BBV Argent Aria, S.a._1

8/3/2019 BBV Argent Aria, S.a._1

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January-march2011

QUARTERLY REPORT

Q


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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-march2011

QUARTERLYREPORT


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2 BBVAGrouphighlights

BBVAGrouphighlights

BBVA Group highlights

(Consolidatedigures)

31-03-11 % 31-03-10 31-12-10

Balance sheet (million euros)

Totalassets 562,174 1.5 553,922 552,738

Customerlending(gross) 346,814 2.7 337,568 348,253

Customerfundsonbalancesheet 389,731 5.0 371,116 378,388

Othercustomerfunds 144,230 1.6 142,026 147,572

Totalcustomerfunds 533,961 4.1 513,142 525,960

Totalequity 37,881 19.0 31,824 37,475

Shareholdersfunds 38,107 27.9 29,805 36,689

Income statement (million euros)

Netinterestincome 3,175 (6.2) 3,386 13,320

Grossincome 5,263 (0.7) 5,301 20,910

Operatingincome 2,904 (8.8) 3,183 11,942

Incomebeforetax 1,659 (10.9) 1,862 6,422

Netattributableproit 1,150 (7.3) 1,240 4,606

Data per share and share performance ratios

Shareprice(euros) 8.56 (15.5) 10.13 7.56

Marketcapitalization(millioneuros) 38,447 1.3 37,967 33,951

Netattributableproitpershare(euros) 0.25 (20.0) 0.31 1.17

Bookvaluepershare(euros) 8.49 6.7 7.95 8.17

P/BV(Price/Bookvalue;times) 1.0 1.3 0.9

Signiicant ratios (%)

ROE(Netattributableproit/Averageequity) 12.8 17.7 15.8

ROA(Netincome/Averagetotalassets) 0.95 1.01 0.89

RORWA(Netincome/Averagerisk-weightedassets) 1.67 1.88 1.64

Eiciencyratio 44.8 40.0 42.9

Riskpremium 1.20 1.26 1.33

NPAratio 4.1 4.3 4.1

NPAcoverageratio 61 59 62

Capital adequacy ratios (%)

BISRatio 13.0 13.4 13.7

Corecapital 8.9 8.1 9.6

TierI 9.8 9.5 10.5

Other information

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

Numberofshareholders 921,650 887,252 952,618

Numberofemployees(1) 108,594 103,545 106,976

Numberofbranches(1) 7,412 7,469 7,361

NumberofATMs (1) 17,564 16,016 16,995

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.


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3Relevantevents

Inthe irst quarter of 2011 BBVAdissipatedthemaindoubts

regardinggrowthfortheyearasawhole:

Againstabackdropofconcernsaboutthesolvency of

inancialinstitutions,theGroupclosedasof31Mar-2011with

acorecapitalratioof8.9%,havingabsorbedtheamountpaidforthepurchaseof24.9%ofGaranti.Thiswasachievedby

thegenerationofearningsandtheimplementationofthe

dividendoption.

Intermsofthecapacityforwholesalefunding,itisimportant

tonotethatBBVAwastheirstbanktomoveintothe liquidity

marketinJanuary2011withanewissueofmortgage-covered

bondsandavolumeoflong-terminancethatcoversalarge

partofthematuritiesforecastforthisyear.

TherehasalsobeenpositivenewsinrelationtotheBanks

asset quality.TheNPAratioremainedstableat4.1%atthe

closeof31March-2011,andtheriskpremiumimprovedby13

basispointsoverthequarter.

Thecapacitytogenerateearningshasremainedhighand

abovethelevelsoftheprevioustwoquarters.Thisisdespite

thefactthatexchangerateshavenotbeenfavorableintheirst

threemonthsof2011.

Oncemore,allthebusiness areashavecontributedpositively

togeneratenetattributableproit.

BelowaresomeoftherelevantaspectsintheBanksperformance

andthatofitsmainareasbetweenJanuaryandMarchofthisyear:

Thegross incomefortheperiodof5,263misabovethatof

thetwopreviousquarters.Thispositiveperformancecanbe

explainedbytwofactors:irst,abalancedbusinessportfolio

thathasgrowthpotential,with51.9%ofrevenuesfrom

emergingcountries(asapercentageofthegrossincome

generatedbytheivebusinessareas);second,thenotable

contributionnettradingincome(NTI),withasigniicant

contributionoftheMarketsunit.

Impairment losses on inancial assetswereattheirlowest

iguresincetheirstquarterof2009thankstothegoodquality

ofBBVAsportfolio,withanincreasingproportionof

lower-riskitems.Thishasbeenpossiblewhilemaintaining

prudentcriteriaandmakingadditionalprovisionstoincrease

theGroupsbalanceofgenericprovisionsinSpain.

Intermsofbusiness activity,lendingcontinuedtorelectthe

geographicaldiferentiationofpreviousquarters.Itwasvery

stronginMexicoandSouthAmerica,butstagnantinSpain.IntheUnitedStates,thetrendcontinuesdownward,asaresult

ofthegradualchangeintheportfoliomixtowardslineswith

lowerassociatedrisk.Incustomerfunds,customerdeposits

performedparticularlywell,basicallyintheresidentsector.

Asof31Mar-2011,BBVAcontinuestohavehighlevelsofunrealized

gainsinitsmostliquidportfoliosofequityholdings,at1,108m.

BBVAs Annual General Meeting washeldonMarch11,2011,

withahighparticipation(65.72%),aboveeventhehighlevels

ofthepreviousyear.TheAGMapprovedthedividendoption,

whichallowsshareholderstochoosehowtheyreceivetheir

remuneration:eitherinnewshares,throughacapitalincrease,

orincashbysellingtherightsassignedundertherightsissue.

Accordingtothissystem,on15Apr-2011anamountof0.149

persharewaspaid;thus,totalshareholdersremunerationfor

theyearwasmaintainedat0.42pershare.

Bybusiness areas,themostimportanteventinthequarter

wasthepaymentof4,391mforthepurchaseof24.9%of

Garanti.ThetransactiontookplaceonMarch22 nd,afterwhich

Garantiwasincorporatedintothegroupbytheproportional

consolidationmethod.ThismeansthatBBVAnowhasa

verysigniicantpresenceinEuropeandAsiaintermsofits

balancesheetandresults.Fortheseandotherreasons(whicharementionedintheintroductiontothebusinessareas)

someoftheunitspreviouslyincludedinSpainandPortugal

orWholesaleBanking&AssetManagementhavebeen

regroupedintoSpainandEurasia.

ThebusinessinSpaincontinuestobeafectedbytheweak

economy.However,thenetinterestincome,whichisdownon

ayearagoduetothediferentmarketconditionsintheirst

halfof2010,hasreduceditsyear-on-yearslowdowncompared

withthepreviousquarter.NTIwasverypositive,duetothe

goodperformancebyMarkets.Finally,loan-lossprovisions

havebeenheldincheck.Theywere21mabovetheigure

forthefourthquarterof2010duetotheincreasedbalanceof

genericprovisions.Inall,theproitgeneratedbytheareainthe

irstquarterwas477m.

Groupinformation

Relevantevents


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4 Groupinformation

Economic environment

Theglobaleconomycontinuedtorecoverinthe

irst quarter of 2011,althoughtheratesvaried

betweenthedevelopedzones,whicharestill

growingbelowtheirpotential,andtheemerging

economies,whichhaveconsolidatedtheir

positionasthemostdynamic;infact,theirhigh

levelsofdomesticdemandareevenleadingtosomeoverheating.Thissituation,combined

withincreasedcommodityprices(particularly

oil),hasincreasedtheriskofinlationrisingin

emergingeconomies,whiledelayingrecoveryin

developedones.

FiguresfromtheUnited Stateshaveshowna

recoveryinconsumption,thoughitisstillheld

backbythedeleveragingprocessunderway.

Thelaborandrealestatemarketsalsoremain

weak.Meanwhile,coreinlationisstillunder

theFedscomfortzone,whichsuggeststherewillbefewchangesinoicialinterestratesin

2011,althoughthenewprogramofquantitative

easing(QE2)isexpectedtoexpireinJune.

Economicactivityin Europe asawhole

rosesurprisinglyattheendof2010andthe

irstquarterof2011,butthereisagrowing

dierencebetweenthegreaterstrengthofcore

countriesandweakeconomyandconidence

inperipherals.Theperipheralcountrieshave

undoubtedlybeenaectedbytheinancial

tensioninGreece,IrelandandPortugal(forced

toseekaidfromtheEuropeanUnionand

theInternationalMonetaryFund).Inmarked

contrast,progressinthestructuralreform

processinSpainhasledtoapositivedierence

betweenthecountrysinancialmarketsand

thoseoftheotherthree.Thisshouldberelected

inincreasedconidenceandpositiveeectson

economicactivity.

InEurasiatherewasanotablecontribution

byChinaCiticBank(CNCB)(earningsup

153.2%year-on-year)andtheproportional

integrationofGarantiintotheGroup.The

impactofthisintegrationwillbecome

signiicantoverthecomingquarters.

BetweenJanuaryandMarch2011,thisarea

generatedearningsof198m,13.5%ofthe

totalproitoftheBBVAbusinessareas,with10.1%oftheGroupsassets.

Mexicoperformedwell,withstrongbusiness

activity,aboveallinthecompaniesportfolio

andconsumerinance.Thereweremajor

year-on-yeargainsinmarketsharein

practicallyalltheitems.Earningsgenerated

amountedto436m,up17.3%year-on-yearat

constantexchangerates,thankstoimproved

revenuesandacontinuingpositivetrendin

loan-lossprovisions.

BusinessresultsinSouth Americawere

excellent.Thecontinuedpositiveeconomic

climatefavorsactivityintheinancialsector,

inlinewithwhathasbeenobservedin

recentquarters,withanactiveparticipation

bythediferentunitsinthearea.Revenues

continuetogrowsteadily.Theypushedthe

netattributableproitupto280m(up17.5%

year-on-yearatconstantexchangerates),

thusalsohelpinginanceexpansionprojects

thatwillensurethegrowthoffutureearnings

inthearea.

Finally,theUnited Statescontinueswiththe

processofchangingtheportfoliomix,with

asigniicantgrowthinresidentialrealestate

(up32.8%year-on-year)andwithitsrepricing

efort.Theabovehashadapositiveimpact

bothonrevenuesandloan-lossprovisions,

andincreasedtheproitintheareato81m

(up47.5%year-on-year).

Interest rates

(Quarterlyaverages)

2011 2010

1Q 4Q 3Q 2Q 1Q

OicialECBrate 1.00 1.00 1.00 1.00 1.00

Euribor3months 1.10 1.02 0.87 0.69 0.66

Euribor1year 1.74 1.52 1.40 1.25 1 .22

USAFederalrates 0.25 0.25 0.25 0.25 0.25

TIIE(Mexico) 4.85 4.87 4.91 4.94 4.92


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5Relevantevents

isforcingtheauthoritiestotakeadjustment

measures(whicharealreadybeginningto

reducepressuresontherealestatemarketand

moderatingcredit).Finally,Turkeyclosed2010

asoneofthecountrieswiththehighestrates

ofgrowth.Inlationremainsathistoricallylow

levels,favoredamongotherfactorsbystable

capacityutilization,despitetherateofeconomic

growth.

Intermsofexchange rates,theinalratesofthe

MexicanpesoandUSdollarhavedepreciated,

inbothyear-on-yearandquarter-on-quarter

terms.Thesearethecurrencieswiththebiggest

inluenceontheGroupsinancialstatements.

Thistrendhasalsohadaneectontherestof

relevantLatinAmericancurrencies,whichin

generalhavemovedinthesamedirection.Thus

theirimpactonboththebalancesheetand

businessactivityisnegative.However,inaverage

exchangerates,theMexicanpeso,USdollar,ChileanandColombianpesoandPeruviansol

haveallappreciatedyear-on-year;whiletheUS

dollar,theArgentineanandColombianpeso,

thePeruviansolandtheVenezuelanbolivar

havedepreciatedoverthequarter.Thustheir

eectispositiveintheyear-on-yearcomparison,

butnegativeforthequarter.Tosumup,the

impactoftheexchange-ratesoverthequarteris

negativeinbothearningsandthebalancesheet

andvolumeofbusiness,butpositivein

year-on-yearcomparisonforearnings.

TheMexican economyhasbeenstrongerthan

expectedthroughoutthefourthquarterof2010

andirstfewmonthsof2011,inbothdomestic

demandandexports,supportedbyfavorable

inancingconditions.Steadyjobcreationhas

relectedthissituation.Theriseintheoilprice

sofarrepresentsabenignshock,asalthough

itwillputupwardpressureoninlation,itwill

alsoimprovetheiscalandexternalbalances.Moreover,ithasnotledtoaneconomic

slowdownintheUnitedStates,whichisMexicos

maintradingpartner.Inall,theriskofincreased

inlationarypressureswillprobablymeanthat

theCentralBankwillstartonaseriesofinterest

raterisesin2011.

Finally,growthinotheremergingeconomies

continuestoeasetomoresustainablelevels,

thuslimitingtheriskofoverheating.In South

America domesticdemandhasmaintained

robustgrowthratesintheirstquarterof2011,whilethetrendininlationhasbeen

upward.Increasedcommoditypriceshave

resultedpositivefortheiscalandforeign

balances,inpartosettingtheriseinimports

derivedfromthestrongdomesticeconomy.

However,inlationarypressuresareleading

variouscountriesintheregiontowithdraw

theirmonetarystimuli,althoughthetoneof

policiesremainsaccommodative.In China,

recentindicatorsofeconomicactivitysuggest

arenewedsurgeandincreasedinlation.This

Exchange rates

(Expressedincurrency/euro)

Yearend exchange rates Average exchange rates

31-03-11

% on

31-03-10% on

31-12-10 1Q11% on

1Q11

Mexicanpeso 16.9276 (1.6) (2.2) 16.5008 7.0

U.S.dollar 1.4207 ( 5.1) (5.9) 1.3680 1.1

Argentineanpeso 5.9066 (11.3) (7.1) 5.6657 (4.9)

Chileanpeso 684.93 3.5 (8.7) 658.76 8.9

Colombianpeso 2,666.67 (2.6) (4.1) 2,570.69 4.6

Peruviannewsol 3.9915 (4.1) (6.0) 3.8017 3.7

Venezuelanbolivarfuerte 6.1014 (5.1) (5.9) 5.8750 (3.9)

Turkishlira 2.1947 (6.5) (5.7) 2.1591 (3.4)

Chineseyuan 9.3036 (1.1) (5.2) 9.0028 4.9


8/55


9/55

7Earnings

andSouthAmerica(up12.0%year-on-yearat

constantexchangerates)largelyosetsthe

lowercontributionbybusinessinSpainresulting

fromthegeneralfallinthisiteminthecountrys

inancialsystem.Nevertheless,itisimportantto

Increaseinexpensesinlinewiththeinal

monthsof2010,duetothecontinued

developmentoftheGroupsvariousgrowth

andexpansionplans,aboveallthose

implementedinemergingmarkets.

Theperformanceofimpairment losses on

inancial assetsandtheriskpremiumwere

veryfavorable.

Generationofearningsthatwerealmost

entirelyorganic(Garantiwasincorporated

inMarch,withacontributionof12minnet

attributableproit).

Net interest income

Net interest incomecontinuestoberesilient,

thankstoanumberoffactors,includingBBVAs

balancedportfoliobygeographicalareas,

customersegmentsandproducts.Intheirst

threemonthsof2011itamountedto3,175m,

36mhigherthaninthefourthquarterof2010

(3,138m).ItsgoodperformanceinMexico

Consolidated income statement

(Millioneuros)

1Q11 %% at constantexchange rates 1Q10 %

% at constantexchange rates 4Q10

Net interest income 3,175 (6.2) (8.1) 3,386 1.2 0.9 3,138

Netfeesandcommissions 1,114 0.7 (1.7) 1,106 (1.8) (1.9) 1,135

Nettradingincome 752 18.8 17.3 633 198.4 198.6 252

Dividendincome 23 (9.2) (10.1) 25 (89.9) (89.9) 227

Incomebytheequitymethod 121 110.3 110.4 57 (2.8) (2.8) 124

Otheroperatingincomeandexpenses 79 (15.1) (18.8) 93 13.0 13.4 70

Gross income 5,263 (0.7) (2.7) 5,301 6.4 6.2 4,946

Operatingcosts (2,359) 11.4 9.4 (2,118) 1.4 1.5 (2,325)

Personnelexpenses (1,276) 11.1 9.4 (1,149) 2.9 3.0 (1,240)

Generalandadministrativeexpenses (887) 11.4 8.9 (796) 0.0 (0.0) (887)

Depreciationandamortization (196) 13.0 11.7 (174) (1.5) (1.4) (199)

Operating income 2,904 (8.8) (10.7) 3,183 10.8 10.5 2,621

Impairmentoninancialassets(net) (1,023) (5.1) (7.5) (1,078) (7.9) (8.1) (1,112)

Provisions(net) (150) (11.7) (12.6) (170) 101.3 99.0 (75)

Othergains(losses) (71) (1.6) (1.7) (72) (74.0) (74.0) (273)

Income before tax 1,659 (10.9) (12.8) 1,862 42.9 42.2 1,162

Incometax (369) (27.6) (29.2) (510) 190.2 188.5 (127)

Net income 1,290 (4.6) (6.6) 1,352 24.7 24.1 1,034

Non-controllinginterests (141) 24.8 23.4 (113) 46.7 47.8 (96)

Net attributable proit 1,150 (7.3) (9.3) 1,240 22.5 21.8 939

Basic earnings per share (euros) 0.25 (20.0) 0.31 9.5 0.23

Net interest income

(Million euros)

(1) At constant exchange rate: 8.1%.

3,386

1Q

3,551

2Q

3,245

3Q

3,138

4Q

3,175

1Q

6.2% (1)

2010 2011


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11/55

9Earnings

Net trading incomeperformedwell,at752m

inthequarter(633mthepreviousyear),thanks

tothesigniicantprogressmadeintheMarkets

activity,particularlyinSpain.One-osalesand

valuationsofsomepositions(aboveallinMexico

andVenezuela)havealsogivenrisetosome

additionalgains.

Dividendincome,at23m,iswellinlinewiththatoftheirstquarterof2010(25m).

Equityaccounted income amountedto121m,

whichcomparesveryfavorablywiththeigure

of57mfortheirstquarterofthepreviousyear.

Thisriseisexplainedpartlybythefactthatthe

purchaseoptionforanadditional5%ofCNCB

wasexercisedinthesecondquarterof2010

(April1),andalsobytheexcellentperformance

ofCNCBitself.

Finally,other operating income and expensesamountedto79m(93minthesameperiod

in2010).Thisigureissigniicantlyinluenced

byincreasedcontributionstodepositguarantee

fundsinvariouscountries(up32.2%

year-on-year).Incontrast,itisworthpointing

tothegoodperformanceoftheinsurance

business,whererevenuesgrewby15.0%

year-on-yearintheirstquarter.

Asaresult,thegross incomestoodat5,263m

intheirstquarter.Althoughthisrepresentsa

slightfallof0.7%ontheirstquarteroflastyear,

whentheeconomicandinancialsituationwas

dierentfromthecurrentone,itisveryfavorable

comparedwiththefourthandthirdquartersof

2010,withgrowthof6.4%and3.5%respectively.

processofinterestrateincreasescontinued

tolimitthestrengthofspreads.However,the

evidentincreaseinactivityisstillosettingthis

eect,andthenetinterestincomeinthearea

wasup23.5%atconstantexchangerates.

Finally,intheUnited Statesthenetinterest

incomeintheirstthreemonthsoftheyearwas

practicallyatthesamelevelsofthelastquarterof2010atconstantexchangerates,despite

thecontinuedincreaseintheproportionof

lendingwithalowerriskandlowerspread,such

asresidentialmortgagesandcommercialand

corporateloans.Oncemore,therehasbeena

repricingeortbyBBVACompass.

Gross income

Intheirstquarterof2011, net fees and

commissionsstoodat1,114m,aslight

year-on-yearincreaseof0.7%.Oncemorea

distinctionhastobemadebetweenemerging

countries(wherethisitemwasupyear-on-year

by12.5%)anddevelopedones(down8.4%

year-on-year).Thisvaryingperformance

hasbeeninluencedbythedierencein

economicactivityinthetwogroups(stagnantindevelopedeconomiesandmoredynamic

inemergingones),loyaltybuilding(basically

inSpain,whereareductioninfeeshasbeen

appliedtoincreasinglymorecustomers)and

legalrestrictionsthatenteredintoforcefrom

March2010insomeAmericancountries.

Meanwhile,feesonfundmanagementgrewby

2.4%,aboveallduetopensionfunds,whilethose

linkedtobankservicesremainedverystable.

Net interest income/ATA

BBVA Group (Percentage)

1Q 2Q

2.52

3Q 4Q 1Q

2010 2011

2.52

2.28 2.212.35

Gross income

(Million euros)


5,301

1Q

5,579

2Q

5,084

3Q

4,946

4Q

5,263

1Q

2010 2011

0.7% (1)


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10 Groupinformation

developedmarkets,nowthattheTransformation

Planbegunin2006hasconcluded,theGroup

isfocusingitseortsonextendingitsrelations

withcustomersandimprovingtheeiciencyof

distributionwiththeaimofcontinuingtowin

marketshare.Despitethis,the eiciency ratio

fortheirstthreemonthsof2011hasimproved

onthepreviousquarter,andat44.8%continues

tobeinabetterpositionthantheaveragefor

thepeers.

Operating income

Operating expensescontinuetoincrease

inlinewiththepreviousyear,1.4%uponthe

fourthquarterof2010,at2,359m,andwitha

year-on-yearincreaseof11.4%.Theinvestment

processcontinues,mainlyinthefranchises

operatinginemergingcountries,whicharethe

enginesoffutureglobalgrowth.Intheseareas

progressisbeingmadeindevelopingcustomer

productsandsegmentsandextendingbanking

penetrationtoincreasegrowth.Incontrast,in

Breakdown of operating costs and eiciency calculation

(Millioneuros)

1Q11 % 1Q10 2010

Personnel expenses 1,276 11.1 1,149 4,814

Wagesandsalaries 983 11.7 881 3,740

Employeewelfareexpenses 194 11.1 174 689

Trainingexpensesandother 99 6.0 94 386

General and administrative expenses 887 11.4 796 3,392

Premises 204 11.9 183 750

IT 146 3.5 141 563

Communications 75 11.1 68 284

Advertisingandpublicity 86 13.1 76 345

Corporateexpenses 22 11.8 19 89

Otherexpenses 261 9.6 238 1,040

Leviesandtaxes 92 29.7 71 322

Administration costs 2,163 11.2 1,945 8,207

Depreciation and amortization 196 13.0 174 761

Operating costs 2,359 11.4 2,118 8,967

Gross income 5,263 (0.7) 5,301 20,910

Eiciency ratio (Operating costs/Gross income, in %) 44.8 40.0 42.9

Operating costs

(Million euros)

(1) At constant exchange rate: +9.4%.

2,118

1Q

2,262

2Q

2,262

3Q

2,325

4Q

2,359

2010

1Q

2011

+11.4% (1)

Efficiency

1Q

2010

1Q

2011

Grossincome

Operatingcost

2010

(Million euros) (Percentage)Efficiency ratio

5,301

20,910

5,263

2,118

8,967

2,359

1Q

2010

1Q

2011

2010

.

.

.

.

.

.

.

40.042.9

44.8


13/55

11Earnings

Provisions and others

TheGroupclosedthequarterwithvery

goodnewsintermsofloan-lossprovisioning.

Impairment losses on inancial assets

amountedto1,023minJanuary-March2011,

AtthecloseofMarch2011,theGrouphad

108,594employees(up4.9%year-on-year),

5,049morethanasof31Mar-2010.Itsbranch

networkdecreasedby57branchesoverthe

sameperiodtoreachatotalof7,412,withnew

openingsinSouthAmericaandtoalesser

extentinMexico.Itisimportanttopointoutthat

thegreateortsmadetorationalizethenetwork

inpreviousyearshaveanticipatedmovesbytherestofthesector,whichiscurrentlyengaged

insimilaroperations.Thishashadaneecton

theincreasedmarketshareofBBVAbranches

inSpain.Thenumberof ATMscontinuestorise,

closingthequarterat17,564(up9.4%

year-on-year).Finally,progresscontinuesin

promotingmulti-channelbankingandthe

implementationofalternativedistribution

channels,whichwillhaveapositiveeecton

commercialproductivity.

Tosumup,theoperating income generatedinthequarterwas2,904million,averypositive,

recurrentandsolidigurecomparedwiththe

secondhalfof2010,at2,621minthefourth

quarterand2,821minthethird.

Number of employees (1)

103,545

March

2010

Spain

Mexico

South America

The United States

Rest of the world

106,976

December

2010

108,594

March

2011

28,27428,416 28,925

32,565 34,08234,525

28,304 29,608 30,054

12,455 12,863 12,978

(1) Excluding Garanti.

Number of branches (1)

7,469

March

2010

7,361

December

2010

7,412

March

2011

3,056 3,024 3,025

1,987 1,985 1,990

1,498 1,456 1,518

784 752 752

Spain

Mexico

South America

The United States

Rest of the world


Operating income

(Million euros)


3,183

1Q

3,317

2Q

2,821

3Q

2,621

4Q

2,904

2010

1Q

2011

8.8% (1)

Number of ATMs (1)

16,016

March

2010

Spain

Mexico

South America

The United States

16,995

December

2010

17,564

March

2011

4,9315,138

5,212

6,3706,760 6,979

3,717 4,019 4,289

998 1,078 1,084


Impairment losses on financial assets

(Million euros)


1,078

1Q

1,341

2Q

1,187

3Q

1,112

4Q

1,023

1Q

2010 2011

5.1% (1)


14/55

12 Groupinformation

thatGarantisresultshaveonlybeenconsidered

for10dayswhereasthefulleectofthecapital

increaseisincluded.Returnontotalaverage

assets(ROA)standsat0.95%.BothROEand

ROAcontinuetocompareverywellwithBBVAs

mainpeers.

thelowestiguresincetheirstquarterof2009.

Asaresult,theGroupsriskpremiumimproved

13basispointsinthequarterto1.20%,whilethe

coverageratiowashardlyaected:asof

31Mar-2011itstoodat61%,comparedwith62%

atthecloseof2010.Thishasbeenpossible

thankstothepositiveoperatingproit,which

hasallowedprudentialcriteriatobemaintained

whilemakingadditionalprovisionstoincreasetheGroupsbalanceofgenericprovisionsin

Spain;andalsotothegoodcreditqualityof

BBVAsportfolio,whichincludesanincreasingly

greaterproportionoflower-riskitems.

Provisionsamountedto150m,compared

with170minJanuary-March2010.This

includes73mforearlyretirementandother

contributionstopensionfunds.

Finally,other gains (losses)amountedto

practicallythesameigureas12monthsearlier,at71m(72mintheirstquarterof2010).

Theycorrespondmainlytoprovisionsforreal

estateassetsmadetomaintaincoverageat

levelsabove30%.

Net attributable proit

Thusthepositiveprogressofrevenuesandthe

excellenttrendinprovisionsallowedBBVAto

continuewithitsexpansionplansandlaythe

foundationsforfuturegrowth.Thishasalltaken

placeinamacroeconomicenvironmentthathas

changedsigniicantlyoverthelastyear.Fromit

willemergeaneworderofglobalgrowthand

majorchangesintheinancialindustryand

atthelevelofsociety.DespitethistheGroup

maintainsagoodlevelofnet attributable proit,

at1,150mintheirstquarter,withapositive

contributionfromallareasofbusiness:Spain

contributed477m,Eurasia198m,Mexico

436m,SouthAmerica280mandtheUnited

States81m.

Earnings per share (EPS)standat0.25comparedwith0.31intheirstquarterof

2010(thecapitalincreasewascarriedoutin

November2010).TheincreaseintheGroups

shareholdersfundshasledtoanincreasein

thebookvaluepershareof6.7%year-on-year

to8.49.Asaresult,theROEhasfallento12.8%.

Suchreductionismainlyexplainedbythefact

Earnings per share

(Euros)

1Q

2009

1Q

2010

1Q

2011

0.33 0.310.25

ROE

(Percentage)

1Q

2010

2010 1Q

2011

17.7

15.8

12.8

ROA

(Percentage)

1Q

2010

2010 1Q

2011

1.01

0.89 0.95


15/55

13Balancesheetandbusinessactivity

BBVAclosedtheirst quarter of 2011 withtotal

assetsat562billion,markingayear-on-yearincreaseof1.5%,anda1.7%increaseascompared

totheigureforthecloseofthepreviousyear.

Theprimarycausesbehindtheprogressofthe

Groupsbalancesheetandbusinessactivityinthis

periodinclude:

Incorporation,byproportionateconsolidation

method,oftheholdinginGarantiinthe

monthofMarch,whichaccountedformore

than16,000millioninassets.

Negativeefectoftheexchange rateinboth

thelastyearandalso,withgreaterintensity,

inthequarterduetothedepreciationofthe

dollaranditsinluenceonthecourseoftherest

ofLatinAmericancurrencies.Inthisregard,at

constantexchangerates,thequarter-on-quarter

variationoftheGroupsassetswas3.1%.

Balancesheetandbusinessactivity

Consolidated balance sheet

(Millioneuros)

31-03-11 % 31-03-10 31-12-10

Cashandbalanceswithcentralbanks 23,002 32.7 17,337 19,981

Financialassetsheldfortrading 57,801 (14.0) 67,188 63,283

Otherinancialassetsdesignatedatfairvaluethroughproitorloss 2,709 4.2 2,600 2,774

Available-for-saleinancialassets 63,417 (8.0) 68,960 56,457

Loansandreceivables 368,344 3.6 355,526 364,707

Loansandadvancestocreditinstitutions 28,465 7.6 26,466 23,636

Loansandadvancestocustomers 337,590 2.8 328,516 338,857

Other 2,289 n.m. 545 2,213

Held-to-maturityinvestments 9,230 2.3 9,024 9,946

Investmentsinentitiesaccountedforusingtheequitymethod 4,435 40.3 3,161 4,547

Tangibleassets 6,819 4.6 6,520 6,701

Intangibleassets 10,101 29.6 7,794 8,007

Otherassets 16,317 3.2 15,813 16,336

Total assets 562,174 1.5 553,922 552,738

Financialliabilitiesheldfortrading 34,290 (6.1) 36,521 37,212

Otherinancialliabilitiesatfairvaluethroughproitorloss 1,604 3.6 1,549 1,607

Financialliabilitiesatamortizedcost 465,056 0.7 461,601 453,164

Depositsfromcentralbanksandcreditinstitutions 68,430 (18.2) 83,608 68,180

Depositsfromcustomers 283,559 11.1 255,301 275,789

Debtcertiicates 88,040 (10.4) 98,240 85,180

Subordinatedliabilities 18,132 3.2 17,575 17,420

Otherinancialliabilities 6,895 0.3 6,877 6,596

Liabilitiesunderinsurancecontracts 8,129 4.7 7,765 8,033

Otherliabilities 15,215 3.8 14,663 15,246

Total liabilities 524,293 0.4 522,098 515,262

Non-controllinginterests 1,577 19.8 1,316 1,556

Valuationadjustments (1,803) n.m. 702 (770)

Shareholdersfunds 38,107 27.9 29,805 36,689

Total equity 37,881 19.0 31,824 37,475

Total equity and liabilities 562,174 1.5 553,922 552,738

Memorandum item:

Contingentliabilities 36,229 9.4 33,130 35,816


16/55


17/55

15Balancesheetandbusinessactivity

basispointsofmarketshareinthisareainthelast12months

(accordingtoFebruary2011data).IntheUnitedStates,anarea

thatisstillimmersedinitsprocessofchangingtheportfoliomix

towardslower-riskitems,residentialrealestatehasperformed

extremelywell(up32.8%year-on-year).ActivityinSpainremains

stagnant,butBBVAscommercialmanagementhasbeen

standout,withanewyear-on-yearmarketsharegainof35basis

points(accordingtothelatestdataavailable,fromFebruary2011),

inhigh-loyaltyproducts(mortgages)tothedetrimentofportfolioswithagreaterassociatedrisk.

Theaboveexplains,therefore,thedierentprogressbetweenthe

domesticandnon-domesticsectors.Ofthenetloanstodomestic

customers,lendingtothepublicsectorincreasedby14.8%

year-on-yearto25billion,butloanstotheotherdomesticsectors

weredown2.8%to168billionasaresultofthegeneralizedfall

inthelendingactivityinSpain.However,theitemswiththeleast

associatedriskandgreatestrelativeweight,securedloans,which

totaled104billion,arehighlystableandwerethosethatfelltheleast

(down1.1%intheyear,butbarelydown0.6%inthequarter).

Furthermore,netlendingtonondomestic customersroseto138

billionasofMarch31,2011,withayear-on-yearincreaseof8.7%that,

excludingtheexchangerateeect,wasup11.4%.Thisincrease,

whichwasrecordedinbothsecuredloansandintheotherloans

category,istheresultofthegreatdynamismofthebusinessactivity

inalmostallcountriesinLatinAmericaandEurasia,thankstothe

recentincorporationofGaranti.

Finally,nonperforming loansweredown2.0%inthelastyear.

Thedecreasesweregeneralizedandwereobservedinboththe

domesticandnon-domesticsectors.

Customer funds

AsofMarch31,2011,totalcustomer fundsincreasedto534billion,

markinganincreaseof4.1%ontheigure12monthspriorandup1.5%onDecember31,2010.

Onceagain,adistinctionmustbemadebetweenthecourse

ofonbalance sheet customer funds,whichwereupto390

billionandrepresent73%ofthetotal,andotherfunds,suchas

mutualfunds,pensionsandcustomerportfolios,whichtotaled

144billion.Theexcellentperformanceofon-balancesheetfunds

stoodout,withgrowthat5.0%year-on-yearand3.0%forthe

quarter.Thisimprovementcontinuestobebasedonthestrength

ofcustomerdeposits(up11.1%year-on-yearto284billion),which

haveperformedverypositivelyinthedomesticsector,whiletime

depositsadvanced3.6%inthequarter. Nondomestic depositsfellback10.9%to147billionasaresultofthedecreaseoftime

deposits(down26.1%year-on-year),whichneverthelessbegan

toslowitsslowdownascomparedtorecentquarters.Onthe

otherhand,headingswithlowerassociatedcosts,likecurrentand

savingsaccounts,grew12.3%year-on-year,andtheirlesspositive

trajectoryinthequarterisprimarilyduetothenegativeeectof

exchangerates.

Customer funds(Millioneuros)

31-03-11 % 31-03-10 31-12-10

Customer funds on balance sheet 389,731 5.0 371,116 378,388

Deposits from customers 283,559 11.1 255,301 275,789

Domesticsector 136,666 51.1 90,424 133,629

Publicsector 24,894 n.m. 3,889 17,412

Otherdomesticsectors 111,772 29.2 86,535 116,217

Currentandsavingsaccounts 42,790 (5.4) 45,247 43,225

Timedeposits 50,913 60.2 31,786 49,160

Assetssoldunderrepurchaseagreementandother 18,069 90.2 9,502 23,832

Non-domesticsector 146,894 ( 10.9) 164,877 142,159

Currentandsavingsaccounts 74,056 12.3 65,939 74,681

Timedeposits 67,106 (26.1) 90,774 61,626

Assetssoldunderrepurchaseagreementandother 5,731 (29.8) 8,164 5,852

Debt certiicates 88,040 (10.4) 98,240 85,180

Mortgagebonds 44,824 16.2 38,577 40,246

Otherdebtcertiicates 43,216 (27.6) 59,663 44,933

Subordinated liabilities 18,132 3.2 17,575 17,420

Other customer funds 144,230 1.6 142,026 147,580

Mutualfunds 42,262 (14.1) 49,219 43,383

Pensionfunds 75,764 9.9 68,919 78,763

Customerportfolios 26,204 9.7 23,888 25,434

Total customer funds 533,961 4.1 513,142 525,968


18/55

16 Groupinformation

Obalance sheetcustomerfundsamounted

to144billionasofMarch31,2011,whichis

slightlyovertheigureoneyearprior,butunder

thatatthecloseof2010(up1.6%anddown

2.3%,respectively).Ofthem,thosefromSpain

represent38%,upto55billionthat,thoughdown

12.5%year-on-year,areup1.3%inthequarter.The

improvedperformanceinthequarterliesinthe

customerportfolios,whichrose7.2%to14billion.

Pensionfundsalsogrewwithrespecttothe

previousquarter,especiallyinindividualpension

schemes.TheabovecontinuestoallowBBVA

tomaintainitsleadingpositionaspensionfund

managerinSpain,withamarketshareof18.3%

(latestavailabledataasofDecember).Finally,

mutualfundsfell2.0%inthesameperiodasa

resultoftheincreasedpreferenceofsaversfor

otherproducts,liketimedeposits.

O-balancesheetfundsfortherest of the world,

90billion,fell4.3%inthequarterprimarily

duetothenegativeimpactoftheexchange

rate.Excludingtheeectofthecurrencies,its

percentchangewas+1.1%,withveryfavorable

performanceinmutualfundsandpensions,as

wellascustomerportfolios.

Statement of changes in equity

Atthecloseoftheirstquarterof2011,BBVAs

total equitycameto37,881million,markinga

newincreasesinceDecember31,2010despite

thenegativeeectofexchangerates.Thenet

attributableproitforthequarter,1,150million,

plustheimplementationofthedividendoption

justifythisprogress.

Other customer funds

(Millioneuros)

31-03-11 % 31-03-10 31-12-10

Spain 54,598 (12.5) 62,415 53,874

Mutualfunds 23,244 (27.0) 31,856 23,708

Pensionfunds 17,042 (2.2) 17,431 16,811

Individualpensionplans 9,876 (3.0) 10,182 9,647

Corporatepensionfunds 7,166 (1.1) 7,249 7,164


Rest of the world 89,632 12.6 79,611 93,707

Mutualfundsandinvestmentcompanies 19,018 9.5 17,363 19,675

Pensionfunds 58,722 14.0 51,488 61,952


Other customer funds 144,230 1.6 142,026 147,580

Customer funds

(Billion euros)

513

March

2010

493

March

2009

534

March

2011

(1) At constant exchange rate: +4.9%.

+4.1% (1)

Other

customer

funds

Customer

funds on

balance

sheet

142123144

371370 390


19/55

17Capitalbase

AsofMarch31,2011,theBBVAGroupscapital

base,calculatedaccordingtotheBISII

regulation,reached41,460m,3.4%lessthan

atthecloseof2010.Thisdecreaseisprimarily

explainedbythematerializationofthe24.9%

acquisitionoftheTurkishbankGaranti,carried

outinMarch,andbytheexchange-rateeect.

Riskweighted assets(RWAs)stoodat

319,044m,up1.8%onthecloseofDecember.

TheincreaseinRWAduetotheentryofGaranti

hasbeenpartiallyosetbythegeneralized

depreciationofcurrenciesinthequarter.

Theminimum capital requirements(8%of

RWA)reached,therefore,25,523m,witha

capitalbasesurplusof15,937m.Therefore,the

Grouphas62%ofcapitalabovetheminimum

requiredlevels.

Core capital reached28,452masofMarch

31,2011.Theratio,inthesamedate,is69basis

pointslowercomparedtoDecember31,2010.

Organiccapitalgenerationcontributed0.2

percentagepoints,anddividendoptionadded

another0.2percentagepointsinthequarter,

whiletheeectoftheincorporationofGaranti,

plusotheritems,subtracted1.1percentage

points.Thus,thecoreratiostandsat8.9%.

TheTier Iratioclosedthequarterat9.8%.

Furthermore,preferencesharesfellslightlyto

5,128mduetotheaforementioneddepreciation

ofthedollar,andtheirproportionoverTierI

capitalstandsat16.5%.

Therestoftheeligiblecapital, Tier II,which

mainlyconsistsofsubordinateddebt,surplus

genericprovisionsandunrealizedcapitalgains,

cameto10,246m,up3.5%onthecloseofthe

year.Thus,theTierIIratiostandsat3.2%,same

levelasofDecember31,2010.Thischangeis

due,amongotherreasons,totheUSD1,250

millionsubordinateddebtissuedbyBBVA

Bancomer,andthecurrenciesdepreciation.

Tosummarize,theBISratiohasabsorbedthe

impactoftheGarantioperation,and,asofMarch

Capitalbase

Capital base (BIS II Regulation)

(Millioneuros)

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

Shareholders'funds 38,107 36,689 31,610 30,609 29,805

Adjustmentsanddeductions (11,654) (8,592) (8,642) (7,680) (7,897)

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

Core capital 28,452 30,097 24,969 24,929 23,908

Preferenceshares 5,128 5,164 5,165 5,224 5,153

Deductions (2,367) (2,239) (1,900) (1,803) (1,194)

Capital (Tier I) 31,214 33,023 28,234 28,351 27,867

Subordinateddebtandother 12,613 12,140 12,955 12,737 12,762

Deductions (2,367) (2,239) (1,900) (1,803) (1,194)

Other eligible capital (Tier II) 10,246 9,901 11,055 10,935 11,568

Capital base 41,460 42,924 39,289 39,285 39,435

Minimumcapitalrequirement(BISIIRegulation) 25,523 25,066 24,506 24,769 23,547

Capital surplus 15,937 17,858 14,783 14,516 15,888

Riskweighted assets 319,044 313,327 306,319 309,617 294,336

BIS ratio (%) 13.0 13.7 12.8 12.7 13.4

Core capital (%) 8.9 9.6 8.2 8.1 8.1

Tier I (%) 9.8 10.5 9.2 9.2 9.5

Tier II (%) 3.2 3.2 3.6 3.5 3.9


20/55

18 Groupinformation

whichwasbasedontheactionscarriedout

previouslyonSpainssovereignrating.Ina

processinwhichtheagencyloweredthescores

for30entities,BBVAsratingwasconirmedat

Aa2.

31,2011,stoodat13.0%(13.7%atthecloseof

2010).

Ratings

InMarch,Moodysinalizedtheperiodofreview

fortheratingsoftheSpanishbankingsystem,

Ratings

Long term Short term Financial strength Outlook

Moodys Aa2 P1 B Negative

Fitch AA F1+ B Stable

Standard&Poors AA A1+ Negative

Core capital generation

(Percentage)

Organicgeneration

1Q 2011

December2010

March2011

Dividendoption

Other (1)

(1) Garanti + Exchange rate + Other.

8.99.6 0.2 1.1

0.2

March2010

13.4

8.1

9.5

3.9

June2010

12.7

8.1

9.2

3.5

September2010

12.8

8.2

9.2

3.6

December2010

13.7

9.6

10.5

3.2

Capital base: BIS II ratio

(Percentage)

Tier II

Core capital

Tier I

March2011

13.0

8.9

9.8

3.2


21/55

19Riskmanagement

Followingtheanticipationeorttomeet

requirementsforprovisionsmadeattheend

of2009,theirst quarter of 2011hasbeen

theifthquarterinarowinwhichBBVAsNPA

ratioremainsincheck.Therehasalsobeenan

improvementintheriskpremium,whichhas

fallento1.20%(1.33%inthepreviousquarter).

TheseindicatorssupporttheGroupsleading

positionagainstthesystem.

Inaddition,thevolumeof total riskswith

customers(includingcontingentliabilities)stood

at383,043mattheendofthequarter,0.3%

downontheigureatthecloseof2010.Using

alike-for-likecomparisonwithoutincludingthe

Garantiigures,thereductionwas3.1%.This

decreaseisaboveallduetothedevaluationof

themaincurrenciesagainsttheeuro,aslending

wasup1.0%intheyearatconstantexchange

rates.

Nonperforming assetsasof31Mar-2011stood

at15,528m,1.0%downontheigureattheclose

of2010.Thisincludes248mcorresponding

Riskmanagement

Variations in nonperforming assets

(Millioneuros)

1Q11 4Q10 3Q10 2Q10 1Q10

Beginning balace 15,685 15,560 16,137 15,870 15,602

Entries 2,804 3,852 3,051 3,042 3,262

Recoveries (1,882) (2,479) (2,116) (2,080) (2,388)

Net variation 922 1,373 935 962 874

Write-os (1,140) (1,269) (1,119) (1,034) (885)

Exchangeratedierencesandother 61 21 (393) 339 279

Periodend balance 15,528 15,685 15,560 16,137 15,870

Memorandum item:

Non-performingloans 15,210 15,361 15,218 15,781 15,520

Non-performingcontingentliabilities 319 324 342 355 351

Credit risk management

(Millioneuros)

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

Non-performingassets 15,528 15,685 15,560 16,137 15,870

Totalrisks (1) 383,043 384,069 376,421 384,344 370,699

Provisions 9,490 9,655 9,641 9,917 9,308

Speciic 6,516 6,823 6,552 6,775 6,437

Genericandcountry-risk 2,974 2,832 3,089 3,142 2,872

NPAratio(%) 4.1 4.1 4 .1 4.2 4.3

NPAcoverageratio(%) 61 62 62 61 59

(1)Includingcontingentliabilities.

Non-performing assets

(Million euros)

15,528

March2011

March2010

15,870

June2010

16,137

September2010

15,560

December2010

15,685

1.0%


22/55

20 Groupinformation

startedbytheFederalGovernment;whileinEurasiaithasfallento

131%from154%inthepreviousquarterduetotheincorporation

ofGaranti.Additionally,itisworthnotingthat59.8%oftheGroupsriskiscollateralized.

Economic capital

Attributableeconomicriskcapital(ERC)consumptionreached

27,547millionasofMarch31,2011,similartotheigureasof

December,20101.

AsistobeexpectedfromBBVAsproile,mostofthisigure

(62.3%)iscreditriskonportfoliosoriginatedintheGroupsbranch

networkfromitsowncustomerbase.Thisriskroseinthequarter

duetotheincorporationofGaranti.

Marketriskcontinuestobetheleastrelevantitem(2.2%),given

thenatureofBBVAsbusinessanditspolicyofminimalproprietary

trading.Itremainsatasimilarleveltothepreviousquarter.Equity

riskbasicallyrelectstheportfolioofHoldingsinIndustrial&

FinancialCompaniesandthestakeinCITIC.Itsyear-endlevel

issimilartothatatthecloseofDecember,at8.5%.Structural

balance-sheetriskstoodat10.6%attheendofMarch2011.It

originatesfromthemanagementoftheGroupsstructural

interest-rateriskandexchange-raterisk.Finally,operationalrisk

remainedat7.2%oftotalERC.

toGaranti(thefalloverthequarteris2.6%usingalike-for-like

comparison).Thefallisaectedbytheexchange-rateimpact,but

alsobythegoodperformanceofgrossadditionsinallbusiness

areas,withtherecoveriesrateasapercentageofadditionstoNPA

at67.1%attheendoftheirstquarter,comparedwith64.4%inthe

previousquarter.

Asaresult,theGroupsNPA ratioremainsat4.1%,thesamelevel

asatthecloseof2010.Brokendownbybusinessareas,the

ratioremainsat4.8%inSpain,3.2%inMexicoand2.5%inSouth

America.IntheUnitedStates,theratioincreasedbyonly7basis

pointsandclosedthequarterat4.5%(4.4%atthecloseof2010).

InEurasia,whichincludestheincorporationofGaranti,theNPA

ratiowas1.2%(0.9%atthecloseof2010).

Coverage provisionsforriskswithcustomersamountedto

9,490m,aslightdecreaseof165montheigureattheclose

of2010,aboveallduetotheexchange-rateimpact.Ofthistotal,

genericprovisionsamountto2,974mandrepresent31.3%ofthe

total.

TheNPAcoverage ratio standsat61%.Bybusinessareas,ithas

improvedintheUnitedStatesto64%(61%atthecloseof2010)

andinSouthAmericato134%(130%asof31Dec-2010).InSpain

itendedthequarterat43%,asimilarleveltothecloseof2010

(44%).IthasfalleninMexicoto136%(152%atthecloseof2010),

basicallyasaresultoftheearlyendofthe Punto Finalplan,

NPA and coverage ratios

(Percentage)

March2011

June2010

September2010

December2010

NPA ratio

Coverageratio

March2010

5961 62 62 61

4,3 4,2 4,1 4,1 4,1

Recoveries over entries to NPA

(Percentage)

2Q 3Q 4Q

2010

1Q 1Q

2011

73.2

68.4 69.4

64.467.1

(1) ThisigureincludestheannualeectsofrecalibrationandreviewofthemodelsinJanuary2011.ComparableiguresforthecloseofDecember2010wouldbe26,293m,compared

withthepublishedigureof25,481m.


23/55

21TheBBVAshare

Intheirstquarterof2011,the main stock market indices

progressedveryunevenly.TheStoxx50inEuropeandtheFTSE

intheUnitedKingdomremainedpracticallylat,whiletheUS

marketperformedpositivelyanditsS&P500indexwasup5.4%.

TheIbex35inSpainwasalsoup7.3%thankstotheimproved

perceptionofitssovereignriskascomparedtoothercountriesin

SouthernEurope.

Againstthisbackdrop,inthe European banking sector,factors

suchassolvency,inancingandliquiditycontinuetobethefocus

ofthemarket.Certainregulatoryuncertaintiesregardingthese

topicscouldberesolvedinthecomingmonths.Theimproved

pricesonthecreditmarketappeartobeinluencingtheequity

marketpositively.Inthisregard,theEuropeanbankindex,StoxxBanks,presentedaslightlypositivecourseinthequarterandwas

up1.3%,whilethisBritishbankindex,FTSEBanks,fellback2.3%.

IntheUnitedStates,theinancialinstitutionindex,S&PFinancials

Index,wasup2.8%,whiletheregionalbankindex,S&PRegional

Banks,rose1.2%.

BBVAsresultsforthefourthquarterof2010havebeenin

linewithorslightlyaboveanalystsexpectations.Ingeneral,

theGroupssolidliquidityandsolvencypositionisespecially

noteworthy.Bybusinessareas,SpainandPortugalhasperformed

betterthanforecastedbythemarketandproducedresilient

results,stillaectedbythediiculteconomicsituation,but

keepingitsNPAratiowellincheck.TheresultsinMexicoonce

againexceededexpectationsandregisteredbetterrevenues

thanhadbeenforecasted.ThepositiveNPAratiois,foranalysts,

arelectionofthegradualrecoveryoftheMexicaneconomy.In

addition,thestandardizationoftheriskpremiumandgrowthof

volumeshavealsobeenwellvalued.InSouthAmerica,theresults

haveagainbeenapleasantsurprise.Someanalystsclaimthat

bothSouthAmericaandTurkeywillcontributeverypositivelyto

theGroupsproitsin2011.

Againstthisbackdrop,theBBVA sharehasimproved13.2%over

thequarter,abovetheIbexandEuropeanbankingsector,and

closedat8.56pershare,foramarketcapitalizationof38,447

million.Thisplacestheprice/tangiblebookvalueat1.0,theP/E

(calculatedonthemedianestimatedearningsfor2011according

totheconsensusamongBloomberganalysts)at8.2andthe

dividendyield(alsocalculatedonthemediandividendspershareestimatedbytheanalystsfor2011ascomparedtothequoted

priceasofMarch31,2011)at4.9%.

TheBBVAsharecontinuestohaveanotablyhighlevelof

liquidity.Intheirstquarteroftheyear,theaveragetrade,in

numberofshares,was78million,foradailyaverageamountof

658million.

Intermsofshareholder remuneration,onApril15th,it

wasdistributed0.149pershare.Thus,totalshareholder

remunerationcorrespondingtotheyear2010amountedto

0.42pershare.AsagreedintheAnnualGeneralMeetingof

ShareholdersonMarch11,2011,aflexibleremunerationsystem

wasimplemented.Calledthedividendoption,itallowsgiven

shareholderstobenefitfromitsfiscalbenefitsandBBVAto

strengthenitscapitalratios.Thepercentageofshareholders

whohaveoptedtoreceiveBBVAsharesreached79.7%,thus

confirmingthewideacceptanceofthisnewremuneration

system.

TheBBVAshare

The BBVA share and share performance ratios

31-03-11 31-12-10

Numberofshareholders 921,650 952,618

Numb er ofshares issued 4 ,490,908 ,2 85 4 ,490,908 ,2 85

Dailyaveragenumberofsharestraded

77,551,482 80,198,596

Dailyaveragetrading(millioneuros)

658 704

Maximumprice(euros) 9.49 10.17

Minimumprice(euros) 6.87 7.00

Closingprice(euros) 8.56 7.56

Bookvaluepershare(euros) 8.49 8.17

Marketcapitalization(millioneuros) 38,447 33,951

Price/Bookvalue(times) 1.0 0.9

PER(Price/Earnings;times) 8.2 7.4

Yield(Dividend/Price;%) 4.9 5.6

Share price index

(31-03-10=100)

60

70

80

90

100

110

120

30-06-10 30-09-1031-03-10 31-12-10 31-03-11

Stoxx 50

BBVA

Europe Stoxx

Banks


24/55


25/55

23Businessareas

Inthissectionwediscussthemoresigniicant aspectsofthe

activitiesandearningsoftheGroupsdierentbusinessareas,

alongwiththoseofthemainunitswithineach,plusCorporate

Activities.Speciically,wedealwiththeincomestatement,the

balancesheetandthemainratios:eiciency,NPAratio,NPA

coverageratioandtheriskpremium.

Followingtheacquisitionof24.9%oftheTurkishbankGaranti

anditsincorporationintotheinancialstatementsoftheGroup

startinginMarch2011,BBVAbegantohaveasigniicantpresence

inEuropeandAsiaintermsofitsbalancesheetandearnings.

Inaddition,sincethestartofthecrisis,theimportanceofthegeographicallocationofbusinesshasbeenclearforproviding

aproperperceptionofrisksandanimprovedestimateofthe

capacityforfuturegrowth.Finally,thenewregulationsfavor

alocalmanagementofstructuralrisksthatavoidspossible

contagionbetweeninancialsystems.Forthesemotives,the

businessespreviouslyincludedinSpainandPortugalandWB&AM

havebeenregroupedintothefollowingareas:

Spain:includesBBVAbusinessesinallsegments,withinthe

country.

Eurasia:coversallBBVAactivityintherestofEuropeandAsia,

includingtheGroupsstakeinGaranti.

Thisrespondstotheincreaseddemandforgeography-speciic

informationfromdierentusers,includingtheregulators.

Inaddition,itisworthnotingthatin2010liquidityconditionsonthe

inancialmarketshavemadeaccesstoinancemoreexpensivefor

Spanishcreditinstitutions.BBVA,S.A.hasbeennoexceptiontothis,

andthussinceJanuary2011,andwithretroactiveeectfor2010

data,theliquiditypremiumimputedtobusinessareasthroughthe

systemofinternalreferencerateshasbeenincreased.Theaimisto

adapttothenewrealityoftheinancialmarkets.

Thebusiness areasarenoworganizedasfollows:

Spain,whichincludes:Theretailnetwork,withthesegmentsof

individualcustomers,privatebanking,andsmallbusinessand

retailbankinginthedomesticmarket;CorporateandBusiness

Banking(CBB),whichhandlestheneedsofSMEs,corporations,

governmentanddevelopersinthecountry;Corporate

andInvestmentBanking,whichincludesactivitywithlarge

corporationsandmultinationalgroups;Markets,withthetrading

looranddistributionbusinessinthedomesticmarket;and

otherunits,amongthemBBVASegurosandAssetManagement

(managementofmutualandpensionfundsinSpain).

Eurasia,whichincludesbusinessintherestofEuropeand

Asia.In2010itwasreportedeitherinSpainandPortugal(BBVA

Portugal,ConsumerFinanceItalyandPortugal,andtheretail

businessofbranchesinParis,LondonandBrussels),orin

WB&AM(CorporateandInvestmentBanking,Markets,CNCB

andCIFH).Additionally,italsoincludestheinformationon

Garanti.

Mexico:includesthebanking,pensionsandinsurance

businessesinthecountry.

United States:encompassestheGroupsbusinessintheUnited

StatesandintheCommonwealthofPuertoRico.

South America:includesthebanking,pensionsandinsurance

businessesinSouthAmerica.

Aswellastheunitsindicated,alltheareasalsohaveallocations

ofotherbusinessesthatincludeeliminationsandotheritemsnot

assignedtotheunits.

Finally,theaggregateofCorporate Activitiesincludesthe

restofitemsthatarenotallocatedtothebusinessareas.

Thesebasicallyincludethecostsofheadofficeswithastrictly

corporatefunction,certainallocationstoprovisionssuchasearly

retirementsandothersalsoofacorporatenature.Corporate

Activitiesalsoperformsfinancialmanagementfunctionsfor

theGroupasawhole;essentiallymanagementofassetand

liabilitypositionsforinterestratesintheeuro-denominated

balancesheetandforexchangerates,aswellasliquidityand

capitalmanagementfunctions.Themanagementofassetand

liabilityinterest-rateriskincurrenciesotherthantheeurois

recordedinthecorrespondingbusinessareas.Italsoincludes

theIndustrialandFinancialHoldingsunitandtheGroupsreal

estatebusinesses.

Inaddition,supplementary informationisprovidedoftheglobal

businesscarriedoutbytheBBVAGroup.Homogeneousproducts

andrisks,andcommoncharacteristicsofthecustomersserved,makethisaggregateofbusinessesrelevanttobetterunderstand

theBBVAGroup.

Furthermore,asusualinthecaseofTheAmericas,bothconstant

andcurrentexchange rateshavebeenappliedwhencalculating

year-on-yearvariations.

TheGroupcompilesreportinginformationonalevelas

disaggregatedaspossible,andalldatarelatingtothebusinesses

theseunitsmanageisrecordedinfull.Thesebasicunitsare

thenaggregatedinaccordancewiththeorganizationalstructure

establishedbytheGroupathigher-levelunitsand,inally,the

businessareasthemselves.Similarly,allthecompaniesmakingup

theGrouparealsoassignedtothedierentunitsaccordingtothe

geographicalareaoftheiractivity.

Businessareas


26/55


27/55

25Spain

Spain

Income statement

(Millioneuros)

Spain

1Q11 % 1Q10

Net interest income 1,109 (14.9) 1,304

Netfeesandcommissions 392 (11.3) 442

Nettradingincome 173 134.6 74

Otherincome/expenses 93 (15.0) 109

Gross income 1,767 (8.4) 1,929

Operatingcosts (705) 2.1 (691)

Personnelexpenses (434) 4.3 (416)

Generalandadministrativeexpenses (247) (1.6) (251)

Depreciationandamortization (24) 2.4 (24)

Operating income 1,062 (14.2) 1,238

Impairmentoninancialassets(net) (422) 123.3 (189)

Provisions(net)andothergains(losses) 32 n.m. (42)

Income before tax 672 (33.3) 1,008

Incometax (195) (33.5) (293)

Net income 477 (33.3) 715

Non-controllinginterests (54.3) (1)

Net attributable proit 477 (33.3) 714

Balance sheet

(Millioneuros)

Spain

31-03-11 % 31-03-10

Cashandbalanceswithcentralbanks 3,367 45.4 2,316

Financialassets 55,547 (18.1) 67,823

Loansandreceivables 223,368 (1.3) 226,391

Loansandadvancestocustomers 207,547 (0.7) 209,025

Loansandadvancestocreditinstitutionsandother 15,822 (8.9) 17,366

Inter-areapositions

Tangibleassets 959 (4.2) 1,001

Otherassets 2,497 10.2 2,265

Total assets/Liabilities and equity 285,738 (4.7) 299,796

Depositsfromcentralbanksandcreditinstitutions 26,492 (28.8) 37,198

Depositsfromcustomers 124,523 31.4 94,740

Debtcertiicates

Subordinatedliabilities 5,394 3.0 5,236

Inter-areapositions 71,559 (31.1) 103,799

Financialliabilitiesheldfortrading 32,261 (5.2) 34,018

Otherliabilities 15,937 4.0 15,326

Economiccapitalallocated 9,571 1.0 9,478


28/55

26 Businessareas

TheareaofSpainincludesallthesegmentsof

BBVAsbankingandnon-bankingbusinessin

thecountry.

Intheirst quarter of 2011,theSpanishinancial

marketcontinuedtoshowsluggishlending

activity,withgreatercompetitivepressurein

thepricesofassetsandliabilitiesandanupturn

intheNPAratioofbanksandsavingsbanks.

Securityandconservativeformulascontinue

tobethemostimportantfactorindemandfor

savingsproducts.Theyhaveshowngreater

returnsthanthoseobservedbeforetheliquidity

squeezeof2010inamarketwithahighlevelof

householdsavingratioandthatisundergoinga

majorcorporatedeleveragingprocess.

AgainstthisbackgroundBBVAcontinuesto

prioritizeloyaltyandpriceovervolume,with

theaimofmaintainingaproitablecustomer

baseinallitssegments.Therefore,gross

lending to customersintheareacontinues

sluggish.Asof31Mar-2011itstoodat212,141m,1.0%downontheigureof31Mar-2010,in

aquarterthatisseasonallylowerthanthe

fourth.Despitethis,BBVAsproactivepolicyin

bringingitscommercialnetworksandcentral

servicestructuresintolinewithaneicient

andproductivecustomer-centricdistribution

system,aswellasitsfocusonmanagingprices

andawiderangeofproductsandservices,has

intheirstquarterconsolidateditscompetitive

advantageintermsofproitability,eiciency

andthegenerationofrecurringincome.BBVAis

alsocontinuingtowinmarketshareinproducts

thatinvolveagreaterlevelofcustomerloyalty.

Thishasconsolidateditsleadingpositioninthe

mainsegmentsofmanagedcustomers.

Withregardsto customer fundsunder

management(deposits,mutualfunds

andpensionfunds),theperformancewas

particularlygood.Theyclosedtheirstquarter

of2011at158,136m,up10.0%year-on-yearand

1.6%overthequarter.Thepositiveperformance

hasbeenbothintimedepositsandthoseof

lowercost.

TheGroupmanaged54,598min

obalancesheet fundsinSpainasof

31Mar-2011,aslightgrowthof1.3%overthe

quarter.Thevolumeofmutualfundshas

stabilizedat23,244m.Thiscontrastswiththe

fallsinthesecondhalfof2010.Themarketshare

remainsat15.6%,thankstothepositiveresults

fromthesaleofguaranteedfunds,whereBBVAs

shareis22.7%.Finally,pensionfundsamountedto

17,042m,aslightgrowthonthepreviousquarter,

aboveallinindividualpensionplans.Thus,BBVA

maintainsitspositionastheleadingpensionfund

managerinSpain,withamarketshareof18.3%

(latestavailabledataasofDecember).

Thefollowingisasummaryoftheearnings in

thearea:

Netinterestincomewas3.0%downoverthe

quarterto1,109m,asaresultofthecontinued

sluggishnessofbusinessmentionedabove,

thegreaterproportionoflower-riskportfolios

(whichalsohaveanarrowerspread),together

withincreasedwholesale-fundingcosts.

However,itisimportanttonotethatthedecline

isslowing,andthattheirstquarterof2011also

hadtwofewerdaysthanthefourthandthird

of2010.Theareahaskeptcustomerspreads

incheckandthusmaintainedproitability,

Signiicant ratios

(Percentage)

Spain

31-03-11 31-12-10 31-03-10Eiciencyratio 39.9 39.9 35.8




Spain highlights in the

irst quarter

Lethargyofbusinessactivityinthesector.

Continuedmarketsharegainsinkeyheadings.

Focusoncustomerloyaltyandpriceoverthe

volume.

Slowdownofthenetinterestincomedecrease.

Superiorperformanceinrisks.


29/55

27Spain

spreadsandthegoodperformanceofactivity

inMarkets.Atthesametime,reducedexpenses

makeahigherlevelofprovisionspossible.

Asaresult,thenet attributable proitinthe

areawas102muponthepreviousquarter,at

477m.

Themainindicatorsofassetquality were

maintainedintheirstquarterof2011.TheNPAratiocontinuedatthelevelsofthecloseof2010

(4.8%)andthecoverageratiostoodat43%(44%

atthecloseofDecember2010).Thisispossible

despitetheincreasedNPAratiointhesector

overall,whichaccordingtothelatestavailable

datastoodat6.2%(NPAratioiguresforbanks

andsavingsbanksasofFebruary).NewNPAfell

by31.5%overthequarter,leavingtherecovery

rateasaproportionofnewNPAat70.9%(66.8%

inthepreviousquarter)andthebalanceofNPA

asof31Mar-2011at2.3%belowtheigurefor

31Dec-2010.

CreditexposureinthedevelopersectorinSpain

asof31Mar-2011amountedto16,235m,aslight

fallonthe16,608masof31Dec-2010andan

improvementinitscomposition,withagreater

proportionofcompletedbuildings(mainly

dwellings)andafallinthenumberofbuildings

underconstructionandunsecuredtransactions.

Thevalueoftheguaranteescoveringdeveloper

risk,basedonup-to-dateappraisals,is24,316

million,withanaverageLTVof66.7%,which

easilycoverstheportfoliovalue.Inaddition,

therearespeciicandgenericprovisions

covering29%ofNPAsplussubstandard

impairedassetsand75%oftheamountto

beprovisioned(thevalueinexcessofthe

guaranteesafterapplyingtheregulatorycriteria

thatenteredintoforcewithCircular3/2010of

theBankofSpain).BBVAalsomaintainedatotal

of3,502minrealestateassetsatgrossbook

valuecomingfromloanstothesecompanies.

measuredasthenetinterestincome/ATAratio,

at1.50%.Netfeesandcommissions,at392m,

havefallenovertheperiodby1.7%,alsoin

linewithreducedbankingactivityandasa

resultofincreasingcustomerloyalty(thearea

hasreducedfeestoanincreasingnumberof

customers).ThegreatercontributionofNTIis

duetothepositivebusinessperformancein

theMarketsunit.Finally,thereductionintheotherincome/expensesitemisbasicallythe

resultofincreasedcontributionstotheDeposit

GuaranteeFund.Asaresultofalltheabove,

gross incomeis10.9%abovethelevelofthe

fourthquarterof2010,at1,767m.

Inaddition,operating expenseshavebeen

keptincheck.Intheirstquarterof2011,they

amountedto705m,ayear-on-yearincrease

of2.1%,slightlybelowthedomesticlevelof

inlation,butafalloverthequarterof5.0%.This

isduetotheproactivemeasuresimplementedbyBBVAwithitsTransformationPlanof2006,

twoyearsbeforethetrendbeguninthesector

asawhole.

Inall,theoperating incomeamountedto

1,062m,whichcomparesveryfavorablywith

thefourthandthirdquartersof2010(851m

and989mrespectively).Asaresult,despite

theextremelydiicultcurrenteconomic

situationthatishavingclearlynegativeeects

onthecountrysinancialsystem,theoperating

incomegeneratedbytheareainSpain

continuestobeextremelyresistant.Thishas

allowedprudentialcriteriatobemaintainedand

additionalprovisionstobeallocatedtoincrease

thebalanceofgenericprovisions.Thus,

impairmentlossesoninancialassetsincreased

by21moverthequarterto422m.

Tosumup,revenueshavebeenhigherthanthe

previousquarter,thankstothemaintenanceof

Spain. Operating income

(Million euros)

1,238

1Q

1,162

2Q

989

3Q

851

4Q

2010

1,062

1Q

2011

14.2%

Spain. Net attributable profit

(Million euros)

714

1Q

651

2Q

515

3Q

374

4Q

2010

477

1Q

2011

33.3%


30/55

28 Businessareas

BBVAhasoncemoreincreaseditsresidential

mortgage lendingshare(up7bpsover

thequarterand35bpsoverthe12months,

accordingtothelatestavailableiguresto

February).Thishasbeenboostedbythe

personalizedandlexibleHomePurchaseLoan,whichnowhasmoreassociated

advantages.Newloansamountedto1,513m,

withyieldupby54basispointsoverthe

quarter(up56basispointsoverthe12months).

Managedloansinresidentialmortgagesthus

increasedby2.9%year-on-yearto78,597m.

ItisaportfoliowithastableandreducedNPA

ratio(2.9%)andahighvalueduetoitscapacity

tobuildloyalty.Itwilltakeafewmonthsbefore

theriseininterestratesbeginstoberelectedin

theyieldofthisportfolio.

BBVAisinaleadingpositionbytheamount

distributedthrough ICO inance facilities,

Thesepropertieshaveanaveragecoverage

ratioof31%.

Retail and Commercial Banking

ThisunitincludestheRetailNetwork,with

thesegmentsofprivateindividualcustomers,

privatebanking,smallcompaniesandretailer

segmentsinthedomesticmarket;Corporate

andBusinessBanking(CBB),whichhandlesthe

needsoftheSMEs,corporations,government

anddevelopersinthedomesticmarket;and

otherbusinesses,amongwhichareBBVA

Seguros.

Asof31Mar-2011the loan book stoodat

195,165m,afallofbarely0.6%overthequarter

(0.5%overthelast12months).Thefollowing

arethemostimportantpointsinthisrespect:

Detail of real estate developers lending

(Millioneuros)

31-03-11 % Weighting 31-12-10 % Weighting Absolute variation

Withcollateral 15,053 92.7 15,249 91.8 (196)

Finishedproperties 7,698 47.4 7,403 44.6 295

Constructioninprogress 3,010 18.5 3,531 21.3 (521)

Land 4,345 26.8 4,315 26.0 30

Withoutcollateralandother 1,182 7.3 1,359 8.2 (177)

Total 16,235 100.0 16,608 100.0 (373)

Coverage of real estate developers exposure

(Millioneurosat310311)

Risk amount

Shortfall over

collateral (1) Provision

% Coverage over

shortfall

% Coverage over

risk

NPL 3,525 1,241 863 70 24

Substandar 2,399 1,045 314 30 13

Genericprovision 541

Total 5,924 2,286 1,717 75 29

(1)ShortfalloverupdatedcollateralvaluesandadditionalhaircutestablishedbytheBankofSpainregulation.

Foreclosures and asset purchases

(Millioneurosat310311)

Gross amount Provision % Coverage Net amount

Fromrealestatedevelopers 3,502 1,090 31 2,412

FromDwellings 986 237 24 749

Other 674 372 55 302

Total 5,162 1,699 33 3,463


31/55


32/55

30 Businessareas

Thusthepositivemanagementofvolumes

andthepricesofassetsandliabilitieshaveled

tostabilizationinthenetinterestincomeat

951m,andthusaslowdowninitsquarterlyfall

(2.8%,comparedwith5.6%asof31Dec-2010

and7.2%asof31Sep-2010).Thedistribution

ofmoreinsurance,stabilityinthevolumeof

mutualfundsundermanagement,leadershipin

pensionfundsandapositivetrendinfeesandotherincomeintheinstitutionalandcorporate

segmenthasalsohelpedtohaltthefallingtrend

oftheotherrevenuesintheunit.Asaresult,

thegross incomeforthequarteramountedto

1,389m,2.5%downonthefourthquarterof

2010.However,becauseoperatingexpenses

felltheoperatingincomeincreasedby4.0%

inthesameperiodto792m,thusallowing

moregenericprovisionstobemade.Thenet

attributable proittotaled285m,slowingits

quarterlyfall(11.6%comparedwith29.3%in

thepreviousquarter).

Wholesale Banking & AssetManagement

Thisunitmanagesthebusinesswithlarge

corporationsandmultinationalgroupsin

thedomesticmarketthroughCorporateand

InvestmentBankingandtheactivityofMarkets

inthesamegeographicalarea,withtheirtrading

loorbusinessanddistribution.Itisacustomer

basewithdiversiiedbusinessandhighcash

lowsfromothercountries.BBVAisableto

oerafullrangeofproductsandservicesand

supportthroughitsextensiveinternational

presence.

Themanaged loanbook(excludingrepos)was

13,038masof31Mar-2011,13.0%underthe

igurefor31Dec-2010,duetothestrategyof

focusingonthosecustomerswiththehighest

levelsofloyalty,proitabilityandcreditquality.Itwasalsoaectedbythegeneraltrendfor

morerestrictedactivity.Itisworthhighlighting

thatitisaportfoliowithalowNPAleveland

lowprovisioningneeds.Customer fundsended

thequarterat22,146m,aquarterlyincreaseof

15.2%(up31.3%year-on-year),mainlyasaresult

ofthehighlevelsofnewfundgathering.

Thishasapositiveeectontheunitsrecurrent

revenues(netinterestincomeplusfees),which

standat247mforthequarter,abovethe

igureregisteredinthethreepreviousquarters.Inaddition,theexcellentbusinessinMarkets

hasboostedNTIto123m.Gross incomethus

increasedby15.0%overtheirstquarterof2010

andmorethandoubledtheigureforthefourth

quarteroflastyear.Expensescontinuewiththe

growthtrendstartedinpreviousquartersasa

resultofinvestments,mainlyinsystemsandthe

developmentandexpansionofMarketsactivity.

Asaresult,theoperating incomewas270m,

up12.4%year-on-year,andmorethanthree

timestheigureforthepreviousquarter,while

thenet attributable proitwas191m(up11.4%

year-on-year).


33/55

31Eurasia

Eurasia

Income statement

(Millioneuros)

Eurasia

1Q11 % 1Q10

Net interest income 104 28.6 81

Netfeesandcommissions 63 12.4 56

Nettradingincome 31 (1.3) 31

Otherincome/expenses 139 128.5 61

Gross income 337 47.0 230

Operatingcosts (88) 25.9 (70)

Personnelexpenses (53) 19.6 (44)

Generalandadministrativeexpenses (31) 42.2 (22)

Depreciationandamortization (5) 7.0 (4)

Operating income 249 56.4 159

Impairmentoninancialassets(net) (29) 275.0 (8)

Provisions(net)andothergains(losses) 6 n.m. (2)

Income before tax 226 51.3 149

Incometax (28) 7.2 (26)

Net income 198 60.6 123

Non-controllinginterests (100.0) 1

Net attributable proit 198 60.0 124

Balance sheet

(Millioneuros)

Eurasia

31-03-11 % 31-03-10

Cashandbalanceswithcentralbanks 1,440 (7.0) 1,548

Financialassets 10,659 115.9 4,936

Loansandreceivables 36,051 40.4 25,683

Loansandadvancestocustomers 32,209 37.5 23,433

Loansandadvancestocreditinstitutionsandother 3,842 70.7 2,250

Inter-areapositions 7,254 (59.4) 17,887

Tangibleassets 549 62.3 338

Otherassets 962 166.8 360

Total assets/Liabilities and equity 56,915 12.1 50,754

Depositsfromcentralbanksandcreditinstitutions 19,740 10.2 17,905

Depositsfromcustomers 28,117 (0.7) 28,324

Debtcertiicates 602 n.m.

Subordinatedliabilities 1,789 43.5 1,247

Inter-areapositions

Financialliabilitiesheldfortrading 255 (29.2) 360

Otherliabilities 2,104 218.7 660

Economiccapitalallocated 4,309 90.8 2,258


34/55

32 Businessareas

ThisareacoversBBVAsactivityinEurope

(excludingSpain)andAsia.Inotherwords,it

includesBBVAPortugal,ConsumerFinanceItaly

andPortugal,theretailbusinessofbranchesin

Paris,LondonandBrussels(in2010thesewere

reportedinSpainandPortugal),andWB&AM

activity(CorporateandInvestmentBanking,MarketsandCNCB)withinthisgeographical

area.ItalsoincludestheGroupsholdingin

Garanti.

Itisanareawithagrowingcontributioninterms

ofbothearningsandthebalancesheet.Inthe

irst quarter of 2011,Eurasiagenerated13.5%

ofthenetattributableproitfromthebusiness

areas(17.2%oftheGroupsproit)andaccounted

for10.1%ofBBVAstotalassets.

Withrespecttothevolumeofbusiness,

gross lending to customersasof31Mar-2011

amountedto32,904m.Itsincreaseof38.1%

year-on-yearand35.5%quarter-on-quarteristhe

resultoftherecentincorporationofBBVAsstake

inGaranti.ExcludingtheTurkishbank,lending

wasverystable,andremainedpracticallyat

thesamelevelsasayearago,duetothefall

inglobalbusiness;atthesametime,retailand

commercialbankingregisteredayear-on-year

growthof14.1%(up2.1%overthequarter).

Customer fundsgrewby36.7%overthequarter

to27,457m.ExcludingGaranti,theyfellby7.6%,

duemainlytothelevelofglobalbusinessin

Europe.

Intermsofearnings,Eurasiagenerated198m

ofnetattributableproitoverthequarter.Garantisshareinthisigureisstillslight,asits

inancialstatementswereincorporatedintothe

GroupinMarch.Itscontributionwillthusbegin

tobemoresigniicantoverthecoming

quarters.Netinterestincome(up28.6%

year-on-year)andfees(up12.4%)performed

wellagainstabackgroundofrestrictedlending,

withthecontributionofWholesaleBanking&

AssetManagementbeingparticularlyimportant

inthisrespect.Asaresult,andcombinedwith

thesigniicantcontributionfromincomeby

theequitymethodfromCNCB,grossincome

increasedby47.0%year-on-yearto337m.

Operatingexpensesamountedto88mand

pushedoperatingincometo249m

(up56.4%).Ofthisigure,11.7%isallocatedfor

loan-lossprovisions,sothenetattributableproit

increasedby60.0%overthelasttwelvemonths.

Oftheaboveearnings,58.6%arefromAsia,

andincludethecontributionfromCNCB.Over

theirstquarterof2011,thiscontributionhas

Signiicant ratios

(Percentage)

Eurasia

31-03-11 31-12-10 31-03-10Eiciencyratio 26.2 27.3 30.6




Eurasia. Operating income

(Million euros)

159

1Q

199

2Q

170

3Q

257

4Q

2010

249

1Q

2011

+56.4%

Eurasia. Net attributable profit

(Million euros)

124

1Q

147

2Q

147

3Q

169

4Q

2010

198

1Q

2011

+60.0%

Eurasia highlights in the irst quarter

Growingcontributionfromthestrategic

holdinginChinaandfromthewholesale

businessinEurope.

Increasedbusinessactivityinboth

geographicalregions.

IncorporationofGarantibytheproportionalconsolidationmethod.


35/55

33Eurasia

beenextremelysigniicant,comparedwiththe

sameperiodthepreviousyear,fortworeasons:

irst,becausetheexerciseoftheadditional5%

purchaseoptionforCNCBwasmadeeectivein

thesecondquarterof2010(April1);andsecond,

becauseoftheareasexcellentperformance.

Inparticular,itisworthnotingthesigniicant

growthofbusinessinCNCB.Atthecloseof

December2010itsloanbookwasup18.6%

andcustomerdepositsup29.0%,withearnings

abovemarketexpectations(2010earningswere

50.2%abovethosefor2009).

AsofMarch22,BBVAexecutedtheacquisition

of24.9%ofGaranti,theleadingbankinTurkey.

Thisisanexcellentfranchisewith9.8million

customers,anetworkof853branchesand

over3,000ATMs.Theresultsfor2010show

arecordproit,withayear-on-yeargrowthof

11.3%,highgrowthinbusinessandcontinuous

improvementincreditquality.Garantiisalsoaverysolventbank,withsoundcapitalratiosand

lowleverage.Thisputsitinaprivilegedposition

forcontinuedstrongfuturegrowth.

Intermsofthecompositionofitsbalancesheet,

loansandadvancestocustomersamount

to56.4%ofthetotalandarethemotorofits

business.Ontheliabilitiesside,ithasavery

diversiiedbaseofsourcesofinance,with58.6%

fromcustomerdeposits.

GarantihasbeenconsolidatedintotheBBVA

Groupusingtheproportionalconsolidation

method.Itcontributesassetsof16.1billion,with

lendingandcustomerdepositsof8.9billion

each,andaproitof12msincethedateofits

acquisitiontotheendofthemonth.

Garanti. Signiicant data

31-12-10Financial statements (million euros)

Attributableproit 1,717

Totalassets 65,619

Loanstocustomers 34,354

Depositsfromcustomers 36,869

Relevant ratios (%)

Eiciencyratio 44.4

NPAratio 3.5

Other information

Numberofemployees 17,660

Numberofbranches 853

NumberofATMs 3,003

Garanti. Composition of assets and lending portfolio

(March 2011)

Garanti. Composition of liabilities

(March 2011)

Cash and banks 12.5%

Credit cards 11.4%

Securities 27.1%

Corporate 19.3%

Consumer 18.1%

SME 12.6%

Commercial 38.6%

Composition of assets Lending portfolio

Other 4.0% Loan to customers56.4%

Shareholders equity 13.0%

Deposits from customers58.6%

Other 6.2%

Fund borrowed 15.4%

Repo obligations 5.4%

Deposits from banks 1.4%


36/55

34 Businessareas

Mexico

Income statement

(Millioneuros) Units:

Mexico Banking business Pensions and Insurance

1Q11 % % (1) 1Q10 1Q11 % % (1) 1Q10 1Q11 % % (1) 1Q10Net interest income 967 12.4 5.1 860 948 12.6 5.2 842 17 (3.2) (9.5) 17

Netfeesandcommissions 299 6.8 (0.2) 280 282 6.6 (0.3) 265 14 (2.3) (8.7) 14

Nettradingincome 120 10.2 3.0 109 94 43.7 34.3 66 26 (40.4) (44.3) 44

Otherincome/expenses 51 31.6 23.0 39 (32) (16.3) (21.8) (38) 99 24.6 16.5 80

Gross income 1,437 11.6 4.3 1,288 1,294 14.0 6.5 1,135 156 0.7 (5.9) 155

Operatingcosts (521) 16.5 8.8 (448) (490) 19.3 11.5 (411) (42) 20.2 12.3 (35)

Personnelexpenses (230) 11.9 4.5 (206) (211) 12.0 4.6 (188) (19) 11.3 4.0 (17)

Generalandadministrativeexpenses (266) 19.0 11.2 (223) (254) 24.4 16.3 (204) (22) 29.5 21.0 (17)

Depreciationandamortization (26) 36.5 27.5 (19) (25) 37.4 28.4 (18) (1) 10.3 3.1 (1)

Operating income 916 9.0 1.8 840 804 11.0 3.7 724 114 (5.0) (11.2) 120

Impairmentoninancialassets(net) (310) (6.4) (12.5) (331) (310) (6.4) (12.5) (331)

Provisions(net)andothergains(losses) (11) (53.8) (56.8) (24) (10) (56.1) (59.0) (24) (1) n.m. n.m.

Income before tax 595 22.5 14.5 485 484 30.8 22.3 370 113 (5.4) (11.6) 120

Incometax (158) 15.1 7.6 (138) (126) 24.2 16.1 (102) (32) (11.0) (16.9) (37)

Net income 436 25.5 17.3 348 357 33.4 24.6 268 81 (2.9) (9.3) 83

Non-controllinginterests (1) (5.5) (11.7) (1) 26.3 18.0 (1) (7.1) (13.2) (1)

Net attributable proit 436 25.5 17.3 347 357 33.4 24.6 268 80 (2.9) (9.2) 83

(1)Atconstantexchangerate.

Balance sheet

(Millioneuros)

Units:

Mexico Banking business Pensions and Insurance

31-03-11 % % (1) 31-03-10 31-03-11 % % (1) 31-03-10 31-03-11 % % (1) 31-03-10Cashandbalanceswithcentral

banks 5,415 (12.0) (10.6) 6,154 5,415 (12.0) (10.6) 6,154

Financialassets 25,553 (0.3) 1.3 25,640 20,868 (2.5) (0.9) 21,407 4,939 10.3 12.1 4,479

Loansandreceivables 42,705 26.0 28.1 33,882 42,379 2 5.8 27.8 33,686 384 46.1 48.4 263

Loansandadvancesto

customers 34,901 12.4 14.2 31,061 34,712 12.2 14.0 30,945 224 69.1 71.8 133

Loansandadvancestocreditinstitutionsandother 7,804 176.7 181.2 2,821 7,667 179.7 184.2 2,741 159 22.6 24.6 130

Tangibleassets 864 6.5 8.3 811 857 6.6 8.3 804 7 (0.8) 0.8 7

Otherassets 913 (49.9) (49.1) 1,825 2,372 18.6 20.6 2,000 185 95.3 98.5 95

Total assets/Liabilities and equity 75,451 10.4 12.2 68,312 71,891 12.2 14.1 64,050 5,514 13.9 15.7 4,843

Depositsfromcentralbanksandcreditinstitutions 13,869 40.4 42.7 9,877 13,869 40.4 42.7 9,877

Depositsfromcustomers 36,950 7.3 9.1 34,430 36,974 7.2 9.0 34,482

Debtcertiicates 3,500 6.9 8.7 3,274 3,500 6.9 8.7 3,274

Subordinatedliabilities 2,164 22.7 24.7 1,765 3,787 90.5 93.6 1,988

Financialliabilitiesheldfortrading 4,441 (15.5) (14.1) 5,254 4,441 (15.5) (14.1) 5,254

Otherliabilities 10,727 3.7 5.3 10,349 5,906 (2.7) (1.2) 6,072 5,178 11.9 13.8 4,625

Economiccapitalallocated 3,799 13.0 14.8 3,363 3,414 10.0 11.8 3,103 336 54.3 56.8 218

(1)Atconstantexchangerate.


37/55

35Mexico

Thisareacomprisesthebanking,pensionsand

insurancebusinessconductedinMexicobythe

BBVABancomerFinancialGroup(hereinafter,

BBVABancomer).

Atthestartof2011,the Mexican economy has

continuedonitsgrowthpaththathastakenit

toGDPrateshigherthanthosebeforethe2009

crisis.Thesustainedstrengthofforeigndemand,favorableconditionsforinanceandalabor

marketthatcontinuestocreatejobsalljustify

prospectsforgrowthof4.7%in2011.Therecould

beupwardpressureoninlationasaresultof

increasedpricesofoilandothercommodities.

Againstthisbackdropofincreaseddemand

andgreatercosts,theCentralBankofMexico

(Banxico)couldbegintoincreaseinterestrates

attheendof2011andevenclosetheyearat

nearly5%(4.5%inApril2011).Banxicoscredibility

inmonetarypolicymanagementandseveral

macroeconomicpoliciesdesignedforstabilitywillpreventtheprocessofincreasingratesfrom

reachingthepeaksrecordedintheprevious

cycle.

Intermsoftheexchange rate,theabundance

ofgroupliquidityandthecyclicalmoment

oftheMexicaneconomyhaveenabledthe

appreciationagainstthedollartobemaintained,

which,asaresultoftheUScurrencyscourse,

hasbeenloweragainsttheeuro.Infact,the

Mexicanpesohasdepreciatedinthelast

twelvemonths,thoughinaverageterms,its

appreciationhascontinued.Inall,theimpact

ofthecurrencyoverthelastyearispositivein

earnings,butnegativeonthebalancesheetand

volumeofbusiness.Asisstandard,comments

regardingthepercentchangeareexpressedin

termsofconstantexchangerates.Theigures

withandwithoutthecurrencyeectareshown

intheenclosedtables.

Intheirstquarterof2011,theareapresented

solidearnings.Thenetinterestincomereached

967m,withyear-on-yeargrowthof5.1%,which

wasboostedprimarilybythegreatervolumes

oflendingandcustomerfunds.Inaddition,the

progressofNTIandrevenuesfrominsurance

activitieshasosetthereducedcontributionof

BBV Argent Aria, S.a._1

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