BBVA in 2012

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