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Investment and Investment Finance
Investment and Investment Finance
BBVA SPAIN Fernando Alonso September, 8th 2017
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Investment and Investment Finance
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Other: Uncertainty of
economic policy,
one- offs,…
Good fundamentals, but still low flows in new production
Despite the economic recovery, credit stock to companies is still decreasing
Structural factors that will continue having an influence in the medium term:
Financial
Structure Deleverage
New production. Companies
(CAGR, %)
8,9 13,0
2,7 8,0
-18,6
8,0
-32,8
0,2
2014 2015 2016 7M17
Up to 1 MM > 1 MM
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Investment and Investment Finance
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Ultimately, internal funding has been key
Investment and financing flows
(% of NFC GVA)
INTERNAL FUNDING (GROSS SAVING)
FINANCIAL ASSETS
OTHER
GROSS FIXED CAPITAL FORMATION
EXTERNAL FINANCING
Source: BoS
Reso
urc
es
Jobs
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Investment and Investment Finance
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Different policies could help boosting the flow of new credit and investment
Increasing size and fostering exports
01
Digitalization 02
Alternative finance 03
Private public partnership programs 04
Index
More solid and solvent demand
Complete the credit offer
Companies
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Investment and Investment Finance
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Increasing size and fostering exports
01
Source: OCDE Entrepreneurship at a Glance (2013)
Productivity and size of Companies, 2010 US$ per worker, en PPA 1
0
20
40
60
80
100
120
140
160
1-9 10-19 20-49 50-249 250+
España UE8
PVAS
CAT
MADRIO
VAL
NAV
ARAMURESP
CAN
CLM
GAL
AND
CYLBAL
AST
CNT
EXT
94
95
95
96
96
97
97
0 1 2 3 4 5 6 7
% d
e m
icro
em
pre
sa
s (0-9
) s
/ to
tal e
n
20
14
Nº de empresas exportadoras por cada 1.000 habitantes en 2014
Number of exporting companies per thousand inhabitants and % of microenterprises in 2014 (%)
Source: BBVA Research FROM INE & ICEX
SPAIN
NUMBER OF EXPORTING COMPANIES PER 1000 INHABITANTS
% O
F M
ICR
OEN
TER
PR
ISES
UE8
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Investment and Investment Finance
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BBVA, long and extensive experience helping customers with their international plans
Retail Banking in >30 countries
Commercial Banking in 17 countries
RM responsible for the global customer relationship
Onboarding
Reward for employes
Data base
IT platform
Cross border Strategic dialogue Global Footprint
Sectorial coverage
Capex
M&A
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Investment and Investment Finance
Financial solutions to help our customers in their strategic decision making
Specialist in RENTING
Specialist in INTERNATIONAL
EXPANSION
Specialist in GLOBAL MARKETS
Specialist in WORKING CAPITAL
1 RELATIONSHIP MANAGER
Specialist in LONG-TERM FINANCING
Specialist in INVESTMENT
BANKING
Specialist in TRADE FINANCE
Specialist in MEANS OF PAYMENT
Specialist in TRANSACTIONAL
SERVICES
B U S I N E S S E X P E R T S
TEAM
1+9
Specialization in commercial banking
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Investment and Investment Finance
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Digitalization 02
Digitization is a tool to deal with a more complex and globalized world
The growth generated by innovation and digital transformation has five sources:
New markets New goods and services
New production and distribution
methods
Change in productive
factors
Changes in the organization
and
management of companies
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Investment and Investment Finance
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Alternative finance 03
New production. Private sector (% new credit production banking sector)
0,12% 0,18% 0,56%
0,03% 0,02%
0,07%
0,07% 0,11%
0,10% 0,75% 0,50%
0,58% 0,01%
0,01%
0,03% 0,01%
0,01%
0,03%
2,29% 2,09%
2,42%
2014 2015 2016
MARF MAB Venture capital Private equity Business Angels Crowdfunding Corporate debt
Strong growth in alternative financing but:
Still incipient volume: less than 4% of the new production.
Crucial role as a complement to bank financing, for the early phases of the project and to make the leap of growth
2016 3,8%
3,0%
3,3%
Source: MARF, MAB, Asociaicón Española de Crowdfunding, BdE
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Investment and Investment Finance
Key Benefits for Banks Recent BBVA-EIB Intermediated Loans and Guarantees
Private public partnership programs
Preferential terms : Long tenors and attractive pricing, which are passed through to the final beneficiaries
Positive signalling effect towards our clients
Alignment of EIBs goals in supporting EU public Policy objectives with Bank’s commercial strategy
New structures allowing an efficient risk management and capital relief in order to increase current lending business
Lines for SMES and midcaps: EUR 200mn
Thematic lines: Lines for SMEs targeted to finance investments in the following sectors
• Agriculture: EUR 50mn
• Vehicle Fleets: EUR 150 mn
• Environmental and social cohesion: EUR 200 mn
• Innovation and digitalization: In negotiation
• Climate change: In negotiation
Risk sharing (partial credit guarantees): guarantees for an existing portfolio of project finance and/or midcaps and large corporates with capital relief for BBVA, enabling BBVA to provide new loans to SMEs
ICO Lines: ICO-Exporters and ICO-enterprises and Entrepreneurship
BBVA has been intermediating loans from the European Investment Bank and ICO for more than 25 years
Despite the current environment of high liquidity due to the ECB’s expansionary monetary policies, BBVA , EIB and ICO continue working actively on i) the traditional business of intermediated loans, including new sectors such as innovation and digitalization, and ii) new financial instruments under the Juncker Plan such as Risk sharing and Synthetic securitizations
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Investment and Investment Finance
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Synthetic Securitization
Under the Juncker Plan, EIB and EIF are providing a mezzanine guarantee of EUR 143 million to BBVA. BBVA retains the Equity and Senior Debt tranches.
The mezzanine guarantee will provide capital relief to BBVA. BBVA commits to provide new funding of EUR 1 billion to SMEs.
First mezzanine guarantee under the Juncker Plan and the biggest synthetic securitization in Spain and Europe
EIB and EIF
Guarantee of
EUR 143 million for the
Mezzanine Tranche
BBVA can provide
new loans for SMEs up
to EUR 1 billion
Senior Debt
Mezzanine Tranche
Regulatory
Capital
Relief
Equity
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Investment and Investment Finance
Investment and Investment Finance
BBVA SPAIN Fernando Alonso September, 8th 2017