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Q1 2009 Earning Report of Banco Bilbao Vizcaya

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BBVA demonstrated the recurrent nature and sustainability of its business model in 2008. In the first quarter of 2009, BBVA continued its strong performance with recurrent operating income supported by recurrent revenues and greater efficiency. Risk management also remained prudent with lower entries to NPAs, provisioning in line with the second half of 2008, and ample generic provisions to cover losses.

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BBVA Group Results First quarter 2009 Recurrence and sustainability Madrid, 28th April 2009
Disclaimer This document is only provided for information purposes and does not constitute, nor must it be interpreted as, an offer to sell or exchange or acquire, or an invitation for offers to buy securities issued by any of the aforementioned companies. Any decision to buy or invest in securities in relation to a specific issue must be made solely and exclusively on the basis of the information set out in the pertinent prospectus filed by the company in relation to such specific issue. Nobody who becomes aware of the information contained in this report must regard it as definitive, because it is subject to changes and modifications. This document contains or may contain forward looking statements (in the usual meaning and within the meaning of the US Private Securities Litigation Act of 1995) regarding intentions, expectations or projections of BBVA or of its management on the date thereof, that refer to miscellaneous aspects, including projections about the future earnings of the business. The statements contained herein are based on our current projections, although the said earnings may be substantially modified in the future by certain risks, uncertainty and others factors relevant that may cause the results or final decisions to differ from such intentions, projections or estimates. These factors include, without limitation, (1) the market situation, macroeconomic factors, regulatory, political or government guidelines, (2) domestic and international stock market movements, exchange rates and interest rates, (3) competitive pressures, (4) technological changes, (5) alterations in the financial situation, creditworthiness or solvency of our customers, debtors or counterparts. These factors could condition and result in actual events differing from the information and intentions stated, projected or forecast in this document and other past or future documents. BBVA does not undertake to publicly revise the contents of this or any other document, either if the events are not exactly as described herein, or if such events lead to changes in the stated strategies and intentions. The contents of this statement must be taken into account by any persons or entities that may have to make decisions or prepare or disseminate opinions about securities issued by BBVA and, in particular, by the analysts who handle this document. This document may contain summarised information or information that has not been audited, and its recipients are invited to consult the documentation and public information filed by BBVA with stock market supervisory bodies, in particular, the prospectuses and periodical information filed with the Spanish Securities Exchange Commission (CNMV) and the Annual Report on form 20-F and information on form 6-K that are disclosed to the US Securities and Exchange Commission. Distribution of this document in other jurisdictions may be prohibited, and recipients into whose possession this document comes shall be solely responsible for informing themselves about, and observing any such restrictions. By accepting this document you agree to be bound by the foregoing Restrictions. 2
Contents Main features of the Group’s results Summary by business area Conclusions 3
2008: a year in which BBVA demonstrated the recurrent nature and sustainability of its business model + Superior performance Sustainable profit Net attributable profit Net attributable profit Peer group aggregate excluding BBVA Group BBVA Group (€bn) Excl. one-offs (€m) 83.1 5,403 5,414 75.2 63.1 60.8 4,580 3,806 31.4 21.7 2,923 2,227 1,719 -28.6 2002 2003 2004 2005 2006 2007 2008 2002* 2003* 2004 2005 2006 2007 2008 Peers: Barclays, BNPP, Crédit Agricole S.A., Credit Suisse, Deutsche Bank, HBOS, Intesa Sanpaolo, Lloyds, RBS, Santander, Société Net attributable profit 2008 including one-offs is €5,020m Générale, UBS and Unicredit 4
First quarter 2009: confirmation of 2008 strengths Gross income BBVA Group (€m) +2.5% Net attrib. profit 4,889 4,772 BBVA Group excluding one-offs 4,559 (€m) +7.2% -14.2% 1Q08 4Q08 1Q09 1,442 1,238 Operating income 1,093 BBVA Group (€m) +13.2% +4.9% 1Q08 4Q08 1Q09 2,819 2,688 2,356 +19.7% One-offs in 4Q08: One-offs in 1Q08: -€575m (Early +€509m 1Q08 4Q08 1Q09 retirements and Madoff) (Bradesco) 5
Despite the persistent complex environment ... Good start to the year with a very positive first quarter supported by ... 1 Recurrent nature of operating income 1.1 Recurrent revenues 1.2 Greater efficiency 2 Prudent risk management Sustainability: Organic generation of capital 3 7
1 Recurrent operating income Operating income BBVA Group (€m) +4.9% 2,819 2,784 2,696 2,688 2,483 2,356 2,306 +19.7% +8.3% in constant € 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 Recurrent operating income: the key in today’s environment 8
Strong growth of net interest income ... 1.1 Net interest income / ATAs BBVA Group Net interest income (%) 2.42 BBVA Group 2.26 (€m) 2.09 2.06 +20.1% 2006 2007 2008 1Q09 3,272 3,043 3,087 2,726 2,830 2,697 Lending and customer funds 2,433 BBVA Group Year-on-year growth (Average balances) +6.0% 12.4 5.3 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 Lending Customer funds Appropriate management of the slowdown and focus on pricing 9
... that supports high quality growth in Gross Income Gross income Breakdown of gross income BBVA Group BBVA Group (€m) (€m) NII + fees & commissions NTI + Other operating income & expenses +2.5% 11.0% 19.2% 4,630 4,772 4,853 4,794 4,559 4,889 4,196 89.0% 80.8% +8.2 pp +7.2% 1Q08 1Q09 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 Improvement in the quality of revenues and limited variability 10
Spain & Portugal: focus on pricing ... Net interest income Lending and customer funds (€m) Year-on-year growth (Average balances) 7.1% +5.6% 1.3% 1,210 1,146 Lending Customer funds* Front book spreads +31.9% on € balance BBVA Spain sheet 8.75 (%) 8,66 8.97 6.31 5.81 7.6 5.59 5.55 1Q08 1Q09 5.19 5.38 4.67 1.32 4.43 3.74 3.5 1.02 Gross income: €1,747m 0.94 0.88 0.88 0.85 0.84 (+1.0% on 1Q08) Sep.07 Dec.07 Mar.08 Jun.08 Sep.08 Dec.08 Mar.09 Consumer Business Mortgages 11 * Liquid funds + time deposits
In Mexico: good levels of business activity and prices maintained with lower-risk mix Lending and cust. funds Net interest income / ATAs Year-on-year growth (%) (Average balances) 6.31 6.32 5.94 5.65 5.53 19.4% 11.9% 1Q08 2Q08 3Q08 4Q08 1Q09 Lending Customer funds Net interest income (Constant €m) +6.0% Lending mix (%) 816 770 39.5% 41.9% 30.1% 32.9% 30.4% 25.2% 1Q08 1Q09 1Q08 1Q09 SMEs, Corporate & Public Sector Mortgages Gross Income: €1,225m Consumer & Cards +1.0% vs 1Q08 | +8.4% vs 1Q08 excl. VISA IPO 12
And in the other areas Gross income WB&AM Lending and customer funds (€m) Year-on-year growth +7.7% (Average balances) 30.1% 518 481 17.1% Lending Customer funds 1Q08 1Q09 USA Lending and customer funds Net interest income Year-on-year growth (Constant €m) (Average balances) +3.6% 8.3% 379 366 2.2% G. Income: -5.3% Lending Customer funds 1Q08 1Q09 South America Net interest income Lending and customer funds (Constant €m) Year-on-year growth +16.2% (Average balances) 26.3% 589 12.3% 507 Gross Income: +19.1% Lending Customer funds 1Q08 1Q09 13
And on the other hand, a very efficient 1.2 distribution network in our main markets ... Spain South America Mexico Market share Market share Market share (%) (%) (%) +33% +61% +46% 11.2%* 29.0%* 12.7%* 18.0% 8.4% 8.68% Branches Business Branches Business Branches Business Efficient networks are essential given their weight in the cost structure 14 * Lending + cust. funds; Dec 08 figures
... as a consequence of the Group’s transformation plan ... Strict cost control Total expenses Total expenses BBVA Group Excl. Compass and one-offs BBVA Group (€m) Year-on-year growth (%) -0.7% 4.8 3.4 3.0 2.6 2,084 2,070 -1.9 3M08 6M08 9M08 12M08 3M09 1Q08 1Q09 Estimated growth of expenses in 2009: +0% 15
... that started in Spain & Portugal and spread to the other business areas ... Total expenses Spain & Portugal Total expenses Mexico Year-on-year growth Year-on-year growth (%) (%) 10.8 1.8 1.7 8.3 7.1 6.5 -0.9 -1.3 2.1 -6.5 3M08 6M08 9M08 12M08 3M09 3M08 6M08 9M08 12M08 3M09 Total expenses Total expenses Total expenses WB&AM USA South America Year-on-year growth Quarter by quarter Year-on-year growth (Constant €m) (%) (%) 17.0 16.6 Adjusted inflation: +16.2% 384 379 377 363 13.3 339 10.8 18.6 18.4 17.5 17.4 7.8 13.3 3M08 6M08 9M08 12M08 3M09 1Q08 2Q08 3Q08 4Q08 1Q09 3M08 6M08 9M08 12M08 3M09 16
... and our ongoing obsession with improving efficiency Efficiency incl. depreciation Efficiency incl. depreciation BBVA Group excluding one-offs Business Areas (%) (%) Efficiency Y/Y growth 1Q09/1Q08 (%) -1.3 p.p. Spain & 35.0% -2.8 p.p. Portugal 43.7 42.3 WB&AM 25.4% 0.0 p.p. Incl. one-offs 42.3% (-1.3 p.p.) Mexico 32.3% +0.4 p.p. USA 62.5% -0.9 p.p. 3M08 3M09 South 40.7% -3.0 p.p. America 17
In summary, recurrent operating income Operating income BBVA Group (€m) +4.9% 2,819 2,784 2,696 2,688 2,483 2,356 2,306 +19.7% +8.3% in constant € 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 Recurrent operating income: the key in today’s environment 18
Despite the persistent complex environment ... Good start to the year with a very positive first quarter supported by ... 1 Recurrent operating income 1.1 Recurrent revenues 1.2 Greater efficiency 2 Prudent risk management 3 Sustainability: Organic generation of capital 19
2 Prudent risk management A Lower entries to NPAs B Provisioning in line with 2H08 C Preservation of generic provisions Ample coverage by provisions and D collateral Operating income: an excellent buffer E for cost of risk 20
Lower entries to NPAs and higher A efficiency with recoveries... Net entries to NPAs Recoveries / entries to NPA BBVA Group BBVA Group (€m) (%) 32.4% 3,001 2,559 29.6% 2,262 27.9% 3Q08 4Q08 1Q09 3Q08 4Q08 1Q09 Net entries to NPAs down 15% in quarter 21
... with special relevance in the case of Spain & Portugal ... Net entries to NPAs NPA spread vs. the system Spain & Portugal BBVA Spain vs. banks and saving banks (€m) BBVA vs. banks 89 + saving banks 1,966 47 1,493 1,497 31 6 Dec.07 Jun.08 Dec.08 Feb.09 3Q08 4Q08 1Q09 ... which enables us to continue improving our relative position 22
B Provisioning starts to stabilise ... Loan-loss provisioning BBVA Group Quarter by quarter (€m) 892 853 802 596 584 545 452 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 23
... at all units Cost of risk Spain & Portugal Cost of risk in Mexico Quarter by quarter Quarter by quarter (%) (%) 4.92 4.81 3.75 0.45 0.38 0.38 3Q08 4QT08 1Q09 3Q08 4Q08 1Q09 Cost of risk in South America Cost of risk USA Quarter by quarter Quarter by quarter (%) (%) 2.30 1.70 1.55 1.37 1.60 1.08 3Q08 4Q08 1Q09 3Q08 4Q08 1Q09 Provisioning starts to stabilise 24
Limited release of generic provisions to C preserve a balance for future quarters ... Generic provisions Breakdown of variations in generic (€m) provisions Mar 09 vs. Dec 08 (€m) -€225m Risk and Variation Mar Transfer to activity 09-Dec 08 specific +€57m Exchange -€66m rates €4,334m €4,558m -€216m -€225m Dec 08 Mar 09 Release of €216m in 1Q09 (vs. €300m in 4Q08) to offset the charge for specific provisions 25
Ample coverage by provisions and D collateral Doubtful assets and property acquired (€m) €2,744m Specific prov €3,009m Total Value of doubtful collateral €10,543M Net doubtful €10,278m €11,177m €7,534m €8,433m Property (net) Property Property (net) €899m €1,119m €899m Collateral exceeds net value of doubtful assets by €2,744m In addition, about €4,991m of generic and substandard provisions 26
Recurrent operating profit is the most important competitive advantage in the E industry in the present context Operating profit1 as Cost of risk Additional cost of risk maximum cost of risk 2 Peer Group supported by operating (%, Dec 08) profit 3 Peer Group (%, Dec 08) Peer Group (%, Dec 08) BBVA 2.6 Peer 1 BBVA 0.34 3.5 Peer 9 2.1 Peer 2 Peer 9 0.41 3.1 Peer 4 1.3 Peer 3 Peer 4 2.3 0.62 Peer 3 1.1 Peer 4 0.69 Peer 12 2.2 Peer 5 1.0 Peer 5 0.75 Peer 10 2.0 Peer 12 0.8 Peer 5 BBVA 0.86 1.8 Peer 10 0.7 Peer 11 1.7 Peer 6 0.89 Peer 11 0.4 Peer 7 Peer 3 1.7 0.96 Peer 8 0.3 Peer 8 Peer 8 1.3 1.01 -1.0 Peer 7 Peer 13 Peer 9 0.5 1.05 -1.8 Peer 13 Peer 7 Peer 10 1.22 0.0 -1.6 Peer 2 Peer 11 1.32 Peer 2 n.a. -5.9 Peer 1 Peer 12 1.35 Peer 1 n.a. n.a. 2.24 -7.1 Peer 13 Peer 6 Peer 6 Peers: Barclays, BNPP, Crédit Agricole S.A., Credit Suisse, Deutsche Bank, HBOS, 1. Operating profit as old account 27 Intesa Sanpaolo, Lloyds, RBS, Santander, Société Générale, UBS and Unicredit 2. Maximum cost of risk supported by operating profit without generating losses 3. Maximum cost of risk – Current cost of risk
Despite the persistent complex environment ... Good start to the year with a very positive first quarter supported by ... 1 Recurrent operating income 1.1 Recurrent revenues 1.2 Greater efficiency 2 Prudent risk management 3 Sustainability: Organic generation of capital 28
3 Sustainable profits ... (€m, excl. one-off items) Annual Growth Annual Growth Accum. 1Q09/1Q08 1Q09/4Q08 BBVA Group 1Q09 Abs. % Abs. % 3,272 20.1% + 185 6.0% + 547 Net Interest Income 4,889 + 117 2.5% + 330 7.2% Gross Income 2,819 + 131 4.9% + 463 19.7% Operating Income 1,834 - 222 -10.8% + 385 26.6% Income Income Tax 1,354 - 182 -11.9% + 163 13.6% Net Income 1,238 - 204 -14.2% + 144 13.2% Net Attributable Profit One-offs in 1Q08 after tax: One-offs in 4Q08 after tax: - +€509m €575m (Bradesco) (early retirements & Madoff) 29
Sustainable profits ... (€m) Annual Growth Annual Growth Accum. 1Q09/1Q08 1Q09/4Q08 BBVA Group 1Q09 Abs. % Abs. % 3,272 + 547 20.1% + 185 6.0% Net Interest Income 4,889 + 117 2.5% + 330 7.2% Gross Income 2,819 + 131 4.9% + 463 19.7% Operating Income 1,834 - 949 -34.1% + 1,206 n.s. Income Income Tax 1,354 - 691 -33.8% + 737 n.s. Net Income 1,238 - 713 -36.6% + 719 n.s. Net Attributable Profit 30
... that allow us to continue generating capital organically Core capital Tier I and Capital ratio BIS II BIS II (%) (%) Tier I 7.7% 6.4 6.2 Capital 11.5% ratio Dec. 08 Mar.09 Organic generation of capital: +20 b.p. 31
Superior profitability levels (%) ROA: 1.00% RoRWA: 1.88% ROE: 19.4% ROTE: 26.7% 32
Despite the persistent complex environment ... Good start to the year with a very positive first quarter supported by ... 1 Recurrent operating income 1.1 Recurrent revenues 1.2 Greater efficiency 2 Prudent risk management 3 Sustainability: Organic generation of capital 34
Contents Main features of the Group’s results Summary by business area Conclusions 35
Spain & Portugal: 1Q09 highlights Customer spread (%) 3.36 3.29 3.12 3.09 3.06 Better price management 1Q08 2Q08 3Q08 4Q08 1Q09 Total expenses Year-on-year growth (%) 1.8 1.7 Decrease in expenses -0.9 -1.3 -6.5 3M08 6M08 9M08 12M08 3M09 Net entries to NPAs (€m) 1,966 1,497 1,493 Lower entries to NPAs 3Q08 4Q08 1Q09 36
Spain & Portugal: 1Q09 highlights Euro balance sheet Net interest income / ATAs Net interest income Euro balance sheet Euro balance sheet (%) (€m) 31.9% 1,585 1,306 2.36 1,136 1,163 1,202 1,207 1,225 1.89 1.84 1.82 1.80 1.80 1.79 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 37
Spain & Portugal: 1Q09 results (€m) Annual Growth Annual Growth Accum. 1Q09/1Q08 1Q09/4Q08 Spain & Portugal 1Q09 Abs. % Abs. % 1,210 + 64 5.6% - 47 -3.7% Net Interest Income 1,747 + 18 1.0% - 64 -3.5% Gross Income 1,135 + 61 5.6% -5 -0.4% Operating Income 947 - 25 -2.5% + 13 1.4% Income Income Tax 657 - 16 -2.4% +8 1.3% Net Income 657 - 16 -2.4% +8 1.3% Net Attributable Profit ROE: 37.0% 38
Wholesale Banking & Asset Management: 1Q09 highlights Lending and customer funds y-o-y growth WB&AM (Average balances) 30.1% 17.1% Corporate & Lending Customer funds Investment Banking: Operating income +25.1% (€m) capitalising on opportunities 173 138 1Q08 1Q09 Market share of mutual funds in Spain (y/y growth) 20.14 19.98 19.78 Asset Management: 18.71 gaining mkt share in mutual 17.92 funds Feb.08 Jun.08 Dec.08 Jan.09 Feb.09 40
Wholesale Banking & Asset Management: 1Q09 results (€m) Annual Growth Annual Growth Accum. Wholesale Banking & 1Q09/1Q08 1Q09/4Q08 Asset Management 1Q09 Abs. % Abs. % 518 + 37 7.7% + 296 n.s. Gross Income 386 + 27 7.6% + 293 n.s. Operating Income 365 + 45 14.2% + 328 n.s. Income Income Tax 269 +0 0.1% + 237 n.s. Net Income -0.1% + 237 n.s. 268 -0 Net Attributable Profit ROE: 25.3% 41
Mexico: 1Q09 highlights Operating income Quarter by quarter (Constant €m) +0.4% +11.7% 829 825 790 781 765 VISA IPO 83 1Q08 2Q08 3Q08 4Q08 1Q09 Good operating income performance 43
Mexico: 1Q09 highlights Lending and customer funds 19.4% Year-on-year growth (Average balances) Good business and 11.9% change of mix Lending Customer funds Total expenses 10.8 Year-on-year growth 8.3 7.1 (%) 6.5 Cost control 2.1 3M08 6M08 9M08 12M08 3M09 Cost of risk (%) 4.9 4.8 3.8 3.0 2.9 Cost of risk contained 1Q08 2Q08 3Q08 4Q08 1Q09 Net attrib. profit: €363m (-16.1% vs -2.4% without VISA IPO) 44
Mexico: 1Q09 results (Constant €m) Annual Growth Annual Growth Accum. 1Q09/1Q08 1Q09/4Q08 Mexico 1Q09 Abs. % Abs. % 816 + 46 6.0% - 18 -2.1% Net Interest Income 1,225 + 12 1.0% + 31 2.6% Gross Income 829 +4 0.4% + 48 6.1% Operating Income +5 1.2% 465 - 136 -22.6% Income Income Tax 363 - 70 -16.1% - 15 -3.9% Net Income 363 - 70 -16.1% - 15 -3.9% Net Attributable Profit Net attrib. profit: €363m (-16.1% vs -2.4% without VISA) 45
USA: 1Q09 highlights Total expenses Quarter by quarter (Constant €m) 384 381 379 377 363 339 Cost control 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 Operating income Quarter by quarter (Constant €m) 215 210 204 181 179 Stabilisation of operating 173 income 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 Provisions Quarter by quarter 150 (Constant €m) 126 112 78 Stabilisation of provisioning 54 54 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 Stabilisation of net attrib. profit: 3Q08: €23m | 4Q08: €23m | 1Q09: €42m 47
USA: 1Q09 results (Constant €m) Annual Growth Annual Growth Accum. 1Q09/1Q08 1Q09/4Q08 USA % 1Q09 Abs. Abs. % 379 + 13 3.6% +0 0.0% Net Interest Income 543 - 31 -5.3% -9 -1.6% Gross Income 204 -6 -3.0% + 31 17.9% Operating Income 62 - 85 -57.7% + 30 93.2% Income Income Tax 42 - 54 -56.0% + 20 86.8% Net Income 42 - 54 -56.0% + 20 86.8% Net Attributable Profit Net attrib. profit: €63m (without amortisation of intangibles) 48
South America: 1Q09 highlights Lending and customer funds 26.3% Year-on-year growth (Average balances) 12.3% Good level of business activity Lending Customer funds Gross income +19.1% (Constant €m) 924 776 Dynamic generation of income 1Q08 1Q09 Total expenses Year-on-year growth 18.6 18.4 17.5 17.4 (%) 13.3 Cost control Adjusted inflation: +16.2% 3M08 6M08 9M08 12M08 3M09 Cost of risk by quarter (%) 2.3 1.6 Cost of risk contained 1.5 1.1 1.0 1Q08 2Q08 3Q08 4Q08 1Q09 50
South America: 1Q09 results (Constant €m) Annual Growth Annual Growth Accum. 1Q09/1Q08 1Q09/4Q08 South America 1Q09 Abs. % Abs. % 589 + 82 16.2% -5 -0.8% Net Interest Income 924 + 148 19.1% + 21 2.3% Gross Income 548 + 104 23.4% + 39 7.6% Operating Income 445 + 70 18.5% + 94 26.7% Income Income Tax 343 + 55 19.1% + 58 20.2% Net Income 225 + 37 19.5% + 38 20.2% Net Attributable Profit ROE: 40.3% 51
Contents Main features of the Group’s results Summary by business area Conclusions 53
In 1Q09 we confirmed the strengths demonstrated in 2008 ... A Recurrent earnings: operating income + Strict cost control Recurrent revenues Improvement of efficiency in dire times B Superior risk management Increase in the gap with competitors C Sustainability of earnings Organic generation of capital 54
BBVA Group Results First quarter 2009 Recurrence and sustainability Madrid, 28th April 2009

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Q1 2009 Earning Report of Banco Bilbao Vizcaya

  • 1. BBVA Group Results First quarter 2009 Recurrence and sustainability Madrid, 28th April 2009
  • 2. Disclaimer This document is only provided for information purposes and does not constitute, nor must it be interpreted as, an offer to sell or exchange or acquire, or an invitation for offers to buy securities issued by any of the aforementioned companies. Any decision to buy or invest in securities in relation to a specific issue must be made solely and exclusively on the basis of the information set out in the pertinent prospectus filed by the company in relation to such specific issue. Nobody who becomes aware of the information contained in this report must regard it as definitive, because it is subject to changes and modifications. This document contains or may contain forward looking statements (in the usual meaning and within the meaning of the US Private Securities Litigation Act of 1995) regarding intentions, expectations or projections of BBVA or of its management on the date thereof, that refer to miscellaneous aspects, including projections about the future earnings of the business. The statements contained herein are based on our current projections, although the said earnings may be substantially modified in the future by certain risks, uncertainty and others factors relevant that may cause the results or final decisions to differ from such intentions, projections or estimates. These factors include, without limitation, (1) the market situation, macroeconomic factors, regulatory, political or government guidelines, (2) domestic and international stock market movements, exchange rates and interest rates, (3) competitive pressures, (4) technological changes, (5) alterations in the financial situation, creditworthiness or solvency of our customers, debtors or counterparts. These factors could condition and result in actual events differing from the information and intentions stated, projected or forecast in this document and other past or future documents. BBVA does not undertake to publicly revise the contents of this or any other document, either if the events are not exactly as described herein, or if such events lead to changes in the stated strategies and intentions. The contents of this statement must be taken into account by any persons or entities that may have to make decisions or prepare or disseminate opinions about securities issued by BBVA and, in particular, by the analysts who handle this document. This document may contain summarised information or information that has not been audited, and its recipients are invited to consult the documentation and public information filed by BBVA with stock market supervisory bodies, in particular, the prospectuses and periodical information filed with the Spanish Securities Exchange Commission (CNMV) and the Annual Report on form 20-F and information on form 6-K that are disclosed to the US Securities and Exchange Commission. Distribution of this document in other jurisdictions may be prohibited, and recipients into whose possession this document comes shall be solely responsible for informing themselves about, and observing any such restrictions. By accepting this document you agree to be bound by the foregoing Restrictions. 2
  • 3. Contents Main features of the Group’s results Summary by business area Conclusions 3
  • 4. 2008: a year in which BBVA demonstrated the recurrent nature and sustainability of its business model + Superior performance Sustainable profit Net attributable profit Net attributable profit Peer group aggregate excluding BBVA Group BBVA Group (€bn) Excl. one-offs (€m) 83.1 5,403 5,414 75.2 63.1 60.8 4,580 3,806 31.4 21.7 2,923 2,227 1,719 -28.6 2002 2003 2004 2005 2006 2007 2008 2002* 2003* 2004 2005 2006 2007 2008 Peers: Barclays, BNPP, Crédit Agricole S.A., Credit Suisse, Deutsche Bank, HBOS, Intesa Sanpaolo, Lloyds, RBS, Santander, Société Net attributable profit 2008 including one-offs is €5,020m Générale, UBS and Unicredit 4
  • 5. First quarter 2009: confirmation of 2008 strengths Gross income BBVA Group (€m) +2.5% Net attrib. profit 4,889 4,772 BBVA Group excluding one-offs 4,559 (€m) +7.2% -14.2% 1Q08 4Q08 1Q09 1,442 1,238 Operating income 1,093 BBVA Group (€m) +13.2% +4.9% 1Q08 4Q08 1Q09 2,819 2,688 2,356 +19.7% One-offs in 4Q08: One-offs in 1Q08: -€575m (Early +€509m 1Q08 4Q08 1Q09 retirements and Madoff) (Bradesco) 5
  • 6. Despite the persistent complex environment ... Good start to the year with a very positive first quarter supported by ... 1 Recurrent nature of operating income 1.1 Recurrent revenues 1.2 Greater efficiency 2 Prudent risk management Sustainability: Organic generation of capital 3 7
  • 7. 1 Recurrent operating income Operating income BBVA Group (€m) +4.9% 2,819 2,784 2,696 2,688 2,483 2,356 2,306 +19.7% +8.3% in constant € 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 Recurrent operating income: the key in today’s environment 8
  • 8. Strong growth of net interest income ... 1.1 Net interest income / ATAs BBVA Group Net interest income (%) 2.42 BBVA Group 2.26 (€m) 2.09 2.06 +20.1% 2006 2007 2008 1Q09 3,272 3,043 3,087 2,726 2,830 2,697 Lending and customer funds 2,433 BBVA Group Year-on-year growth (Average balances) +6.0% 12.4 5.3 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 Lending Customer funds Appropriate management of the slowdown and focus on pricing 9
  • 9. ... that supports high quality growth in Gross Income Gross income Breakdown of gross income BBVA Group BBVA Group (€m) (€m) NII + fees & commissions NTI + Other operating income & expenses +2.5% 11.0% 19.2% 4,630 4,772 4,853 4,794 4,559 4,889 4,196 89.0% 80.8% +8.2 pp +7.2% 1Q08 1Q09 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 Improvement in the quality of revenues and limited variability 10
  • 10. Spain & Portugal: focus on pricing ... Net interest income Lending and customer funds (€m) Year-on-year growth (Average balances) 7.1% +5.6% 1.3% 1,210 1,146 Lending Customer funds* Front book spreads +31.9% on € balance BBVA Spain sheet 8.75 (%) 8,66 8.97 6.31 5.81 7.6 5.59 5.55 1Q08 1Q09 5.19 5.38 4.67 1.32 4.43 3.74 3.5 1.02 Gross income: €1,747m 0.94 0.88 0.88 0.85 0.84 (+1.0% on 1Q08) Sep.07 Dec.07 Mar.08 Jun.08 Sep.08 Dec.08 Mar.09 Consumer Business Mortgages 11 * Liquid funds + time deposits
  • 11. In Mexico: good levels of business activity and prices maintained with lower-risk mix Lending and cust. funds Net interest income / ATAs Year-on-year growth (%) (Average balances) 6.31 6.32 5.94 5.65 5.53 19.4% 11.9% 1Q08 2Q08 3Q08 4Q08 1Q09 Lending Customer funds Net interest income (Constant €m) +6.0% Lending mix (%) 816 770 39.5% 41.9% 30.1% 32.9% 30.4% 25.2% 1Q08 1Q09 1Q08 1Q09 SMEs, Corporate & Public Sector Mortgages Gross Income: €1,225m Consumer & Cards +1.0% vs 1Q08 | +8.4% vs 1Q08 excl. VISA IPO 12
  • 12. And in the other areas Gross income WB&AM Lending and customer funds (€m) Year-on-year growth +7.7% (Average balances) 30.1% 518 481 17.1% Lending Customer funds 1Q08 1Q09 USA Lending and customer funds Net interest income Year-on-year growth (Constant €m) (Average balances) +3.6% 8.3% 379 366 2.2% G. Income: -5.3% Lending Customer funds 1Q08 1Q09 South America Net interest income Lending and customer funds (Constant €m) Year-on-year growth +16.2% (Average balances) 26.3% 589 12.3% 507 Gross Income: +19.1% Lending Customer funds 1Q08 1Q09 13
  • 13. And on the other hand, a very efficient 1.2 distribution network in our main markets ... Spain South America Mexico Market share Market share Market share (%) (%) (%) +33% +61% +46% 11.2%* 29.0%* 12.7%* 18.0% 8.4% 8.68% Branches Business Branches Business Branches Business Efficient networks are essential given their weight in the cost structure 14 * Lending + cust. funds; Dec 08 figures
  • 14. ... as a consequence of the Group’s transformation plan ... Strict cost control Total expenses Total expenses BBVA Group Excl. Compass and one-offs BBVA Group (€m) Year-on-year growth (%) -0.7% 4.8 3.4 3.0 2.6 2,084 2,070 -1.9 3M08 6M08 9M08 12M08 3M09 1Q08 1Q09 Estimated growth of expenses in 2009: +0% 15
  • 15. ... that started in Spain & Portugal and spread to the other business areas ... Total expenses Spain & Portugal Total expenses Mexico Year-on-year growth Year-on-year growth (%) (%) 10.8 1.8 1.7 8.3 7.1 6.5 -0.9 -1.3 2.1 -6.5 3M08 6M08 9M08 12M08 3M09 3M08 6M08 9M08 12M08 3M09 Total expenses Total expenses Total expenses WB&AM USA South America Year-on-year growth Quarter by quarter Year-on-year growth (Constant €m) (%) (%) 17.0 16.6 Adjusted inflation: +16.2% 384 379 377 363 13.3 339 10.8 18.6 18.4 17.5 17.4 7.8 13.3 3M08 6M08 9M08 12M08 3M09 1Q08 2Q08 3Q08 4Q08 1Q09 3M08 6M08 9M08 12M08 3M09 16
  • 16. ... and our ongoing obsession with improving efficiency Efficiency incl. depreciation Efficiency incl. depreciation BBVA Group excluding one-offs Business Areas (%) (%) Efficiency Y/Y growth 1Q09/1Q08 (%) -1.3 p.p. Spain & 35.0% -2.8 p.p. Portugal 43.7 42.3 WB&AM 25.4% 0.0 p.p. Incl. one-offs 42.3% (-1.3 p.p.) Mexico 32.3% +0.4 p.p. USA 62.5% -0.9 p.p. 3M08 3M09 South 40.7% -3.0 p.p. America 17
  • 17. In summary, recurrent operating income Operating income BBVA Group (€m) +4.9% 2,819 2,784 2,696 2,688 2,483 2,356 2,306 +19.7% +8.3% in constant € 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 Recurrent operating income: the key in today’s environment 18
  • 18. Despite the persistent complex environment ... Good start to the year with a very positive first quarter supported by ... 1 Recurrent operating income 1.1 Recurrent revenues 1.2 Greater efficiency 2 Prudent risk management 3 Sustainability: Organic generation of capital 19
  • 19. 2 Prudent risk management A Lower entries to NPAs B Provisioning in line with 2H08 C Preservation of generic provisions Ample coverage by provisions and D collateral Operating income: an excellent buffer E for cost of risk 20
  • 20. Lower entries to NPAs and higher A efficiency with recoveries... Net entries to NPAs Recoveries / entries to NPA BBVA Group BBVA Group (€m) (%) 32.4% 3,001 2,559 29.6% 2,262 27.9% 3Q08 4Q08 1Q09 3Q08 4Q08 1Q09 Net entries to NPAs down 15% in quarter 21
  • 21. ... with special relevance in the case of Spain & Portugal ... Net entries to NPAs NPA spread vs. the system Spain & Portugal BBVA Spain vs. banks and saving banks (€m) BBVA vs. banks 89 + saving banks 1,966 47 1,493 1,497 31 6 Dec.07 Jun.08 Dec.08 Feb.09 3Q08 4Q08 1Q09 ... which enables us to continue improving our relative position 22
  • 22. B Provisioning starts to stabilise ... Loan-loss provisioning BBVA Group Quarter by quarter (€m) 892 853 802 596 584 545 452 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 23
  • 23. ... at all units Cost of risk Spain & Portugal Cost of risk in Mexico Quarter by quarter Quarter by quarter (%) (%) 4.92 4.81 3.75 0.45 0.38 0.38 3Q08 4QT08 1Q09 3Q08 4Q08 1Q09 Cost of risk in South America Cost of risk USA Quarter by quarter Quarter by quarter (%) (%) 2.30 1.70 1.55 1.37 1.60 1.08 3Q08 4Q08 1Q09 3Q08 4Q08 1Q09 Provisioning starts to stabilise 24
  • 24. Limited release of generic provisions to C preserve a balance for future quarters ... Generic provisions Breakdown of variations in generic (€m) provisions Mar 09 vs. Dec 08 (€m) -€225m Risk and Variation Mar Transfer to activity 09-Dec 08 specific +€57m Exchange -€66m rates €4,334m €4,558m -€216m -€225m Dec 08 Mar 09 Release of €216m in 1Q09 (vs. €300m in 4Q08) to offset the charge for specific provisions 25
  • 25. Ample coverage by provisions and D collateral Doubtful assets and property acquired (€m) €2,744m Specific prov €3,009m Total Value of doubtful collateral €10,543M Net doubtful €10,278m €11,177m €7,534m €8,433m Property (net) Property Property (net) €899m €1,119m €899m Collateral exceeds net value of doubtful assets by €2,744m In addition, about €4,991m of generic and substandard provisions 26
  • 26. Recurrent operating profit is the most important competitive advantage in the E industry in the present context Operating profit1 as Cost of risk Additional cost of risk maximum cost of risk 2 Peer Group supported by operating (%, Dec 08) profit 3 Peer Group (%, Dec 08) Peer Group (%, Dec 08) BBVA 2.6 Peer 1 BBVA 0.34 3.5 Peer 9 2.1 Peer 2 Peer 9 0.41 3.1 Peer 4 1.3 Peer 3 Peer 4 2.3 0.62 Peer 3 1.1 Peer 4 0.69 Peer 12 2.2 Peer 5 1.0 Peer 5 0.75 Peer 10 2.0 Peer 12 0.8 Peer 5 BBVA 0.86 1.8 Peer 10 0.7 Peer 11 1.7 Peer 6 0.89 Peer 11 0.4 Peer 7 Peer 3 1.7 0.96 Peer 8 0.3 Peer 8 Peer 8 1.3 1.01 -1.0 Peer 7 Peer 13 Peer 9 0.5 1.05 -1.8 Peer 13 Peer 7 Peer 10 1.22 0.0 -1.6 Peer 2 Peer 11 1.32 Peer 2 n.a. -5.9 Peer 1 Peer 12 1.35 Peer 1 n.a. n.a. 2.24 -7.1 Peer 13 Peer 6 Peer 6 Peers: Barclays, BNPP, Crédit Agricole S.A., Credit Suisse, Deutsche Bank, HBOS, 1. Operating profit as old account 27 Intesa Sanpaolo, Lloyds, RBS, Santander, Société Générale, UBS and Unicredit 2. Maximum cost of risk supported by operating profit without generating losses 3. Maximum cost of risk – Current cost of risk
  • 27. Despite the persistent complex environment ... Good start to the year with a very positive first quarter supported by ... 1 Recurrent operating income 1.1 Recurrent revenues 1.2 Greater efficiency 2 Prudent risk management 3 Sustainability: Organic generation of capital 28
  • 28. 3 Sustainable profits ... (€m, excl. one-off items) Annual Growth Annual Growth Accum. 1Q09/1Q08 1Q09/4Q08 BBVA Group 1Q09 Abs. % Abs. % 3,272 20.1% + 185 6.0% + 547 Net Interest Income 4,889 + 117 2.5% + 330 7.2% Gross Income 2,819 + 131 4.9% + 463 19.7% Operating Income 1,834 - 222 -10.8% + 385 26.6% Income Income Tax 1,354 - 182 -11.9% + 163 13.6% Net Income 1,238 - 204 -14.2% + 144 13.2% Net Attributable Profit One-offs in 1Q08 after tax: One-offs in 4Q08 after tax: - +€509m €575m (Bradesco) (early retirements & Madoff) 29
  • 29. Sustainable profits ... (€m) Annual Growth Annual Growth Accum. 1Q09/1Q08 1Q09/4Q08 BBVA Group 1Q09 Abs. % Abs. % 3,272 + 547 20.1% + 185 6.0% Net Interest Income 4,889 + 117 2.5% + 330 7.2% Gross Income 2,819 + 131 4.9% + 463 19.7% Operating Income 1,834 - 949 -34.1% + 1,206 n.s. Income Income Tax 1,354 - 691 -33.8% + 737 n.s. Net Income 1,238 - 713 -36.6% + 719 n.s. Net Attributable Profit 30
  • 30. ... that allow us to continue generating capital organically Core capital Tier I and Capital ratio BIS II BIS II (%) (%) Tier I 7.7% 6.4 6.2 Capital 11.5% ratio Dec. 08 Mar.09 Organic generation of capital: +20 b.p. 31
  • 31. Superior profitability levels (%) ROA: 1.00% RoRWA: 1.88% ROE: 19.4% ROTE: 26.7% 32
  • 32. Despite the persistent complex environment ... Good start to the year with a very positive first quarter supported by ... 1 Recurrent operating income 1.1 Recurrent revenues 1.2 Greater efficiency 2 Prudent risk management 3 Sustainability: Organic generation of capital 34
  • 33. Contents Main features of the Group’s results Summary by business area Conclusions 35
  • 34. Spain & Portugal: 1Q09 highlights Customer spread (%) 3.36 3.29 3.12 3.09 3.06 Better price management 1Q08 2Q08 3Q08 4Q08 1Q09 Total expenses Year-on-year growth (%) 1.8 1.7 Decrease in expenses -0.9 -1.3 -6.5 3M08 6M08 9M08 12M08 3M09 Net entries to NPAs (€m) 1,966 1,497 1,493 Lower entries to NPAs 3Q08 4Q08 1Q09 36
  • 35. Spain & Portugal: 1Q09 highlights Euro balance sheet Net interest income / ATAs Net interest income Euro balance sheet Euro balance sheet (%) (€m) 31.9% 1,585 1,306 2.36 1,136 1,163 1,202 1,207 1,225 1.89 1.84 1.82 1.80 1.80 1.79 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 37
  • 36. Spain & Portugal: 1Q09 results (€m) Annual Growth Annual Growth Accum. 1Q09/1Q08 1Q09/4Q08 Spain & Portugal 1Q09 Abs. % Abs. % 1,210 + 64 5.6% - 47 -3.7% Net Interest Income 1,747 + 18 1.0% - 64 -3.5% Gross Income 1,135 + 61 5.6% -5 -0.4% Operating Income 947 - 25 -2.5% + 13 1.4% Income Income Tax 657 - 16 -2.4% +8 1.3% Net Income 657 - 16 -2.4% +8 1.3% Net Attributable Profit ROE: 37.0% 38
  • 37. Wholesale Banking & Asset Management: 1Q09 highlights Lending and customer funds y-o-y growth WB&AM (Average balances) 30.1% 17.1% Corporate & Lending Customer funds Investment Banking: Operating income +25.1% (€m) capitalising on opportunities 173 138 1Q08 1Q09 Market share of mutual funds in Spain (y/y growth) 20.14 19.98 19.78 Asset Management: 18.71 gaining mkt share in mutual 17.92 funds Feb.08 Jun.08 Dec.08 Jan.09 Feb.09 40
  • 38. Wholesale Banking & Asset Management: 1Q09 results (€m) Annual Growth Annual Growth Accum. Wholesale Banking & 1Q09/1Q08 1Q09/4Q08 Asset Management 1Q09 Abs. % Abs. % 518 + 37 7.7% + 296 n.s. Gross Income 386 + 27 7.6% + 293 n.s. Operating Income 365 + 45 14.2% + 328 n.s. Income Income Tax 269 +0 0.1% + 237 n.s. Net Income -0.1% + 237 n.s. 268 -0 Net Attributable Profit ROE: 25.3% 41
  • 39. Mexico: 1Q09 highlights Operating income Quarter by quarter (Constant €m) +0.4% +11.7% 829 825 790 781 765 VISA IPO 83 1Q08 2Q08 3Q08 4Q08 1Q09 Good operating income performance 43
  • 40. Mexico: 1Q09 highlights Lending and customer funds 19.4% Year-on-year growth (Average balances) Good business and 11.9% change of mix Lending Customer funds Total expenses 10.8 Year-on-year growth 8.3 7.1 (%) 6.5 Cost control 2.1 3M08 6M08 9M08 12M08 3M09 Cost of risk (%) 4.9 4.8 3.8 3.0 2.9 Cost of risk contained 1Q08 2Q08 3Q08 4Q08 1Q09 Net attrib. profit: €363m (-16.1% vs -2.4% without VISA IPO) 44
  • 41. Mexico: 1Q09 results (Constant €m) Annual Growth Annual Growth Accum. 1Q09/1Q08 1Q09/4Q08 Mexico 1Q09 Abs. % Abs. % 816 + 46 6.0% - 18 -2.1% Net Interest Income 1,225 + 12 1.0% + 31 2.6% Gross Income 829 +4 0.4% + 48 6.1% Operating Income +5 1.2% 465 - 136 -22.6% Income Income Tax 363 - 70 -16.1% - 15 -3.9% Net Income 363 - 70 -16.1% - 15 -3.9% Net Attributable Profit Net attrib. profit: €363m (-16.1% vs -2.4% without VISA) 45
  • 42. USA: 1Q09 highlights Total expenses Quarter by quarter (Constant €m) 384 381 379 377 363 339 Cost control 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 Operating income Quarter by quarter (Constant €m) 215 210 204 181 179 Stabilisation of operating 173 income 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 Provisions Quarter by quarter 150 (Constant €m) 126 112 78 Stabilisation of provisioning 54 54 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 Stabilisation of net attrib. profit: 3Q08: €23m | 4Q08: €23m | 1Q09: €42m 47
  • 43. USA: 1Q09 results (Constant €m) Annual Growth Annual Growth Accum. 1Q09/1Q08 1Q09/4Q08 USA % 1Q09 Abs. Abs. % 379 + 13 3.6% +0 0.0% Net Interest Income 543 - 31 -5.3% -9 -1.6% Gross Income 204 -6 -3.0% + 31 17.9% Operating Income 62 - 85 -57.7% + 30 93.2% Income Income Tax 42 - 54 -56.0% + 20 86.8% Net Income 42 - 54 -56.0% + 20 86.8% Net Attributable Profit Net attrib. profit: €63m (without amortisation of intangibles) 48
  • 44. South America: 1Q09 highlights Lending and customer funds 26.3% Year-on-year growth (Average balances) 12.3% Good level of business activity Lending Customer funds Gross income +19.1% (Constant €m) 924 776 Dynamic generation of income 1Q08 1Q09 Total expenses Year-on-year growth 18.6 18.4 17.5 17.4 (%) 13.3 Cost control Adjusted inflation: +16.2% 3M08 6M08 9M08 12M08 3M09 Cost of risk by quarter (%) 2.3 1.6 Cost of risk contained 1.5 1.1 1.0 1Q08 2Q08 3Q08 4Q08 1Q09 50
  • 45. South America: 1Q09 results (Constant €m) Annual Growth Annual Growth Accum. 1Q09/1Q08 1Q09/4Q08 South America 1Q09 Abs. % Abs. % 589 + 82 16.2% -5 -0.8% Net Interest Income 924 + 148 19.1% + 21 2.3% Gross Income 548 + 104 23.4% + 39 7.6% Operating Income 445 + 70 18.5% + 94 26.7% Income Income Tax 343 + 55 19.1% + 58 20.2% Net Income 225 + 37 19.5% + 38 20.2% Net Attributable Profit ROE: 40.3% 51
  • 46. Contents Main features of the Group’s results Summary by business area Conclusions 53
  • 47. In 1Q09 we confirmed the strengths demonstrated in 2008 ... A Recurrent earnings: operating income + Strict cost control Recurrent revenues Improvement of efficiency in dire times B Superior risk management Increase in the gap with competitors C Sustainability of earnings Organic generation of capital 54
  • 48. BBVA Group Results First quarter 2009 Recurrence and sustainability Madrid, 28th April 2009