Banco Bilbao Vizcaya Argentaria (BBV)

BBVA wants to forge links with innovators through Open Talent, Red Innova and its investment in the 500 Startups fund

• Some 500 projects entered the BBVA Open Talent & Red Innova 2012 competition for innovators.
• More than 36,000 users voted on-line to support their favourite project: www.centrodeinnovacionbbva.com.
• BBVA is also extending its collaboration model for innovative groups via a venture capital fund called “500 Startups” in Silicon Valley.

Some 500 projects battled it out for more than two weeks to become a user favourite in the fourth edition of a competition organised by BBVA Open Talent and Red Innova. From March 29th to May 15th more than 36,000 votes were received for the different projects. The winners in that round are now being evaluated by a panel of experts. The competition is part of BBVA’s open innovation strategy that encourages collective talent and seeks to listen and learn from innovative people as it simultaneously supports the creation of projects entailing technology. 

Projects are competing in two categories: innovation & technology, and financial services. Spain was the source of 305 projects, followed by Argentina with 60, Colombia 29, Chile 23 and Brazil 21.

The only task remaining in this year's competition is the assessment of the selected projects. This job has been entrusted to a panel of well-known personalities and venture capitalists. Work started on May 16th and ends on June 7th with the selection of 20 finalists who will put their projects on display on June 14th and 15th via Red Innova. BBVA will sponsor the winners (one per category) with grants of up to €100,000 in the form of promotion or investment.

BBVA is extending its co-operation with innovators

Along the same lines as its collaboration with innovators of new business models, BBVA has become an investor in 500 Startups, a Silicon Valley venture fund that boosts new projects in the digital world. BBVA’s aim is to gather intelligence on developments in technology and new business models in areas that are strategic for the bank such as mobility, e-commerce and customer behaviour analysis.

It has been working for years to transform its business model to one focused on customers and on the development of a comprehensive technology platform that is modular and intelligent. As part of this strategy BBVA last year opened a new office in Silicon Valley to identify new trends in technology, to develop strategic alliances and to invest in start-ups.

Over the last few months the Silicon Valley team has contacted a lot of companies, incubators and venture capital funds to identify possible partners and to increase its knowledge of the industry’s most innovative developments.

The first investment was in a seed-capital fund called “500 Startups”. This fund was set up by Dave McClure, a person who is highly respected in the valley for his success as an engineer and innovator. He was previously in charge of marketing at PayPal. The 500 Startups fund accelerates innovative projects by supporting companies in their initial development stage. So far it has invested in more than 200 companies in the digital services area. Some of these are developing new business models in financial services such as Simple, inDinero, PeerTransfer or WePay.

Contact
BBVA
Txema Valenzuela
Tel: +34 913740616
Email: jm.valenzuela.valenz@bbva.com

About BBVA
 
BBVA es un grupo financiero global fundado en 1857 con una visión centrada en el cliente. Tiene una posición sólida en España, es la primera entidad financiera de México, y cuenta con franquicias líder en América del Sur y la región del Sunbelt en Estados Unidos. Su negocio diversificado está enfocado a mercados de alto crecimiento y concibe la tecnología como una ventaja competitiva clave. BBVA es uno de los primeros bancos de la eurozona por rentabilidad de los recursos propios (ROE) y eficiencia. La responsabilidad corporativa es inherente a su modelo de negocio, impulsa la inclusión y la educación financieras y apoya la investigación científica y la cultura. BBVA opera con la máxima integridad, visión a largo plazo y mejores prácticas, y está presente en los principales índices de sostenibilidad.

Changes at BBVA’s Management Committee: Juan Asúa will be head of CIB and Jaime Sáenz de Tejada will lead Spain & Portugal

• The changes ensure continuity of the management model at the Spain & Portugal unit and at CIB.
• José Barreiro is stepping down from his executive functions at BBVA for personal reasons although he will maintain links with the Group. Juan Asúa will take over as head of Corporate & Investment Banking. Jaime Sáenz de Tejada, who is currently head of business development in Spain, will fill Mr. Asúa’s previous position as head of Spain & Portugal and will join the management committee.
• BBVA chairman Francisco González said: "I have accepted José’s decision with regret. In my opinion his work at CIB has been extraordinary and I am happy to know he will continue his ties to the Group as a consultant and a representative. Furthermore I am convinced Juan and Jaime will ensure continuity of the franchise management model.”

BBVA is ensuring continuity of its management model following the appointment of Juan Asúa as the new head of Corporate & Investment Banking (CIB) and Jaime Sáenz de Tejada as the new head of Spain & Portugal and a member of the management committee. Mr. Barreiro, who until now was in charge of the group’s wholesale banking businesses (CIB), has decided to step down for personal reasons and will also give up his seat on the bank’s management committee. He will remain linked to BBVA as a consultant, adviser and representative.

Mr. Barreiro leaves the CIB division as a business unit that employs more than 4,000 people and that generated net income of €1.12 billion in 2011. The unit is a significant contributor to the Group’s development in its role as a strategic supplier of products for other networks.

BBVA president and chief operating officer Ángel Cano said he saw Mr. Barreiro’s work as “essential” in understanding the Group’s development. He also pointed to Juan Asúa’s vision and performance during the last five years as head of the Spanish business. Mr. Asúa is replacing Mr. Barreiro as CIB head.

Mr. Cano highlighted the importance of  Mr. Asúa’s management in Spain during the most important moments of the crisis. He said, “Both Juan Asúa and Jaime Sáenz de Tejada did an excellent job at a very critical time. Having both on the management committee will guarantee the quality and continuity of the management model."

Juan Asúa (49) has been head of Spain & Portugal for the last five years. Prior to that, he was head of global corporate banking and capital markets. Earlier still he was in charge of corporate & business banking and a member of the management committee since 2006. He takes over as head of Corporate & Investment Banking.

Jaime Sáenz de Tejada (44) was until now head of business development for Spain & Portugal. Prior to that he was a regional manager in Spain, head of BBVA Banco Continental in Peru, manager of BBVA’s New York branch and manager of corporate and investment banking in the Americas as well as other appointments. He now takes over as head of Spain & Portugal and will join BBVA’s management committee.

Contact details: 
Corporate Communications
Tel: (+34) 91 537 67 51
BZA00104@grupobbva.com

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About BBVA

BBVA is a customer-centric global financial services group founded in 1857. The Group has a solid position in Spain, it is the largest financial institution in Mexico and it has leading franchises in South America and the Sunbelt Region of the United States. Its diversified business is biased to high-growth markets and it relies on technology as a key sustainable competitive advantage. BBVA ranks among the leading euro zone banks in terms of ROE and efficiency. Corporate responsibility is at the core of its business model. BBVA fosters financial education and inclusion, and supports scientific research and culture. It operates with the highest integrity, a long-term vision and applies the best practices. The Group is present in the main sustainability indexes.

BBVA´s Annual Report

BBVA Research: 2012 recession not escalating, while reforms underway, although requiring intensification, should pave the way for faster growth

• The impact of the labor market reform on the Spanish economy has the potential to create 10% (approximately two million) more jobs long-term compared to the no-reform scenario
• The program set in motion by the state government to enable regional and local governments to pay off their trade debts implies a liquidity injection that could have a positive impact on GDP of up to 1% in 2012 if uncertainty wanes, as it will mobilize funding equivalent to roughly 2.5% of GDP
• Exporting activity is looking firmer than in the fourth quarter of 2011 and foreign trade continues to make a positive contribution to GDP, driven mainly by industrial exports and tourism
• BBVA Research confirms its estimate for an overall contraction in GDP of 1.3% in 2012. It expects the recovery to prove slow in 2013, marked by moderate yet positive growth of around 0.6%

BBVA Research’s latest estimates confirm the recession in Spain, pointing to a GDP contraction of 1.3% this year. However, economic indicators are revealing a less dramatic than estimated deterioration in the real economy. The data presented in its ‘Spain Economic Outlook’ report, published today, show that the measures adopted lend credibility to the ability to meet current fiscal deficit targets. BBVA’s economic research department has flagged the positive effect of the program set in motion by the state government to enable supplier payments by cash-strapped regional and local governments as it will entail a liquidity injection that will boost economic activity.

The outlook for 2012 is still for a GDP contraction of 1.3%, in an environment marked by intense prevailing uncertainty due to the lingering European sovereign debt crisis. The economists attribute the increase in Spanish bond prices to the higher than forecast deviation with respect to the stated public deficit target for 2011, coupled with the failure to introduce transparent mechanisms to guarantee delivery of the 2012 deficit target at the regional government level. However, current forecasts point to a recovery, albeit moderate, in GDP from 2013: estimated growth of around 0.6%.

In Spain, economic policy uncertainty is said to have diminished in the wake of the introduction of measures that lend credibility to the ability to deliver the fiscal deficit targets, implementation of ambitious labor market reforms and the new financial sector reform measures announced.

The advent of this double-dip recession has been triggered by various external factors. On the one hand, capital market and European sovereign debt volatility have made it more expensive for the Spanish economy to raise medium and long-term funding. Also, the outlook for contraction of the broader European economy will dampen growth in demand for Spain’s exports. Meanwhile, the upward spiral in oil prices has interrupted the downtrend in inflation.

BBVA Research’s ‘Spain Economic Outlook’ report also confirms the estimate for a reduction in household spending in the first quarter of 2012 of around 0.6% year-on-year, despite the anticipated decline in savings. Investment in capital goods, meanwhile, will register a moderate decline with respect to the last quarter of 2011. Corporate investing activity is, however, expected to begin to recover in 2013, underpinned by gains in competitiveness on the part of exporters and stronger foreign demand. Elsewhere, BBVA Research reiterates estimates for a further 6.6% slump in investment in the residential market in 2012; current estimates point to a recovery, albeit very gradual, starting towards the end of 2013.

Firming exports

As for exports, current estimates point to a stronger performance quarter-over-quarter, albeit masking a highly uneven performance. Both exports of goods through customs and of goods and services by large companies staged a recovery in January, only to contract once again in February. However manufacturing exports and tourism recovered throughout the first quarter. Imports of goods and services, meanwhile, continued to contract during the first months of the year, driven by slumping internal demand. Nevertheless, external demand will have made a positive contribution to GDP in the first quarter of 2012.

BBVA’s economic research department indicates that the deterioration in unemployment between January and March, concentrated among temporary wage earners and service sector workers, to 24.4% of the active population, confirms the recessionary nature of the Spanish economy in the first quarter.

Labor reform: making the economy more competitive

BBVA Research makes a positive assessment of the labor reform introduced by the government which it notes marks significant progress with respect to the old framework, essentially by increasing internal job market flexibility in Spain. The reduction in redundancy costs is designed to drive a reduction in the existing gap between the cost of terminating employees on indefinite contracts and those under temporary contracts. Also, the prioritization of company-level collective bargaining agreements over higher-level agreements will make it easier for companies to adapt to the evolving economic environment and should stimulate a correction in the intensive margin (work hours) and remuneration rather than in the extensive margin (employment).

Moreover, the labor reform facilitates the modification of employment terms and changes the regulatory framework governing temp agencies, authorizing them to act as placement agencies with a view to reducing the time spent collecting unemployment benefits and to enhance the quality of job-employee matches. It further renders employment contracts for training/learning purposes more flexible (extending the age and maximum length) and introduces tax breaks for entering into these kinds of contracts and for converting them to indefinite employment arrangements.

BBVA’s economic research department took all these measures under consideration in estimating the impact that labor reform will have on the Spanish economy, concluding that its impact could be particularly positive, making way for the creation of 10% (approximately two million) more jobs long-term compared to the no-reform scenario.

Despite the measures taken, the recessionary outlook means that the labor market will continue to deteriorate throughout 2012 and the first half of 2013, driving an increase in the unemployment rate, which is estimated to peak at around 25%, despite the forecast decline in the active population.

Impact of the supplier payment program

The supplier payment program set in motion by the Spanish government at the end of February is a mechanism designed to settle the past-due sums payable to suppliers by regional and local governments as of year-end 2011. By launching this program, the state administration has sought to start to put the regional and local finances in order: the list of payables and debt owed by local government entities is estimated at 0.9% of GDP, while the preliminary estimate for the regional governments points to supplier debts equivalent to 1.6% of GDP.

The report published by BBVA Research calculates the impact of this program on the Spanish economy by modeling the propensity of the program beneficiaries to spend the amounts collected. Although this program will give the current holders of the regional and local government debts more liquidity, the knock-on effect on the real economy could take longer to trickle through due to prevailing stress in the financial markets.

BBVA’s economic research department estimates the program’s impact on the Spanish economy by making assumptions regarding the percentage of receivables already discounted in the financial system and the extent of the liquidity crunch. The results of this analysis show that the higher the percentage of receivables already securitized, the lower the likely impact on the economy, and the higher the propensity to spend, the higher the potential positive impact on GDP. The highest-probability scenario points to a 0.7% impact on GDP in 2012. However, the scale of prevailing uncertainty suggests that a lower impact cannot be ruled out.

Unprecedented spending cuts

BBVA Research claims that the government has some room for maneuver in terms of cutting the public deficit and that the measures taken lend visibility to the ability to deliver the deficit targets set. Approval of the new budget stability act and the launch of the supplier payment program give the central government greater control over the regional governments’ accounts. In addition, the announced privatization program (the details of which have yet to be disclosed), coupled with the adoption of structural reforms, could generate additional income that would mitigate the financial market pressure bearing down on Spanish debt.

The raft of measures announced is said to make delivery of the central government’s deficit stability target for 2012 credible: their scale should be sufficient to reduce the deficit to 3.5% of GDP and to partially offset the anticipated economic downturn. However, the risk of missing Spain’s overall fiscal deficit target (at all government levels) remains concentrated at the regional government level: these administrations must take action in addition to the measures already announced if they are to achieve the required cuts.

BBVA’s economic research department highlights that the scale of the fiscal adjustment in 2012 is virtually unprecedented among the developed economies, particularly considering that fact that it is being embarked upon in a recessionary environment. The structural deficit that would be achieved if the administration delivers its stability target for 2012 would be a little over 2% of GDP. If it were to meet its deficit target of 3% of GDP in 2013, BBVA estimates that the administration would have managed to bring the structural deficit to around the targeted 0% of GDP, bringing forward delivery of the target enshrined in the new budget stability act and the Treaty on Stability, Coordination and Governance by a full seven years.

Outlook for 2013

According to BBVA Research, the outlook for 2013 is more promising. The European economy should stage a timid recovery, while the euro should continue to depreciate. Financial tensions should wane and spending cuts should prove less onerous thanks to the measures adopted in 2012. Also, oil prices are expected to fall slightly.
These factors should combine to put the Spanish economy back on the growth track, albeit with internal demand remaining weak. At the regional level, the economies presenting higher international exposure and those that can afford less stringent spending cuts are likely to post somewhat more vigorous growth.

Contact:
Corporate Communications
Tel. +915375858
comunicacion.corporativa@grupobbva.com

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About BBVA

BBVA is a customer-centric global financial services group founded in 1857. The Group has a solid position in Spain, it is the largest financial institution in Mexico and it has leading franchises in South America and the Sunbelt Region of the United States. Its diversified business is biased to high-growth markets and it relies on technology as a key sustainable competitive advantage. BBVA ranks among the leading Euro zone banks in terms of ROE and efficiency. Corporate responsibility is at the core of its business model. BBVA fosters financial education and inclusion, and supports scientific research and culture. It operates with the highest integrity, a long-term vision and applies the best practices. The Group is present in the main sustainability indexes.

BBVA earns €1.005 billion in the first quarter

• Rising revenues: BBVA’s net interest income increased for the fifth consecutive quarter to €3.6 billion, up 13.3% compared to the first three months of 2011. Growth was spread widely across all geographic regions
• Generating earnings: net attributable profit in the quarter exceeded €1 billion, demonstrating once again BBVA’s ability to generate earnings in a recurring and solid fashion despite a complex environment
• Strong capital position: organic generation of capital allowed BBVA to meet the recommendations of the European Banking Authority (EBA) ahead of time without resorting to the sale of strategic assets

BBVA’s profit for the first quarter of 2012 was €1.005 billion, which is 12.6% less than the same period last year but exceeds that of the two previous quarters. Gross income rose 3.5% to €5.45 billion, supported by firm recurring income in all the regions where the Group operates. The solid ability to generate capital organically was the key factor in achieving early compliance with EBA’s recommendations. Risk indicators remained stable for the ninth consecutive quarter.

“These results demonstrate the strength and resilience of our business model, which allows us to navigate the crisis, generating earnings and strengthening our capacity to grow while maintaining dividend payments,” BBVA President and Chief Operating Officer Ángel Cano said.

Net interest income, a measure of basic banking business, was highly positive thanks to excellent pricing in all regions and to buoyant activity in emerging markets. This indicator continues its upward trend, rising 13.3% year-over-year to €3.6 billion in the first quarter compared to the same period a year earlier. Additionally, recurring gross income, which excludes net trading income (NTI) and dividend income, continued to climb reaching €5.05 billion (up 12.6% year-over-year).

The resilience of these items was assisted by limited rises in costs, which grew slower than recurring income and were mainly related to investments in emerging economies. In the first quarter the Group's workforce increased 2.5% year-over-year to 111,306 employees, the number of ATMs grew 8.2% to 19,007 and branches increased slightly to 7,466. Lastly, recurring operating income (excluding the effect of NTI and dividend income) stood at €2.47 billion, up 15.9% compared to the same period last year.

Prudence and anticipation in risk management kept the indicators stable for the ninth consecutive quarter despite Spain’s complex environment. The non-performing asset ratio (NPA) was again 4.0%, improving on the figure of 4.1% a year earlier, and coverage stands at 60%.  Loan-loss and real estate provisions continued to be stable (€1.3 billion in the quarter).

The organic generation of capital means BBVA has met the EBA recommendations (core capital ratio of 9%) ahead of time. This was accomplished without selling strategic assets and without any type of public-sector aid while keeping dividend payments stable. When calculated according to current rules the core capital ratio stands at 10.7%.

In terms of finance requirements BBVA Group enjoys a very comfortable position. Debt redemptions for 2012 and 2013 are already covered and there is ample collateral. BBVA has used funds from the European Central Bank’s three-year loans to improve its liquidity structure.

In terms of business activity gross lending to Group customers rose 3.4% year-over-year to €358.51 billion thanks to buoyant business in emerging economies. Total customer funds rose 0.6% to €429.8 billion.

Geographic diversification

The BBVA Group’s regional diversification, with special emphasis on emerging economies, was a key factor for the income statement.

Spain’s contribution to the income statement was €229 million, down 52.2% year-over-year affected by net trading income (NTI) figures extremely high in the first quarter of 2011 and higher provisioning in the current year. In the declining economic context the favorable management of prices was noteworthy, as were the market share gains in lending and deposits, and the positive evolution of net interest income. The NPA ratio stands at 4.9% and the coverage ratio is 43%.

Eurasia, which includes the investments in China Citic Bank (CNCB) and Garanti, enjoyed vigorous business and growing earnings. Net attributable profit rose 51.7% to €299 million.

In Mexico, BBVA Bancomer consolidated its lead over competitors with a stable risk premium. The franchise contributed €430 million (up 3.6% at constant exchange rates) and it set a new record for quarterly income.

The buoyant activity in South America was reflected in revenues. Gross income grew 18.1% in constant euros to €1.37 billion. The region reported an improvement in efficiency, NPA ratio stood at 2.3%, with a coverage ratio of 141%. Net attributable profit came to €370 million (up 27.1% at constant exchange rates).

In the United States the notable features were the resilience of income and cost control plus a steady improvement in risk indicators. The NPA ratio improved to 3.2%, compared to 3.5% in December and 4.3% in March 2011. Net attributable profit at BBVA’s U.S. franchise came to €115 million (up 15.6% at constant exchange rates).

The highlight in Corporate & Investment Banking was the resilience of the Group’s wholesale banking results. This is due to its focus on customers and the low-risk business model with a high degree of diversification by region and product. In the first quarter this unit generated net attributable profit of €279 million, down 18.7% at constant exchange rates.

Contact 
Corporate Communications
Tel: (+34) 91 537 53 48
BZA00104@grupobbva.com

For more financial information about BBVA

About BBVA

BBVA is a customer-centric global financial services group founded in 1857. The Group has a solid position in Spain, it is the largest financial institution in Mexico and it has leading franchises in South America and the Sunbelt Region of the United States. Its diversified business is biased to high-growth markets and it relies on technology as a key sustainable competitive advantage. BBVA ranks among the leading euro zone banks in terms of ROE and efficiency. Corporate responsibility is at the core of its business model. BBVA fosters financial education and inclusion, and supports scientific research and culture. It operates with the highest integrity, a long-term vision and applies the best practices. The Group is present in the main sustainability indexes.

Francisco González: “We will exit the crisis through greater fiscal, financial and economic integration in Europe”

• “The efforts made by Spain and other countries must be matched with shared European-backed mechanisms”
  
  
• “The Spanish government is working intensely on the right direction since, in just three months, it has implemented a major fiscal adjustment and approved a financial system reform which opens the door to restructuring, a very ambitious and in-depth labor reform, and a plan for paying suppliers of the Public Administrations”
  
  
• “Spain has many strengths and enormous potential to turn the current situation around. If we continue along this path, we will get through this”

Francisco González, Chairman and CEO of BBVA, stated that the crisis in Europe has not yet been resolved but that “in the last few months, there have been some major advances”. At the opening ceremony of the 6th International ABC-Fundación Euroamérica BBVA Conference at the BBVA Campus, he stated that “Spain has implemented adjustments and reforms that must be understood as the start of a modernization process that has been a long time coming”.

Francisco González stated that the restructuring of Greek debt has been a step forward in finding a credible and sustainable long-term solution. According to him, “I’m sure that the mistakes made in Greece will not be repeated in other European countries. Greece is the exception, not the rule”.
Secondly, the BBVA Chairman and CEO stated that another advance was the “European Central Bank’s liquidity policy, which has contributed to ensuring the liquidity of the European financial system, one of the main factors for the recovery”.

Spain has enormous potential

The BBVA Chairman and CEO considers that “Spain is doing its part”. In his opinion, “the Spanish government is working intensely on the right direction. In just three months, it has implemented a major fiscal adjustment and approved a Royal Decree-Law to reform the financial system, opening the door to restructuring it, as well as a very ambitious in-depth labor reform, which will benefit all those living in Spain”.

The BBVA Chairman and CEO also stated that the Spanish government has launched a financial plan to pay the suppliers of the Public Administrations, which will provide a major liquidity boost for the Spanish production system as a whole, especially for small and medium enterprises and self-employed workers.

“This must be understood as the start of the modernization process of the Spanish economy which has been a long time coming. I’m sure that this is the Spanish government’s conviction, since it has shown signs of making the decisions that must be made and continuing the reform process”.

Francisco González stated that “there is clearly more to be done since we need to restore fiscal discipline in all the Public Administrations while implementing the necessary reforms to boost economic recovery and job creation. We need to build a new and more competitive economic model that is more leveraged towards technology and talent, with the capacity to innovate.”

According to the BBVA Chairman and CEO, an ambitious modernization program is required in order to carry that out.  Francisco González highlighted the importance of providing a good explanation of that model and program to the Spanish and European public opinion and capital markets since “they are our creditors and will finance us”.

“We will need to persevere, especially when everything starts to improve. Because the situation will improve. Spain has many strengths and enormous potential to turn the situation around. If we continue along this path, we will get through this”, he explained.

Francisco González also stated that the efforts made by Spain and other countries must be matched with shared European-backed mechanisms. That is why “Europe must also do its part”. “We will exit the crisis through Europe, i.e. with greater fiscal, financial and economic integration. In the short term, advancing towards that solution requires stronger signs from the major European countries regarding their commitment to the European integration process. Those signs must entail specific decisions to support countries which, like Spain, have adhered to the rules of the Stability and Growth Pact, and are implementing ambitious adjustment and reform programs”.

He also believes that it is necessary to advance in the design and implementation of a reciprocal fiscal commitment, which can have different forms, such as the issue of Eurobonds. The BBVA Chairman also stated that “a greater Europe means a more coherent and standard European communication policy that highlights the efforts made by its member states and prevents indiscreet comments”.

According to Francisco González, Europe must establish a set of incentives to support the member states with the largest commitment and progress towards implementing structural reforms. “Solidarity among its citizens is one of the essential principles in building a stable future for the European Union. We face an enormous challenge as well as the opportunity to make Spain more competitive and prosperous within a united and relevant Europe in the new world order”, highlighted Francisco González.


Contact details: 
Corporate Communications
Tel. +91 537 95 58
comunicacion.corporativa@grupobbva.com

For more financial information about BBVA visit:
http://shareholdersandinvestors.bbva.com

About BBVA

BBVA is a customer-centric global financial services group founded in 1857. The Group has a solid position in Spain, it is the largest financial institution in Mexico and it has leading franchises in South America and the Sunbelt Region of the United States. Its diversified business is biased to high-growth markets and it relies on technology as a key sustainable competitive advantage. BBVA ranks among the leading Euro zone banks in terms of ROE and efficiency. Corporate responsibility is at the core of its business model. BBVA fosters financial education and inclusion, and supports scientific research and culture. It operates with the highest integrity, a long-term vision and applies the best practices. The Group is present in the main sustainability indexe

BBVA names Garanti’s Sezgin head of Global Payment Systems

“A definitive solution must be found for non-viable entities based on strict economic efficiency criteria”

• “Spain’s priorities must be to build confidence, create jobs and achieve balanced growth”
•   “The reputation of banks has been tarnished and this has affected all of us in the same way, including entities that have acted in a responsible, prudent and principled manner”
•   “Diversification, customer orientation, operational excellence and a long-term focus will all play an essential role in the global financial industry’s new landscape”

The President and COO of BBVA, Ángel Cano, stated this morning in a speech given at the XIX Encuentro del Sector Financiero ABC-Deloitte, event in Madrid, that the reform of the financial system “will help build confidence, while giving Spanish entities greater access to the capital markets, reviving the property market and accelerating the process of restructuring”. According to Mr Cano, “for this to happen, it must be made clear which entities are not viable and a definitive solution found for this problem”. He also stressed the need to “find incentives to fuel mergers and acquisitions based on strict criteria of economic efficiency”.

During the first part of his speech, the President and COO of BBVA referred to the situation in Spain, saying that “we should be ambitious and uphold the spirit of reform although in many cases this will logically require that sacrifices be made”. He added that “the road will be long and the process uneven, especially in the peripheral economies”, and that “Spain’s priorities must be to build confidence, create jobs and achieve balanced growth”.

Ángel Cano also pointed out that BBVA Research was estimating a 1.3% contraction in Spanish GDP for 2012, but that the reforms recently approved by the government “were a step in the right direction”. He reiterated the importance of compliance with Spain’s fiscal obligation, which is “a binding obligation that our country must meet in order to ensure credibility”.

Referring to the international macroeconomic scenario, Mr. Cano pointed out that “2012 will be a multispeed year, with growth of between 3.5% and 4%, driven mainly by growth in the emerging markets and shaped by the development of the crisis in Europe”.

 Key aspects of the new financial industry

The President and COO of BBVA identified three critical forces at play in the new financial industry. First, “an economy growing at various speeds within a complex macroeconomic and financial framework, marked by an uneven performance between developing and developed economies, but producing lower global economic growth”. According to Mr Cano, the second and most disruptive force in the current transformation is “globalization, technology and new ways of relating to customers”. The third force relates to “the new regulatory and supervisory requirements that are challenging the industry’s future growth and profitability”.

Ángel Cano referred to “the damaged reputation of banks”, that has affected all entities equally, “without distinguishing between those which have acted in a responsible, prudent and principled manner, and those that have not. This has created a social pressure that cannot be ignored”.

The President and COO went on to list the attributes that those entities which successfully weather this phase of the crisis will have in common.  These will be diversification by geography, business area and customers; clear customer orientation; operational excellence focused on ensuring higher quality at lower cost in a stricter regulatory environment and taking advantage of the advantages offered by technology and transversality. Furthermore, a long term vision that implies prudence, anticipation, principles and, above all, people. These are all factors, that according to Ángel Cano, “BBVA has already fully incorporated because we have been working with this new global banking model for some time, and our aim is to play a leading role in a sector that will never be the same again".

Contact:
Corporate Communications
Tel: +34 91 537 95 58
comunicacion.corporativa@grupobbva.com

For more financial information on BBVA

About BBVA

BBVA is a customer-centric global financial services group founded in 1857. The Group has a solid leadership position in Spain, it is the largest financial institution in Mexico and it has leading franchises in South America and the Sunbelt Region of the United States. Its diversified business is biased to high-growth markets and it relies on technology as a key sustainable competitive advantage. BBVA ranks among the leading eurozone banks in terms of ROE and efficiency. Corporate responsibility is inherent to its business model, promotes inclusiveness and supports research and culture. BBVA operates with utmost integrity, long-term vision and best practices, and is included in the main sustainability indexes.

BBVA Research: "Spain records highest euro zone productivity growth, up 11.1% since 2008"

• BBVA Research believes Spain is making good headway in increasing competitiveness which could set the country on the path to sustained recovery and high growth rates
• This improvement is apparent in various areas, including the significant growth in Spanish exports which are up 9.5% since the start of the crisis (the second highest growth in the euro zone) 
• According to BBVA Research, despite improved competitiveness and productivity, Spain must continue to implement structural adjustments such as fiscal consolidation, to regain confidence in the economy

According to BBVA Research’s latest Economic Watch, Spain is regaining competitiveness and productivity the quickest of all the euro zone countries which could put the economy “on the path to sustained recovery.” Over the past four years Spain has recovered much of the competitiveness lost the previous decade by increasing productivity per worker and price and cost competitiveness.
 
This improvement is apparent in various areas, including the significant growth in exports which have enjoyed double-digit growth in recent years. Spain has enjoyed the highest growth of all the euro zone, with the exception of Estonia which joined the euro in 2011-.

A country-by-country comparison provides a better snapshot of the strong growth in Spain which, at the end of 2011, was exporting 9.5% more in real terms than before the crisis. Germany ranked fifth with a 5.3% increase in exports since the beginning of 2008, followed by Ireland with 4.3% growth. Exports were up 1.1% in the euro zone as a whole.

The weight of exports in Spain’s GDP has risen from 22.8% in 2009 to 30.5% in 2011, yet further proof of the economy’s strong performance.  It has also managed to retain its share of world trade despite the upsurge of China and other Asian economies.

BBVA Research’s Economic Watch notes that peripheral economies still have some way to go in terms of competitiveness and must continue to adopt stimulus measures. In Spain’s case, among the factors which have helped boost exports is the improved quality and competitiveness of prices, as illustrated by the inflation differentials with the euro zone which have favored Spain in recent years.

Turning to production costs, according to BBVA Research up until now wages in Spain showed little correlation with growth or productivity both in macroeconomic and corporate terms. Thus, between 2001 and 2007 wages per worker in Spain rose at an annual rate of 3.2%, whereas productivity failed to increase, thereby eroding the competitiveness of Spanish products.

Ireland suffered the widest gap between wages and productivity in this period, rising to 5.8% and 1.7%, respectively.  The trend in Germany meanwhile was the opposite, with wages rising 0.9% and productivity 1.3%.

According to BBVA Research’s Economic Watch, after various years of wages outstripping productivity in Spain, this situation is correcting.  However, it also notes that the changes introduced by new labor legislation guarantee increased competitiveness "so long as productivity continues to improve".

Increased working hours have also helped boost productivity per worker in Spain. The average working day in the fourth quarter of 2011 was 35.2 hours compared to 34.3 hours in 2008, up 2.6%. This figure contrasts sharply with the situation in Germany for example where the number of hours per worker declined 0.8% between 2007 and 2010 meaning  that workers there worked on average 14.7% fewer hours than their Spanish or Irish counterparts. 

The increase in hours worked in Spain is also part of the reason productivity per worker has increased 11.1% since the beginning of 2008, the highest increase in the entire euro zone. That said, even taking into account the longer working day, improved productivity has held strong, rising 8.3% per hour, as in Ireland, and seven percentage points higher than the euro zone average.

BBVA Research concludes that all of the factors which have helped increase competitiveness in Spain will continue in 2012, both for increased productivity and improved costs. By the same token, it notes that after a decade of stagnant competitiveness, Spain’s recovery is now outperforming all other euro zone countries.

The experts at BBVA Research also emphasize that the recent labor reform should help boost the recovery in productivity and competitiveness and that this improvement will help ease the impact of the adjustments which the Spanish government must still implement, such as fiscal consolidation, restructuring of the banking system and reducing the size of the housing market.

Contact:
Corporate Communications
Tel: +91 537 95 58
comunicacion.corporativa@grupobbva.com

For more financial information on BBVA, click here:
http://accionistaseinversores.bbva.com
For more information on BBVA, click here: http://prensa.bbva.com/

About BBVA

BBVA is a customer-centric global financial services group founded in 1857. The Group has a solid leadership position in Spain, it is the largest financial institution in Mexico and it has leading franchises in South America and the Sunbelt Region of the United States. Its diversified business is biased to high-growth markets and it relies on technology as a key sustainable competitive advantage. BBVA ranks among the leading Euro zone banks in terms of ROE and efficiency. Corporate responsibility is inherent to its business model, promotes inclusiveness and supports scientific research and culture. BBVA operates with utmost integrity, long-term vision and best practices, and is included in the main sustainability indexes.

BBVA and MIT continue to make progress in their research on the use of information to create new urban services

• As part of the program being developed by the BBVA Innovation Center to analyze smart cities
• The Massachusetts Institute of Technology (MIT) has been part of BBVA's international innovation network for a number of years

The BBVA Innovation Center today published a video on its website made in partnership with the MIT Senseable City Lab as an advance release on its joint research on the use of information to create new urban services.

The video covers purchasing movements in Spain over Easter Week of 2011. It shows the character of spending patterns of four categories of points of sale (fashion, bars and restaurants, food stores/supermarkets and gas stations) throughout the day across different Spanish regions and cities.

Data will continue to be collected over the upcoming Easter Week 2012 with the aim of testing the predictive capacity of this kind of analysis.

The video showing last year's results is available for downloading here:

BBVA Innovation Center and MIT

The Ssenseable City Lab, MIT is a cutting-edge multidisciplinary research group that studies the interface between cities, people, and technologies and investigates how the ubiquity of digital devices and the various telecommunication networks that augment our cities, are impacting urban living. With an overall goal of anticipating future trends, the Lab strives to reveal how a new, rapidly expanding network of digital devices is serving to modify the traditional principles of understanding, describing and inhabiting cities, as well as how we design and manage them.

The partnership between BBVA and MIT Senseable City Lab, established in 2011, has the following objectives:

• Discover new perspectives on the reuse of anonymized data from payment and cash withdrawal transactions in the city, taking into account the space-time component
• Understand how people relate to the city through interaction with different types of retail outlets
• Evaluate the predictive capacity that this new type of analysis has on future behavior
• Combine these data with other sources of information so that new perspectives may be extracted
• Create new services that improve the quality of life in urban environments

For more information:
http://senseable.mit.edu/
https://www.centrodeinnovacionbbva.com/

About BBVA

BBVA is a customer-centric global financial services group founded in 1857. The Group has a solid position in Spain, it is the largest financial institution in Mexico and it has leading franchises in South America and the Sunbelt Region of the United States. Its diversified business is biased to high-growth markets and it relies on technology as a key sustainable competitive advantage. BBVA ranks among the leading Euro zone banks in terms of ROE and efficiency. Corporate responsibility is at the core of its business model. BBVA fosters financial education and inclusion, and supports scientific research and culture. It operates with the highest integrity, a long-term vision and applies the best practices. The Group is present in the main sustainability indexes.

Launch of the fourth BBVA Open Talent & Red Innova program

Yesterday saw the official presentation of the 4th BBVA Open Talent & Red Innova  program, the prestigious international event aimed at entrepreneurs and start-ups that supports the development of innovative technologically-based projects.  This year a new category has been added for banking projects called 'Financial Services'.

The event was presented at BBVA's Innovation Center (CIBBVA) by Gustavo Vinacua Acosta, Director of the Center, together with Ricardo Forcano García, Director of Corporate Expansion at BBVA, and Inés Temes, Managing Director of Red Innova. All of them urged all the entrepreneurs and SMEs with projects up and running for not more than 24 months to present them to BBVA Open Talent & Red Innova.

The entrepreneurs can present projects in two categories:

a) Innovation and Technology

• Society (health, education, work, travel, tourism, smart cities, etc.)
• Technological platform (mobile applications security, cloud computing, hardware and software, etc.)
• E-business, e-commerce
• Gaming and multimedia
• Social networks and web 2.0

b) The banking category 'Financial Services'. This includes innovative projects in the area of financial services geared toward the development of new business models or new customer service models in areas such as payment methods, mobile financial services, increased banking penetration in emerging markets, exploitation of transactional information, and virtual money in social networks.

This year, this initiative supporting entrepreneurs has two prizes of €100,000 each. It is granted through a 10% holding by BBVA in the share capital of the winning companies, support for promotion, or consulting advice from BBVA.

This year’s program is divided into 3 stages:

1. Presentation of projects: The period for presenting projects runs from today March 26 to April 29, 2012.

2. Public voting and selection of the winners by jury.

• Projects can be voted for from April 30 to May 15
• The jury will analyze the projects voted for from May 16 to June 7. From these, it will choose 20 finalists.

3. Exhibition of finalists in the Red Innova event on June 14th and 15th in Madrid.

During the conference, the 20 finalists will explain their projects to the public.  The winner will be announced at the closing celebration of Red Innova on June 15.
The jury is composed up of prestigious figures and representatives of risk capital companies.

Gustavo Vinacua Acosta explains: “At BBVA we have an open innovation model, meaning that we support the talent there is out there, as we know that many innovative ideas and projects emerge outside the organization, and we want to support these entrepreneurs. We have doubled the volume of financial support this year."

Ricardo Forcano García comments: “It's not only a financial contribution. The aim of BBVA is to support the internationalization, development and global visibility of the projects and enterprises that participate in BBVA OpenTalent & Red Innova.”

“Since it was set up in 2009, Red Innova has supported entrepreneurs by creating a meeting point that increased the visibility of the most innovative projects in Latin America and Europe," adds Inés Temes.

About Red Innova

It is an international meeting point for innovation, the Internet, creativity and the spirit of entrepreneurship where Latin America can come into contact with the world. 

With up-to-date presentations and speakers, Red Innova is a key event for discovering the future of the digital environment, developing international networking opportunities and getting to know leaders in the world of technology, innovation and the Internet.

More than 2,000 visitors from Europe, Latin America and the U.S. have the opportunity to access presentations and workshops to discover the latest working tools, new enterprise projects, opportunities for international investment, international success stories and a workshop dedicated to the best developers.

About BBVA Innovation Center

The Innovation Center focuses the BBVA Group's innovation efforts and is the source of a variety of different solutions to ongoing problems. It is a meeting point for a variety of communities: scientists, academics, entrepreneurs and experts from different environments: education, art, science and technology. The center is developing a virtual strategy based on the website, the OpenMind community, profiles in social networks such as Twitter (@cibbva) and Facebook (centrodeinnovacionbbva). This gives it contact with a large number of people and extends and enriches the experience of those visiting it, as well as giving an opportunity for those who cannot make the trip in person. It is a way of extending the capacity to share, listen and learn.

About BBVA

BBVA is a customer-centric global financial services group founded in 1857. The Group has a solid position in Spain, it is the largest financial institution in Mexico and it has leading franchises in South America and the Sunbelt Region of the United States. Its diversified business is biased to high-growth markets and it relies on technology as a key sustainable competitive advantage. BBVA ranks among the leading Euro zone banks in terms of ROE and efficiency. Corporate responsibility is at the core of its business model. BBVA fosters financial education and inclusion, and supports scientific research and culture. It operates with the highest integrity, a long-term vision and applies the best practices. The Group is present in the main sustainability indexes.