BBVA in 2012

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“ Our principles, people and innovation, combined witha diversified business model and very sound fundamentals,place BBVA at the start of a new profit growth cycle in 2013”BBVA’s earnings in 2012 show that our model, based on balanced diversification and differentialmanagement, works.Gross income, i.e. the Group’s revenue, grew 12.1% in 2012, exceeding that of our peer group. 56% ofthe revenue was generated in emerging markets and 44% in developed economies. Looking towardthe future, we are in a unique position as a result of our presence in regions that are leading globalgrowth, such as Mexico, Turkey, South America and China.As for expenses, as we have always done, we are prudent in their management, adapting their growthto the needs in each market. In 2012 they rose 10.8%, less than the 12.1% increase in revenue. Of thisincrease, 2.8% is related to the change in the perimeter, basically owing to the consolidation of Unnim,3.0% to the exchange-rate effect, and 5.1% to growth in emerging markets, due to our investment andexpansion plans. In contrast, in the more developed markets, expenses have been contained and fellby 0.1%.As a result of the increase in revenue and proper cost control, BBVA maintains a position ofleadership in efficiency, with a 48.1% ratio as of 31-Dec-2012, and generated very significant operatingincome of €11,655m, which is up 13.3% on 2011.This operating income has enabled us to absorb in full the significant loan-loss and real-estateprovisions for 2012, which amounted to €9,518m, without having to sell strategic assets, resort to oneoffitems or change our business strategy.Thus, in 2012 the Group generated a net attributable profit of €1,676m in a very difficult environment.This figure highlights that BBVA has a well-balanced business model, with a high capacity forgenerating recurring revenue and future growth potential.As regards to risks, they are under control and well hedged. As of December 31, 2012, the Group’s NPAratio stood at 5.1% and the coverage ratio was up 11 percentage points during the year to 72%, whichcompares very favorably with our peers.Liquidity has been no problem for BBVA in 2012, despite the moments of tension seen in the markets.We were able to issue nearly €14,000m and we reduced the liquidity gap by an additional €23,000mon the euro balance sheet, improving even further its structure. In 2013 we were the first to tap themarket with several issues, one for 10-year covered bonds, the first one of its kind by a Spanish issuersince 2007.As for solvency, in 2012 we generated 45 basis points of capital, complying with the newrequirements, passing the stress tests, maintaining our dividend and without having to sell strategicassets.In short, high-quality earnings, above our peer group, in a very difficult environment, and growingrevenue that enabled us to comfortably absorb the loan-loss provisions, generate earnings andcapital, and protect our dividends, while maintaining risks under control and improving our fundingstructure.As you can see, very sound fundamentals which, combined with the improved prospects for Spainand the easing of the uncertainties surrounding the euro, are driving a gradual upward revision of theBBVA share-price targets.6 Executive summary
All this is the result of a strategy based around three pillars, i.e. principles, people and innovation, onwhich the Group has been building its competitive advantage for a long time.As for our principles of integrity, prudence and transparency, they translate into very specificcommitments in terms of regulatory compliance, standards of conduct, responsible commercialpractices and effective corporate governance.People are the most important element because they determine how we carry out our business. AtBBVA, we work for a better future for people. In 2012 we have carried out many actions in the social,scientific and cultural areas, including the “Integra Awards” and the “Frontiers of Knowledge Awards”,programs like “Momentum Project”, the Microfinance Foundation and the financial literacy programsin Latin America, the “Ruta Quetzal”, as well as other important initiatives, such as the aforementioned“Yo soy Empleo”, which we are implementing in 2013 and will have a significant social impact.Furthermore, those reassert our constant commitment to the United Nations Global Compact.Innovation and technology are no doubt the key to the future of the financial sector. Technologyis transforming the world. Being competitive in this new environment requires a great deal oftransformation, combining the physical and digital worlds, transforming the distribution modelsand generating new contents, products and services. To do so it is essential to have modern,integrated, modular and flexible technological platforms in place. BBVA is one of the few banks thathas embraced this all-around concept. We have one of the most advanced technological bankingplatforms in the world. It is already operating in Spain, and also in the United States.Our principles, people and innovation, combined with a diversified business model and very soundfundamentals in terms of capital, risks and capacity to generate earnings, place BBVA at the start of anew profit growth cycle in 2013.Lastly, I would like to thank the more than 115,000 BBVA employees for their effort, and I encouragethem to continue working with the same dedication and enthusiasm that have turned BBVA into adifferent bank.And to you, shareholders, thank you very much once again for your support. I assure you that theGroup will continue to work hard to improve every day and build the best universal bank in the world.March 1, 2013Francisco González RodríguezLetter from the Chairman7
Page 2 and 3: BBVA Group Highlights
Page 4 and 5: “ In 2012 the Group generateda ne
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Page 9: Letter from the Chairman 5
Page 13 and 14: 1 As the main expression of t
Page 15 and 16: Our communication in 2012 has conti
Page 17 and 18: Brand management in 2012 was highly
Page 19 and 20: BBVA Board CommitteesIn order to be
Page 21 and 22: • Across-the-board operational co
Page 23 and 24: Primary stakeholdersIntroduction: t
Page 25 and 26: BBVA earnings figures presented in
Page 28 and 29: High liquidity ofBBVA shareBBVA is
Page 30 and 31: Management modelA model of peoplema
Page 32 and 33: To sum up, the combination of the a
Page 35 and 36: South AmericaIn 2012, a common syst
Page 37 and 38: Number of claims filed at the Banki
Page 39 and 40: Environmentand BBVA positioningThe
Page 41 and 42: the measures taken to correct imbal
Page 44 and 45: The easing of financial tensions in
Page 46 and 47: Positioning of BBVA GroupBBVA conti
Page 48 and 49: 20 2. A business model based on th
Page 50 and 51: - Innovate with teams dedicated exc
Page 52 and 53: 25 In short, this banking model
Page 54 and 55: 2. …reflected ingross income…28
Page 56 and 57: Risk under controlBBVA NPAs versusp
Page 58 and 59: Business areasSpainStrong franchise
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EurasiaAn area ofgrowth andpositive
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South AmericaBusiness activity(Year
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In short, abusinesstransformationre
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Group financialinformation65 Earnin
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EarningsIn 2012, BBVA Group reporte
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Consolidated income statement: quar
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• Resilience in Spain, in a conte
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allocations to the deposit guarante
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8 • Maintain its leadership p
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13 Provisions and othersCumulativ
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Lastly, earnings per share (EPS) fr
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In short, a year in which there has
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20 Lastly, non-performing loans ha
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Off-balance-sheet customer funds st
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Capital baseThe main highlight in 2
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26 RatingsIn 2012, BBVA’s ratin
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Risk management90 Global Risk Manag
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Integration of risks andoverall ris
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Credit riskCredit risk quantificati
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Behavioral scoring is used to revie
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The economic cycle in PDThe current
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13LGD for Autos Finanzia, BBVA Spai
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The portfolio model and concentrati
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The exposure breakdown by rating of
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22 Real-estate exposure and coverag
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ConcentrationExcluding sovereign ri
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27 BBVA Group. Net NPA entries(Mill
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Structural risksStructural interest
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Interest rate risk measurement is s
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Structural risk in the equity portf
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BBVA continues working to improve a
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Credit risk in market activitiesThe
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Operational riskOperational risk is
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Operational risk management in the
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Reputational riskThis is another ty
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The economic capital of the Pension
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Categories of financing and advice
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Business areas135 Spain149 Eurasia1
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Furthermore, as usual in the case o
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SpainIncome statement(Million euros
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• On July 20, the Government requ
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3 Spain. Efficiency ratio versus pe
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These lines axes of action will con
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10 Spain. Operating income(Million
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- Creation of a SICAV module on the
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As of 31-Dec-2012, BBVA Seguros has
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EurasiaIncome statement(Million eur
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Management prioritiesIn 2012, the E
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17 Eurasia. Efficiency(Million euro
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• The above, together with the hi
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Highlights• The Bank has been rec
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MexicoIncome statement(Million euro
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area has been positive year-on-year
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30 Mexico. Consumer finance plus cr
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The increase of operating expenses
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As a result of the above, the net a
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government employees and tax collec
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South AmericaIncome statement(Milli
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advancing together with economic ac
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43 South America. Net attributable
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Grupo BBVA. Business share ranking
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Colombia Peru Venezuela2012 ∆%
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The macroeconomic and competitive e
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VenezuelaIn 2012, the growth of the
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By companies, Seguros Argentina, fo
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Significant ratios(Percentage)The U
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opportunities in key markets throug
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51 The United States. NPA and cover
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The area was able to successfully m
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HighlightsThe most relevant awards
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Definition of the aggregateCorporat
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held by retail investors. The conve
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Additional information:Corporate &
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greater efficiency, cost control an
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The trend in operating expenses sho
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Main Corporate Finance transactions
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Corporate LendingCorporate Lending
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In Latin America, the funding of Li
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In Mexico, Global Markets maintains
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Supplementaryinformation216 Consoli
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IFRS (Bank of Spain’s Circular 4/
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JapanTokyoFukoku Seimei Bldg. 12 th
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BBVA in 2012

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