Balance Sheet at 31 December 2010 of BBVA

Translation of financial statements originally issued in Spanish and prepared in accordance with generally accounting principles Spain
(See Note 1 and 54). In the event of a discrepancy, the Spanish-language version prevails.
The table below outlines the distribution of exposure including derivatives by internal ratings, to financial
entities and public institutions (excluding sovereign risk), of the Bank’s main institutions as of December 31,
2010 and 2009:
Credit Risk Distribution by Internal Rating 2010 2009
AAA/AA 27.55% 20.24%
A 28.27% 30.12%
BBB+ 9.54% 8.89%
BBB 4.63% 7.05%
BBB- 5.30% 7.01%
BB+ 4.98% 4.49%
BB 4.33% 6.20%
BB- 4.54% 6.53%
B+ 4.38% 5.41%
B 4.51% 3.05%
B- 1.71% 0.81%
CCC/CC 0.25% 0.20%
Total 100.00% 100.00%
Policies and procedures for preventing excessive risk concentration
In order to prevent the build-up of excessive concentrations of credit risk at the individual, country and sector
levels, the Bank maintains the risk concentration indices updated at the individual and portfolio levels tied to
the various observable variables within the field of credit risk management. The limit on the Bank’s exposure
or share of a customer’s financial business therefore depends on the customer’s credit rating, the nature of
the facility, and the Bank’s presence in a given market, based on the following guidelines:
• The need to balance the customer’s financing needs, broken down by type (commercial/financial,
short/long-term, etc.), and the degree to which its business is or is not attractive to BBVA. This
approach provides a better operational mix that is still compatible with the needs of the bank’s
clientele.
• Other determining factors are national legislation and the ratio between the size of customer lending
and the Bank’s equity (to prevent risk from becoming overly concentrated among few customers).
Additional factors taken into consideration include constraints related to market, customer, internal
regulation and macroeconomic factors, etc
• Meanwhile, correct portfolio management leads to identification of risk concentrations and enables
appropriate action to be taken.
Operations with customers or groups that entail an expected loss plus economic capital of over €18 million
are approved at the highest level, i.e., by the Board Risk Committee. As a reference, this is equivalent in
terms of exposure to 10% of eligible equity for AAA and to 1% for a BB rating, implying oversight of the major
individual risk concentrations by the highest-level risk governance bodies as a function of credit ratings.
There is additional guideline in terms of a maximum risk concentration level of up to and including 10% of
equity: up to this level there are stringent requirements in terms of in-depth knowledge of the client, its
operating markets and sectors of operation.
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