BBVA in 2012

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Corporate ActivitiesIncome statement(Million euros)Corporate Activities2012 ∆% 2011 2010Net interest income (697) 13.4 (614) 117Net fees and commissions (304) 55.6 (196) (205)Net trading income 828 89.7 436 695Other income/expenses 105 (71.2) 366 332Gross income (69) n.m. (8) 939Operating costs (1,107) 13.5 (976) (737)Personnel expenses (627) 14.8 (546) (453)General and administrative expenses (107) (32.9) (160) (55)Deprecation and amortization (373) 38.1 (270) (230)Operating income (1,176) 19.5 (984) 202Impairment on financial assets (net) 60 n.m. (392) (957)Provisions (net) and other gains (losses) (1,569) 49.7 (1,049) (870)Income before tax (2,686) 10.7 (2,425) (1,625)Income tax 1,020 0.8 1,012 608Net income from ongoing operations (1,665) 17.8 (1,413) (1,017)Net income from discontinued operations 15 177.3 5 6Net income (1,651) 17.2 (1,407) (1,011)Non-controlling interests 2 (26.1) 2 0Net attributable profit (1,649) 17.3 (1,405) (1,011)Adjusted (1) (252) (30.4) (362) (362)Net attributable profit (adjusted) (1) (1,397) 33.8 (1,043) (649)(1) In 2011 and 2012, impairment charge related to the deterioration of the real-estate sector in Spain. And in 2012, impact of Unnim badwill.Balance sheet(Million euros)Corporate Activities31-12-12 ∆% 31-12-11 31-12-10Cash and balances with central banks (600) (39.5) (992) (101)Financial assets 34,219 39.4 24,539 26,527Loans and receivables (2,591) (57.8) (6,145) (4,199)Loans and advances to customers 2,656 n.m. (3,615) (1,696)Loans and advances to credit institutions and others (5,246) 107.4 (2,530) (2,504)Inter-area positions (357) (18.1) (437) (17,283)Tangible assets 3,857 20.6 3,199 3,042Other assets 23,122 21.4 19,044 15,421Total assets/Liabilities and equity 57,652 47.0 39,208 23,407Deposits from central banks and credit institutions 14,046 101.0 6,987 (4,607)Deposits from customers 18,865 (35.3) 29,180 14,608Debt certificates 70,798 (0.2) 70,910 78,848Subordinated liabilities 1,654 (29.8) 2,355 5,993Inter-area positions (49,962) (28.4) (69,803) (75,024)Financial liabilities held for trading (4,780) 10.0 (4,347) (3,797)Other liabilities (6,426) (1.8) (6,541) (3,419)Valuation adjustments (2,184) (21.6) (2,787) (770)Shareholders´funds 43,261 12.1 38,583 32,761Economic capital allocated (27,620) 9.0 (25,329) (21,186)196 Business areas
Definition of the aggregateCorporate Activities basically includes the costs of the headquarters with strictly corporatefunctions, certain allocations to provisions such as early retirements and others of a corporatenature. The area also performs financial management functions for the Group as a whole,essentially management of asset and liability positions for interest rates in the euro-denominatedbalance sheet and for exchange rates, as well as liquidity and capital management functions. Themanagement of asset and liability interest-rate risk in currencies other than the euro is recordedin the corresponding business areas. Finally, it includes certain portfolios and assets not linkedto customers, with their corresponding revenues and costs, such as the industrial and financialholdings and the Group’s real-estate assets in Spain assigned to holding services and foreclosed orpurchased assets.EarningsThe most relevant aspects of earnings in this area in 2012 are summarized below:• Net interest income was slightly less negative than in 2011, at –€697m compared with–€614m, due to the increased wholesale-funding costs arising from the current situation inthe euro zone. However, all the issues have been placed at below the price of the Spanishsovereign.• Favorable performance of NTI, basically as a result of the capital gains registered on therepurchase of securitization bonds in the second quarter of 2012 and of subordinated debtin the fourth quarter. As a result, there has been significant growth of 89.7% in NTI in 2012 to€828m.• Gross income is a negative €69m (–€8m a year ago).• Operating expenses continue to reflect the Group’s investment effort in staff training,technology, brand and infrastructure. They increased by 13.5% year-on-year to €1,107m.• There has been a significant increase in provisions to absorb the impairment on the real-estateand foreclosed assets in Spain, though this was offset in part by the badwill generated from theUnnim operation. As a result, provisions and other gains/losses are a negative €1,569m(– €1,049m in 2011).• As a result, the net attributable profit in 2012 is –1,649m, compared with –€1,405m in 2011.This more negative performance compared with the previous year is mainly due to theaforementioned provisioning effort.Asset/Liability ManagementThe Assets and Liabilities Management unit is responsible for managing structuralinterest-rate and foreign-exchange positions, as well as the Group’s overall liquidity andshareholders’ funds.Liquidity management helps to finance the recurring growth of the banking business atsuitable maturities and costs, using a wide range of instruments that provide access to alarge number of alternative sources of finance. A core principle in the BBVA Group’s liquiditymanagement continues to be to encourage the financial independence of its subsidiariesin the Americas. This aims to ensure that the cost of liquidity is correctly reflected in priceformation and that there is sustainable growth in the lending business. Short-term andlong-term wholesale financial markets were affected by heightened uncertainty in 2012,showing mixed performance:Corporate Activities197
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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
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Furthermore, as usual in the case o
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SpainIncome statement(Million euros
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• On July 20, the Government requ
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3 Spain. Efficiency ratio versus pe
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These lines axes of action will con
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10 Spain. Operating income(Million
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Page 163 and 164: MexicoIncome statement(Million euro
Page 165 and 166: area has been positive year-on-year
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Page 169 and 170: The increase of operating expenses
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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: HighlightsThe most relevant awards
Page 203 and 204: held by retail investors. The conve
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Page 207 and 208: greater efficiency, cost control an
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Page 213 and 214: Corporate LendingCorporate Lending
Page 215 and 216: In Latin America, the funding of Li
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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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