BBVA in 2012

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This has enabled BBVA to maintain its position as the number one manager in both mutualand pension funds in Spain, with market shares of 17.4% in mutual funds (according to the latestinformation available as of December) and 19.9% in pensions (according to data published byInverco in December).With respect to asset quality, the slight upward movement in the NPA ratio has continued, due tothe difficult macroeconomic situation and the reduced volumes of lending activity. Despite this, theratio is still far below that reported in the sector overall, and closed December at 6.9%, includingthe Unnim figures. The significant provisions made explain the improvement in the coverage ratio,which increased from 44% as of 31-Dec-2011 to 67% at year-end.9 Spain. NPA and coverage ratios(Percentage)596744 4350CoverageratioNPA ratio6.56.94.8 4.95.1December2011March June September December2012EarningsThe most significant aspect of earnings in the area in 2012 is the resilience of income, in anenvironment marked by very low activity and fierce competition to attract customer funds, strictcost control and a significant increase in provisions to cover the impairment of assets related to thereal-estate sector in Spain.Cumulative net interest income stands at €4,836m, which confirms the high resilience shownfrom quarter to quarter, resulting in a 10.1% year-on-year growth in this heading. Good pricemanagement, and the protection of the residential mortgage portfolio against changes in interestrates, have contributed to this positive trend. Fees and commissions have also performed well,growing by 10.0% year-on-year. This, together with negative NTI (though it improved in the fourthquarter) and a lower amount of other income/expenses compared with the figure for the previousyear, has resulted in a year-on-year increase of 7.2% in gross income to €6,784m. This trend is verysignificant given the economic context in which it has taken place.Operating expenses are up 1.1% over the previous year due to the incorporation of Unnim. Even so,their rate of increase has been below inflation as a result of continued strict control. The efficiencyratio thus improves on the figure posted in 2011, thanks to the better performance of revenue. Itclosed 2012 at 41.5% (44.0% in 2011). As a result, operating income has risen 12.0% to €3,967m.142 Business areas
10 Spain. Operating income(Million euros)4,2113,5413,967+12.0%45004000350042113541300025002000150010005002010201120120(1) A tipo de cambio constante: +x,x%.The strength of operating income mentioned above has made it possible to absorb the increasein loan-loss provisions. In 2012, significant provisioning was made against impairment losses onfinancial assets and provisions to offset the deterioration in assets related to the real-estate sectorin Spain, thus complying with the requirements of Royal Decree-Laws 02/2012 and 18/2012. Theseincreased provisions have enabled an improvement of the coverage ratio in the area, as mentionedabove, resulting in a negative net attributable profit of €1,267m (a positive €1,211m not taking intoaccount the higher loan-loss provisions resulting from the scope of the aforementioned RoyalDecree-Laws).11 Spain. Net attributable profit (adjusted)(Million euros)2,1512500215120001,4801,211–18.2%1500148010005002010201120120(1) A tipo de cambio constanteRetail and Commercial BankingThis unit includes the Retail Network, with the household customer, private banking and smallcompanies and retailer segments in the Spanish market; Corporate and Business Banking (CBB),which handles the needs of the SMEs, businesses, corporations and public sector; and otherbusinesses, including BBVA Seguros.As of 31-Dec-2012, Retail and Commercial Banking manages a loan book of €192,076m, up 0.6%on the figure posted in 31-Dec-2011, and on-balance-sheet customer funds, including promissorynotes, of €120,465m, a 21.1% increase compared with the previous year. Thus there is a clearimprovement in the unit’s liquidity gap.Spain143
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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
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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
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 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: These lines axes of action will con
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
Page 183 and 184: Colombia Peru Venezuela2012 ∆%
Page 185 and 186: The macroeconomic and competitive e
Page 187 and 188: VenezuelaIn 2012, the growth of the
Page 189 and 190: By companies, Seguros Argentina, fo
Page 191 and 192: Significant ratios(Percentage)The U
Page 193 and 194: opportunities in key markets throug
Page 195 and 196: 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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