QUARTERLY REPORT January-September 2011...Data per share and share performance ratios Share price (euros) 6.18 (37.6) 9.91 7.56 Market capitalization (million euros) 29,817 (19.7)

January-September 2011

QUARTERLY REPORT

3Q11 3Q

11

Contents 2 BBVAGrouphighlights

3 Groupinformation Relevantevents........................................................................................................................................................................................................................................................... 3

Earnings................................................................................................................................................................................................................................................................................6

Balancesheetandbusinessactivity................................................................................................................................................................................................. 13

Capitalbase.....................................................................................................................................................................................................................................................................17

Riskmanagement...................................................................................................................................................................................................................................................19

TheBBVAshare......................................................................................................................................................................................................................................................... 21

Corporateresponsibility................................................................................................................................................................................................................................. 22

23 Businessareas Spain......................................................................................................................................................................................................................................................................................25

Eurasia.................................................................................................................................................................................................................................................................................. 31

Mexico..................................................................................................................................................................................................................................................................................34

SouthAmerica...........................................................................................................................................................................................................................................................38

TheUnitedStates...................................................................................................................................................................................................................................................42

CorporateActivities............................................................................................................................................................................................................................................. 46

Otherinformation:WholesaleBanking&AssetManagement....................................................................................................................... 49

January-September2011

QUARTERLYREPORT

2 BBVAGrouphighlights

BBVAGrouphighlights

BBVA Group highlights(Consolidatedfigures)

30-09-11 ∆% 30-09-10 31-12-10

Balance sheet (million euros)

Totalassets 584,438 4.8 557,761 552,738

Customerlending(gross) 352,633 2.8 343,084 348,253

Customerfundsonbalancesheet 282,050 10.3 255,798 275,789

Othercustomerfunds 136,588 (4.4) 142,902 146,188

Totalcustomerfunds 418,638 5.0 398,700 421,977

Totalequity 39,868 21.1 32,909 37,475

Shareholders’funds 41,552 31.5 31,610 36,689

Income statement (million euros)

Netinterestincome 9,676 (5.0) 10,182 13,320

Grossincome 15,052 (5.7) 15,964 20,910

Operatingincome 7,753 (16.8) 9,322 11,942

Incomebeforetax 4,145 (21.2) 5,260 6,422

Netattributableprofit 3,143 (14.3) 3,668 4,606

Data per share and share performance ratios

Shareprice(euros) 6.18 (37.6) 9.91 7.56

Marketcapitalization(millioneuros) 29,817 (19.7) 37,124 33,951

Netattributableprofitpershare(euros) 0.66 (26.9) 0.90 1.16

Bookvaluepershare(euros) 8.61 2.1 8.43 8.17

P/BV(Price/Bookvalue;times) 0.7 1.2 0.9

Significant ratios (%)

ROE(Netattributableprofit/Averageequity) 11.3 17.2 15.8

ROA(Netincome/Averagetotalassets) 0.83 0.95 0.89

RORWA(Netincome/Averagerisk-weightedassets) 1.46 1.75 1.64

Efficiencyratio 48.5 41.6 42.9

Riskpremium 1.10 1.38 1.33

NPAratio 4.1 4.1 4.1

NPAcoverageratio 60 62 62

Capital adequacy ratios (%)

BISRatio 12.6 12.8 13.7

Corecapital 9.1 8.2 9.6

TierI 9.8 9.2 10.5

Other information

Numberofshares(millions) 4,825 28.7 3,748 4,491

Numberofshareholders 981,348 10.4 889,104 952,618

Numberofemployees(1) 110,625 5.1 105,265 106,976

Numberofbranches(1) 7,436 1.0 7,362 7,361

NumberofATMs(1) 18,192 9.5 16,619 17,055

General note: These quarterly statements have not been audited. The consolidated accounts of the BBVA Group have been drawn up according to the International Financial Reporting Standards (IFRS) adopted by the European Union and in conformity with Bank of Spain Circular 4/2004, together with the changes introduced therein.

(1)ExcludingGaranti.

3Relevantevents

Stresslevelsinliquidityandsovereignriskreachedahighinthe

third quarter of 2011,particularlyintheeuroarea.Asaresult,

mostoftheEuropeanbankingsectorhasseensomemajor

sourcesoffundingreduced.Thisinturnhasincreasedtheuse

oftheliquidityfacilitiesprovidedbythecentralbanks.This

situationhasgivenrisetodoubtsinthemarketsaboutcertain

businessmodelswithahighlevelofleverage.Otherfactorsworth

highlightinghavebeenthelossofvalueinnumerousassetsasa

resultofincreasedfundingcostsandtheprevailinguncertainty.In

particular,thereweresignificantfallsintheequityandpublicand

privatedebtmarketsandalowlevelofbusinessactivity,above

allthatmostcloselyrelatedtothewholesalebusiness.Against

thisbackgroundoflossofconfidence,theGrouphasoncemore

demonstratedoverthequarterthatitsbusinessmodelissound,

particularlyintermsofitsliquidity position andgeneration of

earnings.

Intermsofliquidity,BBVAhasaprivilegedpositionwithrespect

tomostofitscompetitors,inthefollowingaspects:

• Thesmallestbalancesheetwithinitspeergroup,at€584

billion.

• Ahighlycustomer-centricretailmodel,withaverysolid

depositbase,asshownbythefactthatBBVAisthebankwith

thebiggestcustomerdeposit/totalassetratiowithinthepeer

group,at48.3%atthecloseofSeptember2011.

• Awholesalebankingbusinessbasedonastrongrelationship

withitscustomersandcharacterizedbylowleveragelevels.

BBVAisrecoveringcompetitivenessinanenvironmentin

whichotherbankshaveannouncedsignificantdeleveraging

plans.

• Inaddition,theGrouphasalwaysbeenproactiveinits

managementoflong-termwholesalefinance,andused

conservativelythe“windowsofopportunity”offeredbythe

markets.Infact,inJuneBBVAalreadyhaditsfinancingneeds

fullycoveredfor2011;andthecomingyearsithasthelowest

leveloflong-termfundingmaturitiesofanybankinitspeer

group.Itshouldalsobepointedoutthatthesematuritiesare

notconcentratedinanyspecificperiod.

• ItisworthnotingthatundertheBBVAmanagementmodel

eachbankingsubsidiaryorgroupmustbeself-sufficientinits

sourcesoffundingwithinitsrespectivegeographicalarea.

• Finally,itmustbepointedoutthatBBVAdoesnotdependon

theUSmarketforshort-termmarketfunding(oneofthekey

subjectsthisquarter),andithasonlyuseditinthepastwhen

appropriateasacheapsource.

Themostimportantpointwithrespecttogeneration of earnings

overtheperiodisthecontinuedgrowthofthemostrecurring

income,i.e.grossincomeexcludingdividendsorNTI:

• Therewasnocontributionfromnet trading income (NTI)over

thequarter,whichcharacterizestheprofileoftheaccount.The

slightlynegativeNTI(–€25m)canbeexplainedbythelowlevel

ofactivityinWholesaleBankingandthefallinassetpricesover

theperiod.

• Gross incomeforthequarterwas€4,627m.Thefallcompared

with€5,162minthepreviousquarteristheresultofthe

performanceofNTImentionedaboveandthedividendpaidin

MayfromthestakeinTelefónica.ExcludingdividendsandNTI,

thegrossrecurringincomegeneratedbyBBVAbetweenJuly

andSeptemberwas€4,602m,up0.8%quarter-on-quarter.This

givesafigureof€15,052myeartodateand€13,656m(about

91%)excludingNTIordividends.

• Operatingexpensesamountedto€2,461mforthequarter,

slightlybelowthefigureforthesecondquarter.Theefficiency

ratiowas48.5%atthecloseofSeptember,oneofthebest

amongtheBank’sEuropeanpeers.

• Impairment losses on financial assets,togetherwithallocation

toprovisionsandothergains(losses),remainatasimilarlevel

tothepreviousquarter.

• BetweenJulyandSeptember2011,theGroupobtainedanet

attributable profit of€804m.Thisfiguredoesnotincludethe

dividendsfromTelefónica(whicharepaidinthesecondand

fourthquarterofeachyear)andhasbeenaffectedbythezero

contributionfromNTI.

TheGrouphasmaintaineditsmainrisk indicatorsstableforyet

anotherquarter(theseventhsinceDecember2009).TheNPA

ratioclosed30-Sep-2011at4.1%andthecoverageratioat60%.

Withrespecttosolvency,BBVAcontinuestohaveanexcellent

capitalposition.AtthecloseofSeptemberthecoreratiowas9.1%,

supportedbythegenerationofearningsandtheimplementation

ofthe“DividendOption.”

Allthebusiness areashavecontributedpositivelytotheGroup’s

results.Themostsignificantaspectsforeachofthemaredetailed

below:

Groupinformation

Relevantevents

4 Groupinformation

customerfundsup27.4%)andearnings.Grossincomeis

up19.0%overthelast12months.Thisfact,combinedwith

outstandingmanagementofassetquality,hasenabledthe

banktocontinuetofinanceexpansionprojectsandtoshow

highratesofgrowthinnetattributableprofitwhichreached

€754myeartodate,up11.2%.

• TheUnited States iscontinuingwithitsprocessofchanging

itsloan-bookmix.Inthethirdquarterof2011,thefavorable

outcomeinthenewproductionoftargetportfoliosoflending

hasoffsetthereductioninloanstothedevelopersector.

Thisexplainsthequarter-on-quartergrowthof1.6%ingross

customerlendinginthearea.Thefocusincustomerfunds

continuestobeonthoseoflowercost.Themostimportant

aspectinearningscontinuestobetheimprovementinthe

costofrisk.Thenetattributableprofitintheareayeartodateis

€218m(up1.5%year-on-year).

Finally,itisimportanttomentionthatadividendof€0.10per

sharewaspaidoutinOctober2011undertheDividend Option

scheme.Thepercentageofshareholderswhohaveopted

toreceivenewBBVAshareswasover91%,thusoncemore

confirmingthepopularityofthisnewremunerationprogram.

Economic environment

Globaleconomicgrowthcontinuedinthethird quarter of

2011, thankstotheemergingcountries(EAGLES),anddespite

theslowdownindevelopedeconomies,asshownbythelatest

economicdatapublished.Thishasbeentheresultoftwofactors:

first,theeffortsmadeatthestartofthesummerbyEuropean

authoritieshavenotmanagedtodissipatedoubtsabouttheir

capacitytomanagethedebtcrisis;andsecond,thefinancial

turmoilinthedebtmarketshashadaneffectontheperception

ofsomesegmentsoftheEuropeanfinancialsystem,whereitis

extremelyexposedtothedebtofcountriesindifficulties.

IntheUnited States,growthhasslowedduetothesluggish

recoveryinemploymentandwages,aresidentialconstruction

sectorstilldeepintheprocessofcorrection,andthecontinued

householddeleveragingprocess.Despitepressureatthestartof

thequartertoimplementacredibleprocessoffiscalconsolidation,

doubtsaboutthestrengthofeconomicactivityhaveledto

thesearchforabalancebetweenlong-termconsolidationand

theneedtosustaintheeconomyintheshortterm,resultingin

• ThebusinessesinSpain showweaklendingactivityasaresult

ofthe(necessaryandpositive)deleveragingprocessbeing

undertakenintheeconomy.Itisimportanttohighlightthat

theliquiditygapintheareaiscontinuingtoimprove:onthe

onehand,throughtherestrictiononlending;andontheother

hand,duetothepositiveperformanceofdeposits,ascanbe

seenfromthehighrateofcustomerrenewalsoftermdeposits

writtenayearago,despitetheirbeingatasignificantlylower

interestrate.Asaresult,thequarterlynetinterestincome

stillshowsstrongresilience(€1,096mcomparedwiththe

€1,102minthesecondquarter).Thequarterlyfallof13.6%in

grossincome(€4,900myeartodate)canbeexplainedby

theeconomicsituation,thelowlevelofactivityinWholesale

Banking,andthedeclineinassetpricesingeneral,witha

majorimpactonNTI.Thearea’snetattributableprofityearto

datestandsat€1,162m.TheNPAandcoverageratiosremain

stable,at4.9%and42%respectivelyasof30-Sep-2011.The

IPOsinJulybyCaixaBank,BankiaandBancaCívica,combined

withrecentinterventionsinsomesavingsbanks,havebegun

toclearupuncertaintyintermsoftherestructuringofthe

bankingsector.

• OfparticularnoteinEurasiaisthecontributionofthe

ChinesebankCNCBandthepaymentmadebyBBVAforits

capitalincrease.Twofactorshaveinfluencedthedecision

toundertakethisoperation:ontheonehand,theneedfor

it,duetothegreatstrengthofbankingactivity;andonthe

otherhand,thewishesoftheChinesesupervisortomaintain

ahighlysolventpartnersuchasBBVAwiththesamestakeas

beforetheoperation.Thenetattributableprofitforthequarter

is€257m,uponthefigureof€251mthepreviousquarter.The

yeartodatefigureis€705m.

• Mexico continuestopostsustainedqualitygrowthinbusiness

activity,aboveallinconsumerfinance,creditcardsand

customerfunds,withinahighlycompetitivefinancialsystem

andinterestratesatall-timelows.Netinterestincomehas

improveditsyear-on-yearrateofgrowth(up6.0%atconstant

exchangerates),whileloan-lossprovisionsremainstableand

thenetattributableprofityeartodateis€1,275m(up2.9%at

constantexchangerates).ItisimportanttohighlightthatBBVA

Bancomeristhemostprofitablebankwithinitspeergroup,

witharatioofnetinterestincomeoverATAof5.9%.

• South Americacontinuestoperformwell,inbothbusiness

activity(lendingup30.7%year-on-yearandon-balance-sheet

Interest rates (Quarterlyaverages)

2011 2010

3Q 2Q 1Q 4Q 3Q 2Q 1Q

OfficialECBrate 1.50 1.25 1.00 1.00 1.00 1.00 1.00

Euribor3months 1.54 1.44 1.10 1.02 0.87 0.69 0.66

Euribor1year 2.00 2.13 1.74 1.52 1.40 1.25 1.22

USAFederalrates 0.25 0.25 0.25 0.25 0.25 0.25 0.25

TIIE(Mexico) 4.81 4.85 4.85 4.87 4.91 4.94 4.92

5Relevantevents

biasedtowardsadropinthelendingrateattheendof2011ifthe

economicenvironmentworsens.

GrowthcontinuestobeverystronginSouth America,whereit

issustainedbydomesticdemandandsupportfromwhatisstill

alaxfiscalpolicy.Despitetheslowdowninadvancedeconomies,

commoditypricesremainhigh,whichexplainsthestrengthof

income.

TheChinese economystillappearssound.Althoughtheregionis

alreadynotingtheeffectsoftheslowdowncausedbythegreater

weaknessofforeigndemand,mostrecenteconomicdatahave

remainedsolid.Strongunderlyingdomesticdemandandwhatis

stillahighinflationratewillprobablypreventtheapplicationofa

policyofmonetaryeasing,althoughtheauthoritiesareprepared

toact(inthefiscalareaaswell)iftheglobalweaknesspersists.

Finally,theTurkisheconomyisgrowingatastrongrate,although

inflationisstillrelativelyhighduetothemajordropinvalueof

theTurkishlirainanenvironmentofhighglobalriskaversion,

whichhasingeneralaffectedtheTurkishfinancialmarkets.Inany

event,theCentralBank’stoneshowsitisclearlycommittedtoan

accommodativemonetarypolicy.

Intermsofexchange rates evolution,thefinalratesofthe

Mexicanpesohavedepreciatednotably,inbothyear-on-yearand

particularlyquarter-on-quarterterms.Thisisthecurrencywith

thebiggestinfluenceontheGroup’sfinancialstatements.The

ChileanandColombianpesohavefollowedsuit,althoughtoa

lesserextent.Incontrast,thefinalrateoftheUSdollarappreciated

inyear-on-year,andparticularlyquarter-on-quarterterms.This

isthesecondmostimportantcurrencyfortheGroup’sresults.

TherestoftheotherimportantcurrenciesinLatinAmericahave

alsogained.Theexceptionistheyear-on-yeardepreciationof

theArgentineanpeso.Overall,theimpactonboththebalance

sheetandbusinessactivityoverthelastyearandinthequarteris

negative.Thesameistrueforearningsinquarterlyand

year-on-yearterms.

theproposalofmeasuresparticularlygearedtojobcreation.

Meanwhile,theFedhasgivensignsofaccompanyingwithan

accommodativemonetarypolicy.

Theslowdownanddoubtsaboutgrowthhavealsobecome

consolidatedinEurope.Thistimeround,theyalsoaffectthe

coreeurozoneareas,whichhaveshownsomeweaknessin

domesticdemand,thoughsofarthishasbeenoffsetbystrength

intheforeignsector.ThecountriessubjecttoEuropeanUnion

andInternationalMonetaryFundprogramscontinuewithmajor

adjustments(exceptinthecaseofIreland,wherethemostrecent

figuressuggestarecovery).Nevertheless,thefocusofattention

isstilltheresolutionofthedebtcrisis,specificallythemeasures

totaketore-channeltheGreekdebttomoresustainablelevels.

Doubtsinthisrespectareaffectingthefinancialsystemofthe

eurozoneandleadingtofundingdifficultiesinthewholesale

markets.Theresurgenceoftensionhasledtoachangeinthe

prospectsofagradualtougheningofmonetarypolicybythe

EuropeanCentralBank(ECB).Infact,theECBhasinterruptedits

cycleofinterest-ratehikesandappearspreparedtocontinuewith

measuresthatsupportliquidity.

InSpain,theadjustmentprocesscontinuesandtheeconomy

hasslowedslightly.Evenso,thestrengthoftheforeignsector

hasoffsettheweaknessofdomesticdemand.Atthesametime,

thepublicadministrationcontinuestobeimmersedinamajor

processoffiscalconsolidation.

Despitetheslowdowninadvancedeconomies,emerging

economiescontinuetogrowsolidlytowardsmoresustainable

levels.InMexico,themostimportantindicators(industrialactivity,

formalemployment,retailsales)remainpositive,sotherateof

growthcouldhavecontinuedinthethirdquarteratlevelsthat

areevenslightlyhigherthanthepreviousquarter.Inflationisnot

aconcern,giventhedomesticenvironmentofcontainedactivity

andmoderateprospectsofglobalgrowth.Monetarypolicyis

thereforerespondingbyalongerpause,andthelendingrate

willremainat4.5%beyond2012.Theuncertaintyisifanything

Exchange rates (Expressedincurrency/euro)

Year-end exchange rates Average exchange rates

30-09-11 ∆% on

30-09-10 ∆% on

30-06-11∆% on

31-12-10 January-Sep. 11∆% on

January-Sep. 10

Mexicanpeso 18.5936 (7.9) (8.7) (11.0) 16.9273 (1.3)

U.S.dollar 1.3503 1.1 7.0 (1.0) 1.4065 (6.5)

Argentineanpeso 5.6773 (3.2) 4.6 (3.4) 5.7510 (9.7)

Chileanpeso 695.41 (4.8) (2.1) (10.1) 666.67 2.5

Colombianpeso 2,583.98 (4.9) (0.5) (1.0) 2,564.10 (2.0)

Peruviannewsol 3.7451 1.6 6.1 0.2 3.8930 (4.4)

Venezuelanbolivarfuerte 5.7991 1.1 7.0 (1.0) 6.0403 (8.1)

Turkishlira 2.5100 (21.1) (6.4) (17.6) 2.2920 (12.8)

Chineseyuan 8.6207 5.9 8.4 2.3 9.1378 (2.1)

6 Groupinformation

BBVAgeneratedanet attributable profitforthe

thirdquarterof2011of€804m.Therearetwo

mainfactorsthatcharacterizetheaccountsfor

thisperiod:ontheonehand,thezerocontribution

fromNTI;andontheotherhand,thegrowthofthe

mostrecurrentearningsintheGroup,i.e.thegross

incomeexcludingNTIordividends.Thefollowing

shouldbehighlightedinthisrespect:

• Thepositiveperformanceofnet interest

income,whichwasup2.2%inthequarter.This

isduetothepositivecontributionofemerging

marketsandtheresilienceofnetinterest

incomeindevelopedcountries.

• Thegreatercontributionfromnet income

by the equity method,thankstothepositive

performanceofCNCB.

• Asaresult,thequarterlygross income

excludingNTIordividendswas€4,602m,

continuingwiththeupwardtrendsincethe

startoftheyear.

• Finally,bothoperating expenses and

impairment on financial assetswereatsimilar

levelstothepreviousquarter.

Earnings

Consolidated income statement: quarterly evolution (Millioneuros)

2011 2010

3Q 2Q 1Q 4Q 3Q 2Q 1Q

Net interest income 3,286 3,215 3,175 3,138 3,245 3,551 3,386

Netfeesandcommissions 1,143 1,167 1,114 1,135 1,130 1,166 1,106

Nettradingincome (25) 336 752 252 519 490 633

Dividendincome 50 259 23 227 45 231 25

Incomebytheequitymethod 150 123 121 124 60 94 57

Otheroperatingincomeandexpenses 22 62 79 70 85 47 93

Gross income 4,627 5,162 5,263 4,946 5,084 5,579 5,301

Operatingcosts (2,461) (2,479) (2,359) (2,325) (2,262) (2,262) (2,118)

Personnelexpenses (1,325) (1,306) (1,276) (1,240) (1,211) (1,215) (1,149)

Generalandadministrativeexpenses (920) (964) (887) (887) (855) (855) (796)

Depreciationandamortization (216) (208) (196) (199) (197) (192) (174)

Operating income 2,166 2,683 2,904 2,621 2,821 3,317 3,183

Impairmentonfinancialassets(net) (904) (962) (1,023) (1,112) (1,187) (1,341) (1,078)

Provisions(net) (94) (83) (150) (75) (138) (99) (170)

Othergains(losses) (166) (154) (71) (273) 113 (88) (72)

Income before tax 1,002 1,484 1,659 1,162 1,609 1,789 1,862

Incometax (95) (189) (369) (127) (359) (431) (510)

Net income 907 1,295 1,290 1,034 1,250 1,358 1,352

Non-controllinginterests (103) (106) (141) (96) (110) (70) (113)

Net attributable profit 804 1,189 1,150 939 1,140 1,287 1,240

Basic earnings per share (euros) 0.17 0.25 0.25 0.22 0.28 0.32 0.31

Net attributable profit(Million euros)

(1) At constant exchange rate: –13.3%.

1,240

1Q

1,287

2Q

1,140

3Q

939

4Q

1,189

1Q

–14.3% (1)

2010 2011

804804

11891150

939

1140

12871240

0

200

400

600

800

1,000

1,200

1,400

1,150

2Q

3,668 3,143

804

3Q

7Earnings

ofincreasedbusinessinemergingmarkets,as

wellastheappropriatemanagementofspreads

indevelopedcountriesasvolumesofbusiness

fall.Thefigureyeartodateis€9,676m.

Inbusinesswithcustomersinthedomestic

sectoroftheeuro area,yieldonloanswasup

Net interest income

TheGroup’squarterlynet interest income

continuestoshowgreatresilience.BetweenJuly

andSeptember2011,ittotaled€3,286m,1.3%up

onthesameperiodlastyearand2.2%abovethe

figureforthepreviousquarter.Thisistheresult

Consolidated income statement (Millioneuros)

January-Sep. 11 ∆%∆% at constant exchange rates January-Sep. 10

Net interest income 9,676 (5.0) (3.0) 10,182

Netfeesandcommissions 3,424 0.7 2.5 3,402

Nettradingincome 1,063 (35.3) (34.0) 1,642

Dividendincome 332 10.2 10.7 302

Incomebytheequitymethod 394 86.6 86.6 211

Otheroperatingincomeandexpenses 163 (27.5) (32.3) 225

Gross income 15,052 (5.7) (4.0) 15,964

Operatingcosts (7,299) 9.9 12.3 (6,642)

Personnelexpenses (3,907) 9.3 11.5 (3,575)

Generalandadministrativeexpenses (2,771) 10.6 13.2 (2,506)

Depreciationandamortization (620) 10.4 13.6 (562)

Operating income 7,753 (16.8) (15.6) 9,322

Impairmentonfinancialassets(net) (2,890) (19.9) (18.4) (3,606)

Provisions(net) (328) (19.7) (19.2) (408)

Othergains(losses) (391) n.m. n.m. (47)

Income before tax 4,145 (21.2) (20.1) 5,260

Incometax (652) (49.8) (49.0) (1,300)

Net income 3,492 (11.8) (10.6) 3,960

Non-controllinginterests (349) 19.3 24.5 (293)

Net attributable profit 3,143 (14.3) (13.3) 3,668

Basic earnings per share (euros) 0.66 (26.9) n.m. 0.90

Net interest income(Million euros)

32863286321531753138324535513386

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000


3,386

1Q

3,551

2Q

3,245

3Q

3,138

4Q

3,215

1Q

–5.0% (1)

2010 2011

3,175

2Q

10,182 9,676

3,286

3Q

Customer spread. Euros domestic sector(Percentage)

3Q 4Q 1Q 2Q2010 2011

Customerspread

Cost ofdeposits

Yield on totalnet lending

3.22 3.313.48

3.60

3.97

1.80

0

1

2

3

4

5

3Q

3.22 3.313.48

3.60

1.70

1.53

1.76 1.81

1.52

1.77

1.73 1.80

3.85

2.10

1.75

8 Groupinformation

CompetitivepressureremainshighinSouth

America.However,buoyantbusinessactivity

meansthatthenetinterestincomeyearto

dateintheareawasup28.4%year-on-yearat

constantexchangerates.

againinthethirdquarterof2011by19basis

pointsto3.50%,whilethecostoffundsslowed

itsrisesignificantly,andincreasedbyonly8

basispointsto1.72%.Asaresult,thecustomer

spreadwasup11basispointsonthefigure

forthesecondquarterof2011to1.78%.This

improvementpracticallyoffsetstheeffectsof

lowerlendingandmoreexpensivewholesale

funding.

InMexico,interbankratesarestilllowand

practicallyatthesamelevelsasatthecloseof

thesecondquarterof2011.Theyieldonloans

hasrisenby14basispointsonthefigureatthe

closeofthepreviousquarter,to13.10%,thanks

tothegoodnewproductionfigures,aboveall

inconsumerfinanceandcreditcards.Deposit

costsincreasedbybarely5basispointsinthe

quarterto1.96%.Thusthecustomerspread

stoodat11.14%atthecloseofthequarter(11.05%

inthefirstquarterof2011)andthenetinterest

incomeyeartodateintheareaisup6.0%

year-on-yearatconstantexchangerates.

Breakdown of yields and costs

3Q11 2Q 11 1Q11 4Q10 3Q10

% of ATA

% yield/Cost

% of ATA

% yield/Cost

% of ATA

% yield/Cost

% of ATA

% yield/Cost

% of ATA

% yield/Cost

Cashandbalanceswithcentralbanks 3.8 1.19 3.6 1.25 3.7 1.30 4.0 1.17 4.2 0.99

Financialassetsandderivatives 25.4 2.87 24.3 2.98 24.4 3.03 25.2 2.75 26.0 2.61

Loansandadvancestocreditinstitutions 4.4 2.88 5.3 2.35 4.5 2.23 4.7 1.97 4.2 2.14

Loansandadvancestocustomers 59.7 5.62 60.3 5.42 61.2 5.24 59.9 4.89 59.5 4.86

Euros 38.4 3.50 39.2 3.31 40.0 3.25 39.5 3.12 39.0 3.12

Domestic 33.1 3.85 34.0 3.60 35.4 3.48 35.6 3.31 35.4 3.22

Other 5.2 1.31 5.2 1.41 4.6 1.43 3.9 1.48 3.6 2.10

Foreigncurrencies 21.3 9.44 21.1 9.33 21.3 8.98 20.4 8.31 20.5 8.19

Otherassets 6.7 0.45 6.4 0.37 6.1 0.44 6.2 0.46 6.1 0.43

Total assets 100.0 4.29 100.0 4.19 100.0 4.12 100.0 3.79 100.0 3.73

Depositsfromcentralbanksandcreditinstitutions 14.3 2.73 13.7 2.52 11.3 2.68 12.9 2.15 15.1 1.82

Depositsfromcustomers 48.3 2.17 48.6 2.06 50.6 1.77 48.1 1.63 45.6 1.51

Euros 27.3 1.72 26.6 1.64 28.1 1.35 24.6 1.40 22.5 1.23

Domestic 16.6 1.75 17.7 1.80 17.7 1.73 17.3 1.77 16.6 1.52

Other 10.7 1.67 8.9 1.31 10.5 0.72 7.3 0.51 5.8 0.41

Foreigncurrencies 21.0 2.75 22.1 2.57 22.4 2.28 23.4 1.87 23.2 1.78

Debtcertificatesandsubordinatedliabilities 18.9 2.47 20.3 2.27 20.1 2.15 20.4 2.15 20.6 1.95

Otherliabilities 11.7 0.99 10.7 1.02 11.1 1.29 12.3 0.64 12.8 0.64

Equity 6.8 - 6.7 - 6.9 - 6.3 - 5.9 -

Total liabilities and equity 100.0 2.02 100.0 1.92 100.0 1.77 100.0 1.58 100.0 1.45

Net interest income/Average total assets (ATA) 2.27 2.27 2.35 2.21 2.28

Net interest income/ATABBVA Group (Percentage)

3Q 4Q 1Q 3Q2010 2011

2.282.21

2.352.27 2.27

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2.28 2.21 2.272.35

2Q

2.27

9Earnings

fallinassetvalues,reducedcustomeractivity

andthelackofearningsfromportfoliosales.As

aresult,thisitemamountedtoanaccumulated

figureof€1,063mtoSeptember(€1,642mayear

ago).

Dividendincome,whichbasicallyincludes

incomefromBBVA’sholdinginTelefónica,

amountedto€332m,10.2%uponthesame

periodin2010.However,itisimportanttonote

thattheTelefónicaremunerationispaidinthe

secondandfourthquartersof2011.

Income by the equity methodcontinueswithits

positivetrend,withyear-on-yeargrowthof86.6%

to€394m,thanksbasicallytothesignificant

contributionfromCNCB.

Finally,theitemofother operating income and

expensesamountedto€163m,down27.5%

comparedwiththesameperiodlastyear.This

fallistheresultofboth,thehyperinflationin

Venezuelaandtheincreasedallocationtothe

depositguaranteefund(up21.8%year-on-year),

whichhavenotbeenoffsetbythepositive

performanceofincomefromtheinsurance

business(up13.9%).

Tosumup,thestrongresilienceoftheGroup’s

recurringearnings,togetherwiththenegative

figuresfromNTI,combinetoexplainwhythe

gross incomeyeartodateis5.7%downon

thefigure12monthspreviously,at€15,052m.

However,itisimportanttopointoutBBVA’s

highcapacitytogeneraterecurringrevenues

quarterafterquarter.Thequarterlygross

incomenetofNTIanddividendsamountedto

€4,602m,ayear-on-yearincreaseof1.8%anda

quarterlyincreaseof0.8%.Intheyeartodate

figures,therecurringgrossincomeexcluding

NTIanddividendsamountedto€13,656m,2.6%

downonthesameperiodin2010.Thisisdue

toacustomer-centricretailmodelthatuses

technologyasleverageandishighlydiversified

geographically,withtheemergingcountries

gainingincreasingweight.

Operating income

Operating expensesamountedto€7,299myear

todate,slowingtheirrateofyear-on-yeargrowth

to9.9%.Thisitemcontinuestobeinfluencedby

theGroup’sinvestmentsinemergingcountries,

ininfrastructure,initsnewtechnological

platformandbrandimage.

Finally,intheUnited Statesnetinterestincome

betweenJulyandSeptember2011remained

atsimilarlevelstothoseoftheprevioustwo

quartersatconstantexchangerates,despitethe

continuedincreaseintheproportionoflower

riskloans,andthusloweryield.Theaboveisthe

resultofcontinuinggoodpricemanagementby

BBVACompass.

Gross income

Fees and commissionsamountto€3,424myear

todate,practicallythesame(up0.7%)asfor

thesameperiodin2010.Therewasapositive

contributionfromtheTurkishbankGaranti,

andgoodfiguresfromthebankingbusiness

fees,whichwereup1.4%year-on-year.However,

feesfromthefundmanagementbusinesswere

down1.1%duetotheadversemarketconditions.

ThenegativeperformanceofNTIoverthe

quartercanbeexplainedbyvariousfactors:a

Gross income(Million euros)

462746275162526349465084

55795301

0

1,000

2,000

3,000

4,000

5,000

6,000


5,301

1Q

5,579

2Q

5,084

3Q

4,946

4Q

5,162

1Q

–5.7% (1)

2010 2011

5,263

2Q

15,964 15,052

4,627

3Q

Gross income net of NTI and dividends(Million euros)

4602460245664488446745204858

4643

0500

1,0001,500

2,0002,5003,0003,5004,0004,5005,000


4,643

1Q

4,858

2Q

4,520

3Q

4,467

4Q

4,566

1Q

–2.6% (1)

2010 2011

4,488

2Q

14,020 13,656

4,601

3Q

10 Groupinformation

Asof30-Sep-2011therewere18,192units,9.5%up

year-on-yearand1.9%upquarter-on-quarter.

Tosumup,thistrendinincomeandcosts

hasresultedinanoperating incomeyearto

date(30-Sep-2011)of€7,753m(€9,322min

January-September2010).Excludingtheleast

recurringincome,NTIanddividends,this

figureis€6,358m,13.8%downonthatayear

ago.

AtthecloseofSeptember,theBankemployed

110,625people,ayear-on-yearincreaseof5.1%

andaquarter-on-quarterincreaseof0.9%.The

branch networknumbered7,436unitsasof

30-Sep-2011,9morethanatthecloseofJune

and74morethanthefigurefor30-Sep-2010.

Theincreaseistheresultoftheexpansion

processundertakeninemergingcountries

(basicallyMexicoandSouthAmerica).Finally,

thereistheongoingincreaseinATMnumbers.

Breakdown of operating costs and efficiency calculation (Millioneuros)

January-Sep. 11 ∆% January-Sep. 10 2010

Personnel expenses 3,907 9.3 3,575 4,814

Wagesandsalaries 3,003 8.7 2,763 3,740

Employeewelfareexpenses 567 10.3 514 689

Trainingexpensesandother 337 13.0 298 386

General and administrative expenses 2,771 10.6 2,506 3,392

Premises 633 12.7 562 750

IT 462 8.9 424 563

Communications 223 6.4 209 284

Advertisingandpublicity 271 8.2 250 345

Corporateexpenses 77 19.1 65 89

Otherexpenses 829 8.1 767 1,040

Leviesandtaxes 276 20.8 228 322

Administration costs 6,678 9.8 6,080 8,207

Depreciation and amortization 620 10.4 562 761

Operating costs 7,299 9.9 6,642 8,967

Gross income 15,052 (5.7) 15,964 20,910

Efficiency ratio (Operating costs/Gross income, in %) 48.5 16.5 41.6 42.9

Operating costs(Million euros)

2461246124792359232522622262

2118

0

500

1,000

1,500

2,000

2,500

(1) At constant exchange rate: +12.3%.

2,118

1Q

2,262

2Q

2,262

3Q

2,325

4Q

2,359

1Q

+9.9% (1)

2010 20112Q

6,642 7,299

2,479

3Q

2,461

January-Sep.2010

January-Sep.2011

41,6 42,9

48,5

10

15

20

25

30

35

40

45

50

2010

15,964

20,910

15,052

6,6428,967

7,299

January-Sep.2010

January-Sep.2011

2010

41.6 42.9

48.5

15052

-7299

20910

-8967

15964

-6642-10,000-5,000

0

5,000

10,000

15,000

20,000

25,000

Efficiency

Grossincome

Operatingcost

(Million euros) (Percentage)

Efficiency ratio

11Earnings

to€2,890m,ayear-on-yearreductionof19.9%.

Asaresult,theGroup’sriskpremiumhas

improvedby8basispointsoverthequarterto

1.01%,andthecoveragerationowstandsat60%.

Provisionsamountto€328m,19.7%downon

lastyear.Theybasicallyincludeprovisionsfor

earlyretirements,othercontributionstopension

fundsandcontingentliabilitiesprovisions.

Other gains (losses)standatanegative€391m,

comparedwithlossesof€47mlastyear.These

lossesaremainlyrelatedtoprovisionsonreal

estateandforeclosedassetswiththeaimof

maintainingcoverageatlevelsofover30%.

Finally,therewasalsoalowtaxchargethis

quarter,mainlyduetothelowerNTI,revenues

withloworzerotaxrates(basicallydividends

andequityaccountedearnings),andthe

higherproportionofresultscomingfrom

TheAmericasandGaranti,whichcarryalow

effectivetaxrate.

Provisions and others

Impairment losses on financial assetscontinue

toshowaslightdecreaseontheprevious

quarter.UpuntilSeptember2011theyamounted

Operating income(Million euros)

21662166

26832904

26212821

33173183

0

500

1,000

1,500

2,000

2,500

3,000

3,500


3,183

1Q

3,317

2Q

2,821

3Q

2,621

4Q

2,904

1Q

–16.8% (1)

2010 20112Q

9,322 7,753

2,683

3Q

2,166

5,061,0 5,138,0

5,258,0

6,558,0 6,760,07,293,0

3,910,0 4,079,04,540,0

1,090,0 1,078,0 1,101,0

sep-10 dic-10 sep-110

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

18,192

September2011

5,258

7,293

4,540

1,101

16,619

September2010

5,061

6,558

3,910

1,090

17,055

December2010

5,138

6,760

4,079

1,078

Number of ATMs (1)

Spain

Mexico

South America

The United States

(1) Excluding Garanti.

105,265

September2010

28,629,0 28,416,029,132,0

33,169,0 34,082,035,538,0

28,886,0 29,608,0 30,690,0

12,609,0 12,863,0 12,991,0

1,972,0 2,007,0 2,274,0


20,000

40,000

60,000

80,000

100,000

120,000106,976

December2010

110,625

September2011

28,629 28,41629,132

33,169 34,082 35,538

28,886 29,608 30,690

12,609 12,863 12,991

Number of employees (1)

Spain

Mexico

South America

The United States

Rest of the world


7,362

September2010

7,361

December2010

7,436

September2011

3,024,0 3,024,0 3,018,0

1,985,0 1,985,0 1,999,0

1,457,0 1,456,0 1,545,0

752,0 752,0 745,0

144,0 144,0 129,0


1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

3,024 3,024 3,018

1,985 1,985 1,999

1,457 1,456 1,545

752 752 745

Number of branches (1)

Spain

Mexico

South America

The United States

Rest of the world


Impairment losses on financial assets(Million euros)

904904962

10231112

1187

1341

1078

0

200

400

600

800

1,000

1,200

1,400


1,078

1Q

1,341

2Q

1,187

3Q

1,112

4Q

962

1Q

–19.9% (1)

2010 2011

1,023

2Q

3,606 2,890

904

3Q

12 Groupinformation

intheGroup’sshareholders’fundshasledtoa

2.1%year-on-yearincreaseinthebookvalueper

shareto€8.61.Finally,ROEwas11.3%andreturn

onaverageassets(ROA)0.83%,makingBBVA

oneofthemostprofitablebanksinitspeer

group.

Net attributable profit

Inconclusion,thepositiveperformanceof

recurringrevenuesandloan-lossprovisions

hasallowedtheBBVAGrouptocontinue

withitsexpansionplansdesignedtolaythe

foundationsforfuturegrowthwhilegenerating

anetattributableprofitof€804minthe

secondquarterand€3,143myeartodate.

Thisperformanceisinanadversemarket

environment,despitewhichallthebusiness

areasaregeneratingpositiveresults.Inthis

regard,Spaingenerated€1,162myeartodate,

Eurasia€705m,Mexico€1,275m,SouthAmerica

€754m,andtheUnitedStates€218m.

Earnings per share(EPS)yeartodate

(30-Sep-2011)stoodat€0.66compared

with€0.90inthesameperiodin2010,after

correctingfortheeffectsofthecapitalincreases

inNovember2010andApril2011.Theincrease

Earnings per share(Euros)

0.170.17

0.250.250.22

0.28

0.320.31

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.31

1Q

0.32

2Q

0.28

3Q

0.22

4Q

0.25

1Q

–26.9%

2010 2011

0.25

2Q

0.90 0.66

0.17

3Q

ROE(Percentage)


2010 January-September2011

17,215,8

11,3

0

10

20

30

40

50

17.2 15.8

11.3

ROA(Percentage)

0

1

2

0.95 0.89 0.83


2010 January-September2011

13Balancesheetandbusinessactivity

Atthecloseofthethird quarter of 2011,BBVA’s

balancesheetcontinuestoshowgreatstability,

at€584billion.ThemainfeaturesoftheGroup’s

balancesheetandbusinessactivityinthis

periodcanbesummedupasfollows:

• Giventhecurrenteconomicandfinancial

situation,itisimportanttostressthatBBVAhas

asoundbalance sheetwithlittleleverageand

its2011fundingrequirementscovered.For2012

theserequirementsarethelowestamongits

Balancesheetandbusinessactivity

Consolidated balance sheet (Millioneuros)

30-09-11 ∆% 30-09-10 30-06-11 31-12-10

Cashandbalanceswithcentralbanks 24,637 18.2 20,836 21,369 19,981

Financialassetsheldfortrading 74,859 8.0 69,306 63,421 63,283

Otherfinancialassetsdesignatedatfairvaluethroughprofitorloss 2,825 4.4 2,706 2,912 2,774

Available-for-salefinancialassets 58,768 2.1 57,558 60,599 56,457

Loansandreceivables 369,919 2.5 360,762 371,314 364,707

Loansandadvancestocreditinstitutions 23,756 (4.4) 24,846 22,890 23,636

Loansandadvancestocustomers 343,416 2.9 333,741 346,222 338,857

Other 2,747 26.3 2,175 2,202 2,213

Held-to-maturityinvestments 11,049 11.9 9,877 9,334 9,946

Investmentsinentitiesaccountedforusingtheequitymethod 5,352 25.9 4,250 4,518 4,547

Tangibleassets 7,026 6.6 6,593 6,965 6,701

Intangibleassets 10,068 29.3 7,785 9,722 8,007

Otherassets 19,935 10.2 18,087 18,551 16,336

Total assets 584,438 4.8 557,761 568,705 552,738

Financialliabilitiesheldfortrading 50,616 6.1 47,706 34,686 37,212

Otherfinancialliabilitiesatfairvaluethroughprofitorloss 1,716 9.7 1,565 1,815 1,607

Financialliabilitiesatamortizedcost 468,494 3.9 450,843 471,248 453,164

Depositsfromcentralbanksandcreditinstitutions 80,072 6.4 75,225 80,545 68,180

Depositsfromcustomers 282,050 10.3 255,798 278,496 275,789

Debtcertificates 83,107 (12.0) 94,394 86,669 85,180

Mortgagebondsandcoveredbonds 44,263 15.2 38,436 44,784 40,246

Otherdebtcertificates 38,844 (30.6) 55,957 41,885 44,933

Subordinatedliabilities 16,067 (13.4) 18,553 17,586 17,420

Otherfinancialliabilities 7,198 4.7 6,873 7,948 6,596

Liabilitiesunderinsurancecontracts 7,478 (6.1) 7,961 7,607 8,033

Otherliabilities 16,265 (3.1) 16,777 15,705 15,246

Total liabilities 544,569 3.8 524,852 531,062 515,262

Non-controllinginterests 1,730 21.3 1,426 1,562 1,556

Valuationadjustments (3,414) n.m. (128) (2,596) (770)

Shareholders’funds 41,552 31.5 31,610 38,677 36,689

Total equity 39,868 21.1 32,909 37,643 37,475

Total equity and liabilities 584,438 4.8 557,761 568,705 552,738

Memorandum item:

Contingentliabilities 38,530 13.9 33,819 36,360 36,441

14 Groupinformation

maincompetitors.Thisisbecauseitsbusiness

model,focusedontheretailsegmentandwith

ahighdegreeofcapillarityinitsdistribution

network,givesitagreatcapacitytogather

liquiditywithoutrecoursetothemarkets.In

fact,ithasthebestratioofcustomerdeposits

tototalassetswithinitspeergroupat48.3%at

thecloseofSeptember2011.

• Geographycontinuestobethemain

differentiatingfactorintheloan book.Onthe

onehand,thereisthepositiveperformance

ofLatinAmerica,ChinaandTurkey;onthe

other,weaknessinassetnewproduction

continuesinSpain.Finally,intheUnited

Statesgrowthisvariable,withthecorporate

segmentperformingparticularlywell.

• Customer fundsareperformingwell,

thankstothefavorabletrendindepositsin

practicallyallthegeographicalareas.Mexico

andSouthAmericastandoutinthisrespect.

InSpaintherewasahighrateofsuccessin

renewingtimedepositsgatheredayearago

andmaturingthisquarter.

• Theexchange rate hashadanegative

influenceoverthelast12months,andin

particularoverthequarter.Thefinalratesof

theMexicanpesohavedepreciatednotably,

inbothyear-on-yearandparticularly

quarter-on-quarterterms.Thisisthecurrency

withthebiggestinfluenceontheGroup’s

financialstatements.

Loans and advances to customers

Asof30-Sep-2011gross customer lending

amountedto€353billion,practicallythesame

figureasthepreviousquarter(down0.8%).This

ispartlyduetothenegativeimpactofexchange

ratesandalsothedeleveragingprocess

underwayinSpain.Overthelast12monthsthe

figurehasincreasedby2.8%.

Bybusiness areas,Mexicoisgrowingat8.0%

atconstantexchangerates(excludingtheold

mortgageportfolio),mainlyduetotheincrease

inconsumerfinanceandcreditcards(up23.4%

year-on-year).InSouthAmericaallitemsand

countriesintheregioncontinuedwithstrong

overallgrowth(up30.7%atconstantexchange

rates).IntheUnitedStates,thetarget

lower-riskportfoliossuchascorporatelending

Customer lending (Millioneuros)

30-09-11 ∆% 30-09-10 30-06-11 31-12-10

Domestic sector 191,330 (4.3) 199,991 201,053 198,634

Publicsector 26,096 8.8 23,986 25,966 23,656

Otherdomesticsectors 165,234 (6.1) 176,005 175,087 174,978

Securedloans 101,552 (4.0) 105,736 101,898 105,002

Commercialloans 5,918 (3.1) 6,107 6,102 6,847

Financialleases 5,151 (11.8) 5,839 5,338 5,666

Othertermloans 42,043 (10.3) 46,896 44,309 46,225

Creditcarddebtors 1,542 21.0 1,275 1,579 1,695

Otherdemandandmiscellaneousdebtors 2,713 9.3 2,482 3,783 2,222

Otherfinancialassets 6,314 (17.7) 7,671 12,077 7,321

Non-domestic sector 145,614 13.9 127,875 138,957 134,258

Securedloans 58,202 27.2 45,742 57,430 45,509

Otherloans 87,413 6.4 82,133 81,528 88,750

Non-performing loans 15,689 3.1 15,218 15,515 15,361

Domesticsector 11,156 2.4 10,894 11,112 10,953

Publicsector 133 38.8 96 132 111

Otherdomesticsectors 11,024 2.1 10,798 10,980 10,841

Non-domesticsector 4,533 4.8 4,324 4,403 4,408

Customer lending (gross) 352,633 2.8 343,084 355,526 348,253

Loan-lossprovisions (9,217) (1.3) (9,343) (9,304) (9,396)

Customer lending (net) 343,416 2.9 333,741 346,222 338,857

15Balancesheetandbusinessactivity

Customer lending (gross)(Billion euros)

343

September2010

331

September2009

352

September2011


+2.8% (1)352343

331

0

50

100

150

200

250

300

350

400

andresidentialrealestatehavemorethanoffset

thefallinloanstothedevelopersector.This

indicatesthattheshiftinthemixtowardsamore

sustainablebalancesheetisbeingcompleted.In

Eurasiatheloanbookgrewby45.4%

year-on-year,duepartlytotheincorporation

oftheTurkishbankGarantianditspositive

performanceinlending,andalsototheslight

riseinCorporateandInvestmentBanking(up

3.0%inthequarter).Finally,inSpain(andinline

withtherestofthesystem)therewasafallof

2.4%comparedwithSeptemberlastyear,dueto

thedeleveragingprocessmentionedabove.

Withinthedomesticsector,thegeneraltoneis

weaknessinnewproduction,aboveallinthose

itemsthataremostcloselyrelatedtocorporate

andbusinessactivity(corporatelending,

financialleasingandothertermloans).Secured

loans,whicharethosewiththebiggestrelative

weightandlowestassociatedrisk,showeda

notablestabilitycomparedwiththecloseof

30-Jun-2011,atatotalof€102billionasof

30-Sep-2011.

Inthenon-domestic sector,theannualincrease

of13.9%isduetothestrengthofbusiness

activity,particularlyinSouthAmerica,andthe

additionofGaranti.Theeffectofexchangerates

wasnegative.

Finally,NPAhaveremainedstablesince

December2009.

Customer funds

Thebalanceofcustomerfundsasof30-Sep-2011

was€419billion,ayear-on-yearincreaseof5.0%.

Off-balance-sheetfundsperformedworst,witha

fallof4.4%.Theywerestronglyhitbythecurrent

turmoilinthemarkets.

On-balance-sheet customer fundstotaled

€282billionasof30-Sep-2011(up10.3%

year-on-year).Ofnoteherewasthegood

performanceoftimedepositsinthedomestic

sectorthankstothehighratioofrenewalsover

thequarterofthetimedepositsgatheredayear

ago.Asaresult,thislineitemgrewby7.5%

Customer funds (Millioneuros)

30-09-11 ∆% 30-09-10 30-06-11 31-12-10

Deposits from customers 282,050 10.3 255,798 278,496 275,789

Domestic sector 146,284 33.2 109,848 135,420 133,629

Publicsector 30,672 n.m. 7,409 24,905 17,412

Otherdomesticsectors 115,612 12.9 102,438 110,515 116,217

Currentandsavingsaccounts 42,215 (7.7) 45,740 44,061 43,225

Timedeposits 51,182 7.5 47,599 52,188 49,160

Assetssoldunderrepurchaseagreementandother 22,215 144.1 9,100 14,266 23,832

Non-domestic sector 135,766 (7.0) 145,951 143,076 142,159

Currentandsavingsaccounts 78,127 15.0 67,930 75,002 74,681

Timedeposits 54,958 (25.4) 73,697 63,320 61,626

Assetssoldunderrepurchaseagreementandother 2,681 (38.0) 4,324 4,754 5,852

Other customer funds 136,588 (4.4) 142,902 144,175 146,188

Mutualfunds 38,361 (9.6) 42,422 40,527 41,991

Pensionfunds 73,870 (2.2) 75,567 77,051 78,763

Customerportfolios 24,357 (2.2) 24,913 26,596 25,434

Total customer funds 418,638 5.0 398,700 422,672 421,977

16 Groupinformation

year-on-year.Combinedwiththefallinthe

loan-bookinSpain,ithascontributedtothe

steadynarrowingoftheliquiditygapinBBVA’s

balancesheet.Inaddition,customerdeposits

inthenon-domesticsectorhavefallenby7.0%

year-on-year,basicallyduetothenegative

impactofexchangerates.

Off-balance sheet customerfundsclosedthe

thirdquarterat€137billion,4.4%downonthe

figureforthesamedatelastyear,and5.3%down

onthecloseofthepreviousquarter.Ofthese

funds,36.8%(€50billion)arelocatedinSpain,a

year-on-yeardropof8.4%andadeclineof3.9%

overthequarter.Thiscanbeexplainedlargely

duetothereductioninthevalueoftheassets

undermanagement,mainlyinmutualfunds

(down16.4%year-on-yearand3.6%

quarter-on-quarter).Itisworthpointingout

thataccordingtothelatestdatafromAugust

2011theeffectofthisfallinBBVAismuchless

significantthanintherestofthesystem,given

themoreconservativeprofileofitsmutual

funds.Inthethirdquarterof2011,thereal-estate

fundBBVAPropiedadchangeditslegalstatus

andbecameapubliccorporation(sociedad

anónima),whichmeansthatitisnolonger

accountedforasamutualfund.Becauseofthis,

thepreviousdatahavebeenrestatedtoensure

thattheyarecomparable.Pensionfundstotaled

€17billion(down1.6%year-on-yearand1.4%

quarter-on-quarter).BBVAhasmaintainedits

positionastheleadingpensionfundmanager

inSpain,withamarketshareof18.3%(June2011

data,thelatestavailable).

Intherestoftheworld,off-balance-sheetfunds

totaled€86billion,withayear-on-yearfallof

2.0%atcurrentexchangerates.Thesefunds

werealsoaffectedbythefallinthevalueof

assetsundermanagement.

Statement of changes in equity

Asof30-Sep-2011,BBVA’sequitytotaled

€39,868m,ariseoverthequarterof5.9%,despite

thenegativeeffectoftheexchangerate.Thiswas

thecombinedresultoftheearningsgenerated

inthequarter,thenewimplementationofthe

dividendoptionschemeandtheconversionof

theconvertiblebondintosharesinJuly2011.

Other customer funds (Millioneuros)

30-09-11 ∆% 30-09-10 30-06-11 31-12-10

Spain 50,225 (8.4) 54,802 52,254 52,482

Mutualfunds 20,220 (16.4) 24,179 20,966 22,316

Pensionfunds 16,741 (1.6) 17,019 16,986 16,811

Individualpensionplans 9,600 (2.6) 9,856 9,799 9,647

Corporatepensionfunds 7,141 (0.3) 7,162 7,186 7,164


Rest of the world 86,363 (2.0) 88,100 91,922 93,707

Mutualfundsandinvestmentcompanies 18,141 (0.6) 18,243 19,562 19,675

Pensionfunds 57,129 (2.4) 58,548 60,066 61,952


Other customer funds 136,588 (4.4) 142,902 144,175 146,188

398

September2010

382

September2009

418

September2011

+5.0% (1)

133 142136

249 255282

050100150200250300350400450

142133136

255249282

Customer funds(Billion euros)


Othercustomer

funds

Customerfunds onbalance

sheet

17Capitalbase

Asof30-Sep-2011,theBBVAGroup’scapital base,

calculatedaccordingtotheBISIIregulation,totaled

€41,120m,averysimilarfigureto30-June-2011

(down0.3%).Themostsignificantdifferencesin

thequarterinclude:anincreaseincorecapitalof

€855m,explainedbythegenerationofearnings

intheperiod,andthehigherdeductionfromthe

investmentmadeinCNCB.Inaddition,therewas

significantmovementincurrenciesinthequarter,

specificallythedepreciationoftheMexicanpeso,

whichhashadanegativeimpactonthecapital

base.

Risk-weighted assets(RWAs)wereup1.3%

inthequarterto€325,458m.Thisgrowth

isfundamentallyexplainedbythestrong

performanceofactivityinLatinAmerica

andbytheappreciationofthedollarand

othercurrenciesinSouthAmerica.Another

differentiatingkeyqualityaspectofBBVAversus

itsEuropeanpeersisthehighRWAdensityand

itsstabilitythroughtime.

Theminimum capital requirements(8%of

RWA)totaled€26,037m,makingthecapital

basesurplusatthecloseofSeptemberreach

€15,083m,thatis,57.9%abovetheminimum

requiredlevels.

Asof30-Sep-2011,core capitalwasup3.0%with

respecttotheJune2011figureandamountedto

Capitalbase

Capital base (BIS II Regulation) (Millioneuros)

30-09-11 30-06-11 31-03-11 31-12-10 30-09-10

Shareholders'funds 41,552 38,677 38,107 36,689 31,610

Adjustmentsanddeductions (11,923) (11,904) (11,654) (8,592) (8,642)

Mandatoryconvertiblebonds - 2,000 2,000 2,000 2,000

Core capital 29,628 28,773 28,452 30,097 24,969

Preferenceshares 5,157 5,114 5,128 5,164 5,165

Deductions (2,733) (2,452) (2,367) (2,239) (1,900)

Capital (Tier I) 32,053 31,435 31,214 33,023 28,234

Subordinateddebtandother 11,800 12,266 12,613 12,140 12,955

Deductions (2,733) (2,452) (2,367) (2,239) (1,900)

Other eligible capital (Tier II) 9,067 9,814 10,246 9,901 11,055

Capital base 41,120 41,249 41,460 42,924 39,289

Minimumcapitalrequirement(BISIIRegulation) 26,037 25,703 25,523 25,066 24,506

Capital surplus 15,083 15,547 15,937 17,858 14,783

Risk-weighted assets 325,458 321,282 319,044 313,327 306,319

BIS ratio (%) 12.6 12.8 13.0 13.7 12.8

Core capital (%) 9.1 9.0 8.9 9.6 8.2

Tier I (%) 9.8 9.8 9.8 10.5 9.2

Tier II (%) 2.8 3.1 3.2 3.2 3.6

54.956.7 56.8 56.5 56.5

0

15

30

45

60

75

RWA’s / Total assets(Percentage)

September2008

September2009

September2010

December2007

September2011

53.5 53.3 54.1 54.9 55.7

18 Groupinformation

andinsuranceentities,standsat€9,067m.This

representsa7.6%decreaseinthequarterdue

totheinvestmentinCNCBandtothefallin

unrealizedcapitalgains.

Tosumup,theBISratioasof30-September-2011

was12.6%withaclearpositiveevolutioninthe

qualityofitscomponentssincethestartofthe

crisis.

Ratings

Severalactionsweretakenontheratingsin

EuropeinOctober.InSpain,Fitchdowngraded

thesovereign(KingdomofSpain)bytwo

notches,fromAAtoAA–withanegativeoutlook,

whichresultedinactionsfortheSpanish

bankingsystem.BBVA’sratingdecreasedtoA+

fromAA–.Likewise,Standard&Poor’suniversally

downgradeditsratingsfortheSpanishbanking

system.BBVA’sratingfelltoAA–fromAA,with

anegativeoutlook.Thesovereignratingwas

alsodowngradedtothesamelevelasthatof

BBVA.Inlinewiththeothertworatingagencies,

Moody’scompletedinOctoberitsSpanish

sovereignratingrevision,whichimpliedatwo

notchdowngradetoA1(negativeoutlook).This

actionhasalsohadadirectimpactonSpanish

banks’ratings.BBVA’sratingwasdowngraded

onenotchtoAa3(negativeoutlook).Thisrating

isonenotchaheadofthesovereignone.

€29,628m,andacoreratioof9.1%.Theorganic

generationofcapitalinthequarterwas15

basispoints,netoftheimpactofthecurrency

evolutionandotherfactors.

TheTier Iratio,9.8%,fellwithrespectto

30-Jun-2011by6basispoints.Thelevelof

preferencesharesissimilartothatinthe

previousquarter,at€5,157m,or16.0%oftotal

bankcapital.

Therestoftheeligiblecapital,Tier II,which

mainlyconsistsofsubordinateddebt,surplus

genericprovisions,eligibleunrealizedcapital

gainsandthedeductionforholdingsinfinancial

Ratings

Long term Short term Financial strength Outlook

Moody’s Aa3 P–1 B– Negative

Fitch A+ F–1+ B Negative

Standard&Poor’s AA– A–1+ – Negative

Capital base: BIS II ratio(Percentage)

Tier II

Core capital

Tier I

5.74.5

4.13.6 2.8

7.37.8

9.4 9.29.8

5.86.4

8.0 8.2

9.1

0

2

4

6

8

10

12

14

December2007

13.0

5.8

7.3

5.7

September2008

12.3

6.4

7.8

4.5

September2009

13.4

8.0

9.4

4.1

September2010

12.8

8.2

9.2

3.6

September2011

12.6

9.1

9.8

2.8

19Riskmanagement

Credit risk

The third quarter of 2011oncemorefeatured

stabilityinthemainindicatorsofcreditquality

withrespecttothecloseof2010.TheNPAratio

closedat4.1%,thecoverageratioat60%andthe

riskpremiumforthequarterstoodat1.01%.

AsofSeptember30,2011,thevolumeoftotal

riskswithcustomers(includingcontingent

liabilities)totaled€390,723m,whichisvery

similartothefigurefromthepreviousquarter

(€391,380m).Thisflatdevelopmentisexplained

inpartbythedepreciationofthemaincurrencies

againsttheeuro(atconstantexchangerates,

lendingfell0.1%inthequarter)andalsobythe

deleveragingprocessobservedinSpain.This

trendmightincreaseinthecomingmonths,

thoughBBVAwillbeaffectedtoalesserdegree

thanthesystemaverage.

Non-performing loans haveremainedstable

sinceDecember2009andreached€15,970m.

Therehasbeenadecreaseinnew

Riskmanagement

Variations in non-performing assets (Millioneuros)

3Q11 2Q11 1Q11 4Q10 3Q10

Beginning balace 15,790 15,528 15,685 15,560 16,137

Entries 2,918 3,713 2,804 3,852 3,051

Recoveries (1,874) (2,484) (1,882) (2,479) (2,116)

Net variation 1,044 1,229 922 1,373 935

Write-offs (876) (939) (1,140) (1,269) (1,119)

Exchangeratedifferencesandother 12 (28) 61 21 (393)

Period-end balance 15,970 15,790 15,528 15,685 15,560

Memorandum item:

Non-performingloans 15,689 15,515 15,210 15,361 15,218

Non-performingcontingentliabilities 281 275 319 324 342

Credit risk management (1) (Millioneuros)

30-09-11 30-06-11 31-03-11 31-12-10 30-09-10

Non-performingassets 15,970 15,790 15,528 15,685 15,560

Totalrisks 390,723 391,380 383,043 384,069 376,421

Provisions 9,503 9,576 9,490 9,655 9,641

Specific 6,584 6,485 6,516 6,823 6,552

Genericandcountry-risk 2,919 3,090 2,974 2,832 3,089

NPAratio(%) 4.1 4.0 4.1 4.1 4.1

NPAcoverageratio(%) 60 61 61 62 62

(1)Includingcontingentliabilities.

Non-performing assets(Million euros)

15560 15685 15528 1579015970

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,00015,970

September2011

December2010

15,685

March2011

15,528

September2010

15,560+1.1%

15,790

June2011

20 Groupinformation

improvedto140%inSouthAmerica(138%asof

30-Jun-2011).Inturn,itfellinEurasiato118%(144%

asof30-Jun-2011)andto128%inMexico(134%as

of30-Jun-2011).Additionally,itisworthnotingthat

58.9%oftheGroup’srisksarecollateralized.

Economic capital

Attributableeconomicriskcapital(ERC)

consumptionamountedto€28,946masof

30-Sep-2011,7.2%uponthefigureasof

30-Jun-2011.Thisincreaseisduetothe

recalibrationofthecreditriskmodelsinSpainin

themonthofAugust.

AsistobeexpectedfromBBVA’sprofile,most

ofthisfigure(64.3%)iscreditriskonportfolios

originatedintheGroup’sbranchnetworkfromits

owncustomerbase.

Marketriskcontinuestobetheleastrelevant

item(1.8%),giventhenatureofBBVA’sbusiness

anditspolicyofminimalproprietarytrading.It

remainsatasimilarleveltothepreviousquarter.

Equityrisk(10.1%)basicallyreflectstheportfolio

ofHoldingsinIndustrial&FinancialCompanies

andthestakeinCNCB.Itslevelisalsosimilar

tothatatthecloseofthepreviousquarter.The

structuralbalance-sheetrisk,originatingfromthe

managementoftheGroup’sstructuralinterest-rate

riskandexchange-raterisk,stoodat7.7%.Finally,

operationalriskstoodat6.9%oftotalERC.

non-performingassetswithrespecttothe

previousquarter,aswellasinrecoveries.The

latter,however,isdueprimarilytotheseasonal

natureofthisperiod,especiallyconsideringthe

summervacationperiodinSpain.Nevertheless,

therateofrecoveriesovernewNPAremainsata

solidlevel(64.2%).

TheNPA ratio oftheGroupstoodat4.1%and

remainedinastablerangewithrespectto

recentquarters.Brokendownbybusinessarea,

theNPAratioroseslightlyinSpain,Mexicoand

Eurasia.ThisvariationinSpainisduetothe

aforementioneddecreaseinlending,astheNPA

asof30-Sep-2011remainedstableascompared

tothefigureasof30-Jun-2011.TheUnitedStates

maintaineditsdownwardtrendintheNPAratio,

andSouthAmericaclosedanotherquarterwith

animprovementof9basispointswithrespectto

thefigureforJune2011.

Coverage provisionsforriskswithcustomers

amountedto€9,503m,averysimilarfigureto

thatfromthesecondquarteroftheyear.Ofthis

total,genericprovisionsreached2,886mand

represented30.4%.

Finally,theNPA coverage ratio stoodat60%,

whichissimilartothatofthepreviousquarter.By

businessarea,itstoodat42%inSpain(43%atthe

endofthepreviousquarter),itincreasedto69%

intheUnitedStates(67%asof30-Jun-2011)and

62.0 62.0 61.0 61.0 60.0

4.1 4.1 4.1 4.0 4.1

0

10

20

30

40

50

60

70

September2011

December2010

March2011

June2011

September2010

62 62 61 61 60

4.1 4.1 4.1 4.0 4.1

NPA and coverage ratios(Percentage)

NPA ratio

Coverageratio

Recoveries over entries to NPA(Percentage)

69.4

64.467.1 66.9

64.2

0

15

30

45

60

75

4Q 1Q 2Q2010

3Q 3Q2011

69.464.4

67.1 66.964.2

21TheBBVAshare

Therewasrenewedturmoilinthefixed-incomeandequity

marketsinthethirdquarterof2011,mainlyduetothedeepening

sovereigndebtcrisisandworseningexpectationsofeconomic

growth,bothinEuropeandglobally.Thishasledtoriskaversion,

mainlyfocusedontheeurozone,andasignificantfallinthemain

stock market indices. TheIbex35wasdownby17.5%,inlinewith

thedropintheStoxx50,whichlost15.7%.Theperformanceofthe

U.S.marketwassimilar,withtheS&P500indexlosing14.3%.

TheEuropean banking sectorwasaffectedbothbythe

perceptionofsovereignriskandbyfinancialpressuredueto

uncertaintyregardingthescopeandpossiblesolutionofthe

Europeancrisis.Inthisenvironment,thebankswithlower

exposuretoperipheralcountriesdebtandbettermanagement

oftheirliquidityandbalancesheethaveperformedbetteronthe

equitymarkets.Thekeystockmarketindicatorforthesector,the

StoxxBanksindexofEuropeanbanks,wasdown27.9%.

BBVA’s resultsforthesecondquarterof2011werebetterthanthe

consensusestimatesandwerefavorablyreceived.Analystsvalue

thefactorsthatsetBBVAapart,aboveallintermsofcreditquality,

thepotentialofitsinternationalbusinessanditssolidcapitalbase.

TheyalsocontinuetovaluethestrengthofitsearningsinMexico

andSouthAmerica.Elsewhere,theyhavealsovaluedpositively

theimprovedmarginsintheUnitedStatesfranchise,aswellas

BBVA’sstableNPAratiosinSpain,whereithasperformedbetter

thanitsdomesticcompetitors.

TheBBVA sharewasdown23.6%inthequarter,closingat

€6.18pershare,resultinginamarketcapitalizationof€29,817

million.Thisputstheprice/bookvalueratioat0.7,theP/Eratio

(calculatedonestimatedmedianearningsfor2011according

totheconsensusamongBloomberganalysts)at6.5,andthe

dividendyield(alsocalculatedonthemediandividendsper

shareestimatedbyanalystsfor2011ascomparedtothequoted

priceasofSeptember30)at6.8%.ThefallintheBBVAshare

pricewasgreaterthanthatregisteredbytheIbex,butbelowthe

performanceofthesectorinEurope(StoxxBankswasdown

27.9%)andtheeurozone(EuroStoxxBanksdown34.3%).In

thecurrentenvironmentofmacroeconomicweaknessandthe

difficultaccesstofinance,themarkethasvaluedtheprofileof

BBVA’sresults,itsdiversificationviaemergingmarketsandthe

advantagesofaretailcustomer-centricbusiness.

Inthethirdquarteroftheyear,theaveragedailytrading volume

was70millionshares,withanaveragevalueof€475million.

Intermsofshareholder remuneration,onSeptember15a

dividendpayoutwasannouncedof€0.10pershare(up11.0%

comparedwiththeequivalentdividendpaymentlastyear)as

partofthe“dividendoption”systemofflexibleremuneration

agreedattheGeneralShareholdersMeetingon11-Mar-2011.

Thisplanoffersshareholdersthechancetoreceiveanamount

equivalenttooneofthetraditionalinterimdividendsfor2011

ineithernewordinarysharesorincash.Thepercentageof

shareholderswhohaveoptedtoreceivenewBBVAshareswas

over91%,whichoncemoreconfirmsthepopularityofthisnew

remunerationprogram.

TheBBVAshare

The BBVA share and share performance ratios

30-09-11 30-06-11

Numberofshareholders 981,348 921,650

Numberofsharesissued 4,824,793,497 4,551,602,570

Dailyaveragenumberofsharestraded 69,688,609 47,764,365

Dailyaveragetrading(millioneuros) 475 387

Maximumprice(euros) 8.38 8.95

Minimumprice(euros) 5.03 7.34

Closingprice(euros) 6.18 8.09

Bookvaluepershare(euros) 8.61 8.50

Marketcapitalization(millioneuros) 29,817 36,822

Price/Bookvalue(times) 0.7 1.0

PER(Price/Earnings;times) 6.5 7.7

Yield(Dividend/Price;%) 6.8 5.2

Share price index(30-09-10=100)

31-12-10 31-03-1130-09-10 30-06-11 30-09-11

Stoxx 50

BBVA

Europe StoxxBanks

50

60

70

80

90

100

110

120

130

140

50

60

70

80

90

100

110

120

130

140

22 Groupinformation

AtBBVAweareconcernednotonlyabouthowwespendthe

moneyweearn,butaboveallhowweearnit.Thatiswhywe

areworkingtointegratecorporateresponsibility(CR)across

thevaluechain,fromthedesignoftheproduct,itsadvertising

andmarketing,tothemanagementofitsrisks.Asaresult,

BBVAremainsoneoftheleadingglobalcompaniesinterms

ofsustainabilityandrepeatsitslistingontheDowJones

SustainabilityIndex(DJSI).BBVAhasalsobecomeamodelat

theEuropeanlevelinCRcommunication.Itwasdistinguishedat

theDigitalCommunicationAwards2011foritscommunication

strategybasedonitsongoingdirect,transparentandsimple

conversationwithallitsstakeholders.Thisperiodhasalsoseen

thepublicationoftheCR2010reportsforBBVACompassand

BBVAChile.Belowisasummaryofthemostoutstandingactivity

relatedtocorporateresponsibilityduringthequarter.

Financial Literacy

BBVABancomerhasincludedapersonalfinanceworkshopdealing

withlifeinsuranceinits‘Adelante con tu futuro’(Forwardwithyour

future),afinancialeducationprogram.Theaimistogivepeople

theknowledgeandskillstheyneedtomakethebestlifeinsurance

choicesandbettermanagetheirpolicy.In2011BBVACompass

hasalsobeguntheCrédito Inteligente(Smartcredit)scheme,in

whichthebank’semployeesvolunteertheirtimeinschoolsinthe

communitieswheretheyworkinordertoshareinformationwith

youngpeopleabouttheresponsibleuseofcredit.

Responsible Banking

Human Resources.ThemagazineActualidad EconómicahaschosenBBVAas‘thebestcompanytoworkfor.’Theaward

recognizestheeffortandcommitmentmadebytheGroupto

the110,000employeesontheBBVAteam.Criteriasuchastalent

management,remunerationpolicy,theworkingenvironment,

employeetrainingandtheirownopinionswerekeyfactorsin

decidingthattheGroupisthebestplacetowork.BBVAChilehas

alsobeenrecognizedasbeingamongthemostsociallyresponsible

companiesinthecountry,accordingtothenationalrankingof

CorporateSocialResponsibility2011drawnupbythemagazineQué

PasaandtheProhumanaFoundation.InSpain,BBVAhasreached

anagreementwiththetradeunionstoregulateandimprovethe

conditionsunderwhichteleworkschemesareimplemented.

The Environment. BBVAhasreinforceditscommitmentandstrategyonquestionsrelatingtoclimatechange,ascanbeseenin

thelatesteditionoftheGlobal500Report2011publishedbythe

CarbonDisclosureProject(CDP).TheGrouphasimprovedits

ratingby10pointsinthisanalysis,whichassessesclimate

change-relatedstrategyandmanagementatthe500biggest

companiesbymarketcapitalization.

Customer focus. BBVABancomerhasworkedwithNacionalFinancieratolaunchtheMicronegocios(micro-enterprise)card,

whichisdesignedtocoverthefinancingneedsofmicro-enterprises

andthussupportthecountry’sproductivesector.

Community Involvement

FranciscoGonzálezpresentedthethirdBBVAINTEGRAAwardto

thefirmLantegiBatuakfromVizcaya,whichhasbeengenerating

innovativeandqualityjobopportunitiesforpeoplewithdisabilities

overthelast25years.TheBBVAINTEGRAAwardcarrieswithit

prizemoneyof200,000euros.Itsaimistofosterexcellenceand

innovationintheintegrationofpeoplewithdisabilitiesintothe

workforceandtopromoteequalopportunitiesandabetterqualityof

lifeforthisgroup.BBVAEspañaandFundosa,thebusinessdivision

oftheFundaciónONCE,havealsosignedafinancialagreement

throughwhichtheBankmakesavailable10millioneurostothe

companytosupportthedevelopmentofSpecialEmployment

Centersandpromotethehiringofpeoplewithdisabilities.

BBVA and Sustainability Indices

Asoftheendofthequarter,BBVA’sweightingsinthemain

sustainabilityindiceswereasfollows:

Formoreinformationandcontactdetails,pleasevisit

www.bancaparatodos.com

Corporateresponsibility

Main sustainability indices in which BBVA participates

Weighting (%)

DJSIWorld 0.52

DJSIEurope 1.18

DJSIEurozone 2.48

ASPIEurozoneIndex 2.13

EthibelSustainabilityIndexExcellenceEurope 1.47

EthibelSustainabilityIndexExcellenceGlobal 0.85

MSCIWorldESGIndex 0.36

MSCIWorldexUSAESGIndex 0.69

MSCIEuropeESGIndex 1.24

MSCIEAFEESGIndex 0.78

FTSE4GoodGlobal 0.35

FTSE4GoodGlobal100 0.58

FTSE4GoodEurope 0.81

FTSE4GoodEurope50 1.31

23Businessareas

Inthissectionwediscussthemoresignificantaspectsofthe

activitiesandearningsoftheGroup’sdifferentbusinessareas,along

withthoseofthemainunitswithineach,plusCorporateActivities.

Specifically,wedealwiththeincomestatement,thebalancesheet

andthemainratios:efficiency,NPAratio,NPAcoverageratioand

theriskpremium.

Followingtheacquisitionof24.9%oftheTurkishbankGaranti

anditsincorporationintothefinancialstatementsoftheGroup

startinginMarch2011,BBVAbegantohaveasignificantpresence

inEuropeandAsiaintermsofitsbalancesheetandearnings.

Inaddition,sincethestartofthecrisis,theimportanceofthe

geographicallocationofbusinesshasbeenclearforproviding

aproperperceptionofrisksandanimprovedestimateofthe

capacityforfuturegrowth.Finally,thenewregulationsfavoralocal

managementofstructuralrisksthatavoidspossiblecontagion

betweenfinancialsystems.Forthesemotives,thebusinesses

includedinSpainandPortugalandWB&AMduring2010havebeen

regroupedintothefollowingareas:

• Spain:includesBBVAbusinessesinallsegments,withinthe

country.

• Eurasia:coversallBBVAactivityintherestofEuropeandAsia,

includingtheGroup’sstakeinGaranti.

Thisrespondstotheincreaseddemandforgeography-specific

informationfromdifferentusers,includingtheregulators.

Inaddition,itisworthnotingthatin2010liquidityconditionson

thefinancialmarketshavemadeaccesstofinancemoreexpensive

forSpanishcreditinstitutions.BBVAhasbeennoexceptiontothis,

andthussinceJanuary2011,andwithretroactiveeffectfor2010

data,theliquiditypremiumimputedtobusinessareasthroughthe

systemofinternalreferencerateshasbeenincreased.Theaimisto

adapttothenewrealityofthefinancialmarkets.

Thebusiness areasarenoworganizedasfollows:

• Spain,whichincludes:Theretailnetwork,withthesegmentsof

individualcustomers,privatebanking,andsmallbusinessand

retailbankinginthedomesticmarket;CorporateandBusiness

Banking(CBB),whichhandlestheneedsofSMEs,corporations,

governmentanddevelopersinthecountry;Corporateand

InvestmentBanking(C&IB),whichincludesactivitywithlarge

corporationsandmultinationalgroups;GlobalMarkets(GM),

withthetradingflooranddistributionbusinessinthedomestic

market;andotherunits,amongthemBBVASegurosandAsset

Management(managementofmutualandpensionfundsin

Spain).

• Eurasia,whichincludesbusinessintherestofEuropeandAsia.In

2010itwasreportedeitherinSpainandPortugal(BBVAPortugal,

ConsumerFinanceItalyandPortugal,andtheretailbusinessof

branchesinParis,LondonandBrussels),orinWB&AM(Corporate

andInvestmentBanking,Markets,CNCBandCIFH).Additionally,it

alsoincludestheinformationonGaranti.

• Mexico:includesthebanking,pensionsandinsurance

businessesinthecountry.

• United States:encompassestheGroup’sbusinessintheUnited

StatesandintheCommonwealthofPuertoRico.

• South America:includesthebanking,pensionsandinsurance

businessesinSouthAmerica.

Aswellastheunitsindicated,alltheareasalsohaveallocations

ofotherbusinessesthatincludeeliminationsandotheritemsnot

assignedtotheunits.

Finally,theaggregateofCorporate Activitiesincludestherest

ofitemsthatarenotallocatedtothebusinessareas.These

basicallyincludethecostsofheadofficeswithastrictlycorporate

function,certainallocationstoprovisionssuchasearlyretirements

andothersalsoofacorporatenature.CorporateActivitiesalso

performsfinancialmanagementfunctionsfortheGroupasawhole;

essentiallymanagementofassetandliabilitypositionsforinterest

ratesintheeuro-denominatedbalancesheetandforexchange

rates,aswellasliquidityandcapitalmanagementfunctions.The

managementofassetandliabilityinterest-rateriskincurrencies

otherthantheeuroisrecordedinthecorrespondingbusiness

areas.ItalsoincludestheIndustrialandFinancialHoldingsunitand

theGroup’snon-internationalrealestatebusinesses.

Inaddition,supplementary informationisprovidedoftheglobal

business(WB&AM)carriedoutbytheBBVAGroup.Homogeneous

productsandrisks,andcommoncharacteristicsofthecustomers

served,makethisaggregateofbusinessesrelevanttobetter

understandtheBBVAGroup.

Furthermore,asusualinthecaseofTheAmericas,bothconstant

andcurrentexchange rateshavebeenappliedwhencalculating

year-on-yearvariations.

TheGroupcompilesreportinginformationonalevelas

disaggregatedaspossible,andalldatarelatingtothebusinesses

theseunitsmanageisrecordedinfull.Thesebasicunitsare

thenaggregatedinaccordancewiththeorganizationalstructure

establishedbytheGroupathigher-levelunitsand,finally,the

businessareasthemselves.Similarly,allthecompaniesmakingup

theGrouparealsoassignedtothedifferentunitsaccordingtothe

geographicalareaoftheiractivity.

Oncethecompositionofeachbusinessareahasbeendefined,

certainmanagement criteriaareapplied,ofwhichthefollowingare

particularlyimportant:

Businessareas

24 Businessareas

• Capital:Capitalisallocatedtoeachbusinessaccordingto

economicriskcapital(ERC)criteria.Thisisbasedontheconcept

ofunexpectedlossataspecificconfidencelevel,depending

ontheGroup’scapitaladequacytargets.Thesetargetshave

twolevels:thefirstiscoreequity,whichdeterminesthecapital

allocated.Thisamountisusedasabasisforcalculating

theprofitabilityofeachbusiness.Thesecondlevelistotal

capital,whichdeterminestheadditionalallocationintermsof

subordinatedebtandpreferredsecurities.Thecalculationofthe

ERCcombinescreditrisk,marketrisk,structural

balance-sheetrisk,equitypositions,operationalriskandfixed

assetandtechnicalrisksinthecaseofinsurancecompanies.

Thesecalculationsarecarriedoutusinginternalmodelsthat

havebeendefinedfollowingtheguidelinesandrequirements

establishedundertheBaselIIcapitalaccord,witheconomic

criteriaprevailingoverregulatoryones.

ERCisrisk-sensitiveandthuslinkedtothemanagementpolicies

ofthebusinessesthemselves.Itstandardizescapitalallocation

betweentheminaccordancewiththerisksincurredandmakes

iteasiertocompareprofitabilityacrossunits.Inotherwords,itis

calculatedinawaythatisstandardandintegratedforallkinds

ofrisksandforeachoperation,balanceorriskposition,allowing

itsrisk-adjustedreturntobeassessedandanaggregatetobe

calculatedfortheprofitabilitybyclient,product,segment,unitor

businessarea.

• Internal transfer prices:Internaltransferratesareappliedto

calculatethenetinterestincomeofeachbusiness,onboththe

assetsandliabilities.Theseratesarecomposedofamarket

ratethatdependsontherevisionperiodoftheoperation,

andaliquiditypremiumthathasbeenrevisedasindicated

above.Earningsaredistributedacrossrevenue-generatingand

distributionunits(e.g.,inassetmanagementproducts)atmarket

prices.

• Assignment of operating expenses:Bothdirectandindirect

costsareassignedtothebusinessareas,exceptwherethereis

noclearlydefinedrelationshipwiththebusinesses,i.e.whenthey

areofaclearlycorporateorinstitutionalnaturefortheGroupas

awhole.

• Cross selling:insomecases,consolidationadjustmentsare

requiredtoeliminateshadowaccountingentriesintheresultsof

twoormoreunitsasaresultofcross-sellingincentives.

Recurrent economic profit by business area (January-September2011.Millioneuros)

Adjusted net

attributable profitEconomic profit

(EP)

Spain 1,339 571

Eurasia 654 265

Mexico 1,316 955

SouthAmerica 577 323

TheUnitedStates 222 12

CorporateActivities (553) (549)

BBVA Group 3,555 1,576

Mayor income statement items by business area and presence in emerging and developed countries(Millioneuros)

Business areas Geography

BBVA Group Spain Eurasia Mexico

South America

The United States

Corporate Activities Emerging (1) Developed


Netinterestincome 9,676 3,308 516 2,874 2,255 1,182 (460) 5,398 4,738

Grossincome 15,052 4,900 1,319 4,208 3,214 1,711 (300) 8,228 7,124

Operatingincome 7,753 2,806 887 2,686 1,751 613 (991) 5,001 3,742

Incomebeforetax 4,145 1,633 837 1,722 1,385 305 (1,737) 3,620 2,262

Net attributable profit 3,143 1,162 705 1,275 754 218 (970) 2,508 1,605


Netinterestincome 10,182 3,734 247 2,748 1,843 1,384 226 4,614 5,343

Grossincome 15,964 5,461 743 4,126 2,814 1,963 857 7,205 7,901

Operatingincome 9,322 3,389 528 2,717 1,599 828 260 4,540 4,522

Incomebeforetax 5,260 2,653 495 1,716 1,277 308 (1,188) 3,211 3,236

Net attributable profit 3,668 1,881 418 1,254 698 223 (808) 2,172 2,304

(1)Mexico,SouthAmerica,TurkeyandAsia.

25Spain

Spain

Income statement (Millioneuros)

Spain

January-Sep. 11 ∆% January-Sep. 10

Net interest income 3,308 (11.4) 3,734

Netfeesandcommissions 1,135 (10.8) 1,273

Nettradingincome 91 (4.6) 95

Otherincome/expenses 365 1.9 358

Gross income 4,900 (10.3) 5,461

Operatingcosts (2,093) 1.0 (2,072)

Personnelexpenses (1,274) 1.2 (1,259)

Generalandadministrativeexpenses (745) 0.6 (741)

Depreciationandamortization (74) 2.5 (72)

Operating income 2,806 (17.2) 3,389

Impairmentonfinancialassets(net) (1,246) 36.1 (916)

Provisions(net)andothergains(losses) 73 (59.3) 179

Income before tax 1,633 (38.4) 2,653

Incometax (472) (38.8) (770)

Net income 1,162 (38.3) 1,883

Non-controllinginterests - n.m. (2)

Net attributable profit 1,162 (38.2) 1,881

Balance sheet (Millioneuros)

Spain

30-09-11 ∆% 30-09-10

Cashandbalanceswithcentralbanks 9,142 74.2 5,249

Financialassets 73,128 5.6 69,232

Loansandreceivables 222,449 (2.1) 227,204

Loansandadvancestocustomers 207,980 (2.2) 212,693

Loansandadvancestocreditinstitutionsandother 14,469 (0.3) 14,512

Tangibleassets 932 (4.8) 979

Otherassets 3,310 12.8 2,933

Total assets/Liabilities and equity 308,960 3.4 305,597

Depositsfromcentralbanksandcreditinstitutions 37,664 14.0 33,047

Depositsfromcustomers 120,530 7.1 112,564

Debtcertificates - n.m. 1

Subordinatedliabilities 5,880 2.7 5,727

Inter-areapositions 71,376 (13.6) 82,645

Financialliabilitiesheldfortrading 45,442 3.4 43,929

Otherliabilities 17,626 1.7 17,336

Economiccapitalallocated 10,443 0.9 10,349

26 Businessareas

TheareaofSpainincludesallthesegmentsof

BBVA’sbankingandnon-bankingbusinessinthe

country.

Inthethird quarter of 2011,Spanishcredit

institutionshaveoperatedunderasetofspecial

circumstancesaffectingthesector:abank

restructuringprocess,gradualdeleveraging,

growingdifficultiesininternationalwholesale

fundingmarkets,moderateeconomicgrowth,

andnegativedevelopmentsinthefinancial

markets.Amongthehighlightsofthebank

restructuringprocesshavebeentheIPOs

ofBankia,CaixaBankandBancaCívica,the

announcementofmergersbetween

medium-sizedbanks(suchasPopularand

Pastor),recentinterventionsinsomesavings

banks,morebranchclosuresinthesectorsince

theonsetofthecrisis(1,768fewerinthefirsthalf

oftheyear,thelatestavailabledata),andthe

trendtowardsareturntonormalintheasset

andliabilitypricesinthesystem.Therewillbe

opportunitiesforbanksthatarewellpositioned

inthisenvironment.

Thegradualdeleveragingprocess,whichis

necessaryandpositivefortheSpanisheconomy,

hasledtoayear-on-yearfallof3.5%incorporate

andhouseholdlending(latestavailablefigures

forAugust).Individualshavecontinuedto

reducetheirconsumerspending,whilenew

homemortgageshavefallenby46%inthe

sametimeframe(alsoAugustfigures);atthe

sametime,companieshavesteadilyreduced

theirhighlevelsofcreditleverage.Asaresult,

thestockofcreditonthebalancesheetsofthe

commercialnetworkshasfallenby€56,100m

sincethestartoftheyear.Thecostofnew

financehasincreasedby75basispointsinthis

period,duetothemoreexpensiveinterbank

marketconditions.However,thevolumeofnew

depositsandotheron-balance-sheetfundsis

upby€12,264msinceSeptember2010,thus

reducingdependenceonwholesalemarkets

overthelast12months.Therateofrenewalof

themostconservativedepositproductsunder

betterconditionsthanlastyearhasbeenhigh,

thusincreasingcustomerspreadsinthesector.

BBVAhasconsolidateditsleadingposition

inbothlendingandcustomerfundsinthe

householdandcorporatesegments.Ithasalso

increasedprofitability,measuredasthenet

interestincomeoverATA,fromtheminimum

levelsofthefourthquarterof2010.Thisis

largelytheresultofincreasingmarketsharein

theproductsinvolvingthebiggestcustomer

loyalty,adaptingcommercialproductand

servicestothespecificneedsofeachcustomer,

andadequateriskcontrolprocedures.

Gross lending to customersintheareaasof

30-Sep-2011amountedto€212,639m,afallof

2.4%year-on-year;however,yieldonloanswas

upby46basispointsonthefourthquarterof

2010.

Customer fundsundermanagement(deposits,

mutualfundsandpensionfunds)amountedto

€150,182m.BBVAmadeasignificantgainof16

basispointsinmarketshareinhouseholdand

corporatecurrentandsavingsaccountstoreach

9.6%(latestavailabledatatoAugust).Inaddition,

theareahasimproveditspositioningintime

depositsandmutualfundsby76basispoints

sincethestartoftheyear.Morethan73%of

fundscorrespondtohouseholdcustomers,who

haveincreasedtheirloyaltytotheBank.

Inoff-balance-sheet fundstheGrouphas

maintaineditsmarketshareinmutualfunds

at16.8%(Septemberdata),withassetsunder

managementinSpainof€20,220m.Theamount

fellby3.6%inthethirdquarterasthevalueof

assetsundermanagementdeteriorateddue

tothemarketturmoil.Itisworthpointingout

that,accordingtothelatestdatafromAugust

2011,theeffectofthisfallinBBVAismuchless

significantthanintherestofthesystem,given

themoreconservativeprofileofitsmutual

Significant ratios (Percentage)

Spain

30-09-11 30-06-11 30-09-10

Efficiencyratio 42.7 40.7 37.9

NPAratio 4.9 4.7 4.8

NPAcoverageratio 42 43 47

Riskpremium 0.77 0.79 0.40

Spain highlights in the third quarter

• Improvedmarketsharesandspreads.

• Stabilizationofthenetinterestincome.

• Expensesremainflat.

• Riskindicatorskeptincheck.

27Spain

resultedingross incomefortheninemonths

ended30-Sep-2011of€4,900m.

Operatingcostsinthearearemaincloselyin

check.Intheninemonthsended30-Sep-2011

theytotaled€2,093m,ayear-on-yearincreaseof

1.0%,belowtherateofinflation(3.1%).Asaresult,

theoperating incomefortheninemonths

ended30-Sep-2011was€2,806m(€3,389mfor

thesameperiodof2010).

Themainasset qualityindicatorsshowaslight

increaseintheNPAratio,to4.9%(4.7%asof

30-Jun-2011).Thisisbasicallybecauseofthe

reductioninlendingmentionedabove,since

thebalanceofNPAasof30-Sep-2011isstable

comparedwiththefigurefor30-Jun-2011.The

figureforBBVAcompareswithanincreasingNPA

ratiointhemarketthatstandsat7.2%according

tothelatestavailablefigures(August).The42%

coverageratioremainsatsimilarlevelstothe

previousquarter(43%asof30-Jun-2011).Finally,

thelevelofnewNPAhasfallensignificantly

andtheratioofrecoveriesovernewNPAhas

alsoimproved

Documents

QUARTERLY REPORT January-September 2011...Data per share and share performance ratios Share price (euros) 6.18 (37.6) 9.91 7.56 Market capitalization (million euros) 29,817 (19.7)