Banco Bilbao Vizcaya Argentaria S.A.

Good morning and welcome to BBVA's second quarter results conference call. I'm joined today by Anur Ghent, our CEO, and Luisa Gomez-Bravo, the group CFO. As in previous quarters, Anur will start reviewing the group figures, followed by Luisa, who will go through the business areas results. Then, Anur will give a brief update on the offer to Sabadell shareholders, and finally, we will open the live to receive your questions. Thank you very much for participating, and now I turn the call over to Anur.

Thank you. Thank you, Patricia. Good morning to everyone. Welcome and thank you for joining BBVA's second quarter 2024 earnings webcast. Let's jump into the presentation as always, starting with slide number three. On the left-hand side of this page, you can see our net attributable profit in the quarter reaching €2,794,000,000. showing obviously another quarter of record results. This figure is 38% above the results of the same quarter of last year and 27% above last quarter results. Our results, they represent 47 euro cents earnings per share, 28% quarter over quarter and 42% year over year growth, both higher growth rates than the ones of the net attributable profit due to obviously to the positive impact of the share buyback programs that we executed. And then the graph on the right-hand side of the slide, it shows the excellent tangible book value per share plus dividends growth with a 20% increase year over year and a 2.4% growth in the quarter. We always highlight the importance of this figure to all of you. We are very happy to see a solid number in the quarter, the 2.4%, despite all the market impacts, especially the upper movement of the interest rate curves and the Mexican peso depreciation in the quarter. On page number four, Our CET1 capital ratio at 12.75, reflecting a seven basis points decrease in the quarter, impacted by the market impacts, as I just mentioned in the previous page, but also due to a very positive development in our view of very strong lending growth, very strong lending growth in our core markets, leading to market share gains. I'm sure we can discuss that in the Q&A as well. The 12.75 CET1 ratio obviously is much above our target range and regulatory requirements. Regarding profitability, on the left-hand side, on the right-hand side, sorry, in the page, we continue to improve our metrics, reaching an outstanding 20% in return on tangible equity and 19.1% in return on equity in the first six months of 2024. We have been truly looking forward to this day of reaching the 20% threshold on return on tangible equity for so many years and it makes us really happy getting to 20%. On page number five, More important than, in our view, the 20%, the consistency of how we got there and the comparison with our competitors, which obviously to us is the most important measure of success, I do think we are doing really well. On the left-hand side, you see the evolution of our first-half profits in current euros. Not only did we achieve almost, again, the mark of 5 billion euros of net interpretable profit in the first six months of this year, we managed to do it by increasing our six-month profits by nearly 1 billion euro in a consistent manner every year. Every year. And then, on the right side of the page, we wanted to compare our return on tangible equity evolution to that of our European and Spanish peers. As you can see, our 20% Rote and its positive evolution, it clearly stands out. It clearly stands out. With these figures, we are clearly one of the most profitable banks out there. Moving to slide number six, this page is a summary of the pages to follow where I will talk to you about the activity, the P&L, the revenue growth, costs, asset quality. So allow me to directly move to the next slide to talk to details in the respective pages. So slide seven, as always, the summarized P&L of the quarter. You can find the year-over-year quarterly evolution in the second column from the left in constant. And right next to it, in current terms, the third column from the left. Basically, the P&L continues its impressive evolution thanks to the strong revenue growth with an increase in gross income of 31% in constant and 28% in current euros and obviously maintaining positive jobs. And as a result of all of this, net attributable profit at the last line item, net attributable profit grows 37% in constant and 38% in current euros. Slide number eight, the summarized P&L of the first half. I would once again highlight the very positive gross income evolution, which increases 31% in constant euros and 23% in current euros. And then the strong gross income growth, coupled with the positive jaws, as is true for the quarter, it led to an outstanding recurrent net attributable profit of almost 5 billion euros, implying 37% growth in constant and 29% in current. Slide number nine, some light into the revenue breakdown and the quarterly evolution. In this page, we show that the excellent trend in revenues continues. showing the strength of our revenue generation capacity quarter after quarter. First, our net interest income. It keeps increasing, 17% versus last year and 1% compared to last quarter, driven by strong activity growth, especially in the last part of the quarter, and good customer spread management. Second, outstanding evolution of net fees and commissions, increasing 35% year-on-year, and 4.4% versus last quarter, levered mainly on payments and asset management. Third, very strong quarter in the net trading income heading, benefiting from a good quarter in the global markets unit and also from the positive mark-to-market of the FX hedges of the Mexican peso in the corporate centers. All in all, excellent growth in gross income. Again, 31% year-over-year and 13.9% quarter-over-quarter. Moving to slide number 10, in this page, we also wanted to provide you with the breakdown of that gross income by geography in current euros. In current euros, important. And gross income is growing year-over-year at double digits in all of our markets. 29% growth in Spain, 14% growth in Mexico, 47% growth in Turkey, and 16% growth in South America. when you look into the quarterly trends you see the continued strength of revenues in spain posting another record basically and then despite a relatively large depreciation in mexican peso eight percent depreciation in the quarter it is important to register the fact that in current euros we managed to keep the revenues stable thanks to a very robust activity

Again, that came towards the end of the quarter.