BBVA in 2012

Significant ratios(Percentage)Eurasia31-12-12 31-12-11 31-12-10Efficiency ratio 35.2 33.1 27.4NPA ratio 2.8 1.5 0.9NPA coverage ratio 87 123 154Risk premium 0.97 0.46 0.38Eurasia highlights in 2012• Deposit gathering recovery in the corporate segment in the latterpart of the year.• Reduction in CIB portfolios.• Growing and balanced revenue.• Favorable performance by Garanti and CNCB.• Strong capital and liquidity position in Garanti.Definition of the areaThis area covers BBVA’s business in Europe (excluding Spain) and Asia. Specifically, it includes BBVAPortugal, Consumer Finance Italia and Portugal, the retail business of the branches in Paris, London andBrussels, and the wholesale banking activity carried out by the Bank in the region. It also includes theGroup’s stake in Garanti (Turkey) and in CNCB (China).Industry trendsIn 2012, the macroeconomic environment in Europe continued to be very difficult, although clearprogress has been made throughout the year toward banking and fiscal integration. In fact, the firststeps were already taken to set up single banking supervision, which is considered key to breakingthe link between sovereign and banking risk.In Turkey, the prospects for a more moderate inflation rate, a steadily improving current-accountdeficit and a slight slowdown in growth of domestic demand, have in the second half of 2012, ledto a fall in the official interest rate for the first time in a year and a reduction in the overnight rate.The year-on-year growth in lending has remained high (16%), although below 2011 figures, andthe NPA ratio remains low. Basel II regulations began to be applied in July. The impact has beenslightly negative on the capital ratio of the sector as a whole, but positive in the case of Garanti.Finally, it should be noted that in November Fitch credit rating agency upgraded Turkey fromspeculative (BB+) to investment grade (BBB–) with a stable outlook. Among the reasons givenfor this are the Turkish economy’s sound banking sector and favorable growth prospects in themedium and long term.In China, the two consecutive interest rate cuts (in June and July), the reduction of 150 basispoints in the reserve ratio announced in December 2011, and increased regulatory flexibility,all helped boost bank lending in the first half of the year. This in turn helped moderate creditgrowth in the informal financial industry. In addition, the financial sector plan was publishedin September, following on from the twelfth Five-Year Plan (2011-2015). The new plan restatesthe intention to abolish interest-rate controls, promote financial innovation and bolster theframework of financial regulation. The Plan also establishes the goal of increasing the weight ofthe financial sector as a proportion of GDP in terms of added value from 4.4% in the last decadeto 15% by 2015. Against this background, growth in the banking sector remained relatively stablein the second half of 2012. However, the proportion of long-term loans increased, reflecting thefact that credit flows are already moving toward public infrastructure projects and corporateinvestment.150 Business areas