BBVA in 2012

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Significant ratios(Percentage)South America highlights in 2012• Very strong business activity.South America31-12-12 31-12-11 31-12-10Efficiency ratio 43.4 46.2 44.8NPA ratio 2.1 2.2 2.5NPA coverage ratio 146 146 130Risk premium 1.64 1.85 2.27• Excellent price management.• Positive performance of the insurance business.• Efficiency improvement.• Stable risk indicators.• Agreement reached on the sale of AFP Horizonte in Colombiaand AFP Provida in Chile.BBVA footprint in South America(31-12-2012)Banks Pension fund managers Insurance companiesArgentina • •Bolivia•Chile • • •Colombia • • •Ecuador•Panama•Paraguay•Peru • •Uruguay•Venezuela • •Definition of the areaSouth America manages the Group’s banking, pension and insurance businesses in theregion. The area is quite diversified and has units operating in practically every SouthAmerican country.In the last quarter of 2012 and so far in 2013 major progress has been made in the conclusionof agreements for the sale of the pension business in Latin America. Specifically, on December24, 2012 an agreement was signed for the sale of the stake in the Colombian subsidiary andon February 1, 2013 a second agreement was concluded for the sale of the stake in the Chileansubsidiary.Industry trendsIn 2012, the economic growth in the region boosted lending activity and customer funds inSouth America. This growth was supported, particularly in the first half of the year, by new localregulations, mainly related to provisioning and capital requirements. The new regulations aim toimplement international standards in the region to maintain quality growth while remaining highlycompetitive.The financial system remains sound in most countries. Lending continues to increase at highrates, boosted by monetary policies focused on supporting economic activity. It has been growingsignificantly in all the countries in the region, particularly in Venezuela, Uruguay and Argentina,and also in Colombia, Chile and Peru, although at a slower pace. Customer deposits are robust,172 Business areas
advancing together with economic activity, and with annual growth similar to that for lending.Faced with external monetary expansion and the ensuing increase in capital flows, many centralbanks have chosen to apply prudential measures to discourage capital inflows and to controldomestic lending growth (particularly in Brazil and Peru).Exchange rates in the region have appreciated in most countries over the last twelve months, inboth average and final terms. As a result, the impact of foreign currencies on the Group’s balancesheet, activity and earnings is positive in the year. The comments below on business activity andearnings refer to constant exchange rates, unless otherwise indicated.Management prioritiesSouth America maintained its growth levels in both business activity and earnings throughout2012. It also improved its asset quality indicators against a background of severe financial turmoilat a global level and high competition in the region. This has been possible thanks to the plansimplemented in the area, focused on: growth in key segments (individuals and corporates),customized value-added products for each segment, and improvements in customer service,productivity and efficiency.The same strategic focus will be maintained in 2013. The business strategy in South America willbe based mainly on the following pillars:1. Promote a cross-cutting approach in the Group’s business initiatives.2. Make the most of the Group’s strengths and experience in each country in terms of segments,products and geographical areas.3. Achieve the right balance between specialization by geographical area and by business(banking, segment, product, multi-channel service, etc.).In addition, simplicity will be present in each one of the 5 priority dimensions for the area:1. Innovation: to define a value proposition adapted to customer needs and to the Bank’s abilities.2. Branding: to reinforce the image of an easy, innovative and flexible bank, with products andchannels designed to offer a better customer service. The Bank will also continue to promote acoordinated and consistent strategy regarding advertising, communication and corporate socialresponsibility.3. Planning: especially in relation to organizational and commercial models.4. Quality: to move from managing metrics to managing processes focused on the customer’sexperience, using a “Comprehensive Quality Model” that each country must put in place andexecute.5. Intelligence: to build commercial trend models in all the countries that contribute to increasingproductivity and making better use of the multi-channel service, in order to develop bothproactive and reactive customer retention models, design customer loyalty models, andimplement a segmentation model according to the Group’s criteria.Lastly, with the launch of the GPS Plan (Growth, Performance and Stability), the Global RiskManagement area has set out the main risk management lines for South America for the period2012-2013. The aim is to make the most of the opportunities afforded by the region within theprudent framework that characterizes BBVA.ActivityAt the close of 2012, both the loan book and customer deposits in the area show high growth rates.Gross customer lending closed December with a balance of €48,721m, a year-on-year growth ofSouth America173
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BBVA Group Highlights
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“ In 2012 the Group generateda ne
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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
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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
Page 125 and 126: Operational riskOperational risk is
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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
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: South AmericaIncome statement(Milli
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
Page 197 and 198: The area was able to successfully m
Page 199 and 200: HighlightsThe most relevant awards
Page 201 and 202: Definition of the aggregateCorporat
Page 203 and 204: held by retail investors. The conve
Page 205 and 206: Additional information:Corporate &
Page 207 and 208: greater efficiency, cost control an
Page 209 and 210: The trend in operating expenses sho
Page 211 and 212: Main Corporate Finance transactions
Page 213 and 214: Corporate LendingCorporate Lending
Page 215 and 216: In Latin America, the funding of Li
Page 217 and 218: In Mexico, Global Markets maintains
Page 219 and 220: Supplementaryinformation216 Consoli
Page 221 and 222: IFRS (Bank of Spain’s Circular 4/
Page 223: JapanTokyoFukoku Seimei Bldg. 12 th
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BBVA in 2012

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