BBVA in 2012

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BBVA has not been immune to the country’s situation, since around 45% of its lending portfoliocorresponds to the agricultural and farming sector. The bank’s activity has been adversely affected.This, combined with the increase in funding costs, has had a negative impact on net interestincome and on fees and commissions. As a result, the unit’s net attributable profit has declined to€14m, 39.8% down on the 2011 figure.At a local level, the rating agency Feller-Rate maintained the bank’s AA rating, with a negativeoutlook, while at the international level Standard&Poor’s has kept its BB– rating, with a stableoutlook, in line with the sovereign rating.In 2012, BBVA has improved its tools and carried out the actions needed to make the most of thebusiness opportunities that will arise in 2013, when the economy is expected to perform morestrongly. For example, BBVA has boosted its retail business with the purchase of the credit cardportfolio of Citibank NA, Paraguay Branch. With this acquisition, BBVA will become one of the mainbanks in this market and improve its position as a comprehensive bank for the preferred customersegment. It has also launched new mortgage products in a sector that is undergoing significantgrowth in the country. Lastly, BBVA has started to operate as an insurance broker in Paraguay inassociation with the country’s most renowned insurance companies, thus completing the range ofproducts and services available to its customers.UruguayIn 2012, the Uruguayan economy posted solid growth (up 4%, according to estimates), thanks tostrong domestic demand in both consumption and investment. The annual inflation rate stood ataround 7.5%.BBVA Uruguay has kept its second place in the private bank ranking for the loan volumeproduced, with year-on-year growth of 13.6% in gross lending to customers and a 20% marketshare. Customer funds are up 2.4% of which lower-cost funds have performed strongly (currentand savings accounts are up 7.0%). In conclusion, the net attributable profit stands at €27m (up196.6%).The highlights of the year have been the major effort made in the retail segment, supportingbanking penetration in the country, and the growth in credit cards, through alliances withdistributors and differential promotions. The call center has also been resized and a “serves to sale”concept has been adopted, developing the distribution channel and adding quality certificationsand complaints service.Regarding asset/liability management, 2012 has been characterized by positive handling ofliquidity and strong activity in local currency operations, where the bank has been extremely activein the primary and secondary markets, both with its own portfolio and customer brokerage.InsuranceThe insurance business continued to perform well in 2012, despite the lower NTI. The unit postednet attributable profit of €87m, thanks mainly to strong activity and cost control.Major marketing efforts have been made in 2012 aimed at improving and expanding thedistribution channels, developing a wide range of products and promoting interrelation with otherBBVA Group businesses. The bancassurance channel continues to drive the insurance business.The initiatives implemented in partnership with BBVA Microfinance Foundation have been veryproductive, and today all the microfinance institutions in South American countries where BBVAhas insurance companies are distributing its products. Progress will continue to be made next yearin the design of specific products for this sector of the population.184 Business areas
By companies, Seguros Argentina, following the sale of ART and Retiro, contributes a netattributable profit of €7m, significantly improving its high level of activity. Strong growth has alsobeen posted in Chile, which contributes €42m, and Colombia, with €30m in earnings, whileSeguros Provincial in Venezuela closed with €8m.South America. Data per country(Million euros)País 2012 ∆%Operating income∆% at constantexchange rates 2011 2010 2012 ∆%Net attributable profit∆% at constantexchange rates 2011 2010Argentina 442 40.5 42.8 315 299 191 21.8 23.9 157 132Chile 321 4.9 (2.4) 306 255 268 19.6 11.2 224 223Colombia 516 36.2 22.3 379 383 331 32.1 18.7 251 223Peru 642 30.5 15.4 492 480 195 27.1 12.5 154 149Venezuela 1,061 58.5 46.3 670 399 329 64.0 51.4 201 123Other countries (1) 54 12.7 1.3 48 62 31 55.2 33.7 20 39Total 3,035 37.4 26.8 2,208 1,877 1,347 33.8 23.6 1,007 889(1) Panama, Paraguay, Uruguay and Bolivia. Additionally, it includes eliminations and other charges.South America185
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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
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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
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Operational riskOperational risk is
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Operational risk management in the
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Reputational riskThis is another ty
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The economic capital of the Pension
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Categories of financing and advice
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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 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: VenezuelaIn 2012, the growth of the
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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