BBVA in 2012

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29 BBVA Group. Risk premiums by business area(Percentage)3.493.492.6620112.1620121.200.780.460.971.311.340.890.23Total GroupSpainEurasiaMexicoSouth AmericaThe United States30 BBVA Group. NPA and coverage ratios(Percentage)627261CoverageratioNPAratio4.1 4.05.1December2010December2011December2012110 Risk management
Structural risksStructural interest-rate riskIn 2012 the economic slowdown became more pronounced, particularly in the Euro Zone,where the crisis was aggravated by the doubts regarding the capacity of the peripheralcountries to undertake fiscal and structural reforms. This situation led to new falls in interestrates in Europe, where they stood at all-time lows, as well as in the United States and Mexico.In South America, central banks maintained an expansive policy, despite upward pressure oninflation.The changes in market interest rates affect net interest income and the book value of entities. Thispotential impact is included in the structural interest-rate risk. Its main source of risk arises fromdifferent maturities or depreciation in assets and liabilities in the banking book and off-balancesheetpositions. The accompanying chart shows the gaps in BBVA’s structural balance sheet ineuros.31Maturity and repricing gaps of BBVA’s structural balance sheet in euros(Million euros)25,00015,0005,000–5,000–15,000–25,0001-3 months 3-6 months 6-9 months 9-12 months 2 months +3 yearsA financial institution’s exposure to adverse changes in market rates is a risk inherent to itsbusiness, while at the same time represents an opportunity to generate value. That is whystructural interest-rate risk should be managed effectively and retains a reasonable relation to itsequity and expected earnings.The management of structural risks in BBVA Group is handled by the Balance-SheetManagement unit, within the Financial Management area. Through the Asset and LiabilityCommittee (ALCO), the unit is in charge of maximizing the Bank’s economic value, preserving netinterest income and guaranteeing the generation of recurrent earnings. With this aim, the FinancialManagement area assesses possible alternatives and proposes the most appropriate actions basedon its expectations, balancing expected economic results and the impact on the risk level. This isdone while adapting to the established risk profile, as well as the strategy and policies defined bythe Group’s management bodies. BBVA has a transfer pricing system that centralizes the Bank’sinterest-rate risk on ALCO’s books and is designed to facilitate this task.Within the Global Risk Management corporate area, the Corporate Risk Management (CRM) unitis responsible for controlling and monitoring structural interest-rate risk with the aim of keepingthe Group’s solvency, supporting its strategy and ensuring the successful development of itsbusiness. To do so, it acts as an independent unit, which guarantees a proper separation betweenStructural risks111
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BBVA Group Highlights
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“ In 2012 the Group generateda ne
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2
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Letter from the Chairman 5
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All this is the result of a strateg
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1 As the main expression of t
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Our communication in 2012 has conti
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Brand management in 2012 was highly
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BBVA Board CommitteesIn order to be
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• Across-the-board operational co
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Primary stakeholdersIntroduction: t
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BBVA earnings figures presented in
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High liquidity ofBBVA shareBBVA is
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Management modelA model of peoplema
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To sum up, the combination of the a
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South AmericaIn 2012, a common syst
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Number of claims filed at the Banki
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Environmentand BBVA positioningThe
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the measures taken to correct imbal
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The easing of financial tensions in
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Positioning of BBVA GroupBBVA conti
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20 2. A business model based on th
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- Innovate with teams dedicated exc
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25 In short, this banking model
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2. …reflected ingross income…28
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Risk under controlBBVA NPAs versusp
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Business areasSpainStrong franchise
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EurasiaAn area ofgrowth andpositive
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South AmericaBusiness activity(Year
Page 64 and 65: In short, abusinesstransformationre
Page 67 and 68: Group financialinformation65 Earnin
Page 69 and 70: EarningsIn 2012, BBVA Group reporte
Page 71 and 72: Consolidated income statement: quar
Page 73 and 74: • Resilience in Spain, in a conte
Page 75 and 76: allocations to the deposit guarante
Page 77 and 78: 8 • Maintain its leadership p
Page 79 and 80: 13 Provisions and othersCumulativ
Page 81 and 82: Lastly, earnings per share (EPS) fr
Page 83 and 84: In short, a year in which there has
Page 85 and 86: 20 Lastly, non-performing loans ha
Page 87 and 88: Off-balance-sheet customer funds st
Page 89 and 90: Capital baseThe main highlight in 2
Page 91 and 92: 26 RatingsIn 2012, BBVA’s ratin
Page 93 and 94: Risk management90 Global Risk Manag
Page 95 and 96: Integration of risks andoverall ris
Page 97 and 98: Credit riskCredit risk quantificati
Page 99 and 100: Behavioral scoring is used to revie
Page 101 and 102: The economic cycle in PDThe current
Page 103 and 104: 13LGD for Autos Finanzia, BBVA Spai
Page 105 and 106: The portfolio model and concentrati
Page 107 and 108: The exposure breakdown by rating of
Page 109 and 110: 22 Real-estate exposure and coverag
Page 111 and 112: ConcentrationExcluding sovereign ri
Page 113: 27 BBVA Group. Net NPA entries(Mill
Page 117 and 118: Interest rate risk measurement is s
Page 119 and 120: Structural risk in the equity portf
Page 121 and 122: BBVA continues working to improve a
Page 123 and 124: Credit risk in market activitiesThe
Page 125 and 126: Operational riskOperational risk is
Page 127 and 128: Operational risk management in the
Page 129 and 130: Reputational riskThis is another ty
Page 131 and 132: The economic capital of the Pension
Page 133 and 134: Categories of financing and advice
Page 135 and 136: Business areas135 Spain149 Eurasia1
Page 137 and 138: Furthermore, as usual in the case o
Page 139 and 140: SpainIncome statement(Million euros
Page 141 and 142: • On July 20, the Government requ
Page 143 and 144: 3 Spain. Efficiency ratio versus pe
Page 145 and 146: These lines axes of action will con
Page 147 and 148: 10 Spain. Operating income(Million
Page 149 and 150: - Creation of a SICAV module on the
Page 151 and 152: As of 31-Dec-2012, BBVA Seguros has
Page 153 and 154: EurasiaIncome statement(Million eur
Page 155 and 156: Management prioritiesIn 2012, the E
Page 157 and 158: 17 Eurasia. Efficiency(Million euro
Page 159 and 160: • The above, together with the hi
Page 161 and 162: Highlights• The Bank has been rec
Page 163 and 164: 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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