BBVA in 2012

Capital baseThe main highlight in 2012 with respect to the capital base was compliance with the EBA capitalrecommendations without having to sell any strategic assets, with no public aid and without anychange in the current dividend policy.In December 2012, core capital ratio reached 10.8% under Basel II. It means 45 basis points up on thefigures at the close of 2011.Other notable aspects with respect to the capital base are as follows:• BBVA comfortably passed the theoretical stress test carried out by Oliver Wyman, once againunderlining its capacity to generate capital, even in very adverse economic scenarios.• The generation of operating income has enabled the Bank to absorb loan-loss provisions aimed ataddressing the impairment of assets related to the Spanish real-estate sector.• Risk-weighted assets (RWA) have declined as a result of the sale of the business in Puerto Rico,lower activity in Spain and the reduction in portfolios with CIB customers. These effects have notbeen offset by the incorporation of Unnim or the growth of business in Latin America.• The impact of the inclusion of Unnim has been practically neutral in terms of core capital. Thenegative effect of 10 basis points has been offset by the exchange of hybrid capital instruments inthe hands of Unnim customers offered in October.• Tier II capital has decreased, due to the repurchase of subordinated debt carried out by the Group.Capital base (BIS II Regulation)(Million euros)31-12-12 31-12-11 31-12-10Core capital 35,451 34,161 30,097Capital (Tier I) 35,451 34,161 33,023Other eligible capital (Tier II) 7,386 8,609 9,901Capital base 42,836 42,770 42,924Risk-weighted assets 329,033 330,771 313,327BIS ratio (%) 13.0 12.9 13.7Core capital (%) 10.8 10.3 9.6Tier I (%) 10.8 10.3 10.5Tier II (%) 2.2 2.6 3.2At the close of 2012, the Group’s capital base was at practically the same level as at the close of 2011, at€42,836m. The main factor to take into account is the aforementioned repurchase of subordinated debtin the fourth quarter of 2012, which affects Tier II.RWA totaled €329,033m, a year-on-year decline of 0.5%. The deleveraging process in Spain, reducedactivity with wholesale customers and the sale of the Puerto Rico subsidiary have countered thepositive effects on this heading, such as the strength of the banking business in emerging countries andthe incorporation of Unnim.Capital base85