1 fully-loaded was 10.3%. It rose 57 basis points from October to December. Moreover in its calculation of the CET1 ratio BBVA has included unrealized capital gains from the sovereign portfolio available for sale, aligning its capital ratio with those of its competitors. The fully-loaded leverage ratio at year end was 6.0%, which was the highest figure among its European peers.

In terms of banking business gross lending to customers jumped 18.1% to €432.9 billion with gains in all regions. In Spain the increase was due the integration of Catalunya Banc because, excluding this effect, gross lending in the year remained flat. Customer deposits grew somewhat faster (up 21.9%) to €403.1 billion.

Lastly, in order to provide a homogeneous comparison with the previous year, the main items on the income statement exclude the change in the scope of consolidation in Turkey. Venezuela is also excluded because the exchange rate in this country would render the figures distorted. In 2015 net interest income rose 13.1% to €14.92 billion (up 10.9% at constant exchange rates). Gross income grew 10.2% (up 7.9% without the currency impact) to €22.04 billion. Operating income rose 8.5% (7.0% at constant interest rates) and closed the year at €10.49 billion.

Transformation of the bank

CEO Carlos Torres Vila said, “BBVA’s transformation is having a profound impact on the customer’s experience and our goal is to be the best bank for our clients across our global footprint.”

Digital banking is the lever to accomplish the goal of becoming a leader in customer satisfaction in all geographic regions. The bank is among the leaders in Spain, Mexico, Colombia, Argentina and Venezuela, according to the standards of the Net Promotor Score index.

Furthermore sales through digital channels continued to grow. At the end of the year 19.2% of new consumer credits in Spain had been sold through digital channels. In Mexico this figure was 29.6%.

In 2015 BBVA significantly extended its base of customers who interact with the bank through digital channels. At the end of 2015, with available data, there were 14.8 million such customers, an increase of 19% compared to a year earlier. Of these, 8.5 million operated mainly through their mobile devices (up 45% y-o-y).

 

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The transformation process accelerated in 2015 thanks to the new structuring that was announced in May, accompanied by new strategic priorities. At the same time the BBVA Group continued to launch digital products and incorporate new digital businesses. The latest move was the purchase of a 29.5% stake in Atom, a mobile-only British bank, in November.

The main highlights of each business area are detailed below.

Banking activity in Spain benefited from the integration of Catalunya Banc. This boosted gross lending and favored recurring earnings (net interest income plus fee and commissions), which grew 6.1% y-o-y. Despite the fall in net trading income (down 11.9% y-o-y) gross income was up 2.8%. Costs rose 13.4% on the incorporation of Catalunya Banc and the related integration costs. These results contributed to a 6.6% decline in operating income. However impairments on financial assets continued the downward trend of previous quarters falling 21.2% y-o-y. The NPL ratio maintained its gradual improvement, reaching 5.8% without Catalunya Banc (6.6% overall) with coverage ratio standing at 44% (59% including Catalunya Banc). This area’s earnings in 2015 came to €1.05 billion, 21.9% more than 2014.

In 2015 Spain reduced its net exposure to real-estate business by 9.6% (excluding Catalunya Banc’s assets). Growing capital gains and the drop in real estate provisions helped to narrow losses 45.4% to €-492 million.

The results for BBVA in Spain -combining banking activity and real estate- came to €554 million, an increase of nearly €600 million compared to the end of 2014.

 

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To better explain the trend of business areas that use a currency other than the euro, the exchange rates described below refer to constant exchange rates.

Increased business activity in the United States led to a 9.4% rise in lending and 7.7% rise in customer funds. Income rose as a result. Operating income (up 10.6%) benefited from the contained rise in costs (1.0%). The U.S. business area earned €537 million in 2015 (up 5.2%).

Since the third quarter Turkey’s earnings are expressed via the full consolidation method. As reported in previous quarters recurring earnings (net interest income and fees and commissions) were supported by buoyant business. Gross income grew 7% y-o-y (without considering the change in the scope of consolidation). Thus despite the slight increase in the NPL ratio, credit quality indicators were solid - better than the system average. Turkey’s net attributable profit in 2015 jumped 24.4% to €371 million.

Mexico is recording double-digit growth in credit and customer funds. Net interest income performed well, rising 9.5% on gross income growth (up 8.1%). This was echoed by operating income (up 8%). The risk premium improved to 3.0%, compared to 3.3% in September thanks to a change in the loan portfolio mix. BBVA’s earnings in Mexico in 2015 came to €2.1 billion (up 8.8%).

South America (excluding Venezuela) continued to report rises of over 15% in lending and customer funds. This area recorded important advances in gross income (11.5%) and in operating income (10.3%). Like earlier quarters the NPL ratio was stable. Net attributable profit for the full year came to €905 million (up 8.7% y-o-y). Including Venezuela, profit was the same amount (€905 million).

Contact details:

BBVA Corporate Communications

Tel. (+34) 91 537 61 14

comunicacion.corporativa@bbva.com

For more financial information about BBVA visit:

http://shareholdersandinvestors.bbva.com

For more BBVA news visit: info.bbva.com

 

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BBVA Group highlights

(Consolidated figures)

 

     31-12-15      D%      31-12-14      31-12-13  

Balance sheet (million euros)

           

Total assets

     750,078         15.1         651,511         599,517   

Loans and advances to customers (gross)

     432,855         18.1         366,536         350,110   

Deposits from customers

     403,069         21.9         330,686         310,176   

Other customer funds

     130,104         9.5         118,851         102,195   

Total customer funds

     533,173         18.6         449,537         412,371   

Total equity

     55,439         7.4         51,609         44,565   

Income statement (million euros)

           

Net interest income

     16,426         8.7         15,116         14,613   

Gross income

     23,680         10.9         21,357         21,190   

Operating income

     11,363         9.2         10,406         9,989   

Income before tax

     5,879         44.7         4,063         2,544   

Net attributable profit

     2,642         0.9         2,618         2,084   

Data per share and share performance ratios

           

Share price (euros)

     6.74         (14.2      7.85         8.95   

Market capitalization (million euros)

     42,905         (11.5      48,470         51,773   

Earning per share (euros) (1)

     0.39         (6.1      0.41         0.34   

Book value per share (euros) (2)

     7.47         (6.7      8.01         7.35   

P/BV (Price/book value; times)

     0.9         (8.0      1.0         1.2   

PER (Price/Earnings; times)

     13.2         (23.3      17.3         23.2   

Yield (Dividend/Price; (%)

     5.5         31.5         4.2         4.7   

Significant ratios (%)

           

ROE (Net attributable profit/average equity)

     5.3            5.6         5.0   

ROTE (Net attributable profit/average equity excluding intangible assets)

     6.6            6.8         5.0   

ROA (Net income/average total assets)

     0.46            0.50         0.48   

RORWA (Net income/average risk-weighted assets)

     0.87            0.90         0.91   

Efficiency ratio

     52.0            51.3         52.9   

Cost of risk

     1.06            1.25         1.59   

NPL ratio

     5.4            5.8         6.8   

NPL coverage ratio

     74            64         60   

Capital adequacy ratios (%) (3)

           

CET1

     12.1            11.9         11.6   

Tier I

     12.1            11.9         12.2   

Total ratio

     15.0            15.1         14.9   

Other Information

           

Number of shares (millions)

     6,367         3.2         6,171         5,786   

Number of shareholders

     934,244         (2.7      960,397         974,395   

Number of employees (4)

     137,968         26.8         108,770         109,305   

Number of branches (4)

     9,145         24.1         7,371         7,420   

Number of ATMs (4)

     30,616         36.6         22,414         20,556   

General note: Since the third quarter of 2015, the total stake in Garanti (39.90%) is consolidated by the full integration method. For previous years, the financial information provided in this document is presented integrated in the proportion corresponding to the percentage of the Group’s stake at that time (25.01%).

 

(1) Adjusted by additional Tier I instrument remuneration.
(2) Numerator- equity plus valuation adjustments, denominator- number of shares outstanding minus treasury stock. All data refers to a specific date.
(3) The capital ratios in 2014 and 2015 are calculated under CRD IV from Basel III regulation applying a 40% phase in for 2015. For periods prior to 2014, the calculation was done in accordance with the Basel II regulations.
(4) Includes Garanti since the third quarter 2015.

 

Information about the net attributable profit from ongoing operations(1)    31-12-15      D%      31-12-14      31-12-13  

Net attributable profit (million euros)

     3,752         43.3         2,618         1,260   

Earning per share (euros)

     0.60         45.0         0.41         0.21   

ROE (%)

     7.6            5.6         3.1   

ROTE (%)

     9.4            6.8         3.1   

ROA (%)

     0.62            0.50         0.35   

RORWA (%)

     1.17            0.90         0.66   

 

(1) Corresponds to the net attributable profit excluding results from corporate operations, which in 2015 include the capital gains from the various sale operations equivalent to 6.34% of BBVA Group’s stake in CNCB, the effect of the valuation at fair value of the 25.01% initial stake held by BBVA in Garanti, the impact of the sale of BBVA’s in 29.68% stake in CIFH and the badwill from the CX operation 2013 figures include the results from the pension business in Latin America, including the capital gains from their sale, the capital gains from the sale of BBVA Panama; the capital gains generated by the reinsurance operation on the individual life and accident insurance portfolio in Spain; the equity-accounted earnings from CNCB (excluding dividends), together with the effect of the mark-to-market valuation of BBVA’s stake in CNCB following the agreement concluded with the CITIC group, which included the sale of 5.1% of CNCB.

 

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Consolidated income statement: quarterly evolution (1)

(Million euros)

 

     2015     2014  
     4Q     3Q     2Q     1Q     4Q     3Q     2Q     1Q  

Net interest income

     4,415        4,490        3,858        3,663        4,248        3,830        3,647        3,391   

Net fees and commissions

     1,263        1,225        1,140        1,077        1,168        1,111        1,101        985   

Net trading income

     451        133        650        775        514        444        426        751   

Dividend income

     127        52        194        42        119        42        342        29   

Income by the equity method

     (16     3        18        3        3        31        16        (14

Other operating income and expenses

     (94     76        62        73        (287     (234     (215     (90

Gross income

     6,146        5,980        5,922        5,632        5,765        5,223        5,317        5,051   

Operating expenses

     (3,292     (3,307     (2,942     (2,776     (2,905     (2,770     (2,662     (2,613

Personnel expenses

     (1,685     (1,695     (1,538     (1,460     (1,438     (1,438     (1,359     (1,375

General and administrative expenses

     (1,268     (1,252     (1,106     (1,024     (1,147     (1,037     (1,017     (959

Depreciation and amortization

     (340     (360     (299     (291     (320     (296     (286     (279

Operating income

     2,853        2,673        2,980        2,857        2,860        2,453        2,655        2,438   

Impairment on financial assets (net)

     (1,057     (1,074     (1,089     (1,119     (1,168     (1,142     (1,073     (1,103

Provisions (net)

     (157     (182     (164     (230     (513     (199     (298     (144

Other gains (losses)

     (97     (127     (123     (66     (201     (136     (191     (173

Income before tax

     1,544        1,289        1,604        1,442        978        976        1,092        1,017   

Income tax

     (332     (294     (429     (386     (173     (243     (292     (273

Net income from ongoing operations

     1,212        995        1,175        1,056        805        733        800        744   

Results from corporate operations (2)

     4        (1,840     144        583        —          —          —          —     

Net income

     1,215        (845     1,319        1,639        805        733        800        744   

Non-controlling interests

     (275     (212     (97     (103     (116     (132     (95     (120

Net attributable profit

     940        (1,057     1,223        1,536        689        601        704        624   

Net attributable profit from ongoing operations (3)

     936        784        1,078        953        689        601        704        624   

Basic earnings per share (euros) (4)

     0.14        (0.18     0.18        0.24        0.10        0.09        0.11        0.10   

 

(1) From the third quarter of 2015, BBVA’s total stake in Garanti is consolidated by the full integration method. For previous periods, Garanti’s revenues and costs are integrated in the proportion corresponding to the percentage of the Group’s stake then (25.01%).
(2) 2015 includes the capital gains from the various sale operations equivalent to 6.34% of BBVA Group’s stake in CNCB, the effect of the valuation at fair value of the 25.01% initial stake held by BBVA in Garanti the impact of the sale of BBVA’s 29.68% stake in CIFH and the badwill from the CX operation.
(3) Corresponds to the attributable profit excluding results from corporate operations.
(4) Adjusted by additional Tier I instrument remuneration.

 

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Consolidated income statement (1)

(Million euros)

 

     2015      D%      D% at constant
exchange rates
     2014  

Net interest income

     16,426         8.7         21.5         15,116   

Net fees and commissions

     4,705         7.8         12.1         4,365   

Net trading income

     2,009         (5.9      (2.6      2,135   

Dividend income

     415         (21.8      (22.4      531   

Income by the equity method

     8         (77.2      (78.9      35   

Other operating income and expenses

     117         n.m.         2.7         (826

Gross income

     23,680         10.9         15.7         21,357   

Operating expenses

     (12,317      12.5         15.8         (10,951

Personnel expenses

     (6,377      13.7         14.7         (5,609

General and administrative expenses

     (4,650      11.7         17.6         (4,161

Depreciation and amortization

     (1,290      9.3         14.7         (1,180

Operating income

     11,363         9.2         15.6         10,406   

Impairment on financial assets (net)

     (4,339      (3.3      1.6         (4,486

Provisions (net)

     (733      (36.6      (30.9      (1,155

Other gains (losses)

     (412      (41.2      (41.3      (701

Income before tax

     5,879         44.7         54.9         4,063   

Income tax

     (1,441      46.9         58.5         (981

Net income from ongoing operations

     4,438         44.0         53.8         3,082   

Results from corporate operations (2)

     (1,109      n.m.         n.m.         —     

Net income

     3,328         8.0         15.3         3,082   

Non-controlling interests

     (686      48.0         93.9         (464

Net attributable profit

     2,642         0.9         4.4         2,618   

Net attributable profit from ongoing operations (3)

     3,752         43.3         48.2         2,618   

Basic earnings per share (euros) (4)

     0.39               0.41   

 

(1) From the third quarter of 2015, BBVA’s total stake in Garanti is consolidated by the full integration method. In 2014, Garanti’s revenues and costs are integrated in the proportion corresponding to the percentage of the Group’s stake then (25.01%).
(2) 2015 includes the capital gains from the various sale operations equivalent to 6.34% of BBVA Group’s stake in CNCB, the effect of the valuation at fair value of the 25.01% initial stake held by BBVA in Garanti, the impact of the sale of BBVA’s 29.68% stake in CIFH and the badwill from the CX operation.
(3) Corresponds to the attributable profit excluding results from corporate operations.
(4) Adjusted by additional Tier I instrument remuneration.

 

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Consolidated income statement of BBVA Group excluding Venezuela and with Turkey presented on a like-for-like comparison (1)

(Million euros)

 

     2015      D%      D% at constant
exchange rates
     2014  

Net interest income

     14,923         13.1         10.9         13,191   

Net fees and commissions

     4,398         8.3         5.0         4,062   

Net trading income

     2,057         1.6         (0.2      2,024   

Other income/expenses

     661         (7.5      (7.9      715   

Gross income

     22,039         10.2         7.9         19,992   

Operating expenses

     (11,545      11.9         8.7         (10,318

Operating income

     10,494         8.5         7.0         9,675   

Impairment on financial assets (net)

     (4,057      (4.7      (4.9      (4,257

Provisions (net) and other gains (losses)

     (1,112      (36.5      (36.8      (1,752

Income before tax

     5,325         45.2         40.8         3,666   

Income tax

     (1,280      45.7         41.2         (878

Net income from ongoing operations

     4,045         45.1         40.6         2,788   

Results from corporate operations (2)

     (1,109      n.m.         n.m.         —     

Net income

     2,936         5.3         2.1         2,788   

Non-controlling interests

     (370      11.4         5.9         (332

Net attributable profit

     2,566         4.5         1.5         2,456   

Net attributable profit from ongoing operations (3)

     3,675         49.7         45.4         2,456   

 

(1) Financial statements with Garanti’s revenues and costs integrated in the proportion corresponding to the percentage (25.01%) of the Group’s stake until the second quarter of 2015.
(2) 2015 includes the capital gains from the various sale operations equivalent to 6.34% of BBVA Group’s stake in CNCB, the effect of the valuation at fair value of the 25.01% initial stake held by BBVA in Garanti, the impact of the sale of BBVA’s 29.68% stake in CIFH and the badwill from the CX operation.
(3) Corresponds to the attributable profit excluding results from corporate operations.

 

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

    Banco Bilbao Vizcaya Argentaria, S.A.
Date: February 3, 2016     By:  

/s/ María Ángeles Peláez

    Name:   María Ángeles Peláez
    Title:   Authorized Representative
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