BBVA in 2012

Share and shareholder structureStock-marketindexes performbetter in theUnited States thanin Europe in 2012In Europe, theStoxx Banks indexperforms betterthan the EuroStoxx Banks indexIn Spain, BBVAshare outperformsthe Ibex 35 indexFollowing a 2011 marked by a slowdown in macroeconomic indicators, global economic activityonce again weakened in the first half of 2012, when risks materialized related, above all, tocontinued sovereign tensions in Europe. This led to a downward review of macroeconomicgrowth outlook throughout the first part of the year. In the summer there was a significantdecrease in the risk premiums thanks to the reduction of tail risks, following decisive actionby the U.S. Federal Reserve (FED) with its QE3 program, and the European Central Bank (ECB),with the implementation of a sovereign bond buyback program, under strict conditionalityand subject to previous request by the country involved. The result was a recovery of growthexpectations for the U.S. economy and, to a lesser extent, for the European economy. Thispositively affected the performance of the stock market indexes in the different regions. In theUnited States, the S&P 500 index increased 13.4% since the close of 2011, while the Stoxx 50index in Europe rose by 8.8%. In Spain, the Ibex 35 index fell back 4.7% over the same period.In Europe, the financial tensions associated with resolving the economic and institutional crisishave been the main barrier to the area’s economic recovery in recent quarters. Although it isundeniable that significant measures have been taken to resolve it, there are still no signs of aclear roadmap for greater fiscal and financial integration. Given this, the financial sector hascontinued to reflect the differences in Europe, apparent in the better relative performance of theStoxx Banks index, which includes non-euro zone banks, and which in 2012 rose 23.1%, comparedwith the Euro Stoxx Banks index (up 12.0% over the same period). Also of note is the recoveryof the peripheral banks in the second half of the year, following the announcement of outrightmonetary transactions (OMT) by the ECB. In the United States, the S&P Financials Index and theS&P Regional Banks Index outperformed the European indexes, at 26.3% and 20.1%, respectively,for the year.In Spain, the year was marked by unfavorable macroeconomic data, the implementationof structural reforms and austerity measures, and the high cost of financing, though it fellsignificantly following the announcement by the ECB of the implementation of the sovereignbond buyback program, which was conditional on requesting a bailout. In the Spanish financialsector, significant progress has been made in the coverage of “toxic” assets (with the publicationof two Royal Decree-Laws which require banks to increase coverage for real-estate exposure)and also in the identification of undercapitalized banks (publication of “bottom-up stress test”results conducted by Oliver Wyman). Details of the structure and funding of the so-called “badbank” (SAREB) have also been outlined. A credible and satisfactory completion of this processcan be crucial in shaping a positive market feeling of the financial sector and its future growthpotential. Given this, BBVA share has outperformed the Ibex 35 index in 2012.520 Executive summary