BBVA in 2012

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Management of ESG risksBBVA integrates “ESG” variables into its risk management system. The ESG (environment, socialand corporate governance) variables aim to manage extra-financial risks that can affect the creditprofile of a borrower or financing project and may threaten the repayment of the debt. This issummed up in the following lines of action:• Ecorating: BBVA uses the Ecorating tool to value the risk portfolio of companies from anenvironmental point of view. It assigns each customer a level of credit risk according to acombination of various factors such as location, polluting emissions, consumption of resources,potential to affect the environment or applicable legislation. In 2012, BBVA has analyzed theenvironmental risk of 200.771 customers in Spain using the Ecorating tool• Equator Principles. These are global standards for determining, assessing and managing ESGrisks when providing finance and advice for investment projects with a capital cost of overUSD 10m. The criteria emanate from the performance standards of the International FinanceCorporation and have been developed by the most active banks in project finance worldwide.BBVA does not take into consideration this minimum threshold, but rather applies the principlesto all transactions, irrespective of the amount and the destination or allocation of the funds:not only to new projects or significant expansions, but also to project funding, acquisitions,refinancing, etc. As for the scope by product, BBVA extends them to consulting, bridge loans,projects in operation, project bonds, assignment of credit rights and buyer’s credit.• Activity with multilateral banks for regional development. In 2012, BBVA maintained closeinstitutional and business relations with Multilateral Financial Institutions (MFI) which contributeto regional development, including the World Bank, the European Investment Bank (EIB), theInter-American Development Bank (IDB), the Andean Development Corporation (ADC) and theEuropean Bank for Reconstruction and Development (EBRD). These institutions require that therecipients of their funds have in place environmental, social, ethical and corporate governancerisk management systems. The activities carried out during the year include: international tradefinancing, co-financing of projects, financial intermediation transactions, debt issues on localcapital markets and trading floor operations.• Sector policies. Since 2005, BBVA had a policy on the financing of the defense sector whichunderwent a major review in 2011. All of the Group’s areas involved took part in the process,with advice from worldwide experts in the field and dialog with the most relevant stakeholders.The result of this work has been the defense-related policy approved in 2012, which expandsthe scope of the previous one and enhances it in terms of clarity and simplicity, guaranteeingcompliance and traceability in line with the needs revealed by the Bank’s internal audit.128 Risk management
Categories of financing and advice projects according to the Equator Principles(Million euros)CategoryNumber ofoperations2012 2011 2010TotalamountAmountfinancedby BBVANumber ofoperationsTotalamountAmountfinancedby BBVANumber ofoperationsTotalamountAmountfinancedby BBVAEurope and North America A - - - - - - - - -B 18 9,550 1,071 43 23,060 3,069 37 14,344 1,593C 8 1,482 271 26 1,687 572 30 3,679 963Total Europe and North America 26 11,033 1,341 69 24,748 3,641 67 18,023 2,555Latin America A 4 1,380 135 1 158 53 - - -B 19 3,652 781 13 5,381 1,245 22 4,379 975C 7 438 190 4 275 120 2 211 84Total Latin America 30 5,470 1,106 18 5,814 1,419 24 4,590 1,059Rest of Group A 1 6,615 78 - - - - - -B 2 56 28 2 690 161 4 1,625 206C - - - 2 1,905 184 - - -Total Rest of Group 3 6,670 106 4 2,595 345 4 1,625 206Total Group 59 23,173 2,553 91 33,157 5,404 95 24,238 3,820Category A: projects with a significant negative impact that may affect a wider area than that considered by the project.Category B: projects with a minor negative impact on the human population or on areas of environmental importance.Category C: projects with a very small or no impact on the environment.Scope: BBVA GroupManagement of ESG risks129
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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
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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
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 and 114: 27 BBVA Group. Net NPA entries(Mill
Page 115 and 116: Structural risksStructural interest
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: The economic capital of the Pension
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
Page 165 and 166: area has been positive year-on-year
Page 167 and 168: 30 Mexico. Consumer finance plus cr
Page 169 and 170: The increase of operating expenses
Page 171 and 172: As a result of the above, the net a
Page 173 and 174: government employees and tax collec
Page 175 and 176: South AmericaIncome statement(Milli
Page 177 and 178: advancing together with economic ac
Page 179 and 180: 43 South America. Net attributable
Page 181 and 182: 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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