BBVA in 2012

This performance of revenues and expenses has resulted in an improvement of the efficiencyratio in the area, which closes the year at 43.4% (46.2% the previous year), and a 26.8% increase inoperating income to €3,035m.45 South America. Efficiency(Million euros at constantexchange rates)Efficiency ratio(Percentage)60005000400030002000353144115363Grossincome3,5314,4115,36344.846.243.450403010000Operatingcosts20-1000-2000-3000-1563-2017-23281,56320102,0172,3282011 20122010 2011 201210046 South America. Operating income(Million euros at constant exchange rates)35003,03530002,394+26.8% (1)25001,9682000150010005002010201120120(1) At current exchange rates: +37.4%.Finally, impairment losses on financial assets are up 21.6%, in line with increased activity, and standat €593m. As a result, the risk premium stands at 1.64% (1.85% as of 31-12-2012).To sum up, strong activity, combined with good price management, has resulted in notable growthin the revenue lines. This, together with expenses that include expansion plans (though they aregrowing slower than revenue), and improved asset quality, has resulted in a 23.6% increase in netattributable profit in the year.Below are some of the most important aspects of the performance of the various countries andthe insurance activity in 2012.176 Business areas