BBVA in 2012

Exposure to the real-estate sector in SpainBBVA’s exposure to the real-estate sector in Spain is limited, and amounts to €27,417m (out of which56% are developer loans and 44% buildings). The year-on-year increase of €5,501m is basicallythe result of the incorporation of Unnim, which as of 31-Dec-2012 had an exposure to this sectorof €5,791m, or 21% of BBVA Group’s total exposure. It should be pointed out that the Unnim dealincludes an asset protection scheme (APS) by which the Deposit Guarantee Fund (DGF) will takeon 80% of any losses of a predetermined asset portfolio for a period of 10 years, after making useof existing provisions. The risk of incorporating Unnim portfolios into BBVA Group is thereforeextremely limited, not only due to their high coverage ratio, but also because of the existence ofthe APS.By status of the assets, 76% are classified as problematic (32.5% NPA, 10.0% substandard and 57.5%foreclosed assets) and 24% are performing risk.The breakdown of the developer loans by type of assets is: 53.2% finished housing, 11.2%housing under development, 26.3% land and 9.4% other assets, including those with personalguarantee.The most relevant aspect in 2012 is the increase in funds used to cover the additionalimpairment in the value of assets associated with the real-estate industry owing to the country’sworsening macroeconomic situation. As a result, additional funds have been set aside, resultingin an increase over the year of coverage for non-performing and substandard assets, togetherwith assets from foreclosures and purchases, to 43%. Following the effort made in provisions, atthe close of 2012 the Group has met the requirements imposed by Royal Decree-Laws 02/2012and 18/2012.Coverage of real-estate exposure in Spain(Million of euros as of 31-12-12)Risk amount Provision % Coverage over riskNPL + Substandard 8,906 3,854 43NPL 6,814 3,123 46Substandard 2,092 731 35Foreclosed real-estate and other assets 12,059 6,186 51From real-estate developers 8,894 4,893 55From Dwellings 2,512 1,020 41Other 653 273 42Subtotal 20,965 10,040 48Performing 6,452 1,788 28With collateral 5,839Finished properties 3,573Construction in progress 854Land 1,412Without collateral and other 613Real-estate exposure 27,417 11,828 43104 Risk management