Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally
accepted accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-
IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a
discrepancy, the original Spanish-language version prevails.
Annual Report
Financial Statements,
Management Report
and Audit Report 2016
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
Contents
Financial Statements
Balance sheets ........................................................................................................................................ 4
Income statements ................................................................................................................................... 7
Statements of recognized income and expenses .......................................................................................... 9
Statements of changes in equity ............................................................................................................... 10
Statements of cash flows ......................................................................................................................... 12
Notes to the Accompanying Financial Statements
1.
Introduction, basis for presentation of the financial statements and internal control of financial information
and other information ...................................................................................................................... 14
2. Accounting policies and valuation criteria applied ................................................................................ 16
3. System of shareholder remuneration ................................................................................................. 32
4. Earnings per share ........................................................................................................................... 34
5. Risk management ............................................................................................................................ 35
6
Fair value of financial instruments ...................................................................................................... 73
7 Cash and cash balances at centrals and banks and other demands deposits and Financial liabilities
measured at amortized cost .............................................................................................................. 81
8
9
Financial assets and liabilities held for trading ...................................................................................... 81
Financial assets and liabilities at fair value through profit or loss ............................................................ 84
10 Available-for-sale financial assets ........................................................................................................ 84
11 Loans and receivables ...................................................................................................................... 88
12 Held-to-maturity investments ............................................................................................................. 91
13 Hedging derivatives and fair value changes of the hedged items in portfolio hedge of interest rate risk ..... 93
14
Investments in subsidiaries, joint ventures and associates ..................................................................... 96
15 Tangible assets .............................................................................................................................. 102
16
Intangible assets ............................................................................................................................ 103
17. Tax assets and liabilities .................................................................................................................. 104
18. Other assets and liabilities ............................................................................................................... 111
19. Non-current assets and disposal groups classified as held for sale ....................................................... 111
20. Financial liabilities at amortized cost ................................................................................................. 114
21. Provisions ..................................................................................................................................... 120
22. Post-employment and other employee benefit commitments .............................................................. 122
23. Common stock .............................................................................................................................. 128
24. Share premium .............................................................................................................................. 130
1
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
25. Retained earnings, Revaluation reserves and Other ........................................................................... 130
26. Treasury shares ............................................................................................................................. 132
27. Accumulated other comprehensive income ...................................................................................... 133
28. Capital base and capital management .............................................................................................. 133
29. Commitments and guarantees given ................................................................................................ 137
30. Other contingent assets and liabilities ............................................................................................... 137
31. Purchase and sale commitments and future payment obligations ....................................................... 138
32. Transactions for the account of third parties ..................................................................................... 138
33. Interest income and expense .......................................................................................................... 139
34. Dividend income............................................................................................................................ 140
35. Fee and commission income .......................................................................................................... 140
36. Fee and commission expenses ........................................................................................................ 140
37. Gains (losses) on financial assets and liabilities (net) hedge accounting and exchange differences ............ 141
38. Other operating income and expenses ............................................................................................. 142
39. Administration costs ....................................................................................................................... 143
40. Depreciation .................................................................................................................................. 145
41. Provisions or reversal of provisions .................................................................................................. 146
42. Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss146
43. Impairment or reversal of impairment on non-financial assets and investments in subsidiaries, joint ventures
or associates. ................................................................................................................................ 146
44. Gains (losses) on derecognized of non-financial assets and subsidiaries, net ......................................... 147
45. Profit or loss from non-current assets and disposal groups classified as held for sale not qualifying as
discontinued operations ................................................................................................................. 147
46. Statements of cash flows ................................................................................................................ 147
47. Accountant fees and services .......................................................................................................... 148
48. Related-party transactions ............................................................................................................... 149
49. Remuneration and other benefits of the Board of Directors and Members of the Bank’s Management
Committee .................................................................................................................................... 150
50. Other information .......................................................................................................................... 156
51. Subsequent events ........................................................................................................................ 158
52. Explanation added for translation into English ................................................................................... 158
APPENDIX I. BBVA Group Consolidated Financial Statements ..................................................................... 160
APPENDIX II. Additional information on consolidated subsidiaries composing the BBVA Group ...................... 170
APPENDIX III. Additional information on investments and jointly controlled companies accounted for under the
equity method of consolidation in the BBVA Group (includes the most significant companies that together
represent 99.71% of total investments in these companies) ............................................................... 180
2
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
APPENDIX IV. Changes and notification of investments and divestments in the BBVA Group in 2016 ........... 181
APPENDIX V.Fully consolidated subsidiaries with more than 10% owned by non-Group shareholders as of
December 31, 2016 ...................................................................................................................... 185
APPENDIX VI. BBVA Group’s structured entities. Securitization funds .......................................................... 187
APPENDIX VII. Details of the outstanding subordinated debt and preferred securities issued by the Bank as of
December 31, 2016 and 2015 ...................................................................................................... 188
APPENDIX VIII. Balance sheets held in foreign currency as of December 31, 2016 and 2015 ...................... 189
APPENDIX IX. Income statement corresponding to the first and second half of 2016 and 2015 ................... 190
APPENDIX X. Information on data derived from the special accounting registry ........................................... 191
APPENDIX XI. Risks related to the developer and real-estate sector in Spain ................................................ 198
APPENDIX XII. Refinanced and restructured operations and other requirements under Bank of Spain Circular
6/2012 ........................................................................................................................................ 205
APPENDIX XIII. Agency Network ............................................................................................................ 212
APPENDIX XIV. Meger by buyout with Catalunya Banc, S.A. Banco Depositario BBVA, S.A. y Unoe Bank, S.A 245
Glossary
Management Report
3
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Balance sheets as of December 31, 2016 and 2015
ASSETS
CASH, CASH BALANCES AT CENTRAL BANKS AND OTHER
DEMAND DEPOSITS
FINANCIAL ASSETS HELD FOR TRADING
Derivatives
Equity instruments
Debt securities
Loans and advances to central banks
Loans and advances to credit institutions
Loans and advances to customers
OTHER FINANCIAL ASSETS DESIGNATED AT FAIR VALUE
THROUGH PROFIT OR LOSS
AVAILABLE-FOR-SALE FINANCIAL ASSETS
Equity instruments
Debt securities
LOANS AND RECEIVABLES
Debt securities
Loans and advances to central banks
Loans and advances to credit institutions
Loans and advances to customers
HELD-TO-MATURITY INVESTMENTS
HEDGING DERIVATIVES
FAIR VALUE CHANGES OF THE HEDGED ITEMS IN PORTFOLIO
HEDGES OF INTEREST RATE RISK
INVESTMENTS IN SUBSIDIARIES, JOINT VENTURES AND
ASSOCIATES
Group entities
Joint ventures
Associates
TANGIBLE ASSETS
Property, plants and equipment
For own use
Other assets leased out under an operating lease
Investment properties
INTANGIBLE ASSETS
Goodwill
Other intangible assets
TAX ASSETS
Current
Deferred
OTHER ASSETS
Insurance contracts linked to pensions
Inventories
Rest
NON-CURRENT ASSETS AND DISPOSAL GROUPS HELD FOR
SALE
TOTAL ASSETS
(*)
Presented for comparison purposes only (note 1.3).
Millions of Euros
Notes
2016
2015
7
8
9
10
11
12
13
13
14
15
16
17
18
22
19
15,855
57,440
42,023
3,873
11,544
-
-
-
-
29,004
3,506
25,498
251,487
11,001
-
26,596
213,890
11,424
1,586
11,191
58,606
40,499
3,974
14,133
-
-
-
-
50,601
4,018
46,583
226,781
4,213
-
25,146
197,422
-
1,714
17
54
30,218
31,599
29,823
31,185
18
377
1,856
1,845
1,845
-
11
942
-
942
12,394
756
11,638
3,709
2,426
-
1,283
2,515
18
396
1,521
1,516
1,516
-
5
853
-
853
8,193
652
7,541
3,850
2,151
-
1,699
2,340
418,447
397,303
The accompanying Notes 1 to 52 and Appendices I to XIII are an integral part of the balance sheet as of
December 31, 2016.
4
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Balance sheets as of December 31, 2016 and 2015
LIABILITIES AND EQUITY
Notes
2016
2015
Millions of Euros
FINANCIAL LIABILITIES HELD FOR TRADING
8
Derivatives
Short positions
Deposits from central banks
Deposits from credit institutions
Customer deposits
Debt certificates
Other financial liabilities
OTHER FINANCIAL LIABILITIES DESIGNATED AT FAIR VALUE
THROUGH PROFIT OR LOSS
FINANCIAL LIABILITIES AT AMORTIZED COST
Deposits from central banks
Deposits from credit institutions
Customer deposits
Debt certificates
Other financial liabilities
Subordinated liabilities
HEDGING DERIVATIVES
FAIR VALUE CHANGES OF THE HEDGED ITEMS IN PORTFOLIO
HEDGES OF INTEREST RATE RISK
PROVISIONS
Provisions for pensions and similar obligations
Other long term employee benefits
Provisions for taxes and other legal contingencies
Provisions for contingent risks and commitments
Other provisions
TAX LIABILITIES
Current
Deferred
OTHER LIABILITIES
LIABILITIES INCLUDED IN DISPOSAL GROUPS CLASSIFIED AS
HELD FOR SALE
TOTAL LIABILITIES
(*)
Presented for comparison purposes only (note 1.3).
9
20
13
13
21
17
18
48,265
40,951
7,314
-
-
-
-
-
-
319,884
26,629
44,977
207,946
33,174
7,158
9,209
1,488
-
8,917
5,271
32
-
658
2,956
1,415
127
1,288
2,092
46,973
39,720
7,253
-
-
-
-
-
-
303,095
19,642
55,462
190,222
30,966
6,803
8,295
1,542
-
6,209
5,177
-
-
263
769
1,225
24
1,201
1,439
-
382,061
-
360,483
The accompanying Notes 1 to 52 and Appendices I to XIII are an integral part of the balance sheet as of
December 31, 2016.
5
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Balance sheets as of December 31, 2016 and 2015
LIABILITIES AND EQUITY (Continued)
Notes
2016
2015
Millions of Euros
23
24
25
25
25
26
27
27
27
STOCKHOLDERS’ FUNDS
Capital
Paid up capital
Unpaid capital which has been called up
Share premium
Equity instruments issued other than capital
Equity component of compound financial instruments
Other equity instruments issued
Retained earnings
Revaluation reserves
Other reserves
Less: Treasury shares
Profit or loss attributable to owners of the parent
Less: Interim dividends
ACCUMULATED OTHER COMPREHENSIVE INCOME
Items that will not be reclassified to profit or loss
Actuarial gains or (-) losses on defined benefit pension plans
Non-current assets and disposal groups classified as held for
sale
Other adjustments
Items that may be reclassified to profit or loss
Hedge of net investments in foreign operations [effective
portion]
Foreign currency translation
Hedging derivatives. Cash flow hedges [effective portion]
Available-for-sale financial assets
Other debt securities
Equity instrumentS
Non-current assets and disposal groups classified as held for
sale
TOTAL EQUITY
TOTAL EQUITY AND TOTAL LIABILITIES
36,748
3,218
3,218
-
23,992
46
-
46
-
20
9,346
(23)
1,662
(1,513)
(362)
(43)
(43)
-
-
(319)
-
13
(127)
(205)
660
(865)
-
36,386
418,447
36,438
3,120
3,120
-
23,992
28
-
28
-
22
7,787
(19)
2,864
(1,356)
382
(22)
(22)
-
-
404
-
21
(75)
458
747
(289)
-
36,820
397,303
MEMORANDUM ITEM
Financial guarantees given
Contingent commitments
TOTAL EQUITY
(*)
Presented for comparison purposes only (note 1.3).
Millions of Euros
2016
2015
29
29
39,704
71,162
110,866
39,850
58,255
98,105
The accompanying Notes 1 to 52 and Appendices I to XIII are an integral part of the balance sheet as of
December 31, 2016.
6
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Income statements for the years ended December 31, 2016 and 2015.
Income Statements for December 31, 2016 and 2015 of
BBVA, S.A
Millions of Euros
2016
2015
INTEREST AND SIMILAR INCOME
INTEREST AND SIMILAR EXPENSES
NET INTEREST INCOME
DIVIDEND INCOME
FEE AND COMMISSION INCOME
FEE AND COMMISSION EXPENSES
GAINS OR (-) LOSSES ON FINANCIAL ASSETS AND LIABILITIES
DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS, NET
GAINS OR (-) LOSSES ON FINANCIAL ASSETS AND LIABILITIES
HELD FOR TRADING, NET
GAINS OR (-) LOSSES ON DERECOGNITION OF FINANCIAL ASSETS
AND LIABILITIES NOT MEASURED AT FAIR VALUE THROUGH
PROFIT OR LOSS, NET
GAINS OR (-) LOSSES FROM HEDGE ACCOUNTING, NET
EXCHANGE DIFFERENCES (NET)
OTHER OPERATING INCOME
OTHER OPERATING EXPENSES
GROSS INCOME
ADMINISTRATION COSTS
Personnel expenses
General and administrative expenses
DEPRECIATION
PROVISIONS OR (-) REVERSAL OF PROVISIONS
IMPAIRMENT OR (-) REVERSAL OF IMPAIRMENT ON FINANCIAL
ASSETS NOT MEASURED AT FAIR VALUE THROUGH PROFIT OR
LOSS
Financial assets measured at cost
Available- for-sale financial assets
Loans and receivables
Held to maturity investments
NET OPERATING INCOME
(*)
Presented for comparison purposes only (note 1.3).
33
33
34
35
36
37
37
37
37
37
38
38
39
40
41
42
6,236
(2,713)
3,523
2,854
1,886
(353)
-
(70)
955
(62)
305
140
(504)
8,674
(4,247)
(2,502)
(1,745)
(575)
(1,187)
(949)
(12)
(180)
(757)
-
1,716
6,506
(3,167)
3,339
2,117
1,751
(289)
-
151
775
(16)
224
114
(465)
7,701
(3,756)
(2,198)
(1,558)
(519)
(651)
(1,304)
(13)
-
(1,291)
-
1,471
The accompanying Notes 1 to 52 and Appendices I to XIII are an integral part of the income statement for the
year ended December 31, 2016.
7
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Income statements for the years ended December 31, 2016 and 2015.
(Continued)
NET OPERATING INCOME
(IMPAIRMENT O R (-) REVERSAL O F IMPAIRMENT O F
INVESTMENTS IN SUBSIDARIES, JO INT VENTURES AND
ASSO C IATES)
IMPAIRMENT O R (-) REVERSAL O F IMPAIRMENT ON NO N-
FINANC IAL ASSETS
Tangible as s e ts
Intangible as s e ts
O the r as s e ts
GAINS (LO SSES) O N DEREC O GNIZED ASSETS NO T C LASSIFIED AS
NO N-C URRENT ASSETS HELD FO R SALE
NEGATIVE GO ODW ILL REC O GNISED IN PRO FIT O R LO SS
PRO FIT O R (-) LO SS FRO M NO N-C URRENT ASSETS AND DISPO SAL
GRO UPS C LASSIFIED AS HELD FO R SALE NO T Q UALIFYING AS
DISC O NTINUED O PERATIO NS
OPERATING PROFIT B EFORE TAX
Tax e xpe ns e or (-) incom e re late d to profit or los s from
continuing ope ration
PROFIT FROM CONTINUING OPERATIONS
Profit from dis continue d ope rations (ne t)
PROFIT
(*)
Presented for comparison purposes only (note 1.3).
43
43
44
45
Millions of Euros
2016
2015
1,716
1,471
(147)
(16)
(16)
-
-
12
-
(73)
1,492
170
1,662
-
1,662
835
(22)
(22)
-
-
8
-
760
3,052
(188)
2,864
-
2,864
The accompanying Notes 1 to 52 and Appendices I to XIII are an integral part of the income statement for the
year ended December 31, 2016.
8
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Statements of recognized income and expenses for the years ended
December 31, 2016 and 2015.
Statements of Recognized Income and Expenses for December 31, 2016
and 2015 of BBVA, S.A
PROFIT RECOGNIZED IN INCOME STATEMENT
OTHER RECOGNIZED INCOME (EXPENSES)
ITEMS NOT SUBJECT TO RECLASSIFICATION TO INCOME STATEMENT
ITEMS SUBJECT TO RECLASSIFICATION TO INCOME STATEMENT
Hedge of net investments in foreign operations [effective portion]
Foreign currency translation
Translation gains or (-) losses taken to equity
Transferred to profit or loss
Other reclassifications
Cash flow hedges [effective portion]
Valuation gains or (-) losses taken to equity
Transferred to profit or loss
Transferred to initial carrying amount of hedged items
Other reclassifications
Available-for-sale financial assets
Valuation gains/(losses)
Amounts reclassified to income statement
Reclassifications (other)
Non-current assets held for sale
Valuation gains/(losses)
Amounts reclassified to income statement
Reclassifications (other)
Income tax
TOTAL RECOGNIZED INCOME/EXPENSES
(*)
Presented for comparison purposes only (note 1.3).
Millions of Euros
2016
2015
1,662
(744)
(21)
(723)
-
(11)
18
(29)
-
(74)
(69)
(5)
-
-
(583)
217
(800)
-
-
-
-
-
(55)
918
2,864
(1,309)
(2)
(1,307)
-
13
30
(17)
-
11
20
(9)
-
-
(1,890)
(723)
(1,167)
-
-
-
-
-
560
1,555
The accompanying Notes 1 to 52 and Appendices I to XIII are an integral part of the statement of recognized
income and expenses for the year ended December 31, 2016
9
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
Statements of changes in equity for the years ended December 31, 2016 and 2015.
BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
December 2016
Balances as of January 1, 2016
Effect o f changes in acco unting po licies
Effect o f co rrectio n o f erro rs
Adjusted initial balance
Total income/expense recognized
Other changes in equity
Issuances o f co mmo n shares
Issuances o f preferred shares
Issuance o f o ther equity instruments
P erio d o r maturity o f o ther issued equity instruments
Co nversio n o f debt o n equity
Co mmo n Sto ck reductio n
Dividend distributio n
P urchase o f treasury shares
Sale o r cancellatio n o f treasury shares
Reclassificatio n o f financial liabilities to o ther equity instruments
Reclassificatio n o f o ther equity instruments to financial liabilities
Transfers between to tal equity entries
Increase/Reductio n o f equity due to business co mbinatio ns
Share based payments
Other increases o r (-) decreases in equity
Balances as of December 31, 2016
C a pit a l
S ha re
P re m ium
E quit y
ins t rum e nt s
is s ue d o t he r
t ha n c a pit a l
O t he r E quit y
R e t a ine d
e a rnings
R e v a lua t io n
re s e rv e s
O t he r
re s e rv e s
( - ) T re a s ury
s ha re s
P ro f it o r lo s s
a t t ribut a ble
t o o wne rs o f
t he pa re nt
Int e rim
div ide nds
A c c um ula t e
d o t he r
c o m pre he n
s iv e inc o m e
T o t a l
M illio ns o f E uro s
3,120
23,992
-
-
-
-
3,120
23,992
-
98
98
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,218
-
23,992
28
-
-
28
-
18
-
-
-
-
-
-
-
-
-
-
-
(3)
-
-
21
46
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
22
-
-
22
-
(2)
-
-
-
-
-
-
-
-
-
-
-
(2)
-
-
-
20
7,787
(19)
2,864
(1,356)
382
36,820
-
-
7,787
-
1,559
(98)
-
-
-
-
-
-
-
10
-
-
1,513
139
-
(5)
9,346
-
-
(19)
-
(4)
-
-
-
-
-
-
-
(1,570)
1,566
-
-
-
-
-
-
-
2,864
1,662
-
-
(1,356)
-
(2,864)
(157)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,303)
-
-
-
-
(2,864)
1,356
-
-
-
-
-
-
382
(744)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(23)
-
1,662
(210)
(1,513)
-
(362)
-
-
36,820
918
(1,352)
-
-
-
-
-
-
(1,303)
(1,570)
1,576
-
-
-
139
-
(194)
36,386
(*) Presented for comparison purposes only (note 1.3).
The accompanying Notes 1 to 52 and Appendices I to XIII are an integral part of the statement of changes in equity for the year ended December 31, 2016.
10
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
Statements of changes in equity for the years ended December 31, 2016 and 2015.
BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
December 2015
Balances as of January 1, 2015
Effect o f changes in acco unting po licies
Effect o f co rrectio n o f erro rs
Adjusted initial balance
Total income/expense recognized
Other changes in equity
Issuances o f co mmo n shares
Issuances o f preferred shares
Issuance o f o ther equity instruments
P erio d o r maturity o f o ther issued equity instruments
Co nversio n o f debt o n equity
Co mmo n Sto ck reductio n
Dividend distributio n
P urchase o f treasury shares
Sale o r cancellatio n o f treasury shares
Reclassificatio n o f financial liabilities to o ther equity instruments
Reclassificatio n o f o ther equity instruments to financial liabilities
Transfers between to tal equity entries
Increase/Reductio n o f equity due to business co mbinatio ns
Share based payments
Other increases o r (-) decreases in equity
Balances as of December 31, 2015
C a pit a l
S ha re
P re m ium
E quit y
ins t rum e nt s
is s ue d o t he r
t ha n c a pit a l
O t he r E quit y
R e t a ine d
e a rnings
R e v a lua t io n
re s e rv e s
O t he r
re s e rv e s
( - ) T re a s ury
s ha re s
P ro f it o r lo s s
a t t ribut a ble
t o o wne rs o f
t he pa re nt
Int e rim
div ide nds
A c c um ula t e
d o t he r
c o m pre he n
s iv e inc o m e
T o t a l
M illio ns o f E uro s
7,619
(46)
1,105
(841)
1,691
36,614
3,024
23,992
-
-
-
-
3,024
23,992
-
96
96
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,120
-
23,992
47
-
-
47
-
(19)
-
-
-
-
-
-
-
-
-
-
-
(8)
-
-
(11)
28
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
23
-
-
23
-
(1)
-
-
-
-
-
-
-
-
-
-
-
(1)
-
-
-
22
-
-
7,619
-
168
(96)
-
-
-
-
-
-
-
(1)
-
-
272
-
-
(7)
7,787
-
-
(46)
-
27
-
-
-
-
-
-
-
(2,297)
2,324
-
-
-
-
-
-
(19)
-
-
1,105
2,864
-
-
-
-
(841)
1,691
-
(1,309)
(1,105)
(515)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,226)
-
-
-
-
(1,105)
842
-
-
-
-
-
2,864
-
-
36,614
1,555
(1,349)
-
-
-
-
-
-
(1,226)
(2,297)
2,323
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(131)
(1,356)
-
382
(149)
36,820
(*)
(**)
Presented for comparison purposes only (note 1.3).
Balance as of December 31, 2014, previously published (note 1.3)
The accompanying Notes 1 to 52 and Appendices I to XIII are an integral part of the statement of changes in equity for the year ended December 31, 2016.
11
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Statements of cash flows for the years ended December 31, 2016 and 2015.
Cash Flows Statements for December 31, 2016 and 2015 of BBVA, S.A
2016 (**)
2015 (*)
Millions of Euros
A) CASH FLOW FROM OPERATING ACTIVITIES (1 + 2 + 3 + 4 + 5)
1. Profit for the year
2. Adjustments to obtain the cash flow from operating activities:
Depreciation and amortization
Other adjustments
3. Net increase/decrease in operating assets
Financial assets held for trading
Financial assets designated at fair value through profit or loss
Available-for-sale financial assets
Loans and receivables
Other operating assets
4. Net increase/decrease in operating liabilities
Financial liabilities held for trading
Other financial liabilities designated at fair value through profit or loss
Financial liabilities at amortized cost
Other operating liabilities
5. Collection/Payments for income tax
B) CASH FLOWS FROM INVESTING ACTIVITIES (1 + 2)
1. Investment
Tangible assets
Intangible assets
Investments
Subsidiaries and other business units
Non-current assets held for sale and associated liabilities
Held-to-maturity investments
Other settlements related to investing activities
2. Divestments
Tangible assets
Intangible assets
Investments
Subsidiaries and other business units
Non-current assets held for sale and associated liabilities
Held-to-maturity investments
Other collections related to investing activities
6,281
1,662
1,811
574
1,237
(16,227)
1,166
-
21,597
(24,706)
(14,284)
19,205
1,292
-
15,847
2,066
(170)
(1,048)
(3,168)
(170)
(320)
(246)
-
(674)
(1,758)
-
2,120
20
-
93
-
511
1,321
175
4,709
2,864
(1,769)
519
(2,288)
11,515
5,889
-
1,564
3,861
201
(8,090)
(4,003)
-
(2,975)
(1,112)
189
(2,259)
(5,625)
(211)
(298)
(4,114)
-
(1,002)
-
-
3,366
12
-
62
-
1,249
-
2,043
Presented for comparison purposes only (note 1.3).
(*)
(**) The statement of cash flows corresponding to 2016 is impacted by the merger of Catalunya Banc, S.A., Banco
Depositario BBVA, S.A. y Unoe Bank, S.A. (Note 1.3).
The accompanying Notes 1 to 52 and Appendices I to XIII are an integral part of the statement of cash flows for
the year ended December 31, 2016.
12
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Statements of cash flows for the years ended December 31, 2016 and 2015.
CASH FLOWS STATEMENTS (Continued)
C) CASH FLOWS FROM FINANCING ACTIVITIES (1 + 2)
1. Investment
Dividends
Subordinated liabilities
Common stock amortization
Treasury stock acquisition
Other items relating to financing activities
2. Divestments
Subordinated liabilities
Common stock increase
Treasury stock disposal
Other items relating to financing activities
D) EFFECT OF EXCHANGE RATE CHANGES
E) NET INCREASE/DECREASE IN CASH OR CASH EQUIVALENTS (A+B+C+D)
F) CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR
G) CASH AND CASH EQUIVALENTS AT END OF THE YEAR
COMPONENTS OF CASH AND EQUIVALENTS AT END OF THE PERIOD
Cash
Balance of cash equivalent in central banks
Other financial assets
Less: Bank overdraft refundable on demand
TOTAL CASH AND CASH EQUIVALENTS AT END OF THE YEAR
(*)
Presented for comparison purposes only (note 1.3).
Millions of Euros
December
2016
December
2015
(501)
(3,247)
(1,497)
(180)
-
(1,570)
-
2,746
1,000
-
1,574
172
(67)
4,665
11,191
15,856
(302)
(4,124)
(916)
(767)
-
(2,297)
(144)
3,822
1,500
-
2,322
-
(302)
1,846
9,262
11,108
Millions of Euros
December
2016
December
2015
879
14,913
63
-
15,855
825
10,283
-
-
11,108
The accompanying Notes 1 to 52 and Appendices I to XIII are an integral part of the statement of cash flows for
the year ended December 31, 2016.
13
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Notes to the financial statements for the year ended December 31, 2016.
1.
Introduction, basis for presentation of the financial statements and
internal control of financial information and other information
1.1
Introduction
Banco Bilbao Vizcaya Argentaria, S.A. (hereinafter “the Bank” or “BBVA") is a private-law entity subject to the laws
and regulations governing banking entities operating in Spain. It carries out its activity through branches and
agencies across the country and abroad.
The Bylaws and other public information are available for consultation at the Bank’s registered address (Plaza San
Nicolás, 4 Bilbao) and on its official website: www.bbva.com.
In addition to the transactions it carries out directly, the Bank heads a group of subsidiaries, jointly controlled and
associated entities which perform a wide range of activities and which together with the Bank constitute the
Banco Bilbao Vizcaya Argentaria Group (hereinafter, “the Group” or “the BBVA Group”). In addition to its own
individual financial statements, the Bank is therefore obliged to prepare the Group’s financial statements.
The Bank’s financial statements for the year ended December 31, 2015 were approved by the shareholders at
the Bank’s Annual General Meeting (“AGM”) held on March 11, 2016.
The Bank’s financial statements for the year ended December 31, 2016 are pending approval by the Annual
General Meeting. However, the Bank’s Board of Directors considers that the aforementioned financial statements
will be approved without any changes.
1.2 Basis for the presentation of the financial statements
The Bank's financial statements for 2016 are presented in accordance with Bank of Spain Circular 4/2004, dated
December 22, and its subsequent amendments, and with any other legislation governing financial reporting
applicable to the Bank. Circular 4/2004 implements and adapts the International Financial Reporting Standards
(EU-IFRS) to Spanish credit institutions, following stipulations established under Regulation 1606/2002 of the
European Parliament and of the Council, dated July 19, 2002, relating to the application of the International
Accounting Standards. The recent publication of Bank of Spain Circular 4/2016, of April 27, has updated Circular
4/2004 to adapt it to the latest publications in banking regulation, maintaining full compatibility with the IFRS
accounting framework.
The Bank's financial statements for the year ended December 31, 2016 have been prepared by the Bank’s
directors (at the Board of Directors meeting held on February 9, 2017) by applying the accounting policies and
valuation criteria described in Note 2, so that they present fairly the Bank's equity and financial position as of
December 31, 2016, together with the results of its operations and cash flows generated during the year ended
on that date.
All obligatory accounting standards and valuation criteria with a significant effect in the financial statements were
applied in their preparation.
The amounts reflected in the accompanying financial statements are presented in millions of euros, unless it is
more convenient to use smaller units. Some items that appear without a total in these financial statements do so
because of the size of the units used. Also, in presenting amounts in millions of euros, the accounting balances
have been rounded up or down. It is therefore possible that the amounts appearing in some tables are not the
exact arithmetical sum of their component figures.
The percentage changes in amounts have been calculated using figures expressed in thousands of euros.
14
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
1.3 Comparative information
The financial statements of BBVA for the year 2016 are prepared in accordance with the presentation models
required by Circular 5/2015 of the Comisión Nacional del Mercado de Valores. The aim is to adapt the content of
the public financial information from the credit institutions and formats of the financial statements established
mandatory by the European Union regulation for the credit institution
The information contained in these financial statements for 2015 is presented solely for the purpose of
comparison with information relating to December 31, 2016. It does not constitute the Bank's financial
statements for 2015. In order to facilitate comparison, the Bank´s financial statements and the information
related to those dates in 2015, have been restated in accordance with the new models mentioned in the
previous paragraph, without having a significant impact on the accompanying financial statements included for
the year ended December 31, 2015.
During 2016, was carried out a merger process of BBVA S.A. (absorbing company), Catalunya Banc, S.A., Banco
Depositario BBVA, S.A. y Unoe Bank, S.A (see note 14).
1.4 Seasonal nature of income and expenses
The nature of the most significant operations carried out by the Bank is mainly related to traditional activities
carried out by financial institutions, which are not significantly affected by seasonal factors.
1.5 Responsibility for the information and for the estimates made
The information contained in the Bank's financial statements is the responsibility of the Bank’s Directors.
Estimates have to be made at times when preparing these financial statements in order to calculate the registered
amount of some assets, liabilities, income, expenses and commitments. These estimates relate mainly to the
following:
Impairment on certain financial assets (see Notes 5, 6, 10, 11,12 and 15).
•
• The assumptions used to quantify certain provisions (see Note 21) for the actuarial calculation of post-
employment benefit liabilities and commitments (see Note 22).
• The useful life and impairment losses of tangible and intangible assets (see Notes, 15,16 and 19).
• The fair value of certain unlisted financial assets and liabilities in organized markets (see Notes 5, 6, 8, 9,
10,12 and 13).
• The recoverability of deferred tax assets (See Note 17).
Although these estimates were made on the basis of the best information available as of December 31, 2016 on
the events analyzed, future events may make it necessary to modify them (either up or down). This would be
done in accordance with applicable regulations and prospectively, recording the effects of changes in the
estimates in the corresponding income statement.
1.6 Control of the BBVA Group’s financial reporting
The description of the BBVA Group’s Internal Financial Reporting Control model is described in the management
report accompanying the Financial Statements for 2016
1.7 Deposit guarantee fund and Resolution fund
The Bank is part of the “Fondo de Garantía de Depósitos” (Deposit Guarantee Fund). Adjusting to the previously
mentioned accounting criteria modification, the expense incurred by the contributions made to this Agency in
2016 and 2015 amounted to €153 million and €117 million, respectively. These amounts are registered under
the heading "Other operating expenses" of the accompanying income statements (see Note 38).
15
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
The previously mentioned amount registered in year 2013 includes the extraordinary contribution established by
the Royal Decree-Law 6/2013. A one-off Deposit Guarantee Fund contribution, applicable to 3 per thousand of
eligible deposits. The first contribution (40%) amounted to 121 million euros paid in 2013. Of the second
contribution (remaining 60%) in 2014 a seventh part was paid and according to the new payment schedule
established by the Management Committee of the Deposit Guarantee Fund. The remaining part of the previously
mentioned second contribution was recognized as a liability as of December 31, 2014 and 50% paid off in June
2016 and 2015,remaining in each year ended.
In accordance with the new regulations, in 2015 a contribution was made to Spain's Orderly Banking Resolution
Fund (FROB) of €123m. In 2016 a single European resolution fund has been established with a contribution of
€137 million Euros through a contribution of €117 million Euros and the creation of a commitment of €20
million Euros which are registered under the heading "Other Operating Expenses" in the attached income
statements (see Note 38).
1.8 Consolidated financial statements
The consolidated financial statements of the BBVA Group for the year ended December 31, 2016 have been
prepared by the Bank's Directors (at the Board of Directors meeting held on February 9, 2017) in accordance
with the International Financial Reporting Standards adopted by the European Union and applicable at the close
of 2016, taking into account Bank of Spain Circular 4/2004, dated December 22, and subsequent amendments,
and with any other legislation governing financial reporting applicable to the Group.
The management of the Group’s operations is carried out on a consolidated basis, independently of the individual
allocation of the corresponding equity changes and their related results. Consequently, the Bank's annual financial
statements have to be considered within the context of the Group, due to the fact that they do not reflect the
financial and equity changes that result from the application of the consolidation policies (full consolidation or
proportionate consolidation methods) or the equity method.
These changes are reflected in the consolidated financial statements of the BBVA Group for the year 2016, which
the Bank's Board of Directors has also prepared. Appendix I includes the Group's consolidated financial
statements. In accordance with the content of these consolidated financial statements prepared following the
International Financial Reporting Standards adopted by the European Union, the total amount of the BBVA
Group’s assets and consolidated equity at the close of 2016 amounted to €731,856 million and €55,428
million, respectively, while the consolidated net profit attributed to the parent company of this period amounted
to €3,475 million.
2.
Accounting policies and valuation criteria applied
The Glossary includes the definition of some of the financial and economic terms used in Note 2 and subsequent
Notes.
The accounting standards and policies and valuation criteria used in preparing these financial statements are as
follows:
2.1 Financial instruments
Measurement of financial instruments and recognition of changes in subsequent fair value
All financial instruments are initially accounted for at fair value which, unless there is evidence to the contrary,
shall be the transaction price.
All the changes in the value of financial instruments, except trading derivatives that are not economic hedges, all
the financial assets held for trading and derivatives, arising from the accrual of interests and similar items are
recognized under the headings “Interest income” or “Interest expenses”, as appropriate, in the accompanying
income statement for the year in which the accrual took place (see Note 33). The dividends paid from other
companies, other than associate entities and joint venture entities, are recognized under the heading “Dividend
income” in the accompanying income statement for the year in which the right to receive them arises (see Note
34).
16
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
The changes in fair value after the initial recognition, for reasons other than those mentioned in the preceding
paragraph, are treated as described below, according to the categories of financial assets and liabilities:
2.1.1
“Financial assets and liabilities held for trading” and “Financial assets and
liabilities designated at fair value through profit or loss”
The assets and liabilities recognized in these chapters of the balance sheets are measured at fair value, and
changes in value (gains or losses) are recognized as their net value under the heading “Gains (losses) on financial
assets and liabilities (net)” in the accompanying income statements (see Note 37). However, changes resulting
from variations in foreign exchange rates are recognized under the heading “Exchange differences (net)" in the
accompanying income statements.
2.1.2
“Available-for-sale financial assets”
Assets recognized under this heading in the balance sheets are measured at their fair value. Subsequent changes
in this measurement (gains or losses) are recognized temporarily for their amount net of tax effect under the
heading “Accumulated other comprehensive income- Items that may be reclassified to profit or loss - Available-for-
sale financial assets ” in the balance sheets (see Note 27).
Changes in the value of non-monetary items resulting from changes in foreign exchange rates are recognized
temporarily under the heading “Accumulated other comprehensive income - Items that may be reclassified to
profit or loss - Exchange differences ” in the accompanying balance sheets. Changes in foreign exchange rates
resulting from monetary items are recognized under the heading “Exchange differences (net)" in the
accompanying income statements.
The amounts recognized under the headings “Accumulated other comprehensive income- Items that may be
reclassified to profit or loss - Available-for-sale financial assets” and “Accumulated other comprehensive income-
Items that may be reclassified to profit or loss - Exchange differences” continue to form part of the Bank's equity
until the asset is derecognized from the balance sheet or until an impairment loss is recognized in the financial
instrument in question. If these assets are sold, these amounts are derecognized and entered under the headings
“Gains (losses) on financial assets and liabilities (net)” or “Exchange differences (net)", as appropriate, in the
income statement for the year in which they are derecognized (see Note 37).
In the specific case of the sale of equity instruments considered strategic investments and recognized under the
heading “Available-for-sale financial assets”, the gains or losses generated are recognized under the heading
“Profit or (-) loss from non-current assets and disposal groups classified as held for sale not qualifying as
discontinued operations” in the income statement, even if they had not been classified in a previous balance
sheet as non-current assets held for sale, as indicated in Rule 56 of Circular 4/2004 and its subsequent
amendments (see Note 45).
The net impairment losses in “Available-for-sale financial assets” over the year are recognized under the heading
“Impairment losses on financial assets (net) – Other financial instruments not at fair value through profit or loss” in
the income statement for that year (see Note 42).
2.1.3
“Loans and receivables”, “Held-to-maturity investments” and “Financial liabilities
at amortized cost”
Assets and liabilities recognized under these headings in the accompanying balance sheets are measured once
acquired at “amortized cost” using the “effective interest rate” method. This is because the Bank intends to hold
such financial instruments to maturity.
Net impairment losses of assets recognized under these headings arising in a particular year are recognized
under the heading “Impairment or (-) reversal of impairment on financial assets not measured at fair value
through profit or loss – loans and receivables”, “Impairment or (-) reversal of impairment on financial assets not
measured at fair value through profit or loss - held to maturity investments” or “Impairment or (-) reversal of
impairment on financial assets not measured at fair value through profit or loss – financial assets measured at
cost” in the income statement for that year (see Note 42).
17
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
2.1.4
“Derivatives-Hedge Accounting ” and “Fair value changes of the hedged items in
portfolio hedges of interest-rate risk”
Assets and liabilities recognized under these headings in the accompanying balance sheets are measured at fair
value.
Changes that take place subsequent to the designation of the hedging relationship in the measurement of
financial instruments designated as hedged items as well as financial instruments designated as hedge accounting
instruments are recognized as follows:
•
•
•
In fair value hedges, the changes in the fair value of the derivative and the hedged item attributable to the
hedged risk are recognized under the heading “Gains or losses from hedge accounting, net ” in the income
statement (see Note 37), with a balancing item under the headings of the balance sheet where hedging items
("Hedging derivatives") or the hedged items are recognized, as applicable.
In fair value hedges of interest rate risk of a portfolio of financial instruments (portfolio-hedges), the gains or
losses that arise in the measurement of the hedging instrument are recognized in the income statement, and
those that arise from the change in the fair value of the hedged item (attributable to the hedged risk) are also
recognized in the income statement (in both cases under the heading “Gains or losses from hedge
accounting, net ”, using, as a balancing item, the headings "Fair value changes of the hedged items in
portfolio hedges of interest rate risk" in the balance sheets, as applicable.
In cash flow hedges, the gain or loss on the hedging instruments relating to the effective portion are
recognized temporarily under the heading "Accumulated other comprehensive income - Items that may be
reclassified to profit or loss - Hedging derivatives. Cash flow hedges” in the balance sheets, with a balancing
entry under the heading “Hedging derivatives” of the Assets or Liabilities of the Financial Statements as
applicable. These differences are recognized in the accompanying income statement at the time when the
gain or loss in the hedged instrument affects profit or loss, when the forecast transaction is executed or at
the maturity date of the hedged item (see Note 33).
• Differences in the measurement of the hedging items corresponding to the ineffective portions of cash flow
hedges are recognized directly under the heading “Gains or (-) losses from hedge accounting, net” in the
income statement (see Note 37).
•
In hedges of net investments in foreign operations, the differences in the effective portions of hedging items
are recognized temporarily under the heading " Accumulated other comprehensive income - Items that may
be reclassified to profit or loss – Hedging of net investments in foreign transactions " in the balance sheets,
with a balancing entry under the heading “Hedging derivatives” of the Assets or Liabilities of the Financial
Statements as applicable. These differences in valuation are recognized under the heading “Exchange
differences (net)" in the income statement when the investment in a foreign operation is disposed of or
derecognized.
2.1.5
Other financial instruments
The following exceptions are applicable with respect to the above general criteria:
• Equity instruments whose fair value cannot be determined in a sufficiently objective manner and financial
derivatives that have those instruments as their underlying asset and are settled by delivery of those
instruments remain in the balance sheet at acquisition cost; this may be adjusted, where appropriate, for any
impairment loss (see Note 6).
• Accumulated other comprehensive income arising from financial instruments classified at balance sheet date
as “Non-current assets and disposal groups classified as held for sale” are recognized with a balancing entry
under the heading ““Accumulated other comprehensive income- Items that may be reclassified to profit or
loss – Non-current assets and disposal groups classified as held for sale” in the accompanying balance sheets
(see Note 27).
18
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
2.2
Impairment losses on financial assets
2.2.1
Definition of impaired financial assets
A financial asset is considered to be impaired – and therefore its carrying amount is adjusted to reflect the effect
of the impairment – when there is objective evidence that events have occurred which:
•
•
In the case of debt instruments (loans and debt securities), give rise to an adverse impact on the future cash
flows that were estimated at the time the transaction was arranged. So they are considered impaired when
there are reasonable doubts that the balances will be recovered in full and/or the related interest will be
collected for the amounts and on the dates initially agreed.
In the case of equity instruments, it means that their carrying amount may not be fully recovered.
As a general rule, the carrying amount of impaired financial instruments is adjusted with a charge to the income
statement for the year in which the impairment becomes known, and the recoveries of previously recognized
impairment losses are recognized in the income statement for the year in which the impairment is reversed or
reduced. any recovery of previously recognized impairment losses for an investment in an equity instrument
classified as financial assets available for sale is not recognized in the income statement, but under the heading "
Accumulated other comprehensive income - Items that may be reclassified to profit or loss - Available-for-sale
financial assets " (see Note 27) in the balance sheet.
In general, amounts collected in relation to impaired loans and receivables are used to recognize the related
accrued interest and any excess amount is used to reduce the principal not yet paid.
When the recovery of any recognized amount is considered to be remote, this amount is written-off on the
balance sheet, without prejudice to any actions that may be taken in order to collect the amount until the rights
extinguish in full either because it is time-barred debt, the debt is forgiven, or for other reasons.
According to the Bank's established policy, the recovery of a recognized amount is considered to be remote and,
therefore, removed from the balance sheet in the following cases:
• Any loan (except for those carrying an sufficient guarantee) to a debtor in bankruptcy and/or in the last
phases of a “concurso de acreedores” (the Spanish equivalent of a Chapter 11 bankruptcy proceeding), and
• Financial assets (bonds, debentures, etc.) whose issuer’s solvency has undergone a notable and irreversible
deterioration.
Additionally, loans classified as non-performing secured loans as a result of borrower arrears are written off in the
balance sheet within a maximum period of four years from the date on which they are classified as non-
performing, while non-performing unsecured loans (such as commercial and consumer loans, credit cards, etc.)
are written off within two years of their classification as non-performing as long as they have maintained a credit
risk coverage of 100%
Calculation of impairment on financial assets
The impairment on financial assets is determined by type of instrument and other circumstances that could affect
it, taking into account the guarantees received by the owners of the financial instruments to assure (in part or in
full) the performance of transactions. The Bank recognizes impairment charges directly against the impaired asset
when the likelihood of recovery is deemed remote, and uses offsetting or allowance accounts when it registers
non-performing loan provisions to cover the estimated loss.
19
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
2.2.2
Impairment of debt securities measured at amortized cost
With regard to impairment losses arising from insolvency risk of the obligors (credit risk), a debt instrument,
mainly Loans and receivables, is impaired due to insolvency when a deterioration in the ability to pay by the
obligor is evidenced, either due to past due status or for other reasons.
BBVA has developed policies, methods and procedures to estimate losses which may be incurred as a result of
outstanding credit risk. These policies, methods and procedures are applied in the study, approval and execution
of debt instruments and Commitments and guarantees given; as well as in identifying the impairment and, where
appropriate, in calculating the amounts necessary to cover estimated losses.
The amount of impairment losses on debt instruments measured at amortized cost is calculated based on
whether the impairment losses are determined individually or collectively. First it is determined whether there is
objective evidence of impairment individually for individually significant financial assets, and collectively for
financial assets that are not individually significant. In the case where the Group determines that no objective
evidence of impairment in the case of debt instrument analyzed individually will be included in a group of debt
instrument with similar risk characteristics and collectively impaired is analyzed.
In determining whether there is objective evidence of impairment the Group uses observable data on the
following aspects:
Significant financial difficulties of the debtor.
•
• Ongoing delays in the payment of interest or principal.
• Refinancing of credit due to financial difficulties by the counterparty.
• Bankruptcy or reorganization / liquidation are considered likely.
• Disappearance of the active market for a financial asset because of financial difficulties.
• Observable data indicating a reduction in future cash flows from the initial recognition such as adverse
changes in the payment status of the counterparty (delays in payments, reaching credit cards limits, etc.)
• National or local economic conditions that are linked to "defaults" in financial assets( increase of
unemployment rate, falling property prices, etc).
Impairment losses determined individually
The amount of the impairment losses incurred on financial assets represents the excess of their respective
carrying amounts over the present values of their expected future cash flows.These cash flows are discounted
using the original effective interest rate. If a financial instrument has a variable interest rate, the discount rate for
measuring any impairment loss is the current effective rate determined under the contract.
As an exception to the rule described above, the market value of quoted debt instruments is deemed to be a fair
estimate of the present value of their future cash flows.
The following is to be taken into consideration when estimating the future cash flows of debt instruments:
• All the amounts that are expected to be recovered over the residual life of the instrument; including, where
appropriate, those which may result from the collateral and other credit enhancements provided for the
instrument (after deducting the costs required for foreclosure and subsequent sale). Impairment losses
include an estimate for the possibility of collecting accrued, past-due and uncollected interest.
• The various types of risk to which each instrument is subject.
• The circumstances in which collections will foreseeably be made.
20
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
Impairment losses determined collectively
Impairment losses on financial assets collectively evaluated for impairment are calculated by using statistical
procedures, and they are deemed equivalent to the portion of losses incurred on the date that the accompanying
financial statements are prepared that has yet to be allocated to specific asset. The Bank estimates impairment
losses through statistical processes that apply historical data and other specific parameters that, although having
been generated as of closing date for these financial statements, have arisen on an individual basis following the
reporting date.
With respect to financial assets that have no objective evidence of impairment, the Bank applies statistical
methods using historical experience and other specific information to estimate the losses that the Bank has
incurred as a result of events that have occurred as of the date of preparation of the financial statements but
have not been known and will be apparent, individually after the date of submission of the information. This
calculation is an intermediate step until these losses are identified on an individual level, at which these financial
instruments will be segregated from the portfolio of financial assets without objective evidence of impairment.
The incurred loss is calculated taking into account three key factors: exposure at default, probability of default
and loss given default.
• Exposure at default (EAD) is the amount of risk exposure at the date of default by the counterparty.
• Probability of default (PD) is the probability of the counterparty failing to meet its principal and/or interest
payment obligations. The PD is associated with the rating/scoring of each counterparty/transaction.
•
Loss given default (LGD) is the estimate of the loss arising in the event of default. It depends mainly on the
characteristics of the counterparty, and the valuation of the guarantees or collateral associated with the asset.
In order to calculate the LGD at each balance sheet date, the Bank evaluates the whole amount expected to be
obtained over the remaining life of the financial asset. The recoverable amount from executable secured collateral
is estimated based on the property valuation, discounting the necessary adjustments to adequately account for
the potential fall in value until its execution and sale, as well as execution costs, maintenance costs and sale costs.
When the property right is contractually acquired at the end of the foreclosure process or when the assets of
distressed borrowers are purchased, the asset is recognized in the financial statements. The accounting treatment
of these assets is included in Note 2.4.
Impairment of other debt instruments classified as financial assets available for sale
The impairment losses on debt securities included in the “Available-for-sale financial asset portfolio are equal to
the positive difference between their acquisition cost (net of any principal repayment), after deducting any
impairment loss previously recognized in the income statement, and their fair value.
When there is objective evidence that the negative differences arising on measurement of these assets are due to
impairment, they are no longer considered as “Accumulated other comprehensive income - Items that may be
reclassified to profit or loss - Available-for-sale financial assets” and are recognized in the income statement.
If all or part of the impairment losses are subsequently recovered, the amount is recognized in the income
statement for the year in which the recovery occurred, up to the limit of the amount recognized previously in
earnings.
Impairment of equity instruments
The amount of the impairment in the equity instruments is determined by the category where they are
recognized:
• Equity instruments classified as available for sale : The criteria for quantifying and recognizing impairment
losses on equity instruments are similar to those for “Debt instruments”, with the exception that any recovery
of previously recognized impairment losses for an investment in an equity instrument classified as available
for sale is not recognized in the income statement but under the heading “Accumulated other comprehensive
income - Items that may be reclassified to profit or loss - Available-for-sale financial assets ” in the balance
sheet (see Note 27).
21
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
The Bank considers that there is objective evidence of impairment on equity instruments classified as
available-for-sale when significant unrealized losses have existed over a sustained period of time due to a
price reduction of at least 40% or over a period of more than 18 months.
When applying this evidence of impairment, the Bank takes into account the volatility in the price of each
individual security to determine whether it is a percentage that can be recovered through its sale on the
market; other different thresholds may exist for certain securities or specific sectors.
In addition, for individually significant investments, the Bank compares the valuation of the most significant
securities against valuations performed by independent experts.
• Equity instruments measured at cost: The impairment losses on equity instruments measured at acquisition
cost are equal to the difference between their carrying amount and the present value of expected future cash
flows discounted at the market rate of return for similar securities. These impairment losses are determined
taking into account the equity of the investee (except for accumulated other comprehensive income due to
cash flow hedges) for the last approved balance sheet, adjusted for the unrealized gains on the measurement
date.
Impairment losses are recognized in the income statement for the year in which they arise as a direct
reduction of the cost of the instrument. These losses may only be reversed subsequently in the event of the
sale of these assets.
Impairment of holdings in subsidiaries, associates or jointly controlled entities
When evidence of impairment exists in the holdings in subsidiaries, associates or jointly controlled entities, the
entity will estimate the amount of the impairment losses by comparing their recoverable amount, which is the fair
value minus the necessary sale costs or their value in use, whichever is greater, with their carrying amount.
Impairment losses are recognized immediately under the heading “Impairment or reversal of impairment on non-
financial assets” in the income statement (see Note 43). Recoveries subsequent to impairment losses recognized
previously are recognized under the same heading in the income statement for the period.
2.2.3
Transfers and derecognition of financial assets and liabilities
The accounting treatment of transfers of financial assets is determined by the way in which risks and benefits
associated with the assets involved are transferred to third parties. Thus, the financial assets are only
derecognized from the balance sheet when the cash flows that they generate are extinguished, or when their
implicit risks and benefits have been substantially transferred to third parties. In the latter case, the financial asset
transferred is derecognized from the balance sheet, and any right or obligation retained or created as a result of
the transfer is simultaneously recognized.
Similarly, financial liabilities are derecognized from the balance sheet only if their obligations are extinguished or
acquired (with a view to subsequent cancellation or renewed placement).
The Bank is considered to have transferred substantially all the risks and benefits if such risks and benefits
account for the majority of the risks and benefits involved in ownership of the transferred assets. If substantially all
the risks and benefits associated with the transferred financial asset are retained:
• The transferred financial asset is not derecognized from the balance sheet and continues to be measured
using the same criteria as those used before the transfer.
• A financial liability is recognized at an amount equal to the amount received, which is subsequently measured
at amortized cost.
In the specific case of securitizations, this liability is recognized under the heading “Financial liabilities at
amortized cost – Customer deposits” in the balance sheets (see Note 20). As these liabilities do not constitute
a current obligation, when measuring such a financial liability the Bank deducts those financial instruments
owned by it which constitute financing for the entity to which the financial assets have been transferred, to
the extent that these instruments are deemed specifically to finance the transferred assets.
• Both the income generated on the transferred (but not derecognized) financial asset and the expenses
associated with the new financial liability continue to be recognized.
22
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
The criteria followed with respect to the most common transactions of this type made by the Bank are as follows:
• Purchase and sale commitments: Financial instruments sold with a repurchase agreement are not
derecognized from the balance sheets and the amount received from the sale is considered to be financing
from third parties.
Financial instruments acquired with an agreement to subsequently resell them are not recognized in the
balance sheets and the amount paid for the purchase is considered to be credit given to third parties.
• Securitization: The Bank has applied the most stringent criteria for determining whether or not it retains
substantially all the risk and rewards on such assets for all securitizations performed since January 1, 2004.
As a result of this analysis, the Bank has concluded that none of the securitizations undertaken since that
date meet the prerequisites for derecognizing the securitized assets from the balance sheets (see Note 11
and Appendix VI), as the Bank retains substantially all the expected credit risks and possible changes in net
cash flows, while retaining the subordinated loans and lines of credit extended to these securitization funds.
2.3 Financial guarantees
Financial guarantees are considered to be those contracts that require their issuer to make specific payments to
reimburse the holder for a loss incurred when a specific borrower breaches its payment obligations on the terms
– whether original or subsequently modified – of a debt instrument, irrespective of the legal form it may take.
Financial guarantees may take the form of a deposit, financial guarantee, insurance contract or credit derivative,
among others.
In their initial recognition, financial guarantees provided on the liability side of the balance sheet at fair value,
which is generally the present value of the fees, commissions and interest receivable from these contracts over
the term thereof, and we simultaneously recognize a credit on the asset side of the balance sheet for the amount
of the fees and commissions received at the inception of the transactions and the amounts receivable at the
present value of the fees, commissions and interest outstanding.
Financial guarantees, irrespective of the guarantor, instrumentation or other circumstances, are reviewed
periodically so as to determine the credit risk to which they are exposed and, if appropriate, to consider whether
a provision is required for them. The credit risk is determined by application of criteria similar to those established
for quantifying impairment losses on debt instruments measured at amortized cost (see Note 2.2).
The provisions made for financial guarantees considered impaired are recognized under the heading “Provisions -
Provisions for contingent risks and commitments” on the liability side in the balance sheets (see Note 21). These
provisions are recognized and reversed with a charge or credit, respectively, to “Provisions or reversal of
provision ” in the income statements (see Note 41).
Income from guarantee instruments is registered under the heading “Fee and commission income” in the income
statement and is calculated by applying the rate established in the related contract to the nominal amount of the
guarantee (see Note 35).
2.4 Non-current assets and disposal groups held for sale and liabilities included in
disposal groups classified as held for sale
The heading “Non-current assets and disposal groups held for sale and liabilities included in disposal groups
classified as held for sale ” in the balance sheets includes the carrying amount of financial or non-financial assets
that are not part of the Bank’s operating activities. The recovery of this carrying amount is expected to take place
through the price obtained on its disposal (see Note 19).
This heading includes individual items and groups of items (“disposal groups”) that form part of a major operating
segment and are being held for sale as part of a disposal plan (“discontinued transactions”). The individual items
include the assets received by the Bank from their debtors in full or partial settlement of the debtors’ payment
obligations (assets foreclosed or in lieu of repayment of debt and recovery of lease finance transactions), unless
the Bank has decided to make continued use of these assets. The Bank has units that specialize in real estate
management and the sale of this type of asset.
Symmetrically, the heading “Liabilities included in disposal groups classified as held for sale” in the balance sheets
reflects the balances payable arising from disposal groups and discontinued operations.
23
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
Non-current assets and disposal groups held for sale and liabilities included in disposal groups classified as held
for sale are generally measured, or the fair value of the property (less costs to sell), whichever is lower.
In the case of real estate assets foreclosed or received in payment of debts, they are initially recognized at the
lower of: the restated carrying amount of the financial asset and the fair value at the time of the foreclosure or
receipt of the asset less estimated sales costs. The carrying amount of the financial asset is updated at the time of
the foreclosure, treating the real property received as a secured collateral and taking into account the credit risk
coverage that would correspond to it according to its classification prior to the delivery. For these purposes, the
collateral will be valued at its current fair value (less sale costs) at the time of foreclosure. This carrying amount
will be purchased with the previous carrying amount and the difference will be recognized as a hedging variation.
On the other hand, the fair value of the foreclosed asset is obtained by appraisal, evaluating the need to apply a
discount on the asset derived from the specific conditions of the asset or the market situation for these assets,
and in any case, deducting the company’s estimated sale costs.
At the time of the initial recognition, these real estate assets foreclosed or received in payment of debts, classified
as "Non-current assets and disposal groups held for sale and liabilities included in disposal groups classified as
held for sale" are valued at the lower of: their restated fair value less estimated sale costs and their carrying
amount; a deterioration or impairment reversal can be recognized for the difference if applicable.
Non-current assets and disposal groups held for sale groups classified as held for sale are not depreciated while
included under this heading.
The fair value of the non-current assets and disposal groups held for sale and liabilities included in disposal groups
classified as held for sale from foreclosures or recoveries is mainly based on appraisals or valuations made by
independent experts and not more than one year old, or less if there are indications of impairment. The Bank
applies the rule that these appraisals may not be older than one year, and their age is reduced if there is an
indication of deterioration in the assets.The Spanish entities mainly use the services of the following valuation and
appraisal companies. None of them is linked to the BBVA Group and all are entered in the official Bank of Spain
register: Sociedad de Tasación, S.A., Valtecnic, S.A., Krata, S.A., Gesvalt, S.A., Alia Tasaciones, S.A., Tasvalor,
S.A., Tinsa, S.A., Ibertasa, S.A., Valmesa, S.A., Arco Valoraciones, S.A., Tecnicasa, S.A. and Uve Valoraciones,
S.A.
Gains and losses generated on the disposal of assets and liabilities classified as non-current held for sale, and
liabilities included in disposal groups classified as held for sale as well as impairment losses and, where pertinent,
the related recoveries, are recognized in “Profit or (-) loss from non-current assets and disposal groups classified
as held for sale not qualifying as discontinued operations” in the income statements (see Note 45). The remaining
income and expense items associated with these assets and liabilities are classified within the relevant income
statement headings.
Income and expenses for discontinued operations, whatever their nature, generated during the year, even if they
have occurred before their classification as discontinued operations, are presented net of the tax effect as a single
amount under the heading “Profit from discontinued transactions” in the income statement, whether the business
remains on the balance sheet or is derecognized from the balance sheet. As long as an asset remains in this
category, it will not be amortized. This heading includes the earnings from their sale or other disposal.
2.5 Tangible assets
Property, plants and equipment for own use
This heading includes the assets under ownership or acquired under lease finance, intended for future or current
use by the Bank and that it expects to hold for more than one year. It also includes tangible assets received by
the Bank in full or part settlement of financial assets representing receivables from third parties and those assets
expected to be held for continuing use.
Property, plants and equipment for own use is recognized in the balance sheets at acquisition cost, less any
accumulated depreciation and, where appropriate, any estimated impairment losses resulting from comparing the
net carrying amount of each item with its corresponding recoverable value.
Depreciation is calculated using the straight-line method, on the basis of the acquisition cost of the assets less
their residual value; the land on which the buildings and other structures stand is considered to have an indefinite
life and is therefore not depreciated.
24
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
The tangible asset depreciation charges are recognized in the accompanying income statements under the
heading "Depreciation and amortization" (see Note 40) and are based on the application of the following
depreciation rates (determined on the basis of the average years of estimated useful life of the different assets):
Type of assets
Annual Percentage
Buildings for own use
Furniture
Fixtures
Office supplies and computerization
1% - 4%
8% - 10%
6% - 12%
8% - 25%
The Bank’s criteria for determining the recoverable amount of these assets, in particular the buildings for own
use, is based on up-to-date independent appraisals that are no more than 3-5 years old at most, unless there are
indications of impairment.
At each accounting close, the Bank analyzes whether there are internal or external indicators that a tangible asset
may be impaired. When there is evidence of impairment, the entity then analyzes whether this impairment
actually exists by comparing the asset’s net carrying amount with its recoverable amount. When the carrying
amount exceeds the recoverable amount, the carrying amount is written down to the recoverable amount and
future depreciation charges are adjusted to reflect the asset’s remaining useful life.
Similarly, if there is any indication that the value of a tangible asset has been recovered, the entities will estimate
the recoverable amounts of the asset and recognize it in the income statement, registering the reversal of the
impairment loss registered in previous years and thus adjusting future depreciation charges. Under no
circumstances may the reversal of an impairment loss on an asset raise its carrying amount above that which it
would have if no impairment losses had been recognized in prior years.
Running and maintenance expenses relating to tangible assets held for own use are recognized as an expense in
the year they are incurred and recognized in the income statements under the heading " Administration costs -
Other administrative expenses - Property, fixtures and equipment " (see Note 39.2).
Other assets leased out under an operating lease
The criteria used to recognize the acquisition cost of assets leased out under operating leases, to calculate their
depreciation and their respective estimated useful lives and to register the impairment losses on them, are the
same as those described in relation to tangible assets for own use.
Investment properties
The heading “Tangible assets - Investment properties” in the balance sheets reflects the net values (purchase cost
minus the corresponding accumulated depreciation and, if appropriate, estimated impairment losses) of the land,
buildings and other structures that are held either to earn rentals or for capital appreciation through sale and that
are neither expected to be sold off in the ordinary course of business nor are destined for own use (see Note 16).
The criteria used to recognize the acquisition cost of investment properties, calculate their depreciation and their
respective estimated useful lives and register the impairment losses on them, are the same as those described in
relation to tangible assets held for own use.
The Bank’s criteria for determining the recoverable amount of these assets is based on up-to-date independent
appraisals that are no more than one year old at most, unless there are indications of impairment.
2.6
Intangible assets
Intangible assets in the individual financial statements have a finite useful life.
The useful life of intangible assets is, at most, equal to the period during which the entity is entitled to use the
asset; If the right of use is for a limited renewable period, the useful life includes the renewal period only when
there is evidence that the renewal will be carried out without a significant cost.
When the useful life of intangible assets cannot be estimated reliably, they are amortized over a ten year period.
Goodwill is presumed, unless proven otherwise, to have a useful life of ten years.
25
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
Intangible assets are amortized according to the duration of this useful life, using methods similar to those used
to depreciate tangible assets. The depreciation charge for these assets is recognized in the accompanying income
statements under the heading "Depreciation and amortization" (see Note 40).
The Bank recognizes any impairment loss on the carrying amount of these assets with charge to the heading
“Impairment or (-) reversal of impairment on non - financial assets- Intangible assets ” in the accompanying income
statements (see Note 43). The criteria used to recognize the impairment losses on these assets and, where
applicable, the recovery of impairment losses recognized in prior years, are similar to those used for tangible
assets.
2.7 Tax assets and liabilities
Expenses on corporation tax applicable to Spanish companies are recognized in the income statement, except
when they result from transactions on which the profits or losses are recognized directly in equity, in which case
the related tax effect is also recognized in equity.
The total corporate income tax expense is calculated by aggregating the current tax arising from the application
of the corresponding tax rate to the tax for the year (after deducting the tax credits allowable for tax purposes)
and the change in deferred tax assets and liabilities recognized in the income statement.
Deferred tax assets and liabilities include temporary differences, defined as at the amounts to be payable or
recoverable in future fiscal years arising from the differences between the carrying amount of assets and liabilities
and their tax bases (the “tax value”), and the tax loss and tax credit carry forwards. These amounts are registered
by applying to each temporary difference the tax rates that are expected to apply when the asset is realized or
the liability settled (see Note 17).
Deferred tax liabilities in relation to taxable temporary differences associated with investments in subsidiaries,
associates or jointly controlled entities are recognized for accounting purposes, except where the Bank can
control the timing of the reversal of the temporary difference and it is also unlikely that it will reverse in the
foreseeable future.
Deferred tax assets are only recognized if it is considered probable that they will have sufficient tax gains in the
future against which they can be made effective.
The deferred tax assets and liabilities recognized are reassessed by the Bank at the close of each accounting
period in order to ascertain whether they are still current, and the appropriate adjustments are made on the basis
of the findings of the analyses performed.
In those circumstances in which it is unclear how a specific requirement of the tax law applies to a particular
transaction or circumstance, and the acceptability of the definitive tax treatment depends on the decisions taken
by the relevant taxation authority in future, the entity recognizes current and deferred tax liabilities and assets
considering whether it is probable or not that a taxation authority will accept an uncertain tax treatment.
Thus, if the entity concludes that it is not probable that the taxation authority will accept an uncertain tax
treatment, the entity uses the most likely amount or expected value in determining tax assets.
The income and expenses directly recognized in equity that do not increase or decrease taxable income are
accounted for as temporary differences.
2.8 Provisions, contingent assets and contingent liabilities
The heading “Provisions” in the balance sheets includes amounts recognized to cover the Bank’s current
obligations arising as a result of past events. These are certain in terms of nature but uncertain in terms of
amount and/or extinguishment date. The settlement of these obligations by the Bank is deemed likely to entail an
outflow of resources embodying economic benefits (see Note 21). The obligations may arise in connection with
legal or contractual provisions, valid expectations formed by Bank companies relative to third parties in relation to
the assumption of certain responsibilities or through virtually certain developments of particular aspects of the
regulations applicable to the operation of the entities; and, specifically, future legislation to which the Bank will
certainly be subject.
The provisions are recognized in the balance sheets when each and every one of the following requirements is
met:
26
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
• They represent a current obligation that has arisen from a past event;
• At the date referred to by the financial statements, there is more probability that the obligation will have to be
met than that it will not;
•
It is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation; and
• The amount of the obligation can be reasonably estimated.
Among other items, these provisions include the commitments made to employees (mentioned in section 2.9),
as well as provisions for tax and legal litigation.
Contingent assets are possible assets that arise from past events and whose existence is conditional on, and will
be confirmed only by, the occurrence or non-occurrence of events beyond the control of the Bank. Contingent
assets are not recognized in the balance sheet or in the income statement; however, they are disclosed in the
Notes to the financial statements, provided that it is probable that these assets will give rise to an increase in
resources embodying economic benefits (see Note 30).
Contingent liabilities are possible obligations of the Bank that arise from past events and whose existence is
conditional on the occurrence or non-occurrence of one or more future events beyond the control of the entity.
They also include the existing obligations of the entity when it is not probable that an outflow of resources
embodying economic benefits will be required to settle them; or when, in extremely rare cases, their amount
cannot be measured with sufficient reliability.
2.9 Post-employment and other employee benefit commitments
Below we provide a description of the most significant accounting criteria relating to post-employment and other
employee benefit commitments assumed by the Bank (see Note 22).
Short-term employee benefits
Benefits for current active employees which are accrued and settled during the year and for which a provision is
not required in the entity´s accounts. These include wages and salaries, social security charges and other
personnel expenses.
Costs are charged and recognized under the heading “Administration costs – Personnel expenses – Other
personnel expenses” of the income statement (see Note 39.1).
Post-employment benefits – Defined-contribution plans
The Bank sponsors defined-contribution plans for its active employees. The amount of these benefits is
established as a percentage of remuneration and/or as a fixed amount.
The contributions made to these plans in each period by the Bank are charged and recognized under the
heading “Administration costs – Personnel expenses – Defined-contribution plan expense” of the income statement
(see Note 39.1).
27
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
Post-employment benefits – Defined-benefit plans
The Bank maintains pension commitments with employees who have already retired or taken early retirement,
certain closed groups of active employees still accruing defined benefit pensions, and in-service death and
disability benefits provided to most active employees. These commitments are covered by insurance contracts,
pension funds and internal provisions.
In addition, the Bank have offered certain employees the option to retire before their normal retirement age
stipulated in the collective labor agreement in force, recognizing the necessary provisions to cover the costs of
the associated benefit commitments, which include both the liability for the benefit payments due as well as the
contributions payable to external pension funds during the early retirement period.
Furthermore, the Bank provides welfare benefits to certain current employees and retirees.
All of these commitments are quantified based on actuarial valuations, with the amounts recorded under the
heading “Provisions – Provisions for pensions and similar obligations” and determined as the difference between
the value of the defined-benefit commitments and the fair value of plan assets at the date of the financial
statements (see Note 22).
Current service cost are charged and recognized under the heading “Administration costs – Personnel expenses –
Defined-benefit plan expense” of the income statement (see Note 39.1).
Interest credits/charges relating to these commitments are charged and recognized under the headings “Interest
income” and “Interest expense” of the income statement.
Past service costs arising from benefit plan changes as well as early retirements granted during the period are
recognized under the heading “Provisions or reversals of provisions” of the income statement (see Note 41).
Other long-term employee benefits
In addition to the above commitments, the Bank maintains leave and long-service awards to their employees,
which consist of either an established monetary amounts or shares in Banco Bilbao Argentaria S.A. granted upon
completion of a number of years of qualifying service.
These commitments are quantified based on actuarial valuations and the amounts recorded under the heading
“Provisions – Other long-term employee benefits” of the balance sheet (see Note 21).
Valuation of commitments: actuarial assumptions and recognition of gains/losses
The present value of these commitments is determined based on individual member data. Active employee costs
are determined using the “projected unit credit” method, which treats each period of service as giving rise to an
additional unit of benefit and values each unit separately.
In establishing the actuarial assumptions we taken into account that:
•
They should be unbiased, i.e. neither unduly optimistic nor excessively conservative.
•
They should be mutually compatible and adequately reflect the existing relationship between economic
variables such as price inflation, expected wage increases, discount rates and the expected return on plan assets,
etc. Future wage and benefit levels should be based on market expectations, at the balance sheet date, for the
period over which the obligations are to be settled.
•
the balance sheet date, on high quality bonds.
The interest rate used to discount benefit commitments is determined by reference to market yields, at
The Bank recognizes actuarial gains/losses relating to early retirement benefits, long service awards and other
similar items under the heading “Provisions or reversal of provisions” of the income statement for the period in
which they arise (see Note 41). Actuarial gains/losses relating to pension benefits are directly charged and
recognized under the heading "Accumulated other comprehensive income – Items that will not be reclassified to
profit or loss – Actuarial gains or (-) losses on defined benefit pension plans" of equity in the balance sheet (see
Note 27).
28
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
2.10 Equity-settled share-based payment transactions
Provided they constitute the delivery of such instruments following the completion of a specific period of services,
equity-settled share-based payment transactions are recognized as en expense for services being provided by
employees, by way of a balancing entry under the heading “Stockholders’ equity – Other equity” in the balance
sheet. These services are measured at fair value, unless this value cannot be calculated reliably. In this case, they
are measured by reference to the fair value of the equity instruments granted, taking into account the date on
which the commitments were assumed and the terms and other conditions included in the commitments.
When the initial compensation agreement includes what may be considered market conditions among its terms,
any changes in these conditions will not be reflected in the income statement, as these have already been
accounted for in calculating the initial fair value of the equity instruments. Non-market vesting conditions are not
taken into account when estimating the initial fair value of instruments, but they are taken into consideration
when determining the number of instruments to be granted. This will be recognized on the income statement
with the corresponding increase in equity.
2.11 Termination benefits
Termination benefits are recognized in the accounts when the Bank agrees to terminate employment contracts
with its employees and has established a detailed plan to do so.
2.12 Treasury stock
The value of common stock (basically, shares and derivatives over the Bank's shares held by some Group
companies that comply with the requirements for recognition as equity instruments) is recognized under the
heading "Stockholders' funds - Treasury stock" in the balance sheets (see Note 26).
These financial assets are recognized at acquisition cost, and the gains or losses arising on their disposal are
credited or debited, as appropriate, under the heading “Stockholders’ funds - Retained earnings ” in the balance
sheets (see Note 25).
2.13 Foreign-currency transactions
Assets, liabilities and futures transactions
The assets and liabilities in foreign currencies, including those of branches abroad, and the unmatured hedging
forward foreign currency purchase and sale transactions, are converted to euros at the average exchange rates
on the Spanish spot currency market (or based on the price of the U.S. dollar on local markets for the currencies
not listed on this market) at the end of each period, with the exception of:
• Non-current investments in securities denominated in foreign currencies and financed in euros or in a
currency other than the investment currency, which are converted at historical exchange rates.
• Unmatured non-hedging forward foreign currency purchase and sale transactions, which are converted at the
exchange rates on the forward currency market at the end of each period as published by the Bank of Spain
for this purpose.
The exchange differences that arise when converting these foreign-currency assets and liabilities (including those
of the branches) into euros are recognized under the heading “Exchange differences(net)" in the income
statement, except for those differences that arise in non-monetary items classified as available for sale. However,
the exchange differences in non-monetary items, measured at fair value, are recognized temporarily in equity
under the heading “Accumulated other comprehensive income - Items that may be reclassified to profit or loss -
Exchange differences”
The breakdown of the main balances in foreign currencies as of December 31, 2016 and 2015, with reference
to the most significant foreign currencies, is set forth in Appendix VIII.
29
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
Structural currency positions
As a general policy, the Bank’s investments in foreign subsidiaries and the endowment funds provided to
branches abroad are financed in the same currency as the investment in order to eliminate the future currency
risk arising from these transactions. However, the investments made in countries whose currencies do not have a
market which permits the obtainment of unlimited, lasting and stable long-term financing are financed in another
currency.
2.14 Recognition of income and expenses
The most significant criteria used by the Bank to recognize its income and expenses are as follows.
•
Interest income and expenses and similar items
As a general rule, interest income and expenses and similar items are recognized on the basis of their period
of accrual using the effective interest rate method. The financial fees and commissions that arise on the
arrangement of loans (basically origination and analysis fees) must be deferred and recognized in the income
statement over the expected life of the loan. The direct costs incurred in arranging these transactions can be
deducted from the amount thus recognized. These fees are part of the effective rate for loans. Also dividends
received from other companies are recognized as income when the companies’ right to receive them arises.
However, when a debt instrument is deemed to be impaired individually or is included in the category of
instruments that are impaired because of amounts more than three months past-due, the recognition of
accrued interest in the income statement is interrupted. This interest is recognized for accounting purposes
as income, as soon as it is received.
• Commissions, fees and similar items
Income and expenses relating to commissions and similar fees are recognized in the income statement using
criteria that vary according to the nature of such items. The most significant items in this connection are:
− Those relating to financial assets and liabilities measured at fair value through profit or loss, which are
recognized when collected/paid.
− Those arising from transactions or services that are provided over a period of time, which are recognized
over the life of these transactions or services.
− Those relating to single acts, which are recognized when this single act is carried out.
• Non-financial income and expenses
These are recognized for accounting purposes on an accrual basis.
• Deferred collections and payments
These are recognized for accounting purposes at the amount resulting from discounting the expected cash
flows at market rates.
2.15 Sales and income from the provision of non-financial services
The heading “Other operating income” in the income statement includes the amount of sales of goods and
revenue from the provision of non-financial services (see Note 38).
2.16 Leases
Lease contracts are classified as finance from the start of the transaction, if they substantially transfer all the risks
and rewards incidental to ownership of the asset forming the subject-matter of the contract. Leases other than
finance leases are classified as operating leases.
When the Bank acts as the lessor of an asset in finance leases, the aggregate present values of the lease
payments receivable from the lessee plus the guaranteed residual value (usually the exercise price of the lessee’s
purchase option on expiration of the lease agreement) are recognized as financing provided to third parties and,
therefore, are included under the heading “Loans and receivables” in the balance sheets.
30
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
When the Bank acts as lessor of an asset in operating leases, the acquisition cost of the leased assets is
recognized under "Tangible assets – Property, plants and equipment – Other assets leased out under an operating
lease" in the balance sheets (see Note 15). These assets are depreciated in line with the criteria adopted for items
of tangible assets for own use, while the income arising from the lease arrangements is recognized in the income
statements on a straight-line basis under the headings " Tangible assets – Property, plant and equipment – Other
assets leased out under an operating lease " and "Other operating expenses" (see Note 38).
In the case of a fair value sale and leaseback, the profit or loss generated by the sale is recognized in the income
statement at the time of sale. If such a transaction gives rise to a finance lease, the corresponding gains or losses
are amortized over the lease period.
2.17 Entities and branches located in countries with hyperinflationary economies
None of the functional currencies of the branches located abroad relate to hyperinflationary economies as defined
by Circular 4/2004 and subsequent amendments. Accordingly, as of December 31, 2016 and 2015 it was not
necessary to adjust the financial statements of any branch to correct for the effect of inflation.
2.18 Statements of recognized income and expenses
The statements of recognized income and expenses reflect the income and expenses generated each year. They
distinguish between income and expenses recognized as results in the income statements and “Accumulated
other comprehensive income” recognized directly in equity. “Accumulated other comprehensive income”include
the changes that have taken place in the year in the “Accumulated other comprehensive income” broken down
by item.
The sum of the changes to the heading “Accumulated other comprehensive income” of the total equity and the
net income of the year forms the “Accumulated other comprehensive income””.
2.19 Statements of changes in equity
The statements of changes in equity reflect all the movements generated in each year in each of the headings of
the equity, including those from transactions undertaken with shareholders when they act as such, and those due
to changes in accounting criteria or corrections of errors, if any.
The applicable regulations establish that certain categories of assets and liabilities are recognized at their fair value
with a charge to equity. These charges, known as “Accumulated other comprehensive income” (see Note 27), are
included in the Bank’s total equity net of tax effect, which has been recognized as deferred tax assets or liabilities,
as appropriate.
2.20 Statements of cash flows
The indirect method has been used for the preparation of the statement of cash flows. This method starts from
the Bank’s net income and adjusts its amount for the effects of transactions of a non-cash nature, any deferrals or
accruals of past or future operating cash receipts or payments, and items of income or expense associated with
cash flows classified as investment or finance. As well as cash, short-term, highly liquid investments subject to a
low risk of changes in value, such as cash and deposits in central banks, are classified as cash and cash
equivalents.
When preparing these financial statements the following definitions have been used:
• Cash flows: Inflows and outflows of cash and cash equivalents.
• Operating activities: The typical activities of credit institutions and other activities that cannot be classified as
investment or financing activities.
•
Investing activities: The acquisition, sale or other disposal of long-term assets and other investments not
included in cash and cash equivalents or in operating activities.
• Financing activities: Activities that result in changes in the size and composition of the Bank's equity and of
liabilities that do not form part of operating activities.
31
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
3.
System of shareholder remuneration
Shareholder remuneration system
During 2012, 2013, 2014, 2015 and 2016 a shareholder remuneration system called the “Dividend Option”
was implemented.
Under this remuneration scheme, BBVA offers its shareholders the possibility to receive all or part of their
remuneration in the form of BBVA newly-issued ordinary shares; whilst maintaining the possibility for BBVA
shareholders to receive their entire remuneration in cash by selling their free allocation rights to BBVA (in
execution of the commitment assumed by BBVA to acquire the free allocation rights attributed to the
shareholders at a guaranteed fixed price) or by selling their free allocation rights on the market at the prevailing
market price at that time.
On September 28, 2016, the Board of Directors approved the execution of the second of the share capital
increases charged to voluntary reserves, as agreed by the AGM held on March 11, 2016 to implement the
Dividend Option. As a result of this increase, the Bank’s share capital increased by €42,266,085.33 by the
issuance of 86,257,317 BBVA newly-issued shares at a €0.49 par value each. 87.85% of the right owners have
opted to receive newly-issued BBVA ordinary shares. The other 12.15% of the right owners opted to sell the
rights of free allocation assigned to them to BBVA, and as a result, BBVA acquired 787,374,942 rights for a total
amount of €62,989,995.36. The price at which BBVA has acquired such rights of free allocation (in execution of
said commitment) was €0.08 per right, registered in “Total Equity-Dividends and Remuneration” of the balance
sheet as of December, 31, 2016.
On March 31, 2016, the Board of Directors approved the execution of the first of the share capital increases
charged to voluntary reserves, as agreed by the AGM held on March 11, 2016 to implement the Dividend
Option. As a result of this increase, the Bank’s share capital increased by €55,702,125.43 by the issuance of
113,677,807 BBVA newly-issued shares at a €0.49 par value each. 82.13% of the right owners have opted to
receive newly-issued BBVA ordinary shares. The other 17.87% of the right owners opted to sell the rights of free
allocation assigned to them to BBVA, and as a result, BBVA acquired 1,137,500,965 rights for a total amount of
€146,737,624.49. The price at which BBVA has acquired such rights of free allocation (in execution of said
commitment) was €0.129 per right, registered in “Total Equity-Dividends and Remuneration” of the balance sheet
as of December, 31, 2016.
On September 30, 2015, the Board of Directors approved the execution of the second of the share capital
increases charged to voluntary reserves, as agreed by the AGM held on March 13, 2015 to implement the
Dividend Option. As a result of this increase, the Bank’s share capital increased by €30,106,631.94 by the
issuance of 61,442,106 BBVA newly-issued shares at a €0.49 par value each. 89.65% of the right owners opted
to receive newly issued ordinary shares. The other 10.35% of the right owners opted to sell the rights of free
allocation assigned to them to BBVA, and as a result, BBVA acquired 652,564,118 rights for a total amount of
€52,205,129.44. The price at which BBVA acquired such rights of free allocation was €0.08 per right, registered
in “Total Equity- Interim dividends” of the balance sheet as of December 31, 2015.
On March 25, 2015, the Board of Directors approved the execution of the first of the share capital increases
charged to voluntary reserves, as agreed by the AGM held on March 13, 2015 to implement the Dividend
Option. As a result of this increase, the Bank’s share capital increased by €39,353,896.26 (80,314,074 shares
at a €0.49 par value each). 90.31% of the right owners opted to receive newly-issued BBVA ordinary shares. The
other 9.69% of the right owners opted to sell the rights of free allocation assigned to them to BBVA, and as a
result, BBVA acquired 602,938,646 rights for a total amount of €78,382,023.98. The price at which BBVA
acquired such rights of free allocation was €0.13 per right, registered in “Total Equity- Interim dividends” of the
balance sheet as of December 31, 2015.
32
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
Dividends
The Board of Directors, at its meeting held on December 21, 2016, approved the payment in cash of €0.08
(€0.0648 withholding tax) per BBVA share, as gross interim dividend against 2016 results. The dividend was
paid on January 12, 2017.
The Board of Directors, at its meeting held on June 22, 2016, approved the distribution in cash of €0.08
(€0.0648 withholding tax) per BBVA share, as gross interim dividend against 2016 results. The dividend is
expected to be paid on July 11, 2016.
The interim accounting statements prepared in accordance with legal requirements evidencing the existence of
sufficient liquidity for the distribution of the interim dividend in the amount approved, are as follows:
Available amount for interim dividend payments
Millions of Euros
May 31,
November 30,
2016
2016
Profit of BBVA, S.A. at each of the dates indicated, after the
provision for income tax
1,371
1,826
Less -
Estimated provision for Legal Reserve
Acquisition by the bank of the free allotment rights in
2015 capital increase
Additional Tier I capital instruments remuneration
Interim dividends for 2015 already paid
Maximum amount distributable
Amount of proposed interim dividend
BBVA cash balance available to the date
-
11
147
114
-
1,099
518
2,614
-
20
210
260
518
818
525
3,003
The first amount of the 2016 interim dividend which was paid to the shareholders on July 11, 2016, after
deducting the treasury shares held by the Group’s entities, amounted to €517 million, and is recognized under
the heading “Stockholders’ funds – Interim dividends” of the interim balance sheet as of June 30, 2016.
The total amount of the second dividend of 2016, which was paid to the shareholders on January 12, 2017,
after deducting the treasury shares held by the Group’s companies, amounted to €525 million and was
recognized under the heading “Stockholders’ funds – Interim dividends” charged in the “Financial liabilities at
amortized cost – Other financial liabilities (see Note 20.4) of the consolidated balance sheet as of December 31,
2016.
As of January 1, 2017 and in accordance with BBVA’s remuneration policy, it is expected to be proposed for the
consideration of the competent governing bodies of approval of a capital increase to be charged to reserves for
the instrumentation of a “Dividend Option” in 2017 in a gross of 0.13 euro per share approximately. The
subsequent shareholders’ remunerations that could be approved would be fully in cash.
33
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
The allocation of earnings for 2016 subject to the approval of the Board of Directors at the Annual Shareholders
Meeting is presented below:
Application of Earnings
Net income for year
Distribution:
Interim dividends
Acquisition by the bank of the free allotment rights(*)
Additional Tier 1 securities
Millons of euros
December
2016
1,662
1,043
210
260
Legal reserve
19
130
Concerning to the remuneration to shareholders who chose to be paid in cash through the "Dividend Option".
Voluntary reserves
(*)
4.
Earnings per share
Earnings per share, basic and diluted are calculated in accordance with the criteria established by IAS 33. For
more information see Glossary of terms.
The Bank issued additional share capital in 2016 and 2015 (see Note 23). In accordance with IAS 33, when
there is a capital increase earnings per share, basic and diluted, should be recalculated for previous periods
applying a corrective factor to the denominator (the weighted average number of shares outstanding) This
corrective factor is the result of dividing the fair value per share immediately before the exercise of rights by the
theoretical ex-rights fair value per share. The basic and diluted earnings per share for 2015 were recalculated on
this basis.
The calculation of earnings per share of the BBVA Group is as follows:
Basic and Diluted Earnings per Share
2016
2015 (*)
Numerator for basic and diluted earnings per share (millions of euros)
Attributable to owners of the parent
Adjustment: Mandatory convertible bonds interest expenses (1)
Profit adjusted (millions of euros) (A)
Profit from discontinued operations (net of non-controlling interest) (B)
Denominator for basic earnings per share (number of shares outstanding)
Weighted average number of shares outstanding (2)
Weighted average number of shares outstanding x corrective factor (3)
Adjusted number of shares - Basic earning per share (C)
Adjusted number of shares - diluted earning per share (D)
Earnings per share
Basic earnings per share from continued operations (Euros per share)A-B/C
Diluted earnings per share from continued operations (Euros per share)A-B/D
3,475
(260)
3,215
-
6,468
6,468
6,468
6,468
0.50
0.50
0.50
2,642
(212)
2,430
-
6,290
6,517
6,517
6,517
0.37
0.37
0.37
(1)
(2)
(3)
(*)
Remuneration in the period related to contingent convertible securities (See Note 20.4)
Weighted average number of shares outstanding (millions of euros), excluded weighted average of treasury
shares during the period.
Corrective factor, due to the capital increase with pre-emptive subscription right, applied for the previous years.
Data recalculated due to the mentioned corrective factor
As of December 31, 2016 and 2015 there were no other financial instruments or share option commitments
with employees that could potentially affect the calculation of the diluted earnings per share for the years
presented. For this reason the basic and diluted earnings are matched.
34
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
5.
Risk management
5.1 General risk management and control model
BBVA has an overall risk management and control model (hereinafter 'the model') tailored to their business, their
organization and the geographies in which it operates, allowing them to develop their activity in accordance with
their strategy and policy control and risk management defined by the governing bodies of the Bank and adapt to
a changing economic and regulatory environment, tackling management globally and adapted to the
circumstances of each instance.
This model is applied comprehensively in the BBVA and consists of the basic elements listed below::
• Governance and organization
• Risk appetite framework
• Decisions and processes
• Assessment, monitoring and reporting
•
Infrastructure
BBVA encourages the development of a risk culture to ensure consistent application of the control and risk
management model in the Group, and to ensure that the risk function is understood and assimilated at all levels
of the organization.
5.1.1 Governance and organization
The governance model for risk management at BBVA is characterized by a special involvement of its corporate
bodies, both in setting the risk strategy and in the ongoing monitoring and supervision of its implementation.
Thus, as developed below, the corporate bodies are the ones that approve this risk strategy and corporate
policies for the different types of risk, being the risk function responsible for the management, its implementation
and development, reporting to the governing bodies.
The responsibility for the daily management of the risks lies on the businesses which abide in the development of
their activity to the policies, standards, procedures, infrastructure and controls, based on the framework set by
the governing bodies, which are defined by the function risk.
To perform this task properly, the risk function in the BBVA Group is configured as a single, comprehensive and
independent role of commercial areas.
Corporate governance system
BBVA has developed a corporate governance system that is in line with the best international practices and
adapted to the requirements of the regulators in the countries in which its different business units operate.
The Board of Directors (hereinafter also referred to as "the Board") approves the risk strategy and oversees the
internal management and control systems. Specifically, in relation to the risk strategy, the Board approves the
Group's risk appetite statement, the core metrics (and their statements) and the main metrics by type of risk (and
their statements), as well as the general risk management and control model.
The Board of Directors is also responsible for approving and monitoring the strategic and business plan, the
annual budgets and management goals, as well as the investment and funding policy, in a consistent way and in
line with the approved Risk Appetite Framework. For this reason, the processes for defining the Risk Appetite
Framework proposals and strategic and budgetary planning at Group level are coordinated by the executive area
for submission to the Board.
With the aim of ensuring the integration of the Risk Appetite Framework into management, on the basis
established by the Board of Directors, the Executive Committee approves the metrics by type of risk in relation to
concentration, profitability and reputational risk and the Group's basic structure of limits at geographical area, risk
type, asset type and portfolio level. This Committee also approves specific corporate policies for each type of risk.
35
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
Lastly, the Board has set up a Board committee focus in risks, the Risk Committee, that assists the Board and the
Executive Committee in determining the Group's risk strategy and the risk limits and policies, respectively,
analyzing and assessing beforehand the proposals submitted to those bodies.The amendment of the Group's risk
strategy and of its elements is the exclusive power of the BBVA Board of Directors, while the Executive
Committee is responsible for amending the metrics by type of risk within its scope of decision and the Group's
basic structure of limits, when applicable. In both cases, the amendments follow the same decision-making
process described above, so the proposals for amendment are submitted by the Chief Risk Officer (“CRO”) and
later analyzed, first by the Risks Committee, for later submission to the Board of Directors or to the Executive
Committee, as appropriate.
Moreover, the Risks Committee, the Executive Committee and the Board itself conduct proper monitoring of the
risk strategy implementation and of the Group's risk profile. The risks function regularly reports on the
development of the Group's Risk Appetite Framework metrics to the Board and to the Executive Committee, after
their analysis by the Risks Committee, whose role in this monitoring and control work is particularly relevant.
The head of the risk function in the executive hierarchy is the Group’s CRO, who carries out its functions with
independence, authority, rank, experience, knowledge and resources to do so. He is appointed by the Board of
the Bank as a member of its Senior Management, and has direct access to its corporate bodies (Board, Executive
Standing Committee and Risk Committee), who reports regularly on the status of risks to the Group.
The CRO, for the utmost performance of its functions, is supported by a cross composed set of units in corporate
risk and the specific risk units in the geographical and / or business areas of the Group structure. Each of these
units is headed by a Risk Officer for the geographical and/or business area who, within his/her field of
competence, carries out risk management and control functions and is responsible for applying the corporate
policies and rules approved at Group level in a consistent manner, adapting them if necessary to local
requirements and reporting to the local corporate bodies.
The Risk Officers of the geographical and/or business areas report both to the Group's CRO and to the head of
their geographical and/or business area. This dual reporting system aims to ensure that the local risk
management function is independent from the operating functions and that it is aligned with the Group's
corporate risk policies and goals.
Organizational structure and committees
The risk management function, as defined above, consists of risk units from the corporate area, which carry out
cross-cutting functions, and risk units from the geographical and/or business areas.
• The corporate area's risk units develop and present the Group's risk appetite framework proposal, corporate
policies, rules and global procedures and infrastructures to the Group's Chief Risk Officer (CRO), within the
action framework approved by the corporate bodies, ensure their application, and report either directly or
through the Group's Chief Risk Officer (CRO) to the Bank's corporate bodies. Their functions include:
− Management of the different types of risks at Group level in accordance with the strategy defined by the
corporate bodies.
− Risk planning aligned with the risk appetite framework principles.
− Monitoring and control of the Group's risk profile in relation to the risk appetite framework approved by
the Bank's corporate bodies, providing accurate and reliable information with the required frequency and
in the necessary format.
− Prospective analyses to enable an evaluation of compliance with the risk appetite framework in stress
scenarios and the analysis of risk mitigation mechanisms.
− Management of the technological and methodological developments required for implementing the
Model in the Group.
− Design of the Group's Internal Control model and definition of the methodology, corporate criteria and
procedures for identifying and prioritizing the risk inherent in each unit's activities and processes.
− Validation of the models used and the results obtained by them in order to verify their adaptation to the
different uses to which they are applied.
36
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
• The risk units in the business units develop and present to the Risk Officer of the geographical and/or
business area the risk appetite framework proposal applicable in each geographical and/or business area,
independently and always within the Group's strategy/risk appetite framework. They also ensure that the
corporate policies and rules approved consistently at a Group level are applied, adapting them if necessary to
local requirements; they are provided with appropriate infrastructures for management and control of their
risks, within the global risk infrastructure framework defined by the corporate areas; and they report to their
corporate bodies and/or to senior management, as appropriate.
The local risk units thus work with the corporate area risk units in order to adapt to the risk strategy at Group
level and share all the information necessary for monitoring the development of their risks.
The risk function has a decision-making process to perform its functions, underpinned by a structure of
committees, where the Global Risk Management Committee (GRMC) acts as the highest committee within Risk. It
proposes, examines and, where applicable, approves, among others, the internal risk regulatory framework and
the procedures and infrastructures needed to identify, assess, measure and manage the material risks faced by
the Group in its businesses; the determination of risk limits by portfolio or counterparty; and the admission of the
operations involving the most relevant risks. The members of this Committee are the Group's Chief Risk Officer
and the heads of the risk units of the corporate area and of the most representative geographical and/or business
areas.
The Global Risk Management Committee (GRMC) carries out its functions assisted by various support committees
which include:
• Global Technical Operations Committee: It is responsible for analyzing and decision-making related to
wholesale credit risk admission in certain customer segments.
• Monitoring, Assessment & Reporting Committee: It guarantees and ensures the appropriate development of
aspects related to risk identification, assessment, monitoring and reporting, with an integrated and cross-
cutting vision.
• Asset Allocation Committee: The executive body responsible for analysis and decision-making on all credit risk
matters related to the processes intended for obtaining a balance between risk and return.
• Technology & Analytics Committee: It ensures an appropriate decision-making process regarding the
development, implementation and use of the tools and models required to achieve an appropriate
management of those risks to which the BBVA Group is exposed.
• Corporate Technological Risks and Operational Control Committee: It approves the Technological Risks and
Operational Control Management Frameworks in accordance with the General Risk Management Model's
architecture and monitors metrics, risk profiles and operational loss events.
• Global Market Risk Unit Global Committee: It is responsible for formalizing, supervising and communicating
the monitoring of trading desk risk in all the Global Markets business units, as well as coordinating and
approving GMRU key decisions activity, and developing and proposing to GRMC the corporate regulation of
the unit.
• Corporate Operational and Outsourcing Risk Admission Committee: It identifies and assesses the operational
risks of new businesses, new products and services, and outsourcing initiatives.
• Retail Risk Committee: It ensures the alignment of the practices and processes of the retail credit risk cycle
with the approved risk tolerance and with the business growth and development objectives established in the
corporate strategy of the Group
Each geographical and/or business area has its own risk management committee (or committees), with objectives
and contents similar to those of the corporate area, which perform their duties consistently and in line with
corporate risk policies and rules.
Under this organizational scheme, the risk management function ensures the risk strategy, the regulatory
framework, and standardized risk infrastructures and controls are integrated and applied across the entire Group.
It also benefits from the knowledge and proximity to customers in each geographical and/or business area, and
transmits the corporate risk culture to the Group's different levels. Moreover, this organization enables the risks
function to conduct and report to the corporate bodies integrated monitoring and control of the entire Group's
risks.
37
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
Internal Risk Control and Internal Validation
BBVA has a specific Internal Risk Control unit whose main function is to ensure there is an adequate internal
regulatory framework in place, together with a process and measures defined for each type of risk identified in
the Bank, (and for other types of risk that could potentially affect the Bank, to oversee their application and
operation, and to ensure that the risk strategy is integrated into the Bank's management. In this regard, The
Internal Risk Control unit verifies the performance of their duties by the units that develop the risk models,
manage the processes and execute the control. Its scope is global both geographically and in terms of type of
risk.
The Director of Group Internal Control Risk is responsible for the function, and reports its activities and work plans
to the CRO and the Risk Committee of the Board, besides attending to it on issues deemed necessary.
For these purposes the Internal Risks Control department has a Technical Secretary's Office, which offers the
Committee the technical support it needs to better perform its duties.
The unit has a structure of teams at both corporate level and in the most relevant geographical areas in which the
Group operates. As in the case of the corporate area, local units are independent of the business areas that
execute the processes, and of the units that execute the controls. They report functionally to the Internal Risk
Control unit. This unit's lines of action are established at Group level, and it is responsible for adapting and
executing them locally, as well as for reporting the most relevant aspects.
Additionally, the Group has an Internal Validation unit, which reviews the performance of its duties by the units
that develop risk models and of those who use them to manage. Its functions include, among others, review and
independent validation, internally, of the models used for the control and management of the Group's risks.
5.1.2 Risk appetite framework
The Group's risk appetite framework, approved by the Board, determines the risks (and their level) that the Group
is willing to assume to achieve its business objectives considering an organic evolution of its business. These are
expressed in terms of solvency, liquidity and funding profitability, recurrent earnings, cost of risk or other
metrics, which are reviewed periodically as well as in case of material changes to the entity’s business or relevant
corporate transactions.. The definition of the risk appetite has the following goals:
• To express the maximum levels of risk it is willing to assume, at both Group and geographical and/or
business area level.
• To establish a set of guidelines for action and a management framework for the medium and long term that
prevent actions from being taken (at both Group and geographical and/or business area level) that could
compromise the future viability of the Group.
• To establish a framework for relations with the geographical and/or business areas that, while preserving their
decision-making autonomy, ensures they act consistently, avoiding uneven behavior.
• To establish a common language throughout the organization and develop a compliance-oriented risk
culture.
• Alignment with the new regulatory requirements, facilitating communication with regulators, investors and
other stakeholders, thanks to an integrated and stable risk management framework.
Risk appetite framework is expressed through the following elements:
Risk appetite statement
Sets out the general principles of the Group's risk strategy and the target risk profile. The Group’s Risk appetite
statement is:
BBVA Group’s risk policy is designed to achieve a moderate risk profile for the entity, through: prudent
management and a responsible universal banking business model targeted to value creation, risk-adjusted return
and recurrence of results; diversified by geography, asset class, portfolio and clients; and with presence in
emerging and developed countries, maintaining a medium/low risk profile in every country, and focusing on a
long term relationship with the client.
38
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
Core metrics and statements
•
•
•
Based on the risk appetite statement, statements are established to set down the general risk management
principles in terms of solvency, profitability, liquidity and funding.
Solvency: a sound capital position, maintaining resilient capital buffer from regulatory and internal requirements
that supports the regular development of banking activity even under stress situations. As a result, BBVA
proactively manages its capital position, which is tested under different stress scenarios from a regular basis.
Liquidity and funding: A sound balance-sheet structure to sustain the business model. Maintenance of an
adequate volume of stable resources, a diversified wholesale funding structure, which limits the weight of short
term funding and ensures the access to the different funding markets, optimizing the costs and preserving a
cushion of liquid assets to overcome a liquidity survival period under stress scenarios.
Income recurrence and profitability: A sound margin-generation capacity supported by a recurrent business
model based on the diversification of assets, a stable funding and a customer focus; combined with a moderate
risk profile that limits the credit losses even under stress situations; all focused on allowing income stability and
maximizing the risk-adjusted profitability.
In addition, the core metrics define, in quantitative terms, the principles and the target risk profile set out in the
risk appetite statement and are in line with the strategy of the Group. Each metric have three thresholds (traffic-
light approach) ranging from a standard business management to higher deterioration levels: Management
reference, Maximum appetite and Maximum capacity. The Group’s Core metrics are:
Solvency
Liquidity and Funding
Income recurrence
and profitability
Metric
Economic Solvency
Regulatory Solvency: CET1 Fully Loaded
Loan to Stable Costumer Deposits (LTSCD)
Liquidity Coverage Ratio (LCR)
Net margin / Average Total Assets
Cost of Risk
Return on Equity (ROE)
By type of risk metrics and statements
Based on the core metrics, statements are established for each type of risk reflecting the main principles
governing the management of that risk and several metrics are calibrated, compliance with which enables
compliance with the core metrics and the statement of the Group. By type of risk metrics define the strategic
positioning per type of risk and have a maximum appetite level.
Basic limits structure (core limits)
The purpose of the basic limits structure or core limits is to manage risks on an ongoing basis within the
thresholds tolerated by core and "by type of risk" metrics; so they are a breakdown by geography and portfolio of
the same metrics or complementary metrics.
In addition to this framework, there’s a Management limits level that is defined and managed by the Risk Area
developing the core limits, in order to ensure that the early management of risks by subcategories or by
subportfolios complies with that core limits and, in general, with the risk appetite framework.
39
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
The following graphic summarizes the structure of BBVA’s Risk appetite framework:
The corporate risk area works with the various geographical and/or business areas to define their risk appetite
framework, which will be coordinated with and integrated into the Group's risk appetite to ensure that its profile
fits as defined.
The risk appetite framework defined by the Group expresses the levels and types of risk that the Bank is willing to
assume to be able to implement its strategic plan with no relevant deviations, even in situations of stress. The risk
appetite framework is integrated in the management and determines the basic lines of activity of the Group,
because it sets the framework within the budget is developed.
During 2016, the Risk Appetite metrics evolved in line with the set profile.
5.1.3 Decisions and processes
The transfer of risk appetite framework to ordinary management is supported by three basic aspects:
• A standardized set of regulations
• Risk planning
• Comprehensive management of risks over their life cycle
Standardized regulatory framework
The corporate GRM area is responsible for proposing the definition and development of the corporate policies,
specific rules, procedures and schemes of delegation based on which risks decisions should take within the
Group.
This process aims for the following objectives:
• Hierarchy and structure: well-structured information through a clear and simple hierarchy creating relations
between documents that depend on each other.
Simplicity: an appropriate and sufficient number of documents.
•
•
• Accessibility: ability to search for, and easy access to, documentation through the corporate risk
Standardization: a standardized name and content of document.
management library.
The approval of corporate policies for all types of risks corresponds to the corporate bodies of the Bank, while the
corporate risk area endorses the remaining regulations.
40
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
Risk units of geographical and / or business areas continue to adapt to local requirements the regulatory
framework for the purpose of having a decision process that is appropriate at local level and aligned with the
Group policies. If such adaptation is necessary, the local risk area must inform the corporate GRM area, which
must ensure the consistency of the set of regulations at the level of the entire Group, and thus must give its
approval prior to any modifications proposed by the local risk areas.
Risk planning
Risk planning ensures that the risk appetite framework is integrated into management, through a cascade process
for establishing limits and profitability adjusted to the risk profile, in which the function of the corporate area risk
units and the geographical and/or business areas is to guarantee the alignment of this process against the
Group's risk appetite framework in terms of solvency, profitability, liquidity and funding.
It has tools in place that allow the risk appetite framework defined at aggregate level to be assigned and
monitored by business areas, legal entities, types of risk, concentrations and any other level considered
necessary.
The risk planning process is present within the rest of the Group's planning framework so as to ensure
consistency among all of them.
Daily risk management
All risks must be managed comprehensively during their life cycle, and be treated differently depending on the
type.
The risk management cycle is composed of 5 elements:
• Planning: with the aim of ensuring that the Bank’s activities are consistent with the target risk profile and
guaranteeing solvency in the development of the strategy.
• Assessment: a process focused on identifying all the risks inherent to the activities carried out by the Bank.
• Formalization: includes the risk origination, approval and formalization stages.
• Monitoring and reporting: continuous and structured monitoring of risks and preparation of reports for
internal and/or external (market, investors, etc.) consumption.
• Active portfolio management: focused on identifying business opportunities in existing portfolios and new
markets, businesses and products.
5.1.4
Assessment, monitoring and reporting
Assessment, monitoring and reporting is a cross-cutting element that should ensure that the Model has a
dynamic and proactive vision to enable compliance with the risk appetite framework approved by the corporate
bodies, even in adverse scenarios. The materialization of this process has the following objectives:
• Assess compliance with the risk appetite framework at the present time, through monitoring of the core
metrics, metrics by type of risk and the basic structure of limits.
• Assess compliance with the risk appetite framework in the future, through the projection of the risk appetite
framework variables, in both a baseline scenario determined by the budget and a risk scenario determined by
the stress tests.
•
Identify and assess the risk factors and scenarios that could compromise compliance with the risk appetite
framework, through the development of a risk repository and an analysis of the impact of those risks.
• Act to mitigate the impact in the Bank of the identified risk factors and scenarios, ensuring this impact
remains within the target risk profile.
• Monitor the key variables that are not a direct part of the risk appetite framework, but that condition its
compliance. These can be either external or internal.
This process is integrated in the activity of the risk units, both of the corporate area and in the business units, and
it is carried out during the following phases:
41
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
•
•
Identification of risk factors:Aimed at generating a map with the most relevant risk factors that can
compromise the Group's performance in relation to the thresholds defined in the risk appetite framework.
Impact evaluation: This involves evaluating the impact that the materialization of one (or more) of the risk
factors identified in the previous phase could have on the risk appetite framework metrics, through the
occurrence of a given scenario.
• Response to undesired situations and realignment measures:Exceeding the parameters will trigger an analysis
of the realignment measures to enable dynamic management of the situation, even before it occurs.
• Monitoring: The aim is to avoid losses before they occur by monitoring the Group's current risk profile and
the identified risk factors.
• Reporting: This aims to provide information on the assumed risk profile by offering accurate, complete and
reliable data to the corporate bodies and to senior management, with the frequency and completeness
appropriate to the nature, significance and complexity of the risks.
5.1.5 Infrastructure
The infrastructure is an element that must ensure that the Group has the human and technological resources
needed for effective management and supervision of risks in order to carry out the functions set out in the
Group's risk Model and the achievement of their objectives.
With respect to human resources, the Group's risk function has an adequate workforce, in terms of number,
skills, knowledge and experience.
With regards to technology, the Group ensures the integrity of management information systems and the
provision of the infrastructure needed for supporting risk management, including tools appropriate to the needs
arising from the different types of risks for their admission, management, assessment and monitoring.
The principles that govern the Bank risk technology are:
•
•
Standardization: the criteria are consistent across the Group, thus ensuring that risk handling is standardized
at geographical and/or business area level.
Integration in management: the tools incorporate the corporate risk policies and are applied in the Group's
day-to-day management.
• Automation of the main processes making up the risk management cycle.
• Appropriateness: provision of adequate information at the right time.
Through the “Risk Analytics” function, the Bank has a corporate framework in place for developing the
measurement techniques and models. It covers all the types of risks and the different purposes and uses a
standard language for all the activities and geographical/business areas and decentralized execution to make the
most of the Group's global reach. The aim is to continually evolve the existing risk models and generate others
that cover the new areas of the businesses that develop them, so as to reinforce the anticipation and
proactiveness that characterize the Group's risk function.
Also the risk units of geographical and / or business areas have sufficient means from the point of view of
resources, structures and tools to develop a risk management in line with the corporate model.
5.2 Risk factors
As mentioned earlier, BBVA has processes in place for identifying risks and analyzing scenarios that enable the
Group to manage risks in a dynamic and proactive way.
The risk identification processes are forward-looking to ensure the identification of emerging risks and take into
account the concerns of both the business areas, which are close to the reality of the different geographical
areas, and the corporate areas and senior management.
42
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
Risks are captured and measured consistently using the methodologies deemed appropriate in each case. Their
measurement includes the design and application of scenario analyses and stress testing and considers the
controls to which the risks are subjected.
As part of this process, a forward projection of the risk appetite framework variables in stress scenarios is
conducted in order to identify possible deviations from the established thresholds. If any such deviations are
detected, appropriate measures are taken to keep the variables within the target risk profile.
To this extent, there are a number of emerging risks that could affect the Bank’s business trends. These risks are
described in the following main blocks:
• Macroeconomic and geopolitical risks
According to the latest information available, global growth remains stable at approximately 3% year-on- year.
Throughout the year there was an increase in the dynamism of global trade, the manufacturing cycle and the
confidence indicators, due to lax monetary conditions, fiscal policies that, although not expansive, are also
not cyclical, moderate raw material prices, especially oil prices (which favors the demand of importing
economies) and the gradual reduction of the accumulated private leverage excess in developed economies.
All of this would favor a slight improvement in global growth in 2017.
The risks of this scenario are compounded by:
–
–
–
increasing vulnerabilities in China caused by the accumulation of corporate debt;
uncertainty about the effective implementation of Great Britain’s UE exit process;
uncertainty arising from the potential increase in trade protectionism. All this in a complex geopolitical
environment
The remaining events that make up the uncertainties for 2017, which could affect the valuation of the
Group's holdings in certain countries:
–
–
Upward inflationary pressure and downward pressure on Mexico’s growth. The Central Bank of Mexico
(Banxico) has continued the interest rate increases since the end of 2015, around 50 basis points per
quarter, to 5.75% in December. Next steps are likely to go in the same direction to counteract upward
inflationary pressure and expectations against the depreciation of the Mexican peso (in 2016, -13.1%
year-on-year depreciation against the euro). This behavior results from the deterioration of Mexico's
growth expectations, assuming a less favorable framework for trade relations with the United States.
In terms of geopolitical tensions in some geographies, it is noteworthy the uncertainty following the
attempt of coup d’etat last July in Turkey, which together with the tightening of global financing
conditions favors an intense slowdown in economic growth.
In this regard, the Group's geographical diversification is a key element in achieving a high level of revenue
recurrence, despite the environmental conditions and economic cycles of the economies in which it operates.
• Regulatory and reputational risks
− Financial institutions are exposed to a complex and ever-changing regulatory and legal environment
defined by governments and regulators. This can affect their ability to grow and the capacity of certain
businesses to develop, and result in stricter liquidity and capital requirements with lower profitability
ratios. The Bank constantly monitors changes in the regulatory framework that allow for anticipation and
adaptation to them in a timely manner, adopt best practices and more efficient and rigorous criteria in its
implementation.
− The financial sector is under ever closer scrutiny by regulators, governments and society itself. Negative
news or inappropriate behavior can significantly damage the Group's reputation and affect its ability to
develop a sustainable business. The attitudes and behaviors of the group and its members are governed
by the principles of integrity, honesty, long-term vision and best practices through, inter alia, internal
control model, the Code of Conduct and Responsible Business Strategy of the Bank.
43
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
• Business, operational and legal risks
− New technologies and forms of customer relationships: Developments in the digital world and in
information technologies pose significant challenges for financial institutions, entailing threats (new
competitors, disintermediation…) but also opportunities (new framework of relations with customers,
greater ability to adapt to their needs, new products and distribution channels...).
− Technological risks and security breaches: The financial entities are exposed to new threats such as
cyber-attacks, theft of internal and customer databases, fraud in payment systems, etc. that require
major investments in security from both the technological and human point of view. The Bank gives
great importance to the active operational and technological risk management and control. One example
was the early adoption of advanced models for management of these risks (AMA - Advanced
Measurement Approach).
− The financial sector is exposed to increased litigation, so that financial institutions face a large number of
proceedings whose economic consequences are difficult to predict. The Group constantly manages and
monitors these proceedings in order to defend their interests, making the adequate provisions in respect
of such legal proceedings, when necessary, following the expert judgment of internal and external
lawyers responsible for the legal aspects in accordance to the applicable regulations.
5.3 Credit risk
Credit risk arises from the probability that one party to a financial instrument will fail to meet its contractual
obligations for reasons of insolvency or inability to pay and cause a financial loss for the other party.
It is the most important risk for the Group and includes counterparty risk, issuer risk, settlement risk and country
risk management.
The principles underpinning credit risk management in BBVA are as follows:
• Availability of basic information for the study and proposal of risk, and supporting documentation for
approval, which sets out the conditions required by the relevant body.
•
Sufficient generation of funds and asset solvency of the customer to assume principal and interest
repayments of loans owed.
• Establishment of adequate and sufficient guarantees that allow effective recovery of the operation, this being
considered a secondary and exceptional method of recovery when the first has failed.
Credit risk management in the Bank has an integrated structure for all its functions, allowing decisions to be taken
objectively and independently throughout the life cycle of the risk.
• At Group level: frameworks for action and standard rules of conduct are defined for handling risk, specifically,
the circuits, procedures, structure and supervision.
• At the business area level: they are responsible for adapting the Group's criteria to the local realities of each
geographical area and for direct management of risk according to the decision-making circuit:
− Retail risks: in general, the decisions are formalized according to the scoring tools, within the general
framework for action of each business area with regard to risks. The changes in weighting and variables
of these tools must be validated by the corporate GRM area.
− Wholesale risks: in general, the decisions are formalized by each business area within its general
framework for action with regard to risks, which incorporates the delegation rule and the Group's
corporate policies.
44
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
5.3.1 Maximum Credit risk exposure
BBVA maximum credit risk exposure (see definition below) by headings in the balance sheet as of December 31,
2016 and 2015 is provided below. It does not consider the availability of collateral or other credit enhancements
to guarantee compliance with payment obligations. The details are broken down by financial instruments and
counterparties.
Maximum Credit Risk Exposure
Notes
2016
2015
Millions of Euros
Financial assets held for trading
Debt securities
Equity instruments
Customer lending
Other financial assets designated at fair value through
profit or loss
Loans and advances to credit institutions
Debt securities
Equity instruments
Available-for-sale financial assets
Debt securities
Equity instruments
Loans and receivables
Loans and advances to central banks
Loans and advances to credit institutions
Loans and advances to customers
Government
Agriculture
Industry
Real estate and construction
Trade and finance
Loans to individuals
Other
Debt securities
Held-to-maturity investments
Derivatives (trading and hedging)
Total Financial Assets Risk
Loan commitments given
Financial guarantees given
Other Commitments given
Total Loan commitments and financial guarantees
Total Maximum Credit Exposure
8
9
10
11
12
8
29
29
29
15,417
11,544
3,873
18,107
14,133
3,974
-
-
-
-
-
29,360
24,983
4,377
259,569
-
26,597
221,966
21,857
1,285
23,039
25,989
28,515
102,949
18,332
11,006
11,424
37,255
353,025
60,863
18,697
31,306
110,866
463,891
-
-
-
-
-
49,945
45,515
4,430
234,264
-
25,145
204,900
23,183
1,192
22,724
27,027
25,982
84,875
19,917
4,219
-
35,535
337,851
47,751
20,959
29,395
98,105
435,956
The maximum credit exposure of the table above is determined by type of financial asset as explained below:
•
•
In the case of financial assets recognized in the bank’s balance sheets, exposure to credit risk is considered
equal to its gross carrying amount, not including certain valuation adjustments (impairment losses, hedges
and others), with the sole exception of derivatives and hedging derivatives.
The maximum credit risk exposure on financial guarantees granted is the maximum that the Group would be
liable for if these guarantees were called in, and that is their carrying amount.
• Our calculation of risk exposure for derivatives is based on the sum of two factors: the derivatives fair value
and their potential risk (or "add-on").
45
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
− The first factor, market value, reflects the difference between original commitments and market values on
the reporting date (mark-to-market). As indicated in Note 2.2.1 to the financial statements, derivatives
are accounted for as of each reporting date at fair value.
− The second factor, potential risk (‘add-on’), is an estimate of the maximum increase to be expected on
risk exposure over a derivative market value (at a given statistical confidence level) as a result of future
changes in the fair value over the remaining term of the derivatives.
The consideration of the potential risk ("add-on") relates the risk exposure to the exposure level at the time of a
customer’s default. The exposure level will depend on the customer’s credit quality and the type of transaction
with such customer. Given the fact that default is an uncertain event which might occur any time during the life
of a contract, the BBVA Group has to consider not only the credit exposure of the derivatives on the reporting
date, but also the potential changes in exposure during the life of the contract. This is especially important for
derivatives, whose valuation changes substantially throughout their terms, depending on the fluctuation of market
prices.
46
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting principles (Bank of Spain Circular 4/2004, and as amended
thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
El detalle por contraparte y por producto de los préstamos y anticipos, neto de pérdidas por deterioro, clasificados en las distintas categorías de activos a 31 de
diciembre de 2016 y 2015 se muestra a continuación:
December 2016
Central banks
General
governments
Credit institutions
Other financial
Non-financial
corporations
corporations
Households
Total
Millions of euros
O n de m a nd a nd s ho rt no t ic e
C re dit c a rd de bt
T ra de re c e iv a ble s
F ina nc e le a s e s
R e v e rs e re purc ha s e lo a ns
O t he r t e rm lo a ns
A dv a nc e s t ha t a re no t lo a ns
Loans and advances
o f which: mo rtgage lo ans [Lo ans co llateralized by immo vable pro perty]
o f which: o ther co llateralized lo ans
o f which: credit fo r co nsumptio n
o f which: lending fo r ho use purchase
o f which: pro ject finance lo ans
December 2015
Central banks
O n de m a nd a nd sho rt no t ic e
C re dit ca rd debt
T rade re ce iva bles
F inanc e le as e s
R ev e rs e repurc has e lo ans
O t he r t e rm lo a ns
A dv a nc e s t ha t a re no t lo a ns
Loans and advances
o f which: mo rtgage lo ans [Lo ans co llateralized by immo vable property]
o f which: o ther co llateralized loans
o f which: credit for co nsumptio n
o f which: lending fo r ho use purchase
o f which: pro ject finance lo ans
-
-
-
-
-
-
-
-
-
-
-
-
-
-
372
1
1,042
42
544
17,357
2,405
21,763
440
544
-
-
-
-
14,907
5,104
6,585
26,596
-
14,908
1,760
1
140
4
6,666
5,298
1,980
15,849
203
6,669
8,371
107
9,254
2,805
-
54,323
773
75,633
14,722
1,870
7,918
1,759
1,717
70
199
-
96,805
94
100,644
87,757
596
7,240
86,423
12,262
1,826
10,506
3,050
22,117
178,887
11,837
240,485
103,122
24,587
7,240
86,423
7,918
Millions of euros
General
governments
Credit institutions
Other financial
Non-financial
corporations
corporations
Households
Total
-
-
-
-
12,037
5,347
7,762
25,146
-
12,033
2,002
1
77
1
4,477
5,064
1,990
13,613
126
4,535
9,013
119
8,349
2,619
9
52,928
463
73,499
16,200
3,346
9,183
1,400
1,119
71
167
-
84,149
87
86,993
76,971
536
5,457
75,372
13,198
1,240
9,417
2,829
16,849
166,629
12,405
222,568
93,693
20,809
5,457
75,372
9,183
783
1
920
42
326
19,141
2,103
23,317
396
359
47
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
5.3.2 Mitigation of credit risk, collateralized credit risk and other credit enhancements
In most cases, maximum credit risk exposure is reduced by collateral, credit enhancements and other actions
which mitigate the Group’s exposure. The BBVA Group applies a credit risk hedging and mitigation policy deriving
from a banking approach focused on relationship banking. The existence of guarantees could be a necessary but
not sufficient instrument for accepting risks, as the assumption of risks by the Group requires prior evaluation of
the debtor’s capacity for repayment, or that the debtor can generate sufficient resources to allow the
amortization of the risk incurred under the agreed terms.
The policy of accepting risks is therefore organized into three different levels in the BBVA Group:
• Analysis of the financial risk of the operation, based on the debtor’s capacity for repayment or generation of
funds;
• The constitution of guarantees that are adequate, or at any rate generally accepted, for the risk assumed, in
any of the generally accepted forms: monetary, secured, personal or hedge guarantees; and finally,
• Assessment of the repayment risk (asset liquidity) of the guarantees received.
The procedures for the management and valuation of collaterals are set out in the Corporate Policies (retail and
wholesale), which establish the basic principles for credit risk management, including the management of
collaterals assigned in transactions with customers.
The methods used to value the collateral are in line with the best market practices and imply the use of appraisal
of real-estate collateral, the market price in market securities, the trading price of shares in mutual funds, etc. All
the collaterals assigned must be properly drawn up and entered in the corresponding register. They must also
have the approval of the Group’s legal units.
The following is a description of the main types of collateral for each financial instrument category:
• Financial instruments held for trading: The guarantees or credit enhancements obtained directly from the
issuer or counterparty are implicit in the clauses of the instrument.
• Derivatives and hedging derivatives: In derivatives, credit risk is minimized through contractual netting
agreements, where positive- and negative-value derivatives with the same counterparty are offset for their net
balance. There may likewise be other kinds of guarantees, depending on counterparty solvency and the
nature of the transaction.
• Financial assets designated at fair value through profit or loss and Available-for-sale financial assets: The
guarantees or credit enhancements obtained directly from the issuer or counterparty are inherent to the
structure of the instrument.
• Loans and receivables:
− Loans and advances to credit institutions: These usually only have the counterparty’s personal guarantee.
− Loans and advances to customers: Most of these operations are backed by personal guarantees
extended by the counterparty. There may also be collateral to secure loans and advances to customers
(such as mortgages, cash guarantees, pledged securities and other collateral), or to obtain other credit
enhancements (bonds, hedging, etc.).
− Debt securities: The guarantees or credit enhancements obtained directly from the issuer or counterparty
are inherent to the structure of the instrument.
Collateralized loans granted by the Bank as of December 31, 2016 and 2015 excluding balances deemed
impaired, is broken down in the previous tables and in Note 11.2
•••• Financial guarantees, other contingent risks and drawable by third parties: These have the counterparty’s
personal guarantee.
48
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
5.3.3
Credit quality of financial assets that are neither past due nor impaired
The BBVA Group has tools (“scoring” and “rating”) that enable it to rank the credit quality of its operations and
customers based on an assessment and its correspondence with the probability of default (“PD”) scales. To
analyze the performance of PD, the Group has a series of tracking tools and historical databases that collect the
pertinent internally generated information, which can basically be grouped together into scoring and rating
models.
Scoring
Scoring is a decision-making model that contributes to both the arrangement and management of retail loans:
consumer loans, mortgages, credit cards for individuals, etc. Scoring is the tool used to decide to originate a
loan, what amount should be originated and what strategies can help establish the price, because it is an
algorithm that sorts transactions by their credit quality. This algorithm enables the BBVA Group to assign a score
to each transaction requested by a customer, on the basis of a series of objective characteristics that have
statistically been shown to discriminate between the quality and risk of this type of transactions. The advantage of
scoring lies in its simplicity and homogeneity: all that is needed is a series of objective data for each customer,
and this data is analyzed automatically using an algorithm.
There are three types of scoring, based on the information used and on its purpose:
• Reactive scoring: measures the risk of a transaction requested by an individual using variables relating to the
requested transaction and to the customer’s socio-economic data available at the time of the request. The
new transaction is approved or rejected depending on the score.
• Behavioral scoring: scores transactions for a given product in an outstanding risk portfolio of the entity,
enabling the credit rating to be tracked and the customer’s needs to be anticipated. It uses transaction and
customer variables available internally. Specifically, variables that refer to the behavior of both the product
and the customer.
•
Proactive scoring: gives a score at customer level using variables related to the individual’s general behavior
with the entity, and to his/her payment behavior in all the contracted products. The purpose is to track the
customer’s credit quality and it is used to pre-grant new transactions.
Rating
Rating tools, as opposed to scoring tools, do not assess transactions but focus on the rating of customers
instead: companies, corporations, SMEs, general governments, etc. A rating tool is an instrument that, based on
a detailed financial study, helps determine a customer’s ability to meet his/her financial obligations. The final
rating is usually a combination of various factors: on one hand, quantitative factors, and on the other hand,
qualitative factors. It is a middle road between an individual analysis and a statistical analysis.
The main difference between ratings and scorings is that the latter are used to assess retail products, while
ratings use a wholesale banking customer approach. Moreover, scorings only include objective variables, while
ratings add qualitative information. And although both are based on statistical studies, adding a business view,
rating tools give more weight to the business criterion compared to scoring tools.
For portfolios where the number of defaults is very low (sovereign risk, corporates, financial entities, etc.) the
internal information is supplemented by “benchmarking” of the external rating agencies (Moody’s, Standard &
Poor’s and Fitch). To this end, each year the PDs compiled by the rating agencies at each level of risk rating are
compared, and the measurements compiled by the various agencies are mapped against those of the BBVA
master rating scale.
Once the probability of default of a transaction or customer has been calculated, a "business cycle adjustment" is
carried out. This is a means of establishing a measure of risk that goes beyond the time of its calculation. The aim
is to capture representative information of the behavior of portfolios over a complete economic cycle. This
probability is linked to the Master Rating Scale prepared by the BBVA Group to enable uniform classification of the
Group’s various asset risk portfolios.
49
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
The table below shows the abridged scale used to classify the BBVA Group’s outstanding risk as of December 31,
2016:
External Rating
Internal Rating
Reduced List (17 groups)
Reduced List (17 groups)
Average
Probability of default
(basic points)
Minimum
from >=
Maximum
AAA
AA+
AA
AA-
A+
A
A-
BBB+
BBB
BBB-
BB+
BB
BB-
B+
B
B-
CCC+
CCC
CCC-
CC+
CC
CC-
AAA
AA+
AA
AA-
A+
A
A-
BBB+
BBB
BBB-
BB+
BB
BB-
B+
B
B-
CCC+
CCC
CCC-
CC+
CC
CC-
1
2
3
4
5
8
10
14
20
31
51
88
150
255
441
785
1,191
1,500
1,890
2,381
3,000
3,780
-
2
3
4
5
6
9
11
17
24
39
67
116
194
335
581
1,061
1,336
1,684
2,121
2,673
3,367
2
3
4
5
6
9
11
17
24
39
67
116
194
335
581
1,061
1,336
1,684
2,121
2,673
3,367
4,243
These different levels and their probability of default (PD) were calculated by using as a reference the rating scales
and default rates provided by the external agencies Standard & Poor’s and Moody’s. These calculations establish
the levels of probability of default for the BBVA Group’s Master Rating Scale. Although this scale is common to
the entire Group, the calibrations (mapping scores to PD sections/Master Rating Scale levels) are carried out at
tool level for each country in which the Group has tools available.
The tables below outline the distribution of exposure, including derivatives, by internal ratings, to corporates,
financial entities and institutions (excluding sovereign risk), of the main BBVA Group entities as of December 31,
2016 and 2015:
Credit Risk Distribution by Internal Rating
Amount
( M illio ns o f
E uro s )
%
AAA/AA
A
BBB+
BBB
BBB-
BB+
BB
BB-
B+
B
B-
CCC/CC
34,713
49,879
38,844
20,870
31,643
19,448
7,812
5,880
4,388
1,784
1,542
4,004
Total
220,807
50
15.72%
22.59%
17.59%
9.45%
14.33%
8.81%
3.54%
2.66%
1.99%
0.81%
0.70%
1.81%
100.00%
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
Credit Risk Distribution by Internal
Rating
Amount
( M illio ns o f
E uro s )
%
A
BBB+
BBB
BBB-
BB+
BB
BB-
B+
B
B-
CCC/CC
56,092
39,835
21,618
30,114
16,386
11,114
4,932
4,307
3,168
2,561
16,678
23.96%
17.01%
9.23%
12.86%
7.00%
4.75%
2.11%
1.84%
1.35%
1.09%
7.12%
Total
234,134
100.00%
51
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting principles (Bank of Spain Circular 4/2004, and as amended
thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
5.3.4
Financial assets past due but not impaired
The table below provides details by counterpart and by product of past due risks but not considered to be impaired, as of December 31, 2016 and December 31,
2015, listed by their first past-due date; as well as the breakdown of the debt securities and loans and advances individually and collectively estimated, and the
specific allowances for individually estimated and for collectively estimated (see Note 2):
December 2016
Past due but not impaired
Millions of Euros
Impaired assets
≤ 30 days
> 30 days ≤ 60
> 60 days ≤ 90
(*)
days
days
Carrying amount
of the impaired
assets
Specific allowances
for financial assets,
individually
estimated
Specific allowances
for financial assets,
collectively estimated
Collective
allowances for
Accumulated
incurred but not
write-offs
reported losses
D e bt s e c urit ie s
Lo a ns a nd a dv a nc e s
Central banks
General go vernments
Credit institutio ns
Other financial co rpo ratio ns
No n-financial co rpo ratio ns
Ho useho lds
T O T A L
Lo a ns a nd a dv a nc e s by pro duc t , by c o lla t e ra l a nd by s ubo rdina t io n
On demand (call) and sho rt no tice (current acco unt)
Credit card debt
Trade receivables
Finance leases
Reverse repurchase lo ans
Other term lo ans
A dvances that are no t lo ans
o f which: mo rtgage lo ans (Lo ans co llateralized by inmo vable pro perty)
o f which: o ther co llateralized lo ans
o f which: credit fo r co nsumptio n
o f which: lending fo r ho use purchase
o f which: pro ject finance lo ans
-
4 9 6
-
63
-
18
387
28
4 9 6
23
4
28
11
431
16
1
3
15
136
-
3 7
-
-
-
24
12
3 7
8
2
2
1
-
24
-
12
1
3
5
-
( 2 7 )
( 1,6 6 3 )
-
(2)
(8)
(11)
(888)
(754)
-
( 2 1,6 0 1)
-
(13)
(5)
-
(17,347)
(4,237)
( 1,6 9 1)
( 2 1,6 0 1)
2 16
16 ,7 4 1
-
292
5
8
10,412
6,024
17 ,0 6 5
470
50
247
197
-
15,777
-
12,687
70
347
5,015
152
9 6
8 ,9 7 6
-
253
-
5
4,448
4,270
9 ,18 0
193
12
54
68
-
8,649
-
7,600
37
83
3,872
13
( 12 0 )
( 2 ,6 7 4 )
-
(19)
-
(1)
(2,296)
(358)
( 2 ,7 9 4 )
(65)
(1)
(43)
(18)
-
(2,547)
-
(1,181)
(18)
(79)
(116)
(75)
-
( 5 ,0 9 1)
-
(20)
(5)
(2)
(3,667)
(1,396)
( 5 ,0 9 1)
(211)
(38)
(150)
(111)
-
(4,582)
-
(3,906)
(16)
(186)
(1,027)
(63)
-
4 4
-
2
-
1
26
15
4 4
2
1
2
1
-
38
-
22
3
8
52
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting principles (Bank of Spain Circular 4/2004, and as amended
thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
December 2015
Past due but not im paired
≤ 30 days
> 30 days ≤ 60
> 60 days ≤ 90
(*)
the impaired assets
Impaired assets
Carrying amount of
days
days
Specific allowances
Specific allowances
for financial assets,
for financial assets,
individually estimated
collectively estimated
Collective
allowances for
Accumulated
incurred but not
write-offs
reported losses
Millions of Euros
D e bt s e c urit ie s
Lo a ns a nd a dv a nc e s
Central banks
General go vernments
Credit institutio ns
Other financial co rpo ratio ns
No n-financial co rpo ratio ns
Ho useho lds
T O T A L
Lo a ns a nd a dv a nc e s by pro duc t , by c o lla t e ra l a nd by s ubo rdina t io n
On demand (call) and sho rt no tice (current acco unt)
Credit card debt
Trade receivables
Finance leases
Reverse repurchase lo ans
Other term lo ans
A dvances that are no t lo ans
o f which: mo rtgage lo ans (Lo ans co llateralized by inmo vable pro perty)
o f which: o ther co llateralized lo ans
o f which: credit fo r co nsumptio n
o f which: lending fo r ho use purchase
o f which: pro ject finance lo ans
-
3 8 1
-
150
-
2
173
57
3 8 1
26
2
62
8
283
85
5
10
36
1
-
5 0
-
2
-
-
27
21
5 0
5
1
12
1
-
32
-
22
4
12
-
-
3 2
-
2
-
-
23
7
3 2
5
1
7
1
-
19
-
8
2
2
1
3 2
16 ,5 5 4
-
178
21
11
11,475
4,870
16 ,5 8 6
552
18
365
155
-
15,464
-
12,137
664
239
3,986
186
11
9 ,3 2 7
-
150
5
2
5,608
3,562
9 ,3 3 8
186
5
110
66
-
8,960
-
7,589
464
80
3,181
75
( 2 1)
( 2 ,8 5 0 )
-
(12)
(10)
(1)
(2,368)
(459)
( 2 ,8 7 2 )
(101)
(0)
(93)
(19)
-
(2,637)
-
(1,425)
(145)
(48)
(220)
(29)
-
( 6 8 )
-
( 4 ,3 7 6 )
( 1,3 5 5 )
( 16 ,9 0 4 )
-
(15)
(5)
(22)
(994)
(320)
-
(17)
(5)
-
(13,485)
(3,398)
( 1,4 2 3 )
( 16 ,9 0 4 )
-
(16)
(6)
(7)
(3,500)
(848)
( 4 ,3 7 6 )
(265)
(13)
(161)
(69)
-
(3,867)
-
(3,123)
(55)
(111)
(584)
(82)
53
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting principles (Bank of Spain Circular 4/2004, and as amended
thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
The breakdown of loans and advances of loans and receivables, impaired and accumulated impairment by sectors as of December 31, 2016 and 2015 is as
follows:
December 2016
Non-performing
Accumulated impairment
Non-performing
or Accumulated changes in
loans and
fair value due to credit
advances as a %
risk
of the total
Millions of Euros
General governments
Credit institutions
Other financial corporations
Non-financial corporations
Agriculture, forestry and fishing
Mining and quarrying
Manufacturing
Electricity, gas, steam and air conditioning supply
Water supply
Construction
Wholesale and retail trade
Transport and storage
Accommodation and food service activities
Information and communication
Real estate activities
Professional, scientific and technical activities
Administrative and support service activities
Public administration and defense, compulsory social security
Education
Human health services and social work activities
Arts, entertainment and recreation
Other services
Households
LOANS AND ADVANCES
54
292
5
8
10,412
104
32
1,099
128
26
5,098
1,205
129
408
88
1,246
382
148
10
20
32
61
195
6,024
16,741
(41)
(13)
(14)
(6,851)
(56)
(28)
(668)
(84)
(7)
(3,150)
(801)
(80)
(173)
(41)
(760)
(293)
(82)
(9)
(9)
(11)
(29)
(572)
(2,508)
(9,428)
1.3%
0.0%
0.1%
12.6%
8.1%
2.1%
7.7%
1.9%
3.9%
33.5%
12.1%
3.4%
13.1%
3.4%
11.5%
12.5%
5.8%
5.0%
9.3%
4.3%
10.4%
3.7%
6.0%
6.8%
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting principles (Bank of Spain Circular 4/2004, and as amended
thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
December 2015
Non-performing
Accumulated impairment
Non-performing
or Accumulated changes in
loans and
fair value due to credit
advances as a %
risk
of the total
Millions of Euros
General governments
Credit institutions
Other financial corporations
Non-financial corporations
Agriculture, forestry and fishing
Mining and quarrying
Manufacturing
Electricity, gas, steam and air conditioning supply
Water supply
Construction
Wholesale and retail trade
Transport and storage
Accommodation and food service activities
Information and communication
Real estate activities
Professional, scientific and technical activities
Administrative and support service activities
Public administration and defense, compulsory social security
Education
Human health services and social work activities
Arts, entertainment and recreation
Other services
Households
LOANS AND ADVANCES
178
21
11
11,475
88
115
1,094
96
27
5,945
1,099
299
360
55
1,117
828
113
0
15
38
48
139
4,870
16,554
(42)
(21)
(30)
(6,862)
(46)
(37)
(616)
(90)
(15)
(3,569)
(639)
(162)
(179)
(30)
(904)
(342)
(62)
(0)
(5)
(15)
(22)
(128)
(1,627)
(8,582)
0.8%
0.1%
0.1%
14.3%
7.4%
6.1%
8.1%
1.4%
3.9%
38.8%
11.5%
7.9%
11.1%
2.4%
10.1%
25.8%
5.0%
0.1%
7.1%
5.7%
13.5%
3.2%
5.5%
7.2%
As of December 31, 2016 and 2015, the accumulated financial income accrued with origin in the impaired assets that, as mentioned in Note 2.2.1 are not
recognized in the accompanying income statements as there are doubts as to the possibility of their collection, were 2,164 and 2,041 million euros, respectively.
55
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting principles (Bank of Spain Circular 4/2004, and as amended
thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
The changes in the year 2016 and 2015 of impaired financial assets and guarantees are as follow:
Changes in Impaired Financial Assets and
Contingent Risks
Balance at the beginning
1) Additions
2) Decreases
Net additions (1)+(2)
Transfers to write-off
Exchange differences and others (*)
Balance at the end
Recoveries on entries (%)
Millions of Euros
2016
2015
17,017
4,420
(4,405)
15
(3,336)
3,811
17,507
100
19,500
4,471
(3,968)
503
(2,880)
(107)
17,017
89
(*) Includes in 2016 the balance amounts attributable to Catalunya Banc upon its consolidation increased to €3,477 million.
56
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting principles (Bank of Spain Circular 4/2004, and as amended
thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
The changes in the year 2016 and 2015 in financial assets derecognized from the accompanying balance sheet as their recovery is considered unlikely
(hereinafter "write-offs"), is shown below:
Changes in Impaired Financial Assets Written-Off
from the Balance Sheet
Balance at the beginning
Increase:
Assets of remote collectability
Past-due and not collected income
Contributions by mergers
Decrease:
Re-financing or restructuring
Cash recovery (Note 47)
Foreclosed assets
Sales of written-off
Debt forgiveness
Time-barred debt and other causes
Net exchange differences
Balance at the end
Millions of Euros
2016
2015
16,905
6,421
3,336
1,180
1,905
(1,728)
(31)
(448)
(150)
-
(845)
(254)
3
21,601
16,431
4,948
2,880
2,068
-
(4,479)
(25)
(380)
(105)
-
(3,019)
(950)
5
16,905
As indicated in Note 2, although they have been derecognized from the balance sheet, the BBVA Group continues to attempt to collect on these written-off
financial assets, until the rights to receive them are fully extinguished, either because it is time-barred financial asset, the financial asset is condoned, or other
reasons.
57
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting principles (Bank of Spain Circular 4/2004, and as amended
thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
5.3.5
Impaired assets and impairment losses
The table below shows the composition of the impaired financial assets and guarantees given as of December 31, 2016 and 2015, broken down by heading in
the accompanying balance sheet:
Increases due
Decreases due
toamounts set aside
toamounts reversed
Decreases due
Millions of euros
December 2016
Opening balance
for estimated loan
for estimated loan
toamounts taken
losses during the
losses during the
against allowances
period
period
Transfers between
allowances
Other adjustments
Closing balance
Recoveries
recorded directly to
the statement of
profit or loss
Equity instruments
Specific allowances for financial assets, individually
estimated
Debt securities
Central banks
General governments
Credit institutions
Other financial corporations
Non-financial corporations
Loans and advances
Central banks
General governments
Credit institutions
Other financial corporations
Non-financial corporations
Households
Specific allowances for financial assets, collectively
estimated
Debt securities
Central banks
General governments
Credit institutions
Other financial corporations
Non-financial corporations
Loans and advances
Central banks
General governments
Credit institutions
Other financial corporations
Non-financial corporations
Households
Collective allowances for incurred but not reported losses
on financial assets
Debt securities
Loans and advances
Total
(2,872)
(21)
-
-
(20)
(2)
-
(2,850)
-
(12)
(10)
(1)
(2,368)
(459)
(4,376)
-
-
-
-
-
-
(4,376)
-
(16)
(6)
(7)
(3,500)
(848)
(1,423)
(68)
(1,355)
(8,672)
(*) Includes the impact of the merger of Catalunya Banc
(97)
(164)
-
-
-
(26)
(138)
68
-
6
-
-
(54)
115
(3,665)
-
-
-
-
-
-
(3,665)
-
(5)
-
2
(2,680)
(982)
262
(12)
274
(3,500)
115
3
-
-
-
-
3
112
-
2
-
-
81
29
1,742
-
-
-
-
-
-
1,742
-
18
-
7
1,467
250
264
-
264
2,121
58
149
64
-
-
5
26
33
85
-
-
-
-
83
2
3,182
-
-
-
-
-
-
3,182
-
6
-
-
2,720
456
5
-
5
3,336
368
-
-
-
-
-
-
368
-
(12)
10
5
339
26
133
-
-
-
-
-
-
133
-
(15)
-
(1)
(309)
458
194
53
142
696
(457)
(1)
-
-
-
-
(1)
(456)
-
(3)
-
(5)
(377)
(71)
(2,106)
-
-
-
-
-
-
(2,106)
-
(7)
-
(4)
(1,365)
(730)
(993)
-
(993)
(3,556)
(2,794)
(120)
-
-
(15)
(2)
(103)
(2,674)
-
(19)
-
(1)
(2,296)
(358)
(5,091)
-
-
-
-
-
-
(5,091)
-
(20)
(5)
(2)
(3,667)
(1,396)
(1,691)
(27)
(1,663)
(9,575)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
448
-
-
-
-
-
-
448
-
1
-
-
279
168
-
-
-
448
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting principles (Bank of Spain Circular 4/2004, and as amended
thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
Increases due
Decreases due
toamounts set aside
toamounts reversed
Decreases due
Millions of euros
December 2015
Opening balance
for estimated loan
for estimated loan
toamounts taken
losses during the
losses during the
against allowances
period
period
Transfers between
allowances
Other adjustments
Closing balance
Recoveries
recorded directly to
the statement of
profit or loss
Equity instruments
Specific allowances for financial assets, individually
estimated
Debt securities
Central banks
General governments
Credit institutions
Other financial corporations
Non-financial corporations
Loans and advances
Central banks
General governments
Credit institutions
Other financial corporations
Non-financial corporations
Households
Specific allowances for financial assets, collectively
estimated
Debt securities
Central banks
General governments
Credit institutions
Other financial corporations
Non-financial corporations
Loans and advances
Central banks
General governments
Credit institutions
Other financial corporations
Non-financial corporations
Households
Collective allowances for incurred but not reported losses
on financial assets
Debt securities
Loans and advances
Total
(2,504)
(21)
-
-
(17)
(4)
-
(2,483)
-
(9)
(13)
-
(2,156)
(306)
(6,228)
-
-
-
-
-
-
(6,228)
-
(16)
(4)
(4)
(4,837)
(1,367)
(1,466)
(3)
(1,463)
(10,198)
(573)
(4)
-
-
(2)
(2)
-
(568)
-
(4)
-
(1)
(398)
(166)
(2,300)
-
-
-
-
-
-
(2,300)
-
(4)
(11)
(26)
(1,643)
(616)
106
-
106
(2,767)
136
4
-
-
1
4
-
132
-
0
3
-
128
2
951
-
-
-
-
-
-
951
-
5
0
0
823
123
9
-
9
1,096
106
-
-
-
-
-
-
106
-
-
-
-
105
1
2,772
-
-
-
-
-
-
2,772
-
3
-
22
2,058
688
2
-
2
2,880
(37)
(0)
-
-
(1)
1
-
(37)
-
1
-
(0)
(47)
10
433
-
-
-
-
-
-
433
-
(3)
9
0
103
324
(71)
(65)
(6)
325
(1)
(0)
-
-
(0)
(0)
-
(0)
-
(0)
-
-
(0)
-
(3)
-
-
-
-
-
-
(3)
-
(0)
(0)
-
(3)
(0)
(4)
-
(4)
(8)
(2,872)
(21)
-
-
(20)
(2)
-
(2,850)
-
(12)
(10)
(1)
(2,368)
(459)
(4,376)
-
-
-
-
-
-
(4,376)
-
(16)
(6)
(7)
(3,500)
(848)
(1,423)
(68)
(1,355)
(8,672)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
380
-
-
-
-
-
-
380
-
-
1
-
212
167
-
-
-
380
59
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
5.4 Market risk
5.4.1
Trading portfolio activities
Market risk originates as a result of movements in the market variables that impact the valuation of traded
financial products and assets. The main risks generated can be classified as follows:
•
Interest-rate risk: This arises as a result of exposure to movements in the different interest-rate curves
involved in trading. Although the typical products that generate sensitivity to the movements in interest rates
are money-market products (deposits, interest-rate futures, call money swaps, etc.) and traditional interest-
rate derivatives (swaps and interest-rate options such as caps, floors, swaptions, etc.), practically all the
financial products are exposed to interest-rate movements due to the effect that such movements have on
the valuation of the financial discount.
• Equity risk: This arises as a result of movements in share prices. This risk is generated in spot positions in
shares or any derivative products whose underlying asset is a share or an equity index. Dividend risk is a sub-
risk of equity risk, arising as an input for any equity option. Its variation may affect the valuation of positions
and it is therefore a factor that generates risk on the books.
• Exchange-rate risk: This is caused by movements in the exchange rates of the different currencies in which a
position is held. As in the case of equity risk, this risk is generated in spot currency positions, and in any
derivative product whose underlying asset is an exchange rate. In addition, the quanto effect (operations
where the underlying asset and the instrument itself are denominated in different currencies) means that in
certain transactions in which the underlying asset is not a currency, an exchange-rate risk is generated that
has to be measured and monitored.
• Credit-spread risk: Credit spread is an indicator of an issuer's credit quality. Spread risk occurs due to
variations in the levels of spread of both corporate and government issues, and affects positions in bonds
and credit derivatives.
• Volatility risk: This occurs as a result of changes in the levels of implied price volatility of the different market
instruments on which derivatives are traded. This risk, unlike the others, is exclusively a component of
trading in derivatives and is defined as a first-order convexity risk that is generated in all possible underlying
assets in which there are products with options that require a volatility input for their valuation.
The metrics developed to control and monitor market risk in BBVA Group are aligned with best practices in the
market and are implemented consistently across all the local market risk units.
Measurement procedures are established in terms of the possible impact of negative market conditions on the
trading portfolio of the Group's Global Markets units, both under ordinary circumstances and in situations of
heightened risk factors.
The standard metric used to measure market risk is Value at Risk (VaR), which indicates the maximum loss that
may occur in the portfolios at a given confidence level (99%) and time horizon (one day). This statistic is widely
used in the market and has the advantage of summing up in a single metric the risks inherent to trading activity,
taking into account how they are related and providing a prediction of the loss that the trading book could
sustain as a result of fluctuations in equity prices, interest rates, foreign exchange rates and commodity prices. In
addition, for some positions other risks also need to be considered, such as credit spread risk, basis risk, volatility
risk and correlation risk.
Most of the headings on the bank’s balance sheet subject to market risk are positions whose main metric for
measuring their market risk is VaR.
With respect to the risk measurement models used in BBVA Group, the Bank of Spain has authorized the use of
the internal model to determine bank capital requirements deriving from risk positions on the BBVA S.A. and
BBVA Bancomer trading book, which jointly account for around 66% of the Group’s trading-book market risk. For
the rest of the geographical areas (South America, Garanti and Compass), bank capital for the risk positions in the
trading book is calculated using the standard model.
The current management structure includes the monitoring of market-risk limits, consisting of a scheme of limits
based on VaR (Value at Risk), economic capital (based on VaR measurements) and VaR sub-limits, as well as stop-
loss limits for each of the Group’s business units.
60
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
The model used estimates VaR in accordance with the "historical simulation" methodology, which involves
estimating losses and gains that would have taken place in the current portfolio if the changes in market
conditions that took place over a specific period of time in the past were repeated. Based on this information, it
infers the maximum expected loss of the current portfolio within a given confidence level. This model has the
advantage of reflecting precisely the historical distribution of the market variables and not assuming any specific
distribution of probability. The historical period used in this model is two years.
VaR figures are estimated following two methodologies:
• VaR without smoothing, which awards equal weight to the daily information for the previous two years. This
is currently the official methodology for measuring market risks for the purpose of monitoring compliance
with risk limits.
• VaR with smoothing, which gives a greater weight to more recent market information. This metric
supplements the previous one.
In the case of South America, a parametric methodology is used to measure risk in terms of VaR except in BBVA
Chile and BBVA Colombia, where historical simulation methodolody is used.
At the same time, and following the guidelines established by the Spanish and European authorities, BBVA
incorporates metrics in addition to VaR with the aim of meeting the Bank of Spain's regulatory requirements with
respect to the calculation of bank capital for the trading book. Specifically, the new measures incorporated in the
Group since December 2011 (stipulated by Basel 2.5) are:
• VaR: In regulatory terms, the charge for VaR Stress is added to the charge for VaR and the sum of both (VaR
and VaR Stress) is calculated. This quantifies the loss associated with movements in the risk factors inherent
in market operations (interest rate, FX, equity, credit, etc.). Both VaR and Stressed VaR are re-scaled by a
regulatory multiplication factor, set at 3 and by the square root of 10, to calculate the capital charge.
•
•
Specific Risk: Incremental Risk Capital (“IRC”). Quantification of the risks of default and rating downgrade of
the bond and credit derivative positions on the trading book. The specific risk capital IRC is a charge
exclusively for those geographical areas with an approved internal model (BBVA S.A. and Bancomer). The
capital charge is determined based on the associated losses (at 99.9% over a time horizon of 1 year under
the constant risk assumption) resulting from the rating migration and/or default status of the asset's issuer.
Also included is the price risk in sovereign positions for the indicated items.
Specific Risk: Securitizations and Correlation Portfolios. Capital charge for securitizations and for the
correlation portfolio to include the potential losses associated with the rating level of a given credit structure
(rating). Both are calculated using the standardized approach. The perimeter of the correlation portfolios is
referred to FTD-type market operations and/or market CDO tranches, and only for positions with an active
market and hedging capacity.
Validity tests are performed regularly on the risk measurement models used by the Group. They estimate the
maximum loss that could have been incurred in the positions with a certain level of probability (backtesting), as
well as measurements of the impact of extreme market events on risk positions (stress testing). As an additional
control measure, backtesting is conducted at trading desk level in order to enable more specific monitoring of the
validity of the measurement models.
Market risk in 2016
The Group’s market risk remains at low levels compared with the aggregates of risks managed by BBVA,
particularly in the case of credit risk. This is due to the nature of the business. In 2016, the market risk of trading
book increase slightly versus the previous year and, in terms of VaR, stood at €11 million at the close of the
period.
The average VaR for 2016 stood at €11 million, in comparison with the €11 million registered in 2015, with a
high for the year on day June 13 at €15 million.
61
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
By type of market risk assumed by the Bank’s trading portfolio, the main risk factor in the Group is linked to
Interest rates (this figure includes the spread risk), accounting for 46% of the total weight at the end of 2016,
increasing its relative weight (vs. 39% at the end of 2015). Volatility and correlation risk amounts 36%, its relative
weight is lower than the figure at the end of 2015 (46%). Exchange-rate risk accounts for 14%, an increase on
the figure 12 months prior (10%), while equity risk accounts for 5%, higher than the 4% accounted at the end of
2015.
Market risk by risk factor
2016
2015
Millions of euros
Interest + credit spread
Exchange rate
Equity
Volatility
Diversification effect (*)
Total
Average VaR
Maximum VaR
Minimum VaR
12
4
1
10
(16)
11
11
15
8
8
2
1
9
(10)
9
11
15
8
(*)
The diversification effect is the difference between the sum of the average individual risk factors and the total VaR
figure that includes the implied correlation between all the variables and scenarios used in the measurement.
Validation of the model
The internal market risk model is validated on a regular basis by backtesting in both BBVA S.A. and Bancomer.
The aim of backtesting is to validate the quality and precision of the internal model used by BBVA Group to
estimate the maximum daily loss of a portfolio, at a 99% level of confidence and a 250-day time horizon, by
comparing the Group's results and the risk measurements generated by the model. These tests showed that the
internal market risk model of both BBVA, S.A. and Bancomer is adequate and precise.
62
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
Two types of backtesting have been carried out in 2016:
••••
••••
"Hypothetical" backtesting: the daily VaR is compared with the results obtained, not taking into account
the intraday results or the changes in the portfolio positions. This validates the appropriateness of the
market risk metrics for the end-of-day position.
"Real" backtesting: the daily VaR is compared with the total results, including intraday transactions, but
discounting the possible minimum charges or fees involved. This type of backtesting includes the
intraday risk in portfolios.
In addition, each of these two types of backtesting was carried out at the level of risk factor or business type, thus
making a deeper comparison of the results with respect to risk measurements.
In the period between the end of 2015 and the end of 2016,, it was carried out the backtesting of the internal
VaR calculation model, comparing the daily results obtained with the estimated risk level estimated by the VaR
calculation model. At the end of the year the comparison showed the model was working correctly, within the
"green" zone (0-4 exceptions), thus validating the model, as has occurred each year since the internal market risk
model was approved for the Group.
Stress test analysis
A number of stress tests are carried out on BBVA Group's trading portfolios. First, global and local historical
scenarios are used that replicate the behavior of an extreme past event, such as for example the collapse of
Lehman Brothers or the "Tequilazo" crisis. These stress tests are complemented with simulated scenarios, where
the aim is to generate scenarios that have a significant impact on the different portfolios, but without being
anchored to any specific historical scenario. Finally, for some portfolios or positions, fixed stress tests are also
carried out that have a significant impact on the market variables affecting these positions.
Historical scenarios
The historical benchmark stress scenario for the BBVA Group is Lehman Brothers, whose sudden collapse in
September 2008 led to a significant impact on the behavior of financial markets at a global level. The following
are the most relevant effects of this historical scenario:
• Credit shock: reflected mainly in the increase of credit spreads and downgrades in credit ratings.
•
•
Increased volatility in most of the financial markets (giving rise to a great deal of variation in the prices of
different assets (currency, equity, debt).
Liquidity shock in the financial systems, reflected by a major movement in interbank curves, particularly in
the shortest sections of the euro and dollar curves.
Simulated scenarios
Unlike the historical scenarios, which are fixed and therefore not suited to the composition of the risk portfolio at
all times, the scenario used for the exercises of economic stress is based on Resampling methodology. This
methodology is based on the use of dynamic scenarios are recalculated periodically depending on the main risks
held in the trading portfolios. On a data window wide enough to collect different periods of stress (data are taken
from January 1, 2008 until today), a simulation is performed by resampling of historic observations, generating a
loss distribution and profits to analyze most extreme of births in the selected historical window. The advantage of
this methodology is that the period of stress is not predetermined, but depends on the portfolio maintained at
each time, and making a large number of simulations (10,000 simulations) allows a richer information for the
analysis of expected shortfall than what is available in the scenarios included in the calculation of VaR.
The main features of this approach are: a) The generated simulations respect the correlation structure of the
data, b) Flexibility in the inclusion of new risk factors and c) allows to introduce a lot of variability in the
simulations (desirable to consider extreme events).
63
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
5.4.2 Structural risk
The Assets and Liabilities Committee (ALCO) is the key body for the management of structural risks relating to
liquidity/funding, interest rates, currency and solvency. Every month, with representatives from the areas of
Finance, Risks and Business Areas, this committee monitors the above risks and is presented with proposals for
managing them for its approval. These management proposals are made proactively by the Finance area, taking
into account the risk appetite framework and with the aim of guaranteeing recurrent earnings and preserving the
entity's solvency. All the balance-sheet management units have a local ALCO, assisted constantly by the members
of the Corporate Center. There is also a corporate ALCO where the management strategies in the Group's
subsidiaries are monitored and presented.
Structural interest-rate risk
The structural interest-rate risk (SIRR) is related to the potential impact that variations in market interest rates have
on an entity's net interest income and equity. In order to properly measure SIRR, BBVA takes into account the
main sources that generate this risk: reprising risk, yield curve risk, option risk and basis risk, which are analyzed
from two complementary points of view: net interest income (short term) and economic value (long term).
ALCO monitors the interest-rate risk metrics and the Finance area carries out the management proposals for the
structural balance sheet. The management objective is to ensure the stability of net interest income and book
value in the face of changes in market interest rates, while respecting the internal solvency and limits in the
different balance-sheets and for BBVA Group as a whole; and complying with current and future regulatory
requirements.
BBVA's structural interest-rate risk management control and monitoring is based on a set of metrics and tools that
enable the Entity's risk profile to be monitored correctly. A wide range of scenarios are measured on a regular
basis, including sensitivities to parallel movements in the event of different shocks, changes in slope and curve,
as well as delayed movements. Other probabilistic metrics based on statistical scenario-simulating methods are
also assessed, such as income at risk (IaR) and economic capital (EC), which are defined as the maximum
adverse deviations in net interest income and economic value, respectively, for a given confidence level and time
horizon. Impact thresholds are established on these management metrics both in terms of deviations in net
interest income and in terms of the impact on economic value. The process is carried out separately for each
currency to which the Group is exposed, and the diversification effect between currencies and business units is
considered after this.
In order to guarantee its effectiveness, the model is subjected to regular internal validation, which includes
backtesting. In addition, interest-rate risk exposures of the Banking book are subjected to different stress
scenarios in order to reveal balance sheet vulnerabilities under extreme scenarios. This testing includes an
analysis of adverse macroeconomic scenarios designed specifically by BBVA Research, together with a wide
range of potential scenarios that aim to identify interest-rate environments that are particularly damaging for the
Entity. This is done by generating extreme scenarios of a breakthrough in interest rate levels and historical
correlations, giving rise to sudden changes in the slopes and even to inverted curves.
The model is necessarily underpinned by an elaborate set of hypotheses that aim to reproduce the behavior of
the balance sheet as closely as possible to reality. Especially relevant among these assumptions are those related
to the behavior of “accounts with no explicit maturity”, for which stability and remuneration criterions are
established, consistent with an adequate segmentation by type of product and customer, and prepayment
estimates (implicit optionality). The hypotheses are reviewed and adapted, at least on an annual basis, to signs of
changes in behavior, kept properly documented and reviewed on a regular basis in the internal validation
processes.
The impacts on the metrics are assessed both from a point of view of economic value (gone concern) and from
the perspective of net interest income, for which a dynamic model (going concern) consistent with the corporate
assumptions of earnings forecasts is used.
In 2016 in Europe monetary policy has remained expansionary, which pushed interest rates lower, towards more
negative levels in short term rates. In The United States, Fed’s reference interest rate continues the upward cycle
initiated in 2015. While in Mexico, the upward interest rates cycle has intensified given the Mexican peso
evolution and the inflation prospects, setting the rates level at the maximum since 2009. In Turkey, the weakness
of the Turkish lira has led to a rise in rates in the last quarter of the year following declines in the first three
quarters. The main economies of South America appear to have completed the cycle of increases initiated at the
end of 2015.
64
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
The BBVA in all its Balance Sheet Management Units ("BSMUs") maintains a positive sensitivity in its net interest
income to an increase in interest rates. The entry of Turkey, has helped to diversify the Group's net exposure due
to the opposite direction of its position on Europe. The higher sensitivities in the net interest income, relatively
speaking, are observed in mature markets (Europe and USA), where, however, the negative sensitivity in their net
interest income to decrease in interest rates is limited by the plausible downward trend in interest rates. The
Group maintains a moderate risk profile, according to its target risk, through effective management of its balance
sheet structural risk.
Structural equity risk
BBVA's exposure to structural equity risk stems basically from investments in industrial and financial companies
with medium- and long-term investment horizons. This exposure is mitigated through net short positions held in
derivatives of their underlying assets, used to limit portfolio sensitivity to potential falls in prices.
Structural management of equity portfolios is the responsibility of the BBVA units specializing in this area. Their
activity is subject to the corporate risk management policies for equity positions in the equity portfolio. The aim is
to ensure that they are handled consistently with BBVA's business model and appropriately to its risk tolerance
level, thus enabling long-term business sustainability.
The BBVA risk management systems also make it possible to anticipate possible negative impacts and take
appropriate measures to prevent damage being caused to the Entity. The risk control and limitation mechanisms
are focused on the exposure, annual operating performance and economic capital estimated for each portfolio.
Economic capital is estimated in accordance with a corporate model based on Monte Carlo simulations, taking
into account the statistical performance of asset prices and the diversification existing among the different
exposures.
Backtesting is carried out on a regular basis on the risk measurement model used.
In the market, it is remarkable the underperformance of European stock markets in 2016, while main US stock
exchange indices have reached historical maximum levels. It is also noteworthy the upsurge in stock prices
volatililty , and the initial shock in the financial markets after the Brexit, due to the policy uncertainty that this
process entails and its potential impact on the Eurozone growth expectations. This effect led to a deterioration of
capital gains accumulated in the Group's equity portfolios as of the end of June, although it faded away as main
equity indices have recovered pre-Brexit levels.
Structural equity risk, measured in terms of economic capital, has decreased in the period as a result of the
reduction of the stake in China Citic Bank, along with lower positioning in some sectors. Stress tests and analyses
of sensitivity to different simulated scenarios are carried out periodically to analyze the risk profile in more depth.
They are based on both past crisis situations and forecasts made by BBVA Research. This checks that the risks
are limited and that the tolerance levels set by the Group are not at risk.
5.4.3 Financial instrument netting
Financial assets and liabilities may be netted, i.e. they are presented for a net amount on the balance sheet only
when the Group's entities comply with the provisions of IAS 32-Paragraph 42, so they have both the legal right to
net recognized amounts, and the intention of settling the net amount or of realizing the asset and simultaneously
paying the liability.
In addition, the Bank has unnetted assets and liabilities on the balance sheet for which there are master netting
arrangements in place, but for which there is neither the intention nor the right to settle. The most common
types of events that trigger the netting of reciprocal obligations are bankruptcy of the entity, swifter accumulation
of indebtedness, failure to pay, restructuring and dissolution of the entity.
In the current market context, derivatives are contracted under different framework contracts being the most
widespread developed by the International Swaps and Derivatives Association (ISDA) and, for the Spanish market,
the Framework Agreement on Financial Transactions (CMOF). Almost all portfolio derivative transactions have
been concluded under these framework contracts, including in them the netting clauses mentioned in the
preceding paragraph as "Master Netting Agreement", greatly reducing the credit exposure on these instruments.
Additionally, in contracts signed with professional counterparts, the collateral agreement annexes called Credit
Support Annex (CSA) are included, thereby minimizing exposure to a potential default of the counterparty.
65
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
Moreover, in transactions involving assets purchased or sold under a purchase agreement there has greatly
increased the volume transacted through clearing houses that articulate mechanisms to reduce counterparty risk,
as well as through the signature of various master agreements for bilateral transactions, the most widely used
being the Global Master Repurchase Agreement (GMRA), published by ICMA (International Capital Market
Association), to which the clauses related to the collateral exchange are usually added within the text of the
master agreement itself.
The assets and liabilities subject to contractual netting rights at the time of their settlement are presented below
as of December 31, 2016.
2016
Gross Amounts
Recognized (A)
Gross Amounts
Offset in the
Condensed
Consolidated
Balance Sheets (B)
Net Amount Presented
in the Condensed
Consolidated Balance
Sheets (C=A-B)
Millions of euros
Gross Amounts Not Offset in the Condensed
Consolidated Balance Sheets (D)
Financial Instruments
Cash Collateral
Net Amount
Received/ Pledged
(E=C-D)
Trading and hedging derivatives
Reverse repurchase, securities borrowing and similar agreements
Total Assets
Trading and hedging derivatives
Repurchase, securities lending and similar agreements
Total Liabillities
56,887
22,120
79,007
56,210
31,275
87,485
13,278
-
13,278
13,771
-
13,771
43,609
22,120
65,729
42,439
31,275
73,714
33,162
22,200
55,362
33,162
31,646
64,808
6,462
61
6,523
6,843
13
6,856
3,985
(141)
3,844
2,434
(384)
2,051
The amount of recognized financial instruments within derivatives includes the effect in case of compensation
with counterparties with which the bank holds netting agreements, while, for repos, it reflects the market value of
the collateral associated with the transaction.
Information on risk concentration by activity and geography is in Appendix XII, and the concentration of risks in
the real estate sector in Spain in Appendix XI.
5.5
Liquidity risk
5.5.1
Management of liquidity
Management of liquidity and structural finance within the BBVA Group is based on the principle of the financial
autonomy of the entities that make it up. This approach helps prevent and limit liquidity risk by reducing the
Group’s vulnerability in periods of high risk. This decentralized management avoids possible contagion due to a
crisis that could affect only one or several BBVA Group entities, which must cover their liquidity needs
independently in the markets where they operate. Liquidity Management Units (LMUs) have been set up for this
reason in the geographical areas where the main foreign subsidiaries operate, and also for the parent BBVA S.A.,
within the Euro currency scope, which includes BBVA Portugal.
A liquidity pool is maintained at an individual entity level, both in Banco Bilbao Vizcaya Argentaria, S.A. and in the
banking subsidiaries.The table below shows the liquidity available by instrument as of December 31, 2016 based
on the prudential supervisory information:
2016
BBVA Eurozone
(1)
Cash and balances with central banks
Assets for credit operations with central banks
Central governments issues
Of Which: Spanish government securities
Other issues
Loans
Other non-eligible liquid assets
ACCUMULATED AVAILABLE BALANCE
AVERAGE BALANCE
16,038
50,706
30,702
23,353
20,005
-
6,884
73,629
68,322
(1)
Includes Banco Bilbao Vizacaya Argentaria, S.A. and Banco Bilbao Vizcaya Argentaria (Portugal), S.A.
66
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
Finance Division, through Global ALM, manages BBVA Group's liquidity and funding. It plans and executes the
funding of the long-term structural gap of each LMUs and proposes to ALCO the actions to adopt in this regard in
accordance with the policies and limits established by the Standing Committee.
As first core element, The Bank's target behavior in terms of liquidity and funding risk is characterized through the
Liquidity Coverage Ratio (LCR) and the Loan-to-Stable-Customer-Deposits (LtSCD) ratio. LCR is a regulatory
measurement aimed at ensuring entities’ resistance in a scenario of liquidity stress within a time horizon of 30
days. BBVA, within its risk appetite framework and its limits and alerts scheme, has established a level of
requirement for compliance with the LCR ratio both for the Group as a whole and for each of the LMUs
individually. The internal levels required are geared to comply sufficiently and efficiently in advance with the
implementation of the regulatory requirement of 2018, at a level above 100%.
Throughout 2016 the level of the LCR for BBVA Group has remained above 100%. At the European level the
LCR ratio was effective beginning October 1, 2015, with an initial required level of 60%, and a phased-in level of
up to 100% in 2018.
The LtSCD measures the relation between the net credit investment and stable funds.The aim is to preserve a
stable funding structure in the medium term for each of the LMUs making up BBVA Group, taking into account
that maintaining an adequate volume of stable customer funds is key to achieving a sound liquidity profile.
Customer funds captured and managed by business units are defined as stable customer funds. These funds
usually show little sensitivity to market changes and are largely non-volatile in terms of aggregate amounts per
operation, thanks to customer linkage to the unit. Stable funds in each LMU are calculated by analyzing the
behavior of the balance sheets of the different customer segments identified as likely to provide stability to the
funding structure, and by prioritizing an established relationship and applying bigger haircuts to the funding lines
of less stable customers. The main base of stable funds is composed of deposits by individual customers and
small businesses.
For the purpose of establishing the (maximum) target levels for LtSCD in each LMU and providing an optimal
funding structure reference in terms of risk appetite, GRM-Structural Risks identifies and assesses the economic
and financial variables that condition the funding structures in the various geographical areas.
The second core element in liquidity and funding risk management is to achieve proper diversification of the
funding structure, avoiding excessive reliance on short-term funding and establishing a maximum level of short-
term borrowing comprising both wholesale funding as well as volatile funds from customers. Regarding long-term
funding, the maturity profile does not show significant concentrations, which enables adaptation of the
anticipated issuance schedule to the best financial conditions of the markets. Finally, concentration risk is
monitored at the LMU level, with a view to ensuring the right diversification both per counterparty and per
instrument type.
The third core element promotes the short-term resilience of the liquidity risk profile, making sure that each LMU
has sufficient collateral to address the risk of wholesale markets closing. Basic Capacity is the short-term liquidity
risk management and internal control metric that is defined as the relationship between the available explicit
assets and the maturities of wholesale liabilities and volatile funds, at different terms, with special relevance being
given to 30-day maturities.
Stress analyses are also a basic element of the liquidity and funding risk monitoring system, as they help
anticipate deviations from the liquidity targets and limits set out in the risk appetite as well as establish tolerance
ranges at different management levels. They also play a key role in the design of the Liquidity Contingency Plan
and in defining the specific measures for action for realigning the risk profile.
For each of the scenarios, a check is carried out whether the Bank has a sufficient liquid assets to meet the
liquidity commitments/outflows in the various periods analyzed. The analysis considers four scenarios, one core
and three crisis-related: systemic crisis; unexpected internal crisis with a considerable rating downgrade and/or
affecting the ability to issue in wholesale markets and the perception of business risk by the banking
intermediaries and the bank's customers; and a mixed scenario, as a combination of the two aforementioned
scenarios. Each scenario considers the following factors: liquidity existing on the market, customer behavior and
sources of funding, impact of rating downgrades, market values of liquid assets and collateral, and the interaction
between liquidity requirements and the performance of the bank's asset quality.
67
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting
principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-
language version prevails.
The results of these stress analyses carried out regularly reveal that BBVA has a sufficient buffer of liquid assets to
deal with the estimated liquidity outflows in a scenario such as a combination of a systemic crisis and an
unexpected internal crisis, during a period in general longer than 3 months for LMUs, including a major
downgrade in the bank's rating (by up to three notches).
Beside the results of stress exercises and risk metrics, Early Warning Indicators play an important role in the
corporate model and also in the Liquidity Contingency Plan. These are mainly financing structure indicators,
related to asset encumbrance, counterparty concentration, outflows of customer deposits, unexpected use of
credit lines, and market indicators, which help to anticipate potential risks and capture market expectations.
Long and short term wholesale funding markets were stable in 2016. The ECB carried out the new program
Targeted Longer-Term Refinancing Operations (TLTRO II), based on four quarterly targeted 4 years refinancing
operations, with the aim of boosting channeled lending and improving financial conditions for the whole
European economy. In the first auction the Euro LMU took €23.7 billion after amortizing €14 billion in previous
TLTRO auctions. In addition, over the whole year the Euro LMU made issues in the public market for €6,350
million, which has allowed it to obtain funding at favorable price conditions.
In this context, BBVA has maintained its objective of strengthening the funding structure of the different Group
entities based on growing their self-funding from stable customer funds, while guaranteeing a sufficient buffer of
fully available liquid assets, diversifying the various sources of funding available, and optimizing the generation of
collateral available for dealing with stress situations in the markets.
Below is a breakdown by contractual maturity of the balances of certain headings in the accompanying balance
sheets, excluding any valuation adjustments or impairment losses:
68
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting principles (Bank of Spain Circular 4/2004, and as amended
thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
December 2016
Contractual Maturities
Cash, cash balances at central banks and other demand
deposits
Deposits in credit entities
Deposits in other financial institutions
Reverse repo, securities borrowing and margin lending
Loans and Advances
Securities' portfolio settlement
December 2015
Contractual Maturities
Millions of Euros
Demand
Up to 1 Month
1 to 3 Months
3 to 6 Months 6 to 9 Months 9 to 12 Months 1 to 2 Years
2 to 3 Years
3 to 5 Years Over 5 Years
Total
2,213
13,825
-
-
-
82
-
839
630
19,533
9,498
210
-
61
548
542
9,744
2,460
-
38
159
523
8,607
2,351
-
5
87
-
6,395
1,058
Millions of Euros
-
28
141
428
6,601
2,620
-
1
405
500
-
-
424
285
-
21
639
124
19,354
13,636
13,829
4,083
24,924
5,311
-
16,038
4,262
259
189
87,304
30,904
5,255
3,292
22,125
186,338
62,633
Demand
Up to 1 Month
1 to 3 Months
3 to 6 Months 6 to 9 Months 9 to 12 Months
1 to 2 Years
2 to 3 Years
3 to 5 Years Over 5 Years
Total
Cash, cash balances at central banks and other demand deposits
Deposits in credit entities
Deposits in other financial institutions
Reverse repo, securities borrowing and margin lending
Loans and Advances
Securities' portfolio settlement
2,025
92
5
-
67
25
10,501
1,039
381
8,179
11,002
3,006
-
466
179
853
9,510
2,663
-
101
230
432
9,615
3,039
-
31
206
201
5,839
2,350
-
3
154
2,323
9,003
2,527
-
39
106
10
-
5
419
-
-
1
920
117
15,591
9,120
13,681
6,906
22,959
11,721
-
12,526
3,908
268
343
5,687
2,869
12,458
94,219
191,486
80,626
121,982
69
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accepted accounting principles (Bank of Spain Circular 4/2004, and as amended
thereafter, which adapts the EU-IFRS for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
Millions of Euros
December 2016
Contractual Maturities
Wholesale funding
Deposits in financial institutions
Deposits in other financial institutions and
international agencies
Customer deposits
Securitiy pledge funding
Derivatives (net)
Demand
Up to 1 Month
1 to 3 Months
3 to 6 Months 6 to 9 Months 9 to 12 Months 1 to 2 Years
2 to 3 Years
3 to 5 Years Over 5 Years
Total
-
1,949
12,670
96,186
-
-
7,026
3,558
4,502
10,172
22,791
(2,017)
1,980
469
6,039
11,116
3,327
(1)
3,938
196
2,013
9,852
522
(1)
1,768
396
1,693
8,947
486
(3)
Millions of Euros
4,603
332
761
9,442
912
4
4,740
53
5
5,368
51
-
1,687
10
4
4,647
174
(1)
8,465
-
51
775
23,795
-
21,263
2,328
55,470
9,291
253
1,875
1,608
-
27,992
158,379
53,666
(2,018)
December 2015
Demand
Up to 1 Month
1 to 3 Months
3 to 6 Months
6 to 9 Months 9 to 12 Months
1 to 2 Y ears
2 to 3 Years
3 to 5 Years
Over 5 Years
Total
C ontractual Maturities
W hole s ale f unding
De pos its in financial ins titutions
De pos its in oth e r financial ins titutions an d
inte rnatio nal age ncie s
C us tom e r d e pos its
Se cu ritiy ple dge fun ding
De rivative s (ne t)
-
2,3 17
11,0 52
79,1 95
-
-
3,464
3,485
7,083
11,919
27,990
(2,746 )
6,004
1,012
5,427
14,616
10,870
(4)
3,4 90
45 3
2,7 46
10,9 45
50 9
(11)
724
575
2,411
10,670
102
(3)
3,686
164
12 ,260
1,437
2,041
11,482
834
(2 )
91
9,269
451
(1)
4,301
828
1
2,937
13,989
-
5,2 94
1,1 79
7
3 20
1 96
-
22,051
3,910
61,277
9,655
273
1,097
978
-
31,133
15 2,449
55,921
(2,768)
70
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
5.5.2
Encumbered Assets
As of December 31, 2016, the encumbered (given as collateral for certain liabilities) and unencumbered assets
ate broken down as follows:
2016
Assets
Equity instruments
Debt Securities
Other assets
Millions of Euros
Encumbered assets
Unencumbered assets
Book value
Fair value
Book value
Fair Value
2,214
18,448
79,321
2,214
18,241
5,166
41,018
-
272,280
5,166
41,336
-
The committed value of "Loans and Advances and other assets" corresponds mainly to loans linked to the issue of
covered bonds, territorial bonds or long-term securitized bonds (see Note 20) as well as those used as a
guarantee to access certain funding transactions with central banks. Debt securities and equity instruments
respond to underlying that are delivered in repos with different types of counterparties, mainly clearing houses or
credit institutions, and to a lesser extent central banks. Collateral provided to guarantee derivative operations is
also included as committed assets.
As of December 31, 2016 collateral pledge mainly due to repurchase agreements and securities lending, and
those which could be committed in order to obtain funding are provided below:
2016
Collateral received
Collateral received
Equity instruments
Debt securities
Other collateral received
Own debt securities issued other than own
covered bonds or ABSs
Millions of Euros
Fair value of encumbered
collateral received or own debt
Fair value of collateral received
or own debt securities issued
Fair value of collateral received or
own debt securities issued not
securities issued
available for encumbrance
available for encumbrance
16,683
58
16,625
-
5
6,782
-
6,782
-
126
-
-
-
-
-
As of December 31, 2016, financial liabilities issued related to encumbered assets in financial transactions as well
as their book value were as follows:
2016
Sources of encumbrance
Matching liabilities, contingent liabilities or
securities lent
Assets, collateral received and own
debt securities issued other than covered
bonds and ABSs encumbered
Millions of Euros
Book value of financial liabilities
Derivatives
Loans and Advances
Outstanding subordinated debt
Other sources
5.6 Operational Risk
99,003
7,220
62,836
28,946
-
116,672
7,408
71,444
35,623
2,197
Operational risk is defined as one that could potentially cause losses due to human errors, inadequate or faulty
internal processes, system failures or external events. This definition includes legal risk and excludes strategic
and/or business risk and reputational risk.
Operational risk is inherent to all banking activities, products, systems and processes. Its origins are diverse
(processes, internal and external fraud, technology, human resources, commercial practices, disasters, suppliers).
71
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Operational risk management framework
Operational risk management in the Group is based on the value-adding drivers generated by the advanced
measurement approach (AMA), as follows:
• Active management of operational risk and its integration into day-to-day decision-making means:
− Knowledge of the real losses associated with this type of risk.
−
− The existence of indicators that enable the Bank to analyze operational risk over time, define warning
Identification, prioritization and management of real and potential risks.
signals and verify the effectiveness of the controls associated with each risk.
The above helps create a proactive model for making decisions about control and business, and for prioritizing
the efforts to mitigate relevant risks in order to reduce the Group's exposure to extreme events.
Improved control environment and strengthened corporate culture.
•
• Generation of a positive reputational impact.
• Model based on three lines of defense, aligned with international best practices.
Operational Risk Management Principles
Operational risk management in BBVA Group should:
• Be aligned with the risk appetite framework statement set out by the Board of Directors of BBVA.
• Anticipate the potential operational risks to which the Group would be exposed as a result of new or modified
products, activities, processes, systems or outsourcing decisions, and establish procedures to enable their
evaluation and reasonable mitigation prior to their implementation.
• Establish methodologies and procedures to enable a regular reassessment of the relevant operational risks to
which the Group is exposed in order to adopt appropriate mitigation measures in each case, once the
identified risk and the cost of mitigation (cost/benefit analysis) have been considered, while preserving the
Group's solvency at all times.
•
Identify the causes of the operational losses sustained by the Group and establish measures to reduce them.
Procedures must therefore be in place to enable the capture and analysis of the operational events that cause
those losses.
• Analyze the events that have caused operational risk losses in other institutions in the financial sector and
promote, where appropriate, the implementation of the measures needed to prevent them from occurring in
the Group.
•
Identify, analyze and quantify events with a low probability of occurrence and high impact in order to ensure
their mitigation. Due to their exceptional nature, it is possible that such events may not be included in the
loss database or, if they are, they have impacts that are not representative.
• Have an effective system of governance in place, where the functions and responsibilities of the areas and
bodies involved in operational risk management are clearly defined.
These principles reflect BBVA Group's vision of operational risk, on the basis that the resulting events have an
ultimate cause that should always be identified, and that the impact of the events is reduced significantly by
controlling that cause.
Irrespective of the adoption of all the possible measures and controls for preventing or reducing both the
frequency and severity of operational risk events, BBVA ensures at all times that sufficient capital is available to
cover any expected or unexpected losses that may occur.
72
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
6
Fair value of financial instruments
The fair value of financial instrument is defined as the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at the measurement date. It is therefore a
market-based measurement and not specific to each entity.
All financial instruments, both assets and liabilities are initially recognized at fair value, which at that point is
equivalent to the transaction price, unless there is evidence to the contrary in an active market. Subsequently,
depending on the type of financial instrument, it may continue to be registered at fair value through adjustments
in the profit and loss or equity.
When possible, the fair value is determined as the market price of a financial instrument. However, for many of
the assets and liabilities of the Group, especially in the case of derivatives, there is no market price available, so its
fair value is estimated on the basis of the price established in recent transactions involving similar instruments or,
in the absence thereof, by using mathematical measurement models that are sufficiently tried and trusted by the
international financial community. The estimates used in such models take into consideration the specific features
of the asset or liability to be measured and, in particular, the various types of risk associated with the asset or
liability. However, the limitations inherent in the measurement models and possible inaccuracies in the
assumptions and parameters required by these models may mean that the estimated fair value of a financial
asset or liability does not exactly match the price for which the asset or liability could be exchanged or settled on
the date of its measurement.
The process for determining the fair value established in the entity to ensure that trading portfolio assets are
properly valued, BBVA has established, at a geographic level, a structure of New Product Committees responsible
for validating and approving new products or types of assets and liabilities before being contracted. The members
of these Committees, responsible for valuation, are independent from the business (see Note 5).
These areas are required to ensure, prior to the approval stage, the existence of not only technical and human
resources, but also adequate informational sources to measure these financial assets and liabilities, in accordance
with the rules established by the Global Valuation Area and using models that have been validated and approved
by the Department of Methodologies that reports to Global Risk Management.
Additionally, for assets and liabilities that show significant uncertainty in inputs or model parameters used for
assessment, criteria is established to measure said uncertainty and activity limits are set based on these. Finally,
these measurements are compared, as much as possible, against other sources such as the measurements
obtained by the business teams or those obtained by other market participants.
The process for determining the fair value required the classification of the financial assets and liabilities according
to the measurement processes used set forth below:
• Level 1: Measurement using market observable quoted prices for the financial instrument in question,
secured from independent sources and referred to active markets - according to the Group policies. This level
includes listed debt securities, listed equity instruments, some derivatives and mutual funds.
• Level 2: Measurement that applies techniques using inputs drawn from observable market data.
• Level 3: Measurement using techniques where some of the material inputs are not taken from market
observable data. As of December 31, 2016, the affected instruments accounted for approximately 0.06% of
financial assets and 0.01% of the Group’s financial liabilities registered at fair value. Model selection and
validation is undertaken by control areas outside the market units.
73
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Below is a comparison of the carrying amount of the Bank’s financial instruments in the accompanying balance
sheets and their respective fair values.
Fair Value and Carrying Amount
ASSETS-
Cash and balances with central banks
Financial assets held for trading
Available-for-sale financial assets
Loans and receivables
Held-to-maturity investments
Derivatives – Hedge accounting
LIABILITIES-
Financial liabilities held for trading
Financial liabilities at amortized cost
Hedging derivatives
Millions of Euros
2016
2015
Notes
Carrying
Amount
Fair Value
Carrying
Amount
Fair Value
7
8
10
11
12
13
8
20
13
15,855
57,440
29,004
15,855
57,440
29,004
11,191
58,606
50,601
11,191
58,606
50,601
251,487
253,285
226,781
228,675
11,424
1,586
11,507
1,586
-
-
1,714
1,714
48,265
48,265
46,973
46,973
319,884
324,812
303,095
304,875
1,488
1,488
1,542
1,542
Not all assets and liabilities are recorded at fair value, so below we provide the information on financial
instruments at fair value and subsequently the information of those recorded at cost with an assigned value,
although this value is not used when accounting for these instruments.
6.1 Fair value of certain financial instruments registered at fair value using
valuation criteria
The following table shows the main financial instruments carried at fair value in the accompanying balance
sheets, broken down by the measurement technique used to determine their fair value:
Fair Value of financial Instruments by Levels Notes
ASSETS-
Millions of Euros
2016
2015
Level 1
Level 2
Level 3
Level 1
Level 2
Level 3
Financial assets held for trading
8
16,053
41,207
180
18,894
39,554
158
Loans and advances
Debt securities
Equity instruments
Derivatives
Available-for-sale financial assets
Debt securities
Equity instruments
Hedging Derivatives
LIABILITIES-
Financial liabilities held for trading
Derivatives
Short positions
Hedging Derivatives
-
24
96
60
30
30
-
-
47
47
-
-
-
13,692
3,880
1,322
49,539
45,650
3,889
-
-
417
2
39,135
912
911
1
1,714
8,172
38,764
919
38,764
7,253
-
-
1,542
-
24
92
42
22
22
-
-
37
37
-
-
10
13
8
13
-
11,109
3,769
1,175
28,066
24,717
3,349
-
-
412
7
40,788
752
751
1
1,586
8,230
39,989
916
39,989
7,314
-
-
1,488
74
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
The heading “Available-for-sale financial assets” in the accompanying balance sheets as of December 31, 2016
and 2015 additionally includes €156 and €128 million, respectively, accounted for at cost, as indicated in the
section of this Note entitled “Financial instruments at cost”.
The following table sets forth the main measurement techniques, hypothesis and inputs used in the estimation of
fair value of the financial instruments classified under Levels 2 and 3, based on the type of financial asset and
liability and the corresponding balances as of December 31, 2016:
Financial Instruments
Level 2
Fair Value
(Millions of
euros)
Debt securities
Financial assets held for trading
Financial assets designated at fair value
through profit or loss
Available-for-sale financial assets
Equity instruments
Financial assets held for trading
Available-for-sale financial assets
Derivatives
Derivatives
Financial assets held for trading
Financial liabilities held for trading
Hedging Derivatives
Assets
Liability
412
-
751
7
1
-
40,788
39,989
1,586
1,488
Valuation technique(s)
Unobservable inputs
Present-value method
(Discounted future cash flows)
Active price in inactive market
Comparable pricing
(Observable price in a similar market)
- Prepayment rates
- Issuer credit risk
- Current market interest rates
- Brokers/dealers quotes
- External contributing prices
- Market benchmarks
Comparable pricing
(Observable price in a similar market)
- Brokers quotes
- Market operations
- NAVs published
• Co mmo dities: Disco unted cash flo ws and mo ment
adjustment
• Credit pro ducts: Default mo del and Gaussian co pula
• Exchange rate pro ducts: Disco unted cash flo ws, B lack,
Lo cal Vo l and M o ment adjustment
• Fixed inco me pro ducts: Disco unted cash flo ws
• Equity instruments: Lo cal-Vo l, B lack, M o ment adjustment
and Disco unted cash flo ws
• Interest rate pro ducts:
- Interest rate swaps, Call mo ney Swaps y FRA : Disco unted
cash flo ws
- Caps/Flo o rs: B lack, Hull-White y SA B R
- B o nd o ptio ns: B lack
- Swaptio ns: B lack, Hull-White y LGM
- Interest rate o ptio ns: B lack, Hull-White y SA B R
- Co nstant M aturity Swaps: SA B R
- Exchange rates
- M arket quo ted future prices
- M arket interest rates
- Underlying assests prices: shares, funds,
co mmo dities
- M arket o bservable vo latilities
- Issuer credit spread levels
- Quo ted dividends
- M arket listed co rrelatio ns
75
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Financial Instruments
Level 3
Fair Value
(Millions of
euros)
Valuation technique(s)
Unobservable inputs
Debt securities
Financial assets held for trading
Available-for-sale financial assets
Equity instruments
Financial assets held for trading
Available-for-sale financial assets
Derivatives
Derivatives
Trading asset portfolio
Trading liability portfolio
Hedging Derivatives
Liability
Present-value method
(Discounted future cash flows)
Comparable pricing
(Comparison with prices of similar instruments)
Net Asset Value
Comparable pricing
(Comparison with prices of similar instruments)
Credit Option: Gaussian Copula
Equity OTC Options: Heston
Interest rate options: Libor Market Model
24
30
96
-
60
47
-
- Credit spread
- Reco very rates
- Interest rates
- M arket benchmark
- Prices o f similar instruments o r market
benchmark
- NA V pro vided by the administrato r o f
the fund
- Prices o f similar instruments o r market
benchmark
- Co rrelatio n default
- Credit spread
- Reco very rates
- Vo latility o f vo latility
- Interest rate yields
- Dividends
- Assets co rrelatio n
- Beta
- Co rrelatio n rate/credit
- Credit default vo latility
Quantitative information of non-observable inputs used to calculate Level 3 valuations is presented below:
Financial instrument
Valuation technique(s)
Debt Securities
Equity instruments
Net Present Value
Comparable pricing
Net Asset Value
Comparable pricing
Significant unobservable
inputs
Credit Spread
Recovery Rate
Min
Max
Average
61.23
40.00%
0.47%
396.76
61.46%
93.40%
225.58
40.30%
41.73%
Too wide Range to be relevant
Credit Option
Gaussian Copula
Correlation Default
0.48
0.73
0.67
Corporate Bond Option
Black 76
Price Volatillity
Equity OTC Option
Heston
Forward Volatility Skew
Beta
79.58
0.25
Interest Rate Option
Libor Market Model
Correlation Rate/Credit
(100.00)
Credit Default Volatility
0.00
5.16
79.58
18.00
100.00
0.00
79.58
Vegas
9.00
%
%
0.00
Vegas
Units
p.b.
%
%
%
Vegas
The techniques used for the assessment of the main instruments classified in Level 3, and its main unobservable
inputs, are described below:
• The net present value: This model uses the future cash flows of each instrument, which are established in the
different contracts, and discounted to their present value. This model often includes many observable market
parameters, but may also include unobservable market parameters directly, as described below:
− Credit Spread: represents the difference in yield of an instrument and the reference rate, reflecting the
additional return that a market participant would require to take the credit risk of that instrument.
Therefore, the credit spread of an instrument is part of the discount rate used to calculate the present
value of future cash flows.
− Recovery rate: defines how the percentage of principal and interest recovered from a debt instrument
that has defaulted.
76
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
• Comparable prices: prices of comparable instruments and benchmarks are used to calculate its yield from the
entry price or current rating making further adjustments to account for differences that may exist between
valued asset and it is taken reference. It can also be assumed that the price of an instrument is equivalent to
the other.
• Net asset value: represents the total value of the assets and liabilities of a fund and is published by the fund
manager thereof.
• Gaussian copula: dependent on credit instruments of various references, the joint density function to
integrate to value is constructed by a Gaussian copula that relates the marginal densities by a normal
distribution, usually extracted from the correlation matrix of events approaching default by CDS issuers.
• Black 76: variant of Black Scholes model, which main application is the valuation of bond options, caps floors
and swaptions to directly model the behavior of the Forward and not the own Spot.
• Heston: the model, typically applied to equity options assumes stochastic behavior of volatility. According to
which, the volatility follows a process that reverts to a long-term level and is correlated with the underlying
instrument. As opposed to local volatility models, in which the volatility evolves deterministically, the Heston
model is more flexible, allowing it to be similar to that observed in the short term today.
• Libor market model: This model assumes that the dynamics of the interest rate curve can be modeled based
on the set of forwards that compose the process. The correlation matrix is parameterized on the assumption
that the correlation between any two forwards decreases at a constant rate, beta, to the extent of the
difference in their respective due dates. The multifactorial frame of this model makes it ideal for the valuation
of instruments sensitive to the slope or curve.
Adjustments to the valuation for risk of default
The credit valuation adjustments (“CVA”) and debit valuation adjustments (“DVA”) are a part of derivative
valuations, both assets and liabilities, to reflect the impact in the fair value of the credit risk of the counterparty
and its own, respectively.
These adjustments are calculated by estimating Exposure At Default, Probability of Default and Loss Given
Default, for all derivative products on any instrument at the legal entity level (all counterparties under a same ISDA
/ CMOF) in which BBVA has exposure.
As a general rule, the calculation of CVA is done through simulations of market and credit variables to calculate
the expected positive exposure, given the Exposure at Default and multiplying the result by the Loss Given
Default of the counterparty. Consequently, the DVA is calculated as the result of the expected negative exposure
given the Exposure at Default and multiplying the result by the Loss Given Default of the counterparty. Both
calculations are performed throughout the entire period of potential exposure.
The information needed to calculate the exposure at default and the loss given default come from the credit
markets (Credit Default Swaps or iTraxx Indexes), save for cases where an internal rating is available. For those
cases where the information is not available, BBVA implements a mapping process based on the sector, rating
and geography to assign probabilities of both probability of default and loss given default, calibrated directly to
market or with an adjustment market factor for the probability of default and the historical expected loss.
The impact recorded under "Net gains (losses) on financial asset and liabilities" in the income statement for the
year ended December 31, 2016 corresponding to the credit risk assessment of the asset derivative positions as
"Credit Valuation Adjustment" (CVA) and liabilities derivative position as "Debit Valuation Adjustment" (DVA),
increased to -€199 million and €153 million, respectively. The impact recorded under “Gains or (-) losses on
financial assets and liabilities held for trading, net” in the income statement corresponding to the mentioned
adjustments was a net impact of -€18 million.
77
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Financial assets and liabilities classified as Level 3
The changes in the balance of Level 3 financial assets and liabilities included in the accompanying balance sheets
are as follows:
Financial Assets Level 3
Changes in the Period
Balance at the beginning
Changes in fair value recognized in profit and loss (*)
Changes in fair value not recognized in profit and loss
Acquisitions, disposals and liquidations
Net transfers to level 3
Exchange differences and others
Balance at the end
Millions of Euros
2016
2015
Assets
Liabilities
Assets
Liabilities
180
36
-
(23)
16
-
209
37
(6)
-
15
-
-
47
166
19
-
(77)
72
180
36
(2)
-
3
-
37
(*)
Profit or loss that is attributable to gains or losses relating to those assets and liabilities held at the end of the reporting
period. Valuation adjustments are recorded under the heading “Gains (losses) on financial assets and liabilities (net)”.
In 2016, the profit/loss on sales of financial instruments classified as level 3 recognized in the accompanying
income statement was not material.
Transfers between levels
The Global Valuation Area, in collaboration with the Technology and Methodology Area, has established the rules
for a proper financials assets held for trading classification according to the fair value hierarchy defined by
international accounting standards.
On a monthly basis, any new assets registered in the portfolio are classified, according to this criterion, by the
generating subsidiary. Then, there is a quarterly review of the portfolio in order to analyze the need for a change
in classification of any of these assets.
The financial instruments transferred between the different levels of measurement in 2016 are at the following
amounts in the accompanying balance sheets as of December 31, 2016:
Transfer between levels
ASSETS
Financial assets held for trading
Available-for-sale financial assets
Hedging Derivatives
Total
LIABILITIES-
Financial liabilities held for trading
Hedging Derivatives
Total
From:
To:
Level I
Millions of Euros
Level 2
Level 3
Level 2
Level 3
Level 1
Level 3
Level 1
Level 2
-
56
-
56
-
-
-
1
-
-
1
-
-
-
192
259
-
451
-
-
-
4
10
-
14
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
The amount of financial instruments that were transferred between levels of valuation for 2016 is insignificant
relative to the total portfolios, basically corresponding to the above revisions of the classification between levels
because these assets had modified some of its features . Specifically:
• The transfers between Tier 1 and 2 were produced mainly in debt securities, which are either no longer listed
on an active market (transfer from Tier 1 to 2) or are just starting to be listed (transfer from Tier 2 to 1).
• The transfers from Tier 2 to Tier 3 are due €13 million to debt securities and €2 million to equity instruments
for which observable data are not available in their valuation.
78
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Sensitivity Analysis
Sensitivity analysis is performed on products with significant unobservable inputs (products included in level 3), in
order to obtain a reasonable range of possible alternative valuations. This analysis is carried out on a monthly
basis, based on the criteria defined by the Global Valuation Area taking into account the nature of the methods
used for the assessment and the reliability and availability of inputs and proxies used. In order to establish, with a
sufficient degree of certainty, the valuating risk that is incurred in such assets without applying diversification
criteria between them.
As of December 31, 2016, the effect on the income and equity of changing the main hypotheses used for the
measurement of Level 3 financial instruments for other reasonably possible models, taking the highest (most
favorable hypotheses) or lowest (least favorable hypotheses) value of the range deemed probable, would be as
follows:
Financial Assets Level 3
Sensitivity Analysis
ASSETS
Financial assets held for trading
Available-for-sale financial assets
Hedging Derivatives
LIABILITIES-
Financial liabilities held for trading
Total
Millions of Euros
Potential Impact on Consolidated Income
Potential Impact on Total Equity
Most Favorable
Least Favorable
Most Favorable
Least Favorable
Hypothesis
Hypothesis
Hypothesis
Hypothesis
17
-
-
-
17
(30)
-
-
-
(30)
-
4
-
4
-
(3)
-
(3)
6.2 Fair value of financial instruments carried at cost
The valuation methods used to calculate the fair value of financial assets and liabilities carried at cost are
presented below:
• The fair value of "Cash and balances with central banks and other demand deposits" has been assimilated to
their book value, as it is mainly short-term balances.
• The fair value of the "Loans and receivables ", Held to maturity investments “and "financial liabilities at
amortized cost" was estimated using the method of discounted expected future cash flows using market
interest rates at the end of each year. Additionally, factors such as prepayment rates and correlations of
default are taken into account.
The following table presents key financial instruments carried at amortized cost in the accompanying balance
sheets, broken down according to the method of valuation used to estimate their fair value:
Fair Value of financial Instruments at
amortized cost by Levels
ASSETS-
Millions of Euros
Notes
Level 1
2016
Level 2
Level 3
Level 1
2015
Level 2
Level 3
Cash and cash balances at central
banks
Loans and receivables
Held-to-maturity investments
LIABILITIES-
Financial liabilities at amortized cost
7
11
12
20
15,855
-
-
11,191
-
-
-
10,991
242,293
11,496
-
-
11
-
-
-
-
324,812
-
-
-
2,988
225,687
-
-
-
304,875
79
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
The main valuation methods, hypotheses and inputs used to estimate the fair value of financial instruments
accounted for at cost and classified in levels 2 and 3 is shown below. These are broken down by type of financial
instrument and the balances correspond to those at December 31, 2016:
Financial Instruments
Level 2
Fair Value
(Millions of
euros)
Level 2
Loans and receivables
Debt securities
10,991
Level 3
Loans and receivables
Loans and advances to credit institutions
27,024
Loans and advances to customers
215,260
Debt securities
10
Financial liabilities at amortized cost
Deposits from central banks
Deposits from credit institutions
Customer deposits
Debt certificates
Other financial liabilities
26,629
45,143
210,830
35,133
7,077
Financial instruments at cost
Valuation technique(s)
Unobservable inputs
Present-value method
(Discounted future cash flows)
- Credit spread
- Interest rates
Present-value method
(Discounted future cash flows)
- Credit spread
- Prepayment rates
- Market interest rates
Present-value method
(Discounted future cash flows)
- Credit spread
- Prepayment rates
- Market interest rates
As of December 31, 2016 and 2015, equity instruments, derivatives with these equity instruments as underlying
assets, and certain discretionary profit-sharing arrangements in some companies, are recognized at cost in the
balance sheets because their fair value could not be reliably determined, as they are not traded in organized
markets and, thus, their unobservable inputs are significant. On the above dates, the balance of these financial
instruments recognized in the portfolio of available-for-sale financial assets amounted to €156 million and €128
million, respectively.
The table below outlines the financial assets and liabilities carried at cost that were sold in 2016 and 2015:
Sales of Financial Instruments at Cost
Amount of Sale (A)
Carrying Amount at Sale Date (B)
Gains/Losses (A-B)
Millions of Euros
December
2016
December
2015
149
8
141
29
22
7
80
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
7
Cash and cash balances at centrals and banks and other demands
deposits and Financial liabilities measured at amortized cost
The breakdown of the balance under the headings “Cash and cash balances at central banks and other demands
deposits” and "Financial liabilities at amortized cost – Deposits from central banks" in the accompanying balance
sheets is as follows:
Cash and cash balances at central banks
Cash on hand
Cash balances at central banks
Other demand deposits
Total
Financial liabilities measured at amortised cost
Deposits from Central Banks
Deposits from Central Banks (*)
Repurchase agreements
Accrued interest until expiration
Total
Millions of Euros
2016
2015
879
14,913
63
15,855
825
10,283
83
11,191
Millions of Euros
Notes
2016
2015
31
20
26,505
115
9
26,629
19,238
389
15
19,642
(*) The increase in this item is due to the participation in the different TLTRO programs (see Note 5.5)
8
Financial assets and liabilities held for trading
The breakdown of the balance under these headings in the accompanying balance sheets is as follows:
Financial Assets and Liabilities Held-for-Trading
ASSETS-
Derivatives
Equity instruments
Debt securities
Total
LIABILITIES-
Trading derivatives
Short positions
Other financial liabilities
Total
81
Millions of Euros
2016
2015
42,023
3,873
11,544
57,440
40,951
7,314
-
48,265
40,499
3,974
14,133
58,606
39,720
7,253
-
46,973
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
8.1 Debt securities
The breakdown by type of instrument of the balance under this heading in the accompanying balance sheets is
as follows:
Financial Assets Held-for-Trading
Debt securities by issuer
Issued by Central Banks
Spanish government bonds
Foreign government bonds
Issued by Spanish financial institutions
Issued by foreign financial institutions
Other debt securities
Total
Millions of Euros
2016
2015
-
4,840
5,306
218
391
789
11,544
-
7,414
4,843
329
642
905
14,133
The debt securities included under Financial Assets Held for Trading earned average annual interest of 0.324% in
2016 (0.703% in 2015).
8.2 Equity instruments
The breakdown of the balance under this heading in the accompanying balance sheets is as follows:
Financial Assets Held-for-Trading
Equity instruments by Issuer
Shares of Spanish companies
Credit institutions
Other sectors
Subtotal
Shares of foreign companies
Credit institutions
Other sectors
Subtotal
Shares in the net assets of mutual funds
Total
8.3 Derivatives
Millions of Euros
2016
2015
781
935
1,716
246
1,753
1,999
158
3,873
804
1,193
1,997
285
1,495
1,780
197
3,974
The derivatives portfolio arises from the Bank’s need to manage the risks incurred by it in the course of normal
business activity, as well as commercializing these products to large corporations, mutual funds, etc. As of
December 31, 2016 and 2015, derivatives are principally contracted in over-the-counter (OTC) markets, with
credit entities other financial corporations, and related to foreign-exchange, interest-rate and equity risk.
82
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Below is a breakdown of the net positions by transaction type of the fair value of outstanding financial derivatives
recognized in the accompanying balance sheets, divided into organized and OTC markets:
Millions of Euros
Assets
Liabilities
Derivatives by type of risk / by product or by type of
market - December 2016
Interest rate
OTC options
OTC other
Organized market options
Organized market other
Equity
OTC options
OTC other
Organized market options
Organized market other
Foreign exchange and gold
OTC options
OTC other
Organized market options
Organized market other
Credit
Credit default swap
Credit spread option
Total return swap
Other
Commodity
Other
DERIVATIVES
of which: OTC - credit institutions
of which: OTC - other financial corporations
of which: OTC - other
Notional amount -
Total
1,477,601
210,629
1,251,133
1,311
14,528
87,107
44,538
4,109
34,916
3,544
378,670
23,978
354,691
-
-
16,136
15,986
150
-
-
-
-
25,540
3,379
22,161
-
-
1,985
990
79
916
-
13,198
398
12,800
-
-
229
229
-
-
-
-
-
40,951
27,835
8,923
3,277
1,959,514
816,295
990,992
97,927
27,265
3,270
23,994
1
-
2,008
745
89
1,174
-
12,504
297
12,207
-
-
246
246
-
-
-
-
-
42,023
25,693
10,391
4,764
83
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Derivatives by type of risk / by product or by type of
market - December 2015
Interest rate
OTC options
OTC other
Organized market options
Organized market other
Equity
OTC options
OTC other
Organized market options
Organized market other
Foreign exchange and gold
OTC options
OTC other
Organized market options
Organized market other
Credit
Credit default swap
Credit spread option
Total return swap
Other
Commodity
Other
DERIVATIVES
of which: OTC - credit institutions
of which: OTC - other financial corporations
of which: OTC - other
Millions of Euros
Assets
Liabilities
26,759
3,221
23,538
-
-
3,044
1,625
97
1,322
-
10,206
208
9,998
-
-
488
435
1
-
52
2
-
40,499
25,766
9,142
4,269
25,278
3,298
21,980
-
-
2,783
1,762
103
918
-
11,262
297
10,965
-
-
392
391
1
-
-
5
-
39,720
27,974
7,817
3,009
Notional amount -
Total
1,194,675
196,278
987,451
-
10,946
106,613
66,612
3,580
33,837
2,584
390,279
30,836
359,443
-
-
30,707
30,247
450
-
10
18
-
1,722,292
922,300
655,437
97,172
9
Financial assets and liabilities at fair value through profit or loss
As of December 31, 2016 and 2015, this heading of the accompanying balance sheets had no balances.
10 Available-for-sale financial assets
10.1 Breakdown of the balance
The breakdown of the balance by the main financial instruments in the accompanying balance sheets is as
follows:
Available-for-Sale Financial Assets
Debt securities
Impairment losses
Subtotal
Equity instruments
Impairment losses
Subtotal
Total
84
Millions of Euros
2016
2015
25,640
(142)
25,498
3,603
(97)
3,506
29,004
46,666
(83)
46,583
4,103
(85)
4,018
50,601
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
The amount of the heading "Available-for-sale financial assets - Debt securities” decreases in 2016 mainly due to
the reclassification of certain debt securities to the heading “Loans and receivables- Debt securities” amounting to
€862 million (see Note 11) and to the heading “Held-to-maturity Investments” amounting to 11,162 (see Note
12).
10.2 Debt securities
The breakdown of the balance under the heading “Debt securities”, broken down by the nature of the financial
instruments, is as follows:
Available-for-sale financial assets
Debt Securities
December 2016
Domestic Debt Securities
Spanish Government and other government agency debt
securities
Other debt securities
Issue by Central Banks
Issue by credit institutions
Issue by other issuers
Subtotal
Foreign Debt Securities
Mexico
Mexican Government and other government agency debt
securities
Other debt securities
Issue by Central Banks
Issue by credit institutions
Issue by other issuers
The United States
Government securities
US Treasury and other US Government agencies
States and political subdivisions
Other debt securities
Issue by Central Banks
Issue by credit institutions
Issue by other issuers
Turkey
Turkey Government and other government agency debt
securities
Other debt securities
Issued by Central Banks
Issued by credit institutions
Issued by other issuers
Other countries
Other foreign governments and other government agency
debt securities
Other debt securities
Issue by Central Banks
Issue by credit institutions
Issue by other issuers
Subtotal
Total
Millions of Euros
Amortized
Unrealized
Unrealized
Cost (*)
Gains
Losses
Book
Value
13,288
1,072
224
848
14,360
627
133
494
494
1,809
157
157
1,652
34
1,618
-
-
-
-
-
8,187
4,822
3,365
16
216
3,133
10,623
24,983
372
9
2
7
381
2
2
2
11
-
11
1
10
-
-
-
-
-
270
251
19
1
18
283
664
(16)
(1)
(1)
(17)
(9)
(3)
(6)
(6)
(22)
-
13,644
1,080
226
854
14,724
620
130
490
490
1,798
157
157
(22)
1,641
(22)
35
1,606
-
-
-
-
-
(101)
(72)
(29)
(1)
(28)
(132)
(149)
-
-
-
-
-
8,356
5,001
3,355
16
216
3,123
10,774
25,498
85
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Available-for-sale financial assets
Debt Securities
December 2015
Domestic Debt Securities
Spanish Government and other government agency debt
securities
Other debt securities
Issue by Central Banks
Issue by credit institutions
Issue by other issuers
Subtotal
Foreign Debt Securities
Mexico
Mexican Government and other government agency debt
securities
Other debt securities
Issue by Central Banks
Issue by credit institutions
Issue by other issuers
The United States
Government securities
US Treasury and other US Government agencies
States and political subdivisions
Other debt securities
Issue by Central Banks
Issue by credit institutions
Issue by other issuers
Other countries
Other foreign governments and other government agency debt
securities
Other debt securities
Issue by Central Banks
Issue by credit institutions
Issue by other issuers
Subtotal
Total
Millions of Euros
Amortized
Unrealized
Unrealized
Cost (*)
Gains
Losses
Book
Value
25,570
3,217
-
1,775
1,442
28,787
653
131
522
-
-
522
2,781
151
151
-
2,630
33
2,597
13,294
7,088
6,206
16
488
5,702
16,728
45,515
1,003
59
-
32
27
1,062
-
-
-
-
-
-
6
-
-
-
6
-
6
494
481
13
-
1
12
500
1,562
(29)
(11)
-
-
(11)
(40)
(26)
(1)
(25)
-
-
(25)
(126)
-
-
-
26,544
3,265
-
1,807
1,458
29,809
627
130
497
-
-
497
2,661
151
151
-
(126)
2,510
-
(126)
(302)
(11)
(291)
-
(2)
(289)
(454)
(494)
33
2,477
13,486
7,558
5,928
16
487
5,425
16,774
46,583
86
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
10.3 Equity instruments
The breakdown of the balance under the heading "Equity instruments" as of December 31, 2016 and 2015 is as
follows:
Available-for-sale financial assets
Equity Instruments
December 2016
Equity instruments listed
Listed Spanish company shares
Credit institutions
Other entities
Listed foreign company shares
United States
Other countries
Subtotal
Unlisted equity instruments
Unlisted Spanish company shares
Credit institutions
Other entities
Unlisted foreign companies shares
United States
Other countries
Subtotal
Total
Available-for-sale financial assets
Equity Instruments
December 2015
Equity instruments listed
Listed Spanish company shares
Credit institutions
Other entities
Listed foreign company shares
United States
Other countries
Subtotal
Unlisted equity instruments
Unlisted Spanish company shares
Credit institutions
Other entities
Unlisted foreign companies shares
United States
Other countries
Subtotal
Total
Millions of Euros
Amortized
Unrealized
Unrealized
Cost
Gains
Losses
Book
Value
3,564
-
3,564
657
-
657
4,221
48
4
44
108
81
27
156
4,377
1
-
1
91
-
91
92
-
-
-
92
(950)
-
(950)
(13)
-
(13)
(963)
-
-
-
(963)
2,615
-
2,615
735
-
735
3,350
48
4
44
108
81
27
156
3,506
Millions of Euros
Amortized
Unrealized
Unrealized
Cost
Gains
Losses
Book
Value
1
-
1
124
1
123
125
-
-
-
-
-
-
-
(510)
-
(510)
(27)
(27)
(537)
-
-
-
-
-
-
-
125
(537)
2,804
-
2,804
1,086
19
1,067
3,890
50
-
50
78
51
27
128
4,018
3,313
-
3,313
989
18
971
4,302
50
-
50
78
51
27
128
4,430
87
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
10.4 Gains/losses
The changes in the gains/losses, net of taxes, recognized under the equity heading “Accumulated other
comprehensive income – Items that may be reclassified to profit or loss- Available-for-sale financial assets ” in the
accompanying balance sheets are as follows:
Accumulated other comprehensive income-Items that may be reclassified
to profit or loss-
Available-for-Sale Financial Assets
Balance at the beginning
Valuation gains and losses
Income tax
Amounts transferred to income
Other reclassifications
Balance at the end
Of which:
Debt securities
Equity instruments
Millions of Euros
2016
2015
458
217
(80)
(800)
(205)
660
(865)
1,781
(723)
567
(1,167)
-
458
747
(289)
No additional impairment has been estimated, as following an analysis according to the criteria of the Note 2.2.
During 2016, the losses recognized, mainly for certain Debt in the heading “Impairment or reversal of impairment
on financial assets not measured at fair value through profit or loss- Available- for-sale financial assets”, amounted
to €174 million (Note 42).
11 Loans and receivables
The breakdown of the balance under this heading in the accompanying balance sheets, according to the nature
of the financial instrument, is as follows:
Loans and Receivables
Notes
2016
2015
Loans and advances to credit institutions
Loans and advances to customers
Debt securities
Total
11.1
11.2
11.3
26,596
213,890
11,001
251,487
25,146
197,422
4,213
226,781
Millions of Euros
88
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
11.1 Loans and advances to credit institutions
The breakdown of the balance under this heading in the accompanying balance sheets, according to the nature
of the financial instrument, is as follows:
Loans and Advances to Central Banks and Credit Institutions
Notes
2016
2015
Millions of Euros
Loans and advances to central banks
Loans and advances to credit institutions
Deposits with agreed maturity
Reverse repurchase agreements
Other accounts
Total gross
Valuation adjustments
Impairment losses
Accrued interest and fees
Hedging derivatives and others
Total
31
5.3.1
5.3.4
-
26,597
2,547
14,908
9,142
26,597
(1)
(13)
13
-
26,596
-
25,145
3,342
12,033
9,770
25,145
1
(21)
22
-
25,146
11.2 Loans and advances to customers
The breakdown of the balance under this heading in the accompanying balance sheets, according to the nature
of the financial instrument, is as follows:
Loans and Advances to Customers
Notes
2016
2015
Millions of Euros
Mortgage secured loans
Operating assets mortgage loans
Home mortgages
Rest of mortgages
Other loans secured with security interest
Cash guarantees
Secured loan (pledged securities)
Rest of secured loans (*)
Unsecured loans
Credit lines
Commercial credit
Receivable on demand and other
Credit cards
Finance leases
Reverse repurchase agreements
Financial paper
Impaired assets
Total gross
Valuation adjustments
Impairment losses
Derivatives – Hedge accounting and others
Rest of valuation adjustments
Total net
5.3.4
5.3.1
5.3.4
89
93,237
2,065
80,207
10,965
3,023
95
388
2,540
69,359
9,731
10,425
2,120
1,813
3,057
7,212
5,253
16,736
221,966
(8,076)
(9,414)
483
855
213,890
83,249
1,810
70,540
10,899
2,672
70
418
2,184
67,008
10,681
9,457
1,827
1,244
2,771
4,814
4,644
16,533
204,900
(7,478)
(8,561)
319
764
197,422
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
As of December 31, 2016, 10% of "Loans and advances to customers" with a maturity greater than one year
were concluded with fixed-interest rates and 90% with variable interest rates.
The heading “Loans and advances to customers” includes financial lease arrangements provided by various
entities in the Bank for their customers to finance the purchase of assets, including movable and immovable
property. The breakdown of the financial lease arrangements as of December 31, 2016 and 2015 is as follows:
Financial Lease Arrangements
Movable property
Real Estate
Fixed rate
Floating rate
Millions of Euros
2016
2015
1,728
1,329
1,661
1,396
1,415
1,356
1,309
1,462
The heading “Loans and receivables – Loans and advances to customers” in the accompanying balance sheets
also includes certain mortgage loans that, as mentioned in Note 5.6 and pursuant to the Mortgage Market Act,
are considered a suitable guarantee for the issue of long-term mortgage covered bonds (see Appendix X).
Additionally, this heading also includes certain loans that have been securitized and that have not been
derecognized since the Bank has retained substantially all the related risks or rewards due to the fact that it has
granted subordinated debt or other types of credit enhancements that absorb either substantially all expected
credit losses on the asset transferred or the probable variation in attendant net cash flows.
The amounts recognized in the balance sheets corresponding to these securitized loans are as follows:
Securitized Loans
Securitized mortgage assets
Other securitized assets
Commercial and industrial loans
Finance leases
Loans to individuals
Total
11.3 Debt securities
Millions of Euros
2016
2015
28,443
3,364
3,226
86
52
31,807
24,983
3,229
3,018
122
89
28,212
The breakdown of the balance under this heading in the accompanying balance sheets, according to the nature
of the financial instrument, is as follows:
Debt securities
Government
Credit institutions
Other s ectors (*)
Total gross
Impairment losses
Total net
Millions of Euros
Notes
2016
2015
4,094
12
6,900
11,006
(5)
11,001
2,563
12
1,644
4,219
(6)
4,213
5.3.1
5.3.5
The increase in 2016, is mainly due to the incorporation of Catalunya Banc and to some debt securities that were
reclassified from "Available-for-sale financial assets" to “Loans and receivables-Debt securities”.
90
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
The following table shows the fair value and carrying amounts of these reclassified financial assets:
Debt Securities reclassified to "Loans and
receivables" from "Available-for-sale financial
Carrying Amount
Fair Value
Carrying Amount
Fair Value
As of Reclassification date
As of December 31, 2016
Millions of Euros
assets"
General Governments
Other sectors
Total
853
9
862
853
9
862
731
113
844
747
116
863
The following table presents the amount recognized in 2016 income statement from the valuation at amortized
cost of the reclassified financial assets, as well as the impact recognized on the income statement and under the
heading “Total Equity - Accumulated other comprehensive income”, as of December 31, 2016, if the
reclassification was not performed.
Effect on Income Statement and Other
Comprehensive Income
General Governments
Total
Millions of Euros
Recognized in
Effect of not Reclassifying
Income
Statement
22
22
Income Statement
"Valuation
Equity
Adjustments"
(5)
(5)
22
22
12 Held-to-maturity investments
The breakdown of the balance under this heading in the accompanying balance sheets, according to the
according to the issuer of the financial instrument, is as follows:
Held-to-Maturity Investments (*)
Domestic Debt Securities
Spanish Government and other government agency
debt securities
Other Domestic Securities
Credit institutions
Other resident
Subtotal
Foreign Debt Securities
Government and other government agency debt
securities
Others securities
Credit institutions
Other non resident
Subtotal
Valuation adjustments
Total
(*)
Millions of Euros
December
2016
8,063
562
494
68
8,625
2,719
79
58
22
2,799
-
11,424
As of December, 2015 BBVA has not registered any balances in this heading.
91
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
In the year 2016, some debt securities were reclassified from "Available-for-sale financial assets" to “Held-to-
maturity investments” amounted to €11,162 million, due to the intention the Bank regarding how to manage
such securities, is held to maturity.
The following table shows the fair value and carrying amounts of these reclassified financial assets:
As of Reclassification date
As of December 31, 2016
Millions of Euros
Debt Securities reclassified to "Held to Maturity
Carrying
Investments"
General Governments
Credit institutions
Other sectors
Total
Amount
10,321
614
227
11,162
Fair Value
Carrying
Amount
Fair Value
10,321
614
227
11,162
8,948
551
90
9,589
8,991
553
91
9,635
The fair value carrying amount of these financials asset on the date of the reclassification becomes its new
amortized cost. The previous gain on that asset that has been recognized in “Accumulated other comprehensive
income – Items that may be reclassified to profit or loss - Available for sale financial assets” is amortized to profit
or loss over the remaining life of the held-to-maturity investment using the effective interest method. Any
difference between the new amortized cost and maturity amount is also amortized over the remaining life of the
financial asset using the effective interest method, similar to the amortization of a premium and a discount. This
reclassification was triggered by a change in the Group´s strategy regarding the management of these securities.
The following table presents the amount recognized in the 2016 income statement from the valuation at
amortized cost of the reclassified financial assets, as well as the impact recognized on the income statement and
under the heading “Total Equity - Accumulated other comprehensive income”, as of December 31, 2016, if the
reclassification was not performed.
Millions of Euros
R e c o gnize d in
E f f e c t o f no t R e c la s s if ying
Equity
Effect on Income Statement and
Other Comprehensive Income
Income
Statement
Income Statement
"Accumulated other
comprehensive
income"
General Governments
Credit institutions
Other sectors
Total
211
14
5
230
211
14
5
230
(76)
(8)
(1)
(86)
92
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
13 Hedging derivatives and fair value changes of the hedged items in
portfolio hedge of interest rate risk
The balance of these headings in the accompanying balance sheets is as follows:
Hedging derivatives and fair value changes of the hedged
items in portfolio hedge of interest rate risk
ASSETS-
Derivatives – Hedge accounting
Fair value changes of the hedged items in portfolio hedges
of interest rate risk
LIABILITIES-
Derivatives – Hedge accounting
Fair value changes of the hedged items in portfolio hedges
of interest rate risk
Millions of Euros
2016
2015
1,586
1,714
17
54
1,488
1,542
-
-
As of December 31, 2016 and 2015, the main positions hedged by the Bank and the derivatives assigned to
hedge those positions were:
• Fair value hedging:
− Available-for-sale fixed-interest debt securities: This risk is hedged using interest-rate derivatives (fixed-
variable swaps).
− Long-term fixed-interest debt securities issued by the Bank: This risk is hedged using interest-rate
derivatives (fixed-variable swaps).
− Available-for-sale equity instruments: This risk is hedged using equity forwards.
− Fixed-interest loans: This risk is hedged using interest-rate derivatives (fixed-variable swaps).
− Fixed-interest and/or embedded derivative deposit portfolio hedges: it covers the interest rate risk
through fixed-variable swaps. The valuation of the loan deposits corresponding to the interest rate risk is
in the heading "Fair value changes of the hedged items in portfolio hedges of interest rate risk”.
• Cash-flow hedges
Most of the hedged items are floating interest-rate loans and asset hedges linked to the inflation of the
available for sale portfolio. This risk is hedged using foreign-exchange and interest-rate swaps, inflation and
FRA’s (“Forward Rate Agreement”).
• Net foreign-currency investment hedges
The risks hedged are foreign-currency investments in the Bank’s subsidiaries based abroad. This risk is
hedged mainly with foreign-exchange options and forward currency sales and purchases.
Note 5 analyzes the Bank's main risks that are hedged using these financial instruments.
93
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
The details of the net positions by hedged risk of the fair value of the hedging derivatives recognized in the
accompanying balance sheets are as follows:
Derivatives - Hedge accounting
Millions of Euros
Notional
Breakdown by type of risk and type of hedge
Assets
Liabilities
amount - Total
December 2016
Interest rate
OTC options
OTC other
Organized market options
Organized market other
Equity
Foreign exchange and gold
Credit
Commodity
Other
1,419
120
1,299
-
-
-
-
-
-
-
FAIR VALUE HEDGES
1,419
Interest rate
OTC options
OTC other
Organized market options
Organized market other
Equity
Foreign exchange and gold
OTC options
OTC other
Organized market options
Organized market other
Credit
Commodity
Other
36
-
36
-
-
-
89
89
-
-
-
-
-
-
hedging
58,116
404
57,712
-
-
-
-
-
-
-
58,116
16,380
-
16,380
-
-
-
4,331
4,331
-
-
-
-
-
-
979
118
861
-
-
-
-
-
-
-
979
225
-
225
-
-
-
70
70
-
-
-
-
-
-
CASH FLOW HEDGES
125
295
20,711
HEDGE OF NET INVESTMENTS IN A FOREIGN
OPERATION
PORTFOLIO FAIR VALUE HEDGES OF INTEREST
RATE RISK
PORTFOLIO CASH FLOW HEDGES OF INTEREST
RATE RISK
DERIVATIVES-HEDGE ACCOUNTING
of which: OTC - credit institutions
of which: OTC - other financial corporations
of which: OTC - other
-
42
-
1,586
1,500
86
-
-
-
214
12,735
-
1,488
1,386
84
18
-
91,562
26,455
64,847
260
94
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Derivatives - Hedge accounting
Millions of Euros
Notional
Breakdown by type of risk and type of hedge
Assets
Liabilities
amount - Total
December 2015
Interest rate
OTC options
OTC other
Organized market options
Organized market other
Equity
Foreign exchange and gold
Credit
Commodity
Other
1,557
187
1,370
-
-
1
-
-
-
-
1,040
128
912
hedging
51,849
311
51,538
-
-
-
-
-
-
-
FAIR VALUE HEDGES
1,558
1,040
Interest rate
OTC options
OTC other
Organized market options
Organized market other
Equity
Foreign exchange and gold
OTC options
OTC other
Organized market options
Organized market other
Credit
Commodity
Other
CASH FLOW HEDGES
HEDGE OF NET INVESTMENTS IN A FOREIGN
OPERATION
PORTFOLIO FAIR VALUE HEDGES OF INTEREST
RATE RISK
PORTFOLIO CASH FLOW HEDGES OF INTEREST
RATE RISK
DERIVATIVES-HEDGE ACCOUNTING
of which: OTC - credit institutions
of which: OTC - other financial corporations
of which: OTC - other
64
-
64
-
-
-
42
42
-
-
-
-
-
-
106
-
50
-
1,714
1,655
58
1
204
-
204
-
-
-
12
12
-
-
-
-
-
-
216
-
286
-
1,542
1,278
234
30
95
-
-
-
-
-
-
-
51,849
6,580
-
6,580
-
-
-
1,493
1,493
-
-
-
-
-
-
8,073
-
9,928
-
69,850
23,080
46,510
260
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
The cash flows forecasts for the coming years for cash flow hedging recognized on the accompanying balance
sheet as of December 31, 2016 are:
Cash Flows of Hedging Instruments
Receivable cash inflows
Payable cash outflows
Millions of Euros
3 Months or
Less
From 3
Months to 1
Year
From 1 to 5
More than 5
Years
Years
Total
17
9
47
29
227
148
210
120
501
306
The above cash flows will have an effect on the income statements until the year 2026.
In 2016 and 2015, there was no reclassification in the accompanying income statements of any amount
corresponding to cash flow hedges that was previously recognized in equity.
As of December 31, 2016 and 2015 there was no hedge accounting that did not pass the effectiveness test.
14 Investments in subsidiaries, joint ventures and associates
14.1 Investments in Group entities
The heading Investments - Group Entities in the accompanying balance sheets includes the carrying amount of
the shares of companies forming part of the BBVA Group. The percentages of direct and indirect ownership and
other relevant information on these companies are provided in Appendix II.
96
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
The breakdown, by currency and listing status, of this heading in the accompanying balance sheets is as follows:
Subsidaries
Breakdown by entities
Subsidiaries
By currency:
In euros
In foreign currencies
By share price
Listed
Unlisted
Impairment losses
Total
Millions of Euros
2016
2015
42,656
17,112
25,544
42,656
6,335
36,321
(12,833)
29,823
36,772
11,006
25,766
36,772
6,388
30,384
(5,587)
31,185
The changes in 2016 and 2015 in the balance under this heading in the balance sheets, disregarding the
balance of the impairment losses, are as follows:
Subsidaries
Changes in the Year
Balance at the beginning
Acquisitions and capital increases
Losses due to merger transactions
Disposals and capital reductions
Transfers
Exchange differences and others
Balance at the end
Millions of Euros
2016
2015
36,772
15
6,326
(80)
(1)
(376)
42,656
28,639
2,098
-
(57)
5,763
329
36,772
Changes in the holdings in Group entities
The most notable transactions performed in 2016 and 2015 are as follows:
Changes in 2016
Mergers
The BBVA Group, at its Board of Directors meeting held on March 31, 2016, adopted a resolution to begin a
merger process of BBVA S.A. (absorbing company), Catalunya Banc, S.A., Banco Depositario BBVA, S.A. y Unoe
Bank, S.A.
This transaction is part of the corporate reorganization of its banking subsidiaries in Spain and has been
successfully completed throughout 2016.
Changes in 2015
Investments
97
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Acquisition of an additional 14.9% of Garanti
On November 19, 2014 BBVA Group entered into a new agreement with Dogus Holding A.S., Ferit Faik Şahenk,
Dianne Şahenk and Defne Şahenk (“Dogus”) for the acquisition of 62,538,000,000 shares of Garanti at a
maximum total consideration of 8.90 Turkish Liras per share (Garanti is listed in sets of 100 shares each).
In the same agreement stated that if the payment of dividends for the year 2014 was executed by Dogus before
the closing of the acquisition, that amount would be deducted from the amount payable by BBVA. On April 27,
2015, Dogus received the amount of the dividend paid to shareholders of Garanti, which amounted to Turkish
Liras 0,135 per batch.
On July 27, 2015, after obtaining all the required regulatory approvals, the Group has materialized said
participation increase after the acquisition of the new shares. Now the Group's interest in Garanti is 39.9%.
This participation was reclassified from Investments in Joint Ventures to Investments in Group entities. The total
price effectively paid by BBVA amounts to 8.765 TL per batch (amounting to approximately TL 5,481 million and
€1,854 million applying a 2,9571 TL/EUR exchange rate).
Acquisition of Catalunya Banc
On July 21, 2014, the Management Commission of the Banking Restructuring Fund (known as “FROB”) accepted
BBVA´s bid in the competitive auction for the acquisition of Catalunya Banc, S.A. (“Catalunya Banc”). On April 24,
2015, once the necessary authorizations have been obtained and all the agreed conditions precedent have been
fulfilled, BBVA announced that it acquired 1,947,166,809 shares of Catalunya Banc, S.A. (approximately 98.4%
of its share capital) for a price of approximately €1,165 million.
Capital increase in Anida Grupo Inmobiliario
On December 17, 2015 BBVA fully subscribed an increase of capital in Anida Grupo Imobiliario by € 300 million.
Preferred shares issue in BBVA Compass Bancshares, Inc.
On December 2, 2015 BBVA fully subscribed a preferred shares issue of BBVA Compass Bancshares, Inc. by
$230 million (approximately €217 million)
Acquisition of BBVA Seguros
On July 21, 2015, BBVA acquired a 5.60% stake in BBVASEGUROS, S.A. DE SEGUROS Y REASEGUROS from
Corporación General Financiera, S.A. (subsidiary of BBVA Group) by €170 million.
Acquisition of Banco Depositario
On December 23, 2015, BBVA acquired a 90.37% stake in Banco Depositario BBVA. S.A. from Corporación
General Financiera, S.A. (subsidiary of BBVA Group) by €129 million.
Divestitures
Partial sale of China CITIC Bank Corporation Limited (CNCB)
On January 23, 2015 the Group BBVA signed an agreement to sell 4.9% in China CITIC Bank Corporation
Limited (CNCB) to UBS AG, London Branch (UBS), who entered into transactions pursuant to which such CNCB
shares will be transferred to a third party and the ultimate economic benefit of ownership of such CNCB shares
will be transferred to Xinhu Zhongbao Co., Ltd (Xinhu) (the Relevant Transactions). On March 12, 2015, after
having obtained the necessary approvals, BBVA completed the sale.
The selling price to UBS is HK$ 5.73 per share, amounting to a total of HK$ 13,136 million, equivalent to
approximately €1,555 million (with an exchange rate of EUR/HK$=8.45 as of the date of the closing).
98
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
In addition to the above mentioned 4.9%, during the year ended December 31, 2015 various sales were made
in the market to total a 1.45.% participation sale. This gain gross of taxes amounted to €499 million, was
recognized under "Profit or (-) loss from non-current assets and disposal groups classified as held for sale not
qualifying as discontinued operations” (See Note 45).
Sale of the participation in Citic International Financial Holding (CIFH)
On December 23, 2014, the BBVA Group signed an agreement to sell its participation of 29.68% in Citic
International Financial Holdings Limited (hereinafter “CIFH”), to China CITIC Bank Corporation Limited (hereinafter
“CNCB”). CIFH is a non-listed subsidiary of CNCB domiciled in Hong Kong. The selling price is HK$8,162 million.
On August 27, 2015, the sale of this participation was completed. The gain gross amounted to €403 million,
registered under the heading “Profit or loss from non-current assets and disposal groups classified as held for sale
not qualifying as discontinued operations of 2015 (see Note 45).
14.2 Investments in joint ventures and associates
The breakdown, by currency and listing status, of this heading in the accompanying balance sheets is as follows:
Associates and joint ventures Entities.
Breakdown by entities
Associates Entities
By currency:
In euros
In foreign currencies
By share price
Listed
Unlisted
Impairment losses
Subtotal
Joint ventures
By currency:
In euros
In foreign currencies
By share price
Listed
Unlisted
Impairment losses
Subtotal
Total
Millions of Euros
2016
2015
468
393
75
468
-
468
(91)
377
19
19
-
19
-
19
(1)
18
587
564
23
587
6
581
(191)
396
18
18
-
18
-
18
-
18
395
414
The investments in associates as of December 31, 2016, as well as the most important data related to them, can
be seen in Appendix III.
99
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
The following is a summary of the gross changes in 2016 and 2015 under this heading in the accompanying
balance sheets:
Associates and joint ventures Entities.
Changes in the Year
Balance at the beginning
Acquisitions and capital increases
Losses due to merger transactions
Disposals and capital reductions
Transfers
Exchange differences and others
Balance at the end
Millions of Euros
2016
2015
605
231
4
(6)
(342)
(5)
487
4,362
2,015
-
-
(5,767)
(5)
605
The changes in joint venture entities in 2015 relates mainly to the acquisition of an additional 14.89% in Garanti
Bank and the following reclassification to “Holdings in Group entities” (see changes in “Holdings in Group entities”).
The 2016 movement is mainly explained, by:
•
•
•
In January 2016, two capital increases were made of Metrovacesa through a debt swap and a
contribution of real estate assets, which provided the bank 194 million euros, including the share
premium.
In March 2016, there was a partial split of Metrovacesa, S.A in favor of a beneficiary company from a
new constitution denominated Metrovacesa Suelo y Promocion, S.A, through the transfer in block and by
universal succession of the patrimony belonging to its branch activity of floor and real estate promotion.
In October 2016, there was a total split of Metrovacesa, S.A through its extinction and division of its
patrimony in three parts (Commercial Patrimony, Residential Patrimony and Non-Strategic Patrimony)
that have been transmitted in block and by universal succession to Merlin Properties, SOCIMI, S.A, Testa
Residencial, SOCIMI, S.A and Metrovacesa Promoción y Arrendamiento, S.A, respectively.
• As result of the previous mentioned splits, the Bank has received equity interests in the corresponding
beneficiary companies. In the case of Merlin Properties, SOCIMI, S.A, 4.97% of its capital was received,
having been transferred to the heading "Available-for-sale financial assets. (see Note 10)
14.3 Notifications about acquisition of holdings
Appendix IV provides notifications on acquisitions and disposals of holdings in associates or jointly-controlled
entities, in compliance with Article 155 of the Corporations Act and Article 53 of the Securities Market Act
24/1988.
100
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
14.4 Impairment
The breakdown of the changes in impairment losses in 2016 and 2015 under this heading is as follows:
Impairment
Balance at the beginning
Increase in impairment losses charged to income
Decrease in impairment losses credited to income
43
43
Losses due to merger transactions
Amount used
Transfers
Balance at the end
Millions of Euros
Notes
2016
2015
5,778
316
(169)
7,101
(7)
(94)
12,925
6,848
411
(1,246)
-
(235)
-
5,778
As a result of the improvement in the future expectations for BBVA USA Bancshares, the difference between the
carrying amount and the present value of expected cash flows has been reduced by €1,203 million in 2015.
This figure has been charged under the heading "Impairment or reversal of impairment on non-financial assets" in
the income statement for 2015 (see Note 43). The changes in impairment include the exchange differences
resulting from applying the dollar exchange rate at the close of each year and comparing it with the carrying
amount exchange rate (exchange rate at the time of the acquisition). As of December 31, 2016 there is no
impairment recorded for this investment.
101
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
15 Tangible assets
The breakdown of the balance and changes under this heading in the accompanying balance sheets, according
to the nature of the related items, is as follows:
Tangible Assets. Breakdown by Type of
Assets and Changes in the year 2016
Land and
Buildings
Work in
Progress
For Own Use
Millions of Euros
Furniture,
Fixtures and
Vehicles
Total Tangible
Asset of Own
Use
Investment
Properties
Total
Revalued cost -
Balance at the beginning
Additions
Contributions from merger transactions (*)
Retirements
Transfers
Exchange difference and other
Balance at the end
Accrued depreciation -
Balance at the beginning
Additions
Contributions from merger transactions
Retirements
Transfers
Exchange difference and other
Balance at the end
Impairment -
Balance at the beginning
Additions
Contributions from merger transactions
Retirements
Transfers
Exchange difference and other
Balance at the end
Net tangible assets -
Balance at the beginning
Balance at the end
852
554
34
3
1,443
172
14
80
(1)
265
152
4
(2)
(1)
163
316
528
862
61
(59)
2
-
-
-
61
2
3,100
169
432
(143)
10
(1)
3,567
2,173
206
337
(123)
(6)
(1)
2,586
-
14
(14)
-
927
981
4,013
169
986
(143)
(15)
2
5,012
2,345
220
417
(123)
(6)
(2)
2,851
152
18
-
(2)
(1)
149
316
1,516
1,845
10
246
(224)
32
1
2
11
(9)
5
4
94
(85)
3
16
5
11
4,023
169
1,232
(143)
(239)
2
5,044
2,346
222
428
(123)
(15)
(2)
2,856
156
18
94
(2)
(86)
152
332
1,521
1,856
(*) Mainly as result of the integration of the companies Catalunya Banc, S.A., Custodian Bank BBVA, S.A. And
Unoe Bank, S.A. as indicated in Note 14.
102
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Tangible Assets. Breakdown by Type of
Assets and Changes in the year 2015
Land and
Buildings
Work in
Progress
For Own Use
Millions of Euros
Furniture,
Fixtures and
Vehicles
Total Tangible
Asset of Own
Use
Investment
Properties
Total
Revalued cost -
Balance at the beginning
Additions
Contributions from merger transactions
Retirements
Transfers
Exchange difference and other
Balance at the end
Accrued depreciation -
Balance at the beginning
Additions
Contributions from merger transactions
Retirements
Transfers
Exchange difference and other
Balance at the end
Impairment -
Balance at the beginning
Additions
Contributions from merger transactions
Retirements
Transfers
Exchange difference and other
Balance at the end
Net tangible assets -
Balance at the beginning
Balance at the end
874
1
-
(23)
-
852
170
9
-
(7)
172
147
8
(1)
(2)
-
152
557
528
46
22
-
(7)
-
61
-
-
-
-
-
-
-
-
-
-
-
-
46
61
2,944
188
(42)
6
4
3,100
2,013
191
(31)
(3)
3
2,173
-
15
-
-
(15)
-
931
927
3,864
211
(42)
(24)
4
4,013
2,183
200
(31)
(10)
3
2,345
147
23
-
(1)
(2)
(15)
152
1,534
1,516
10
-
-
-
-
10
1
-
-
-
-
1
4
-
-
-
-
4
5
5
3,874
211
(42)
(24)
4
4,023
2,184
200
(31)
(10)
3
2,346
151
23
-
(1)
(2)
(15)
156
1,539
1,521
As of December 31, 2016 and 2015, the fully depreciated tangible assets still in use amounted to €1,555 million
and €1,272 million, respectively.
The main activity of the Bank is carried out through a network of bank branches located geographically as shown
in the following table:
Branches by Geographical Location
Spain
Rest of the world
Total
Number of Branches
2016
2015
3,303
20
3,323
3,076
19
3,095
The change is explained by the incorporation of Catalunya Banc. S.A.
As of December 31, 2016 and 2015, the percentage of branches leased from third parties in Spain was 70.48%
and 75.98%, respectively.
16 Intangible assets
The breakdown of the balance under this heading in the balance sheets as of December 31, 2016 and 2015
relates mainly to the net balance of the disbursements made on the acquisition of computer software. The
average life of the Bank's intangible assets is 5 years.
103
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
The breakdown of the changes in 2016 and 2015 in the balance under this heading in the balance sheets is as
follows:
Millions of Euros
Other Intangible Assets. Changes Over the Period
Notes
2016
2015
Balance at the beginning
Additions
Contributions from merger transactions
Retirements
Amortization in the year
Exchange differences and other
Impairment
Balance at the end
40
853
321
121
(353)
942
874
298
-
-
(319)
-
-
853
"Contributions from merger transactions” in the table above reflects the intangible assets of the merged company
Catalunya Banc, S.A."
17. Tax assets and liabilities
The balance of the heading “Tax Liabilities” in the accompanying balance sheets contains the liability for applicable
taxes, including the provision for corporation tax of each year, net of tax withholdings and prepayments for that
period, and the provision for current period corporation tax in the case of companies with a net tax liability. The
amount of the tax refunds due to Group companies and the tax withholdings and prepayments for the current
period are included under “Tax Assets” in the accompanying balance sheets.
Banco Bilbao Vizcaya Argentaria, S.A. and its tax-consolidable subsidiaries file consolidated tax returns. The
subsidiaries of Argentaria, which had been in Tax Group 7/90, were included in Tax Group 2/82 from 2000,
since the merger had been carried out under the tax neutrality system provided for in Title VIII, Chapter VIII of
Corporation Tax Law 43/1995. On 30 December 2002, the pertinent notification was made to the Ministry of
Economy and Finance to extend its taxation under the consolidated taxation regime indefinitely, in accordance
with current legislation. Similarly, on the occasion of the acquisition of Unnim Group in 2012, the companies
composing the Tax Group No. 580/11 which met the requirements became part of the tax group 2/82 from
January 1, 2013. Lastly, on the occasion of the acquisition of Catalunya Banc Group in 2015, the companies
composing the Tax Group No. 585/11 which met the requirements became part of the tax group 2/82 from
January 1, 2016.
During the year, the Bank has carried out merger by absorption of Catalunya Banc, S.A., Banco Depositario
BBVA, S.A.U. and Uno-e Bank, S.A.U., under the special regime for mergers, divisions, transfers of assets and
exchanges of securities provided for in Chapter VII of Title VII of the Corporate Tax Law, approved by Law
27/2014, of November 27.
Consequently, in accordance with Article 86 of the quoted Corporate Tax Law, as Annex XIV to these financial
statements, the following is attached:
−
−
Balance sheet of the transferor entities as of the date before transfer.
Tax years in which the transferors acquired the property transferred.
− Detail of assets that have been incorporated in the books of the Bank with a different value to that
contained in the books of Catalunya S.A., Banco Depositario, S.A.U. and Uno-e Bank, S.A.U.,
respectively.
104
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Catalunya Banc, S.A., is the result of the integration of Caixa d´Estalvis de Catalunya, Caixa d´Estalvis de
Tarragona and Caixa d´Estalvis de Manresa. This integration was carried out in July 1, 2010, by means of a
merger and creation of a new savings bank, Caixa d´Estalvis Unió de Caixes de Catalunya, Tarragona I Manresa.
In 2011, the entity transferred its financial business to a newly created bank, Catalunya Banc, S.A. Both the
merger and the segregation of financial activity were conducted under the special regime for mergers, divisions,
transfers of assets and exchanges of securities provided for in Chapter VIII of Title VII of the Corporation Tax Act,
approved by Royal Legislative Decree 4/2004, of March 5. The mandatory terms resulting from these
restructuring operations are contained in the Annual Report of Caixa d´Estalvis Unió de Caixes de Catalunya,
Tarragona I Manresa for the year 2010 and in the Annual Report of Catalunya Banc, S.A., for the year 2011,
respectively. In general, the information requirements relating to the reorganizations are included in the financial
statements for those years.
Due to the volume of assets transferred by Catalunya Banc, S.A., Banco Depositario BBVA, S.A.U., and Uno-e
Bank, S.A.U., to the Bank, it is not possible to detail in these financial statements all the information required by
Article 86 of the Corporate Tax Law. However, all the required information is in the merger by absorption deed,
other official documents and internal records of the Bank, available to the tax authorities.
In 2013, 2011 and 2009, the Bank also participated in corporate restructuring operations subject to the special
regime for mergers, splits, transfers of assets and exchanges of securities under Chapter VIII of Title VII of the
Corporation Tax Act, approved by Royal Legislative Decree 4/2004, of March 5. The reporting requirements
under the above legislation are included in the financial statements of the relevant entities for 2013, 2011 and
2009 as well as in the merger by absorption deed, other official documents and internal records of the Bank,
available to the tax authorities.
Also, in 2003, as in previous years, the Bank performed corporate restructuring operations under the special
system of tax neutrality regulated by Act 29/1991 of December 16 (which adapted certain tax provisions to the
Directives and Regulations of the European Communities) and by Title VIII, Chapter VIII of Corporation Tax Act
43/1995, of December 27. The disclosures required under the aforementioned legislation are included in the
financial statements of the relevant entities for the period in which the transactions took place.
17.1 Years open for review by the tax authorities
At the date these financial statements were prepared, the Bank had 2010 and subsequent years open for review
by the tax authorities for the main taxes applicable to it.
In 2014, as a result of the tax audit conducted by the tax authorities, tax inspection proceedings were initiated
against several Group companies for the years up to and including 2009, having been all signed in acceptance.
These proceedings became final in 2014.
In view of the different interpretations that can be made of some applicable tax legislation, the outcome of the tax
inspections of the open years that could be conducted by the tax authorities in the future could give rise to
contingent tax liabilities which cannot be objectively quantified at the present time. However, the Banks’ Board of
Directors and its tax advisors consider that the possibility of these contingent liabilities becoming actual liabilities is
remote and, in any case, the tax charge which might arise therefore would not materially affect the Bank’s
financial statements.
105
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
17.2 Reconciliation
The reconciliation of the corporation tax expense resulting from the application of the standard tax rate to the
recognized corporation tax expense is as follows:
Reconciliation of the Corporate Tax Expense Resulting from
the Application of the Standard Rate and the Expense
2016
2015
Millions of Euros
Registered by this Tax
Corporation tax
Decreases due to permanent differences:
Tax credits and tax relief at consolidated Companies
Other items net
Net increases (decreases) due to temporary differences
Charge for income tax and other taxes
Deferred tax assets and liabilities recorded (utilized)
Income tax and other taxes accrued in the period
Adjustments to prior years' income tax and other taxes
Income tax and other taxes
448
-
(27)
(686)
425
(425)
(265)
95
(170)
916
-
(24)
(792)
(100)
100
100
88
188
The item “Other taxes” of the above table includes in 2016 the effect in income tax of those dividends and capital
gains entitled to avoid double taxation of €838 million.
The Bank avails itself of the tax credits for investments in new fixed assets (in the scope of the Canary Islands tax
regime, for a non-material amount), tax relief, R&D tax credits, donation tax credits and double taxation tax
credits, in conformity with corporate income tax legislation.
Under the regulations in force until December 31, 2001, the Bank and the savings banks which would form
Unnim Banc and Catalunya Banc were available to the tax deferral for reinvestment. The information related to
this tax credit can be found in the corresponding annual reports.
From 2002 to 2014, the Bank availed itself to the tax credit for reinvestment of extraordinary income obtained
on the transfer for consideration of properties and shares representing ownership interests of more than 5%. The
acquisition of shares over the 5% figure in each period was allocated to fulfill the reinvestment commitments
which are a requirement of the previously mentioned tax credit.
The amount assumed in order to qualify for the aforementioned tax credit is as follows:
106
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Year
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Millions of Euros
276
27
332
80
410
1,047
71
23
35
5
4
70
2
Additionally, due to the merger of Unnim Banc, the Bank assumes the commitment of maintenance during the
time required by the tax legislation of the assets in which Caixa d´Estalvis de Sabadell, Caixa d´Estalvis de
Terrassa and Caixa d´Estalvis Unió de Caixes Manlleu Sabadell y Terrassa materialized in previous years the
reinvestment of extraordinary profits for the implementation of a corresponding deduction. The amount of
income qualifying for the deduction indicated is as follows:
Year
2009
2009
2010
Millions of Euros
61
59
202
107
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Finally, due to the merger of Catalunya Banc, the Bank assumes the commitment of maintenance during the time
required by the tax legislation of the assets in which Caixa d´Estalvis de Catalunya, Caixa d´Estalvis de Tarragona,
Caixa d’Estalvis de Manresa and Caixa d´Estalvis Unió de Caixes de Catalunya, Tarragona I Manresa materialized
in previous years the reinvestment of extraordinary profits for the implementation of a corresponding deduction.
The amount of income qualifying for this deduction indicated is as follows:
Year
2005
2006
2007
2008
2009
2010
Millions of Euros
1
22
111
82
10
107
In 2016, following the approval of Royal Decree-Law 3/2016, of December 2, by which certain measures in the
tax field directed to the consolidation of the public finances and other urgent measures in social matter are
adopted, the Bank has included in its tax base €148 million as a reversal of the impairment losses on instruments
representing participation in the capital or in the equity of companies which have been tax deductible from the
tax base of Corporate Income Tax in tax periods started prior to 1 January 2013. The amount pending to be
included in the tax base at closure and from the investees amounted to €560 million approximately.
Pending addition to taxable income as of December 31, 2015 (*)
Decrease income (included) 2016
Pending addition to taxable income as of December 31, 2016
(*) Includes outstanding balances pending to be integrated by Catalunya Banc, S.A..
Millions of Euros
2016
708
(148)
560
108
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
17.3 Tax recognized in equity
In addition to the income tax registered in the income statements, in 2016 and 2015 the Bank recognized the
following amounts in equity:
Tax Recognized in Total Equity
Charges to total equity
Debt securities
Equity instruments
Other
Subtotal
Credits to total equity
Debt securities
Equity instruments
Other
Subtotal
Total
Millions of Euros
2016
2015
(283)
-
(5)
(288)
-
6
73
79
(209)
(443)
-
(9)
(452)
123
124
42
289
(163)
17.4 Deferred taxes
The balance under the heading "Tax assets" in the accompanying balance sheets includes the tax receivables
relating to deferred tax assets. The balance under the “Tax liabilities” heading includes the liabilities relating to the
Bank's various deferred tax liabilities. The details of the most important tax assets and liabilities are as follows:
Tax Assets and Liabilities. Breakdown
2016
2015
Variation
Millions of Euros
Tax assets-
Current tax assets
Deferred tax assets
Pensions
Financial Instruments
Other assets
Impairment losses
Other
Secured tax assets (*)
Tax losses
Total
Tax Liabilities-
Current tax liabilities
Deferred tax liabilities
Charge for income tax and other taxes
Total
756
11,638
215
349
266
206
357
9,125
1,120
12,394
127
1,288
1,288
1,415
652
7,542
102
606
383
126
184
5,224
917
8,194
24
1,200
1,200
1,224
104
4,096
113
(257)
(117)
80
173
3,901
203
4,200
103
88
88
191
(*)
The Law guaranteeing the deferred tax assets have been approved in Spain in 2013.
109
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Based on the available information, including historical profit levels and projections that the Bank handles for the
coming years results, it is considered that sufficient taxable income to recover deferred tax assets above would be
generated when they become deductible under the provisions of tax legislation.
With respect to the changes in assets and liabilities due to deferred tax contained in the above table, the
following should be pointed out:
• The decrease in deferred tax assets is due mainly to the reduction of deferred tax assets related to valuation
adjustments and recognized against equity
• The increase in guaranteed tax assets is due to the incorporation of guaranteed tax assets from Catalunya
Banc,S.A., as a result of the merger by absorption of this entity.
• The increase in tax losses is mainly due to the offset in the corporate tax return finally presented for the year
2015 of an amount of negative tax bases and deductions lower than estimated in the annual accounts for
that year and, on the other hand, to the generation in 2016 of negative tax bases and deductions.
Of the assets and liabilities due to deferred tax contained in the above table, those included in section 18.3
above have been recognized against the entity's equity, and the rest against earnings for the year.
From the guaranteed tax assets contained in the above table, the detail of the items and amounts guaranteed by
the Spanish Government is as follows:
Secured tax assets
Pensions
Impairment losses
Total
Millions of Euros
2016
2015
1,927
7,198
9,125
1,868
3,356
5,224
As a result of the merger by absorption of Catalunya Banc, S.A., the Bank has subrogated in the right to offset
negative tax bases and deductions pending compensation in the transferor as of December 31, 2015. With
respect to these tax credits, the Bank has maintained the prudential criterion adopted in previous years by
Catalunya Banc, S.A., according to which the transferor entity only recognized in the balance sheet those tax
assets that have the guaranteed condition
110
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
18. Other assets and liabilities
The breakdown of the balance under these headings in the accompanying balance sheets is as follows:
Millions of Euros
Other Assets and Liabilities
Notes
2016
2015
ASSETS-
Insurance contracts linked to pensions
Rest of other assets
Transactions in progress
Accruals
Unaccrued prepaid expenses
Other prepayments and accrued income
Other items
Total
LIABILITIES-
Transactions in transit
Accrued interest
Unpaid accrued expenses
Other accrued expenses and deferred income
Other items
Total
22
2,426
1,283
83
335
53
282
865
3,709
33
978
751
227
1,082
2,092
2,151
1,699
37
295
41
254
1,367
3,850
19
886
649
237
534
1,439
19. Non-current assets and disposal groups classified as held for sale
The composition of the balance under the heading “Non-current assets and disposal groups classified as held for
sale” in the accompanying balance sheets, broken down by the origin of the assets, is as follows:
Non-current assets and disposal groups classified as held for sale
Breakdown by items
Foreclosures and recoveries
Foreclosures
Recoveries from financial leases
Other assets from tangible assets
Property, plant and equipment
Operating leases
Investment properties
Business sale - Assets
Accrued amortization (*)
Impairment losses
Total Non-current assets and disposal groups classified as held
for sale
Millions of Euros
2016
2015
3,488
3,349
139
323
323
-
-
-
(43)
(1,253)
2,515
2,833
2,666
166
212
212
-
-
-
(26)
(678)
2,340
(*)
Corresponds to the accumulated depreciation of assets before classification as “Non-current assets and disposal
groups classified as held for sale".
111
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
The changes in the balances under this heading in 2016 and 2015 are as follows:
Non-Current Assets Held-for-Sale
Changes in the year 2016
Cost (1)
Balance at the beginning
Additions
Contributions from merger transactions
Retirements (sales and other decreases)
Transfers, other movements and
exchange differences
Balance at the end
Impairment (2)
Balance at the beginning
Additions
Contributions from merger transactions
Retirements (sales and other decreases)
Other movements and exchange
differences
Balance at the end
Balance at the end of Net carrying value (1)-
(2)
Foreclosed Assets
Foreclosed
Notes
Assets through
Recovered Assets
Auction
from Finance
Proceeding
Leases
Millions of Euros
From Own Use
Assets
(*)
Other assets
Total
2,666
629
402
(555)
207
3,349
537
60
212
(124)
359
1,044
2,305
166
42
(62)
(8)
138
38
2
(5)
(3)
32
106
186
3
147
(61)
6
281
103
7
-
(33)
100
177
104
-
-
-
-
-
-
-
-
-
-
-
-
-
3,018
674
549
(678)
205
3,768
678
69
212
(162)
456
1,253
2,515
(*) Net of accumulated amortization until reclassified as non-current assets and disposal groups held for sale.
Non-Current Assets Held-for-Sale
Changes in the year 2015
Cost (1)
Balance at the beginning
Additions
Retirements (sales and other decreases)
Transfers, other movements and exchange
differences
Balance at the end
Impairment (2)
Balance at the beginning
Additions
Retirements (sales and other decreases)
Other movements and exchange differences
Balance at the end
Balance at the end of Net carrying value (1)-(2)
Millions of Euros
Foreclosed Assets
Foreclosed
Notes
Assets through
Recovered Assets
Auction
from Finance
Proceeding
Leases
From Own Use
Assets
(*)
Other assets
(**)
Total
2,540
876
(311)
(439)
2,666
456
134
(56)
3
537
2,129
138
54
(16)
(10)
166
39
8
(11)
2
38
128
173
71
(73)
15
186
66
62
(31)
6
103
83
482
(530)
48
-
-
-
-
-
-
-
3,333
1,001
(930)
(386)
3,018
561
204
(98)
11
678
2,340
(*) Net of accumulated amortization until reclassified as non-current assets and disposal groups held for sale.
(**) Corresponds to the sales agreement of companies (see Note 14).
The table below shows the non-current assets held for sale from foreclosures or recoveries:
112
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Non-Current Assets Held for Sale
From Foreclosures or Recoveries
Residential assets
Industrial assets
Agricultural assets
Total
Millions of Euros
2016
2015
1,961
417
33
2,411
1,883
344
30
2,257
The table below shows the length of time for which the main assets from foreclosures or recoveries that were on
the balance sheet as of December 31, 2016 and 2015 had been held:
Non-Current Assets Held for Sale
Period of Ownership
Up to one year
From 1 to 3 years
From 3 to 5 years
Over 5 years
Total
Millions of Euros
2016
2015
298
1,084
719
310
2,411
469
989
620
179
2,257
In 2016 and 2015, some of the sales of these assets were financed by the Bank. The amount of the loans
granted to the buyers of these assets in those years totaled €210 million and €170 million, respectively, with a
mean percentage financed of 93% and 93%, respectively, of the price of sale. The total nominal amount of these
loans, which are recognized under “Loans and receivables”, is €1,320 million and €1,110 million, as of
December 31, 2016 and 2015, respectively.
As of December 31, 2016, there were no gains from the sale of assets financed by the Bank.
As of December 31, 2015, the gains from the sale of assets financed by the Bank (and, therefore, not
recognized in the income statement), amounted to €17 million.
113
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
20. Financial liabilities at amortized cost
The breakdown of the balance under this heading in the accompanying balance sheets is as follows:
Financial liabilities measured at amortised cost
Notes
2016
2015
Millions of Euros
Deposits
Deposits from Central Banks
Deposits from Credit Institutions
Customer deposits
Debt securities issued
Other financial liabilities
Total
7
20.1
20.2
20.3
20.4
279,552
265,326
26,629
44,977
207,946
33,174
7,158
319,884
19,642
55,462
190,222
30,966
6,803
303,095
20.1 Deposits from credit institutions
The breakdown of the balance under this heading in the accompanying balance sheets, according to the nature
of the financial instruments, is as follows:
Deposits from credit institutions
Notes
2016
2015
Millions of Euros
Reciprocal accounts
Deposits with agreed maturity
Demand deposits
Other accounts
Repurchase agreements
Subtotal
Accrued interest until expiration
Total
31
143
16,976
2,862
-
24,945
44,926
51
44,977
119
25,456
2,066
-
27,745
55,386
76
55,462
114
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
The breakdown of this heading by geographical area and the nature of the related instruments in the
accompanying balance sheets, disregarding accrued interest pending maturity, is as follows:
Deposits from Credit Institutions
2016
Spain
Rest of Europe
Mexico
South America
The United States
Rest of the world
Total
Deposits from Credit Institutions
2015
Spain
Rest of Europe
Mexico
South America
The United States
Rest of the world
Total
Millions of Euros
Demand
Deposits &
Reciprocal
Accounts
Deposits with
Agreed
Maturity
Repurchase
Agreements
Total
924
1,120
286
460
131
83
3,004
5,153
7,944
-
900
1,328
1,652
16,977
817
23,620
-
-
-
508
24,945
6,894
32,684
286
1,360
1,459
2,243
44,926
Millions of Euros
Demand
Deposits &
Reciprocal
Accounts
Deposits with
Agreed
Maturity
Repurchase
Agreements
Total
816
929
61
274
59
46
2,185
11,715
8,564
499
989
1,601
2,088
25,456
4,545
22,220
-
-
-
980
27,745
17,076
31,713
560
1,263
1,660
3,114
55,386
115
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
20.2 Customer deposits
The breakdown of this heading of the accompanying balance sheets, by type of financial instruments, is as
follows:
Customer deposits
Notes
2016
2015
Millions of Euros
Government and other government agencies
Spanish
Foreign
Repurchase agreements
Accrued interest
Other resident sectors
Current accounts
Savings accounts
Fixed-term deposits
Reverse repos
Other accounts
Accrued interest
Non-resident sectors
Current accounts
Savings accounts
Fixed-term deposits
Repurchase agreements
Other accounts
Accrued interest
Total
Of which:
Deposits from other creditors without valuation
adjustment
Accrued interest
Of which:
In euros
In foreign currency
31
31
31
7,358
6,897
458
-
3
169,297
58,508
41,442
64,804
1,900
2,189
454
31,291
4,861
792
20,983
4,315
305
14,827
6,873
449
7,500
5
140,310
37,671
32,607
65,368
1,436
2,699
529
35,085
5,022
650
21,388
7,462
535
35
207,946
28
190,222
207,454
189,640
492
582
192,915
15,031
177,192
13,030
Previous table includes as of 31, December 2016 and 2015, subordinated deposits amounted to €2,942 million
and €3,105 million, respectively, vinculated to subordinated debt issues and preferred shares launched by BBVA
International Preferred, S.A.U., BBVA Subordinated Capital, S.A.U. y BBVA Global Finance, Ltd., Caixa Terrassa
Societat de Participacions Preferents, S.A. Unipersonal y CaixaSabadell Preferents, S.A. Unipersonal which are
unconditionally and irrevocably secured by the Bank.
116
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
The breakdown of this heading in the accompanying balance sheets, by type of instrument and geographical
area, disregarding valuation adjustments, is as follows:
2016
Customer Deposits
Demand
Deposits
Savings
Deposits
Spain
Rest of Europe
Mexico
South America
The United States
Rest of the world
Total
64,542
3,903
268
449
191
41,464
426
24
143
40
415
69,768
160
42,257
Millions of Euros
Deposits
with Agreed
Repos
Total
Maturity
67,902
15,225
337
1,364
1,791
2,665
89,284
1,900
4,307
175,808
23,861
-
-
8
629
1,956
2,030
-
6,215
3,240
207,524
Millions of Euros
Deposits
with Agreed
Repos
Total
Maturity
68,478
17,532
146
1,277
1,441
1,560
90,434
8,936
7,438
154,205
29,577
-
-
24
532
1,823
1,714
-
16,398
1,861
189,712
2015
Customer Deposits
Demand
Deposits
Savings
Deposits
Spain
Rest of Europe
Mexico
South America
The United States
Rest of the world
Total
44,164
4,243
367
422
223
32,627
364
19
124
26
184
49,603
117
33,277
117
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
20.3 Debt certificates issued
The breakdown of the balance under this heading in the accompanying balance sheets is as follows:
Debt securities issued
In Euros
Promissory bills and notes
Non-convertible bonds and debentures at floating interest rates
Non-convertible bonds and debentures at fixed interest rates
Mortgage Covered bonds
Hybrid financial instruments
Securitization bonds made by the Group
Other securities
Accrued interest and others (*)
Subordinated liabilities
Convertible
Convertible perpetual securities
Non-convertible
Preferred Stock
Other subordinated liabilities
Valuation adjustments (*)
In Foreign Currency
Promissory bills and notes
Non-convertible bonds and debentures at floating interest rates
Non-convertible bonds and debentures at fixed interest rates
Mortgage Covered bonds
Hybrid financial instruments
Other securities associated to financial activities
Securitization bonds made by the Group
Other securities
Accrued interest and others (*)
Subordinated liabilities
Convertible
Convertible perpetual securities
Non-convertible
Preferred Stock
Other subordinated liabilities
Valuation adjustments (*)
Total
Millions of Euros
Notes
2016
2015
30,161
-
12,264
1,428
24,790
-
(14,997)
-
1,840
4,836
4,000
4,000
770
14
756
66
3,013
-
-
1,892
121
-
-
(449)
-
18
1,431
1,423
1,423
-
-
-
8
33,174
28,061
-
12,383
509
23,959
-
(14,450)
-
1,856
3,804
3,000
3,000
794
14
780
10
2,905
-
-
1,832
115
-
-
(443)
-
15
1,386
1,378
1,378
-
-
-
8
30,966
(*)
Accrued interest but pending payment, valuation adjustments and issuance costs included
The total cost of the accrued interest under “Debt securities issued” in 2016 and 2015 totaled €793 million and
€840 million, respectively.
As of December 31, 2016 and 2015 the accrued interest pending payment from promissory notes and bills and
bonds and debentures amounted to €465 million and €545 million, respectively.
The headings “Nonconvertible bonds and debentures at floating interest rate" and “Non-convertible bonds and
debentures at fixed rate” as of December 31, 2016 include several issues, the latest maturing in 2033.
The "Covered Bonds" account as of December 31, 2016 includes issues with various maturities, the latest in
2037.
118
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Subordinated liabilities included in this Note and in Note 20.2, and accordingly, for debt seniority purposes, they
rank behind ordinary debt, but ahead of the Bank’s shareholders, without prejudice to any different seniority that
may exist between the different types of subordinated debt instruments according to the terms and conditions of
each issue. The breakdown of this heading in the accompanying balance sheets, disregarding valuation
adjustments, by currency of issuance and interest rate is shown in Appendix VII.
The variations of the balance under this heading are mainly the result of the following transactions:
• Perpetual securities eventually convertible.
On April 8, 2016, BBVA issued perpetual securities eventually convertible into new ordinary shares of
BBVA,(Additional level I capital instruments) without pre-emption rights, for a total amount of €1,000 million.
On February 10, 2015, BBVA issued perpetual securities eventually convertible into new ordinary shares of
BBVA, (Additional level I capital instruments) without pre-emption rights, for a total amount of €1,500 million.
Such issuances were targeted only towards qualified foreign investors. and in any case would not be made or
subscribed in Spain or by Spanish-resident investors.
These convertible perpetual securities could be subjectinto common shares if the trigger event occurs, that
is, if BBVA’s Common Equity Tier 1 capital ratio falls below 5.125% among other events.
These issuances may be fully amortized, to option of BBVA, only in the cases included in its terms and
conditions, and in any case, in accordance with the provisions of the applicable regulations.
20.4 Other financial liabilities
The breakdown of the balance under this heading in the accompanying balance sheets is as follows:
Other financial liabilities
Creditors for other financial liabilities
Collection accounts
Creditors for other payment obligations
Dividend payable but pending payment (*)
Total
Millions of Euros
2016
2015
3,662
1,964
1,007
525
7,158
3,511
1,740
1,043
509
6,803
(*)
Corresponding to the cash dividend declared in December 2016 and 2015 and paid in January 2017 and 2016 (see
Note 3).
The information required by Final Provision second of Law 31/2014 of December 3, amending Additional
Provision third of Law 15/2010, of July 5, amending the Law 3/2004 of December 29, through which measures
for combating late payment are set, is as follows:
Payments made and peding payments (*)
Average payment period to suppliers (days)
Ratio of outstanding payment transactions (days)
Ratio outstanding payment transactions (days)
Total payments
Total outstanding payments
Millions of Euros
Millions of Euros
2016
2015
BBVA GROUP IN
BBVA GROUP IN
BBVA SPAIN
SPAIN
BBVA SPAIN
SPAIN
33
34
21
2,426
92
33
33
22
2,568
96
31
32
21
2,631
86
31
31
32
2,838
96
(*)
It is considered on time payments made within 60 days, and not on time those which exceeds 60 days.
The data shown in the table above on payments to suppliers refer to those which by their nature are trade
creditors for the supply of goods and services, so data relating to "Other financial liabilities other liabilities -Trade
pay " is included in the balance.
119
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
21. Provisions
The breakdown of the balance under this heading in the accompanying balance sheets, based on type of
provisions, is as follows:
Provisions.
Breakdown by concepts
Pensions and other post employment defined benefit
obligations
Other long term employee benefits
Commitments and guarantees given
Other provisions (*)
Total
Millions of Euros
2016
2015
5,271
32
658
2,956
8,917
5,177
-
263
769
6,209
(*) As of December 31, 2016, this line item includes provisions for different concepts, the most significant the merger of
Catalunya Banc and the provision of €577 million euros made by the known as "floor clauses", as mentioned below.
The changes in 2016 and 2015 in the balances under this heading in the accompanying balance sheets are as
follows:
Provisions for Pensions and Similar Obligations.
Changes Over the Period
Notes
Pension fund and
similar obligations
(Note 21)
Other long employee
benefits
Commitments and
Taxes, other legal
contingent risks
contingencies and other
provisions
provisions
Millions of Euros
2016
Balance at the beginning
Add -
Charges to income for the year
Interest expenses and similar charges
Personnel expenses
Provision expenses
Charges to equity (*)
Transfers and other changes
Less -
Available allowances
Payments to early retirements
Credited to retained earnings (*)
Derecognition of allowances
Transfers and other changes
Balance at the end
33.2
41
22
41
5,177
300
49
4
247
10
533
(14)
(735)
-
-
-
5,271
-
-
-
-
6
-
36
-
-
-
(10)
-
32
263
249
-
-
249
269
137
(242)
-
-
-
(18)
658
769
-
-
-
1,090
85
1,613
(144)
-
-
(350)
(107)
2,956
(*)
Corresponds to actuarial losses (gains) arising from certain welfare benefits (see Note 2.9).
120
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Provisions for Pensions and Similar Obligations.
Changes Over the Period
Notes
Balance at the beginning
Add -
Charges to income for the year
Interest expenses and similar charges
Personnel expenses
Provision expenses
Charges to equity (*)
Transfers and other changes
Less -
Available allowances
Payments to early retirements
Credited to retained earnings
Derecognition of allowances
Transfers and other changes
Balance at the end
Pension fund and
Millions of Euros
2015
Commitments and
Taxes, other legal
similar obligations
contingent risks
contingencies and other
(Note 21)
provisions
provisions
5,267
238
652
33.2
41
22
41
613
60
3
550
3
1
(4)
(674)
-
(29)
-
5,177
35
-
-
35
-
-
(6)
-
-
-
(4)
263
136
4
15
117
-
113
(46)
-
-
(86)
-
769
(*)
Corresponds to actuarial losses (gains) arising from certain welfare benefits (see Note 2.9).
121
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Ongoing legal proceedings and litigation
Different entities of the BBVA Group are frequently party to legal actions in a number of jurisdictions (including,
among others, Spain, Mexico and the United States). According to the procedural status of these proceedings
and the criteria of the legal counsel, BBVA considers that, except for the proceeding mentioned below, none is
material, individually or as a whole, and with no significant impact on the operating results, liquidity or financial
situation at a consolidated or individual level of the Bank. The Group´s Management believes that the provisions
made in respect of such legal proceedings are adequate.
Regarding the consequences of the invalidity of the clauses of limitation of interest rates in mortgage loans with
consumers (the so-called “cláusulas suelo”) the legal situation is as follows:
• The Spanish Supreme Court, in a judgment dated May 9, 2013, rendered on a collective claim against
BBVA among others, and that is definitive, resolved unanimously that those clauses should be deemed
as invalid if they did not comply with certain requirements of material transparency set forth in the
referred judgment. In addition, that judgment determined that there were no grounds for the refund of
the amounts collected pursuant to those clauses before May 9, 2013.
• As communicated to the market by means of Relevant Event dated June 12, 2013, BBVA ceased to
apply, in execution of that judgment, as from May 9, 2013, the “cláusula suelo” in all mortgage loan
agreements with consumers in which it had been included.
In an individual claim, the Provincial Court of Alicante raised a preliminary ruling to the Court of Justice of the
European Union (CJEU), for the CJEU to determine if the time limitation for the refund of the amounts set forth by
the Supreme Court complies with Directive 93/13/EEC. On July 13, the opinion of the Advocate-General of the
CJEU was published and in its conclusions it stated that the European directive did not oppose to a Member
State’s Supreme Court limiting, due to exceptional circumstances, the restorative effects of the invalidity to the
date on which its first judgment in this regard was issued.
Last December 21, the CJEU published its sentence that decided the preliminary ruling raised by the Provincial
Court of Alicante and other national judicial bodies, in the sense that the Supreme Court’s case law that limited in
time the restorative effects related to the unfair declaration of a clause included in an agreement between a
consumer and a professional is contrary to Article 6.1 of Directive 93/13/EEC on unfair terms in consumer
contracts.
After the mentioned CJEU’s decision, BBVA has made, once analyzed the portfolio of mortgage loans to
consumers, in which the “cláusulas suelo” have applied, a provision of €577 million (with an impact on the
attributed profit of approximately €404 million, as communicated to the market in the Relevant Event dated
December 21, 2016), to cover future claims that could be filed.
22. Post-employment and other employee benefit commitments
As stated in Note 2.9, the Bank has assumed commitments with employees including short-term employee
benefits (Note 38.1), defined contribution and defined benefit plans, as well as other long-term employee
benefits.
The main Employee Welfare System has been implemented in Spain. Under the collective labor agreement,
Spanish banks are required to supplement the social security benefits received by employees or their beneficiary
right-holders in the event of retirement (except for those hired after March 8, 1980), permanent disability, death
of spouse or death of parent.
122
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
The Employee Welfare System in place at the Bank supersedes and improves the terms and conditions of the
collective labor agreement for the banking industry; including benefits in the event of retirement, death and
disability for all employees, including those hired after March 8, 1980. The Bank externally funded all its pension
commitments with active and retired employees pursuant to Royal Decree 1588/1999, of October 15. These
commitments are instrumented in external pension plans, insurance contracts with non-Group companies and
insurance contracts with BBVA Seguros, S.A. de Seguros y Reaseguros, which is 99.95% owned by the Banco
Bilbao Vizcaya Argentaria Group.
The table below shows a breakdown of recorded balance sheet liabilities relating to defined benefit plans as at
December 31, 2016 and 2015:
Net Liability (asset) on the Balance Sheet
2016
2015
Millions de euros
Early retirement commitments
Other long-term employee benefits
Total commitments
Pension plan assets
Total plan assets
Total net liability/asset on the balance sheet
of which:
Provisions- Provisions for pensions and similar
obligations
Provisions-Other long-term employee benefits
Insurance contracts linked to pensions
2,555
32
6,331
1,028
1,028
5,303
5,271
32
2,426
2,689
-
6,210
1,033
1,033
5,177
5,177
-
2,151
The following table shows defined benefit plan costs recorded in the income statement for fiscal years 2016 and
2015:
Income Statement and Equity Impact
Notes
2016
2015
Millions of Euros
Interest and similar expenses
Interest expense
Interest income
Personnel expenses
Defined contribution plan expense
Defined benefit plan expense
Other benefit expenses
Provision (net)
Early retirement expense
Past service cost expense
Remeasurements (*)
Other provision expenses
Total Effects in Income Statements: Debit (Credit)
Total Effects on Equity: Debit (Credit) (**)
123
33.2
39.1
39.1
49
49
-
53
28
21
4
239
233
(3)
3
6
341
10
60
60
-
50
29
18
3
547
501
26
23
(3)
657
3
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
(*) Actuarial losses (gains) on remeasurement of the net defined benefit liability relating to early retirements in Spain and
other long-term employee benefits (see Note 2.9).
(**) Actuarial gains (losses) on remeasurement of the net defined benefit liability relating to pension before income taxes
(see Note 2.9).
22.1 Defined benefit plans
The commitments under these plans relate mainly to employees who have retired or taken early retirement from
the Bank and to certain groups of employees still active in the case of pension benefits, and to most active
employees in the case of permanent disability and death benefits. For the latter, BBVA pays the required
premiums for full underwriting.
The change in these commitments as of December 31,2016 and 2015 was as follows:
Defined Benefit Plans
Balance at the beginning
Current service cost
Interest income or expense
Contributions by plan participants
Employer contributions
Past service costs
Remeasurements:
(1)
(2)
Return on plan assets
From changes in demographic assumptions
From changes in financial assumptions
Other actuarial gain and losses
Benefit payments
Settlement payments
Business combinations and disposals
Effect on changes in foreign exchange rates
Other effects
Balance at the end
Millions of Euros
2016
Defined
Benefit
Obligation
Plan Assets
Net Liability
(asset)
Insurance
contracts
linked to
pensions
Defined
Benefit
Obligation
2015
Plan Assets
Net Liability
(asset)
Insurance
contracts
linked to
pensions
6,210
1,033
5,177
2,151
6,324
1,057
5,267
2,189
7
109
-
-
230
245
-
(1)
187
59
(936)
(43)
402
(17)
92
6,299
-
20
-
9
-
66
66
-
-
-
(118)
-
22
(13)
9
1,028
7
89
-
(9)
230
179
(66)
(1)
187
59
(818)
(43)
380
(4)
83
5,271
-
40
-
-
-
166
166
-
-
-
(136)
-
205
-
-
2,426
5
132
-
-
527
105
-
-
93
12
(923)
-
-
9
31
6,210
-
25
-
7
-
2
2
-
-
-
(102)
-
-
7
37
1,033
5
107
-
(7)
527
103
(2)
-
93
12
(821)
-
-
2
(6)
5,177
-
47
-
-
-
77
77
-
-
-
(125)
-
-
-
(37)
2,151
(1)
(2)
Including gains and losses arising from settlements.
Excluding interest, which is recorded under "Interest income or expense".
The balance under the heading “Provisions – Pensions and other post-employment defined benefit obligations” of
the accompanying balance sheet as of December 31, 2016 includes €355 million for commitments for post-
employment benefits maintained with previous members of the Board of Directors and the Bank’s Management
Committee.
Both the costs and the present value of the commitments are determined by independent qualified actuaries
using the “projected unit credit” method.
In order to guarantee the good governance of these plans, the Bank has established an Employee Benefits
Committee including members from the different areas to ensure that all decisions are made taking into
consideration all of the associated impacts.
The following table sets out the key actuarial assumptions used in the valuation of these commitments as at
December 31, 2016 and 2015:
124
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Actuarial Assumptions
Commitments in Spain
Discount rate
Rate of salary increase
Mortality tables
2016
2015
1,50%
1,50%
PERM/F 2000P
2,0%
Al menos 2,0%
PERM/F 2000P
The discount rate used to value future benefit cashflows has been determined by reference to Eurozone high
quality corporate bonds.
The expected return on plan assets has been set in line with the adopted discount rate.
Assumed retirement ages have been set by reference to the earliest age at which employees are entitled to retire
or the contractually agreed age in the case of early retirements.
Changes in the main assumptions can affect the calculation of the commitments. Should the discount interest
rate have increased or decreased by 50 basis points, an impact on equity for the commitments in Spain would
have been registered for approximately €33 million net of tax.
In addition to the commitments to employees shown above, the Group has other less material long-term
employee benefits. These include leave and long-service awards, which consist of either an established monetary
award or shares in Banco Bilbao Argentaria A.A. granted to employees when they complete a given number of
years of qualifying service. As of December 31, 2016 and 2015 the value of these commitments amounted to
€32 and €24 million respectively. These amounts are recorded under the heading "Provisions - Other long-term
employee benefits" of the accompanying balance sheet (see Note 21).
Information on the various commitments is provided in the following sections.
Pension commitments
These commitments correspond mainly to retirement, death and disability pensions in payment. They are
covered by insurance contracts, pension funds and internal provisions.
The change in pension commitments as of December 31, 2016 and 2015 is as follows:
125
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Pensions commitments
Balance at the beginning
Current service cost
Interest income or expense
Contributions by plan participants
Employer contributions
Past service costs
(1)
Remeasurements:
Return on plan assets
(2)
From changes in demographic assumptions
From changes in financial assumptions
Other actuarial gain and losses
Benefit payments
Settlement payments
Business combinations and disposals
Effect on changes in foreign exchange rates
Other effects
Balance at the end
Of Which:
Vested benefit obligation relating to
current employees
Vested benefit obligation relating to
retired employees
Millions of Euros
2016
2015
Defined
Benefit
Plan Assets
Obligation
Net Liability
(asset)
Insurance
contracts
linked to
pensions
Defined
Benefit
Plan Assets
Obligation
Net Liability
(asset)
Insurance
contracts
linked to
pensions
3,521
1,033
2,488
2,151
3,521
1,057
2,464
2,189
-
20
-
9
-
66
66
-
-
-
(118)
-
22
(13)
9
1,028
7
46
-
(9)
(3)
171
(66)
(1)
162
76
(157)
(43)
215
(4)
5
2,716
-
40
-
-
-
166
166
-
-
-
(136)
-
205
-
-
2,426
7
66
-
-
(3)
237
-
(1)
162
76
(275)
(43)
237
(17)
14
3,744
3,564
180
-
25
-
7
-
2
2
-
-
-
(102)
-
-
7
37
1,033
5
54
-
(7)
26
87
(2)
-
79
10
(146)
-
-
2
3
2,488
-
47
-
-
-
77
77
-
-
-
(125)
-
-
-
(37)
2,151
5
79
-
-
26
89
-
-
79
10
(248)
-
-
9
40
3,521
3,337
184
(1)
(2)
Including gains and losses arising from settlements.
Excluding interest, which is recorded under "Interest income or expense".
In Spain, local regulation requires that pension and death benefit commitments must be funded, either through
the assets held for a qualified pension plan or an insurance contract.
These commitments are covered by insurance contracts which meet the requirements of the accounting
standard regarding the non-recoverability of contributions. However, a significant number of the insurance
contracts are with BBVA Seguros, S.A. and CatalunyaCaixa Vida –BBVA related parties – and consequently these
policies cannot be considered plan assets under IAS 19. For this reason, the liabilities insured under these policies
are fully recognized under the heading "Provisions – Pensions and other post-employment defined benefit
obligations" of the accompanying balance sheet (see Note 21), while the related assets held by the insurance
company are included under the heading “Insurance contracts linked to pensions “.
In addition there are commitments covered by insurance contracts with insurance companies not related to the
Bank. These commitments are funded by plan assets and therefore are presented in the accompanying balance
sheets for the net amount of the commitment less plan assets. As of December 31, 2016 and 2015, the plan
assets related to the aforementioned insurance contracts equaled the amount of the commitments covered;
therefore, no amount for this item is included in the accompanying balance sheets.
Pensions benefits are paid by the insurance companies with whom BBVA has insurance contracts and to whom
all insurance premiums have been paid. The premiums are determined by the insurance companies using “cash
flow matching” techniques to ensure that benefits can be met when due, guaranteeing both the actuarial and
interest rate risk.
The Bank signed a Social Benefit Standardization Agreement for its employees in Spain. The agreement
standardizes the existing social benefits for the different groups of employees and, in some cases where a service
was provided, quantified it as an annual amount in cash.
In addition, some overseas branches of the Bank maintain defined-benefit pension commitments with some of
their active and inactive personnel. These arrangements are closed to new entrants who instead participate in
defined-contribution plans.
126
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Early retirement commitments
In 2016 the Bank offered certain employees the possibility of taking early retirement before the age stipulated in
the collective labor agreement in force. This offer was accepted by 601 employees (1,206 in 2015).The
commitments to early retirees include the compensation and indemnities and contributions to external pension
funds payable during the period of early retirement.
The change in these commitments during financial years 2016 and 2015 is shown below:
Early retirement commitments
Balance at the beginning
Current service cost
Interest income or expense
Contributions by plan participants
Employer contributions
Past service costs
Remeasurements:
(1)
(2)
Return on plan assets
From changes in demographic assumptions
From changes in financial assumptions
Other actuarial gain and losses
Benefit payments
Settlement payments
Business combinations and disposals
Effect on changes in foreign exchange rates
Other effects
Balance at the end
Defined
Benefit
Obligation
2,689
Millions of Euros
2016
Plan Assets
Net Liability
(asset)
2015
Plan Assets
Defined
Benefit
Obligation
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,689
2,803
-
43
-
-
233
8
-
-
25
(17)
(661)
-
165
-
78
2,555
-
53
-
-
501
16
-
-
14
2
(675)
-
-
-
(9)
2,689
Net Liability
(asset)
2,803
-
53
-
-
501
16
-
-
14
2
(675)
-
-
-
(9)
2,689
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
43
-
-
233
8
-
-
25
(17)
(661)
-
165
-
78
2,555
(1)
(2)
Including gains and losses arising from settlements.
Excluding interest, which is recorded under "Interest income or expense".
The valuation and account treatment of these commitments is the same as that of the pension commitments,
except for the treatment of actuarial gains and losses (see Note 2.9).
Estimated benefit payments
The estimated payments over the next 10 years are as follows:
Estimated Future Payments
2017
2018
2019
2020
2021
2022-
2026
Commitments in Spain
Of which:
Early retirements
819
605
735
527
651
449
563
366
470
1.268
279
422
Millions of Euros
22.2 Defined contribution plans
The Bank sponsors defined contribution plans, in some cases with employees making contributions which are
matched by the employer.
127
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
These contributions are accrued and charged to the income statement in the corresponding financial year (see
Note 2.9). No liability is therefore recognized in the accompanying balance sheets for this purpose.
23. Common stock
As of December 31, 2016, BBVA’s share capital amounted to €3,217,641,468.58 divided into 6,566,615,242
fully subscribed and paid-up registered shares, all of the same class and series, at €0.49 par value each,
represented through book-entry accounts. All of the Bank shares carry the same voting and dividend rights, and
no single stockholder enjoys special voting rights. There are no shares that do not represent an interest in the
Bank’s common stock.
The Bank’s shares are traded on the Spanish stock market, as well as on the London and Mexico stock markets.
BBVA American Depositary Shares (ADSs) traded on the New York Stock Exchange. Also, as of December 31,
2016, the shares of BBVA Banco Continental, S.A., Banco Provincial S.A., BBVA Colombia, S.A., BBVA Chile,
S.A., and BBVA Banco Frances, S.A. were listed on their respective local stock markets. BBVA Banco Frances,
S.A. is also listed on the Latin American market (Latibex) of the Madrid Stock Exchange and on the New York
Stock Exchange.
As of December 31, 2016, State Street Bank and Trust Co., Chase Nominees Ltd and The Bank of New York
Mellon SA NV in their capacity as international custodian/depositary banks, held 11.74%, 7.04%, and 5.18% of
BBVA common stock, respectively. Of said positions held by the custodian banks, BBVA is not aware of any
individual shareholders with direct or indirect holdings greater than or equal to 3% of BBVA common stock
outstanding.
On January 13, 2016, the Blackrock, Inc. reported to the Spanish Securities and Exchange Commission (CNMV)
an indirect holding of BBVA common stock totaling 5.253% de derechos de voto atribuidos a las acciones, más
un 0,353% de derechos de voto a través de instrumentos financieros.
BBVA is not aware of any direct or indirect interests through which control of the Bank may be exercised. BBVA
has not received any information on stockholder agreements including the regulation of the exercise of voting
rights at its annual general meetings or restricting or placing conditions on the free transferability of BBVA shares.
No agreement is known that could give rise to changes in the control of the Bank.
The changes in the heading “Common Stock” of the accompanying balance sheets are due to the following
common stock increases:
Capital Increase
As of December 31, 2014
Dividend option - January 2015
Dividend option - April 2015
Dividend option - October 2015
As of December 31, 2015
Dividend option - April 2016
Dividend option - October 2016
As of December 31, 2016
Number of
Shares
Common Stock
(Millions of Euros)
6,171,338,995
53,584,943
80,314,074
61,442,106
6,366,680,118
113,677,807
86,257,317
6,566,615,242
3,024
26
39
30
3,120
56
42
3,218
“Dividend Option” Program in 2016:
The AGM held on March 11, 2016 under Third Point of the Agenda, adopted four resolutions on capital increase
to be charged to reserves, to once again implement the shareholder remuneration program called the “Dividend
Option” (see Note 4), pursuant to article 297.1 a) of the Spanish Corporate Enterprises Act, conferring on the
Board of Directors the authority to indicate the date on which said capital increases should be carried out, within
one year of the date of the AGM, including the power not to implement any of the resolutions, when deemed
advisable.
128
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
As a consequence of such agreement, on March 31, 2016, the Board of Directors of BBVA approved the
execution of the first of the capital increases charged to voluntary reserves agreed by the aforementioned AGM.
As a result of this increase, the Bank’s capital increased by €55,702,125.43 through the issue and circulation of
113,677,807 shares with a €0.49 par value each.
On September 28, 2016, the Board of Directors of BBVA approved the execution of the second of the capital
increases charged to voluntary reserves agreed by the aforementioned AGM. As a result of this increase, the
Bank’s capital increased by €42,266,085.33 through the issue and circulation of 86,257,317 shares with a
€0.49 par value each.
“Dividend Option” Program in 2015:
The AGM held on March 13, 2015 under Point Four of the Agenda, adopted four resolutions on capital increase
to be charged to voluntary reserves, to once again implement the shareholder remuneration program called the
“Dividend Option” (see Note 4), pursuant to article 297.1 a) of the Spanish Corporate Enterprises Act, conferring
on the Board of Directors the authority to indicate the date on which said capital increases should be carried out,
within one year of the date of the AGM, including the power not to implement any of the resolutions, when
deemed advisable.
On March 25, 2015, the Board of Directors of BBVA approved the execution of the first of the capital increases
charged to voluntary reserves agreed by the aforementioned AGM. As a result of this increase, the Bank’s capital
increased by €39,353,896.26 through the issue and circulation of 80,314,074 shares with a €0.49 par value
each.
Likewise, on September 30, 2015, the Board of Directors of BBVA approved the execution of the second of the
capital increases charged to voluntary reserves agreed by the aforementioned AGM. As a result of this increase,
the Bank’s capital increased by €30,106,631.94 through the issue and circulation of 61,442,106 shares with a
€0.49 par value each.
Capital increase
The Bank’s AGM held on March 16, 2012 agreed, in Point Three of the Agenda, to confer authority on the Board
of Directors to increase common stock in accordance with Article 297.1.b) of the Corporations Act, on one or
several occasions, within the legal deadline of five years from the date the resolution takes effect, up to the
maximum nominal amount of 50% of the subscribed and paid-up common stock on the date on which the
resolution is adopted. Likewise, an agreement was made to enable the Board of Directors to exclude the
preemptive subscription right on those common stock increases in line with the terms of Article 506 of the
Corporations Act. This authority is limited to 20% of the common stock of the Bank on the date the agreement is
adopted.
On November 19, 2014, the Board of Directors of BBVA, exercising the authority delegated by the AGM held on
March 16, 2012 under point Three of its Agenda, decided to carry out a capital increase though an accelerated
bookbuilt offering.
On November 20, 2014, the capital increase finished with a total par value of €118,787,879.56 through the
issue of 242,424,244 shares of BBVA, each with a par value of €0.49, of the same class and series as the
shares currently in circulation and represented by book entries. The subscription price of these new shares was
determined to be €8.25 per share (corresponding €0,49 to par value and €7,76 to share premium). Therefore,
the total effective amount of the Capital Increase was of €2,000,000,013 corresponding €118,787,879.56
euros to par value and €1,881,212,133.44 euros to share premium (see Note 27).
Convertible and/or exchangeable securities
At the AGM held on March 16, 2012 the shareholders resolved, in Point Five of the Agenda, to delegate to the
Board of Directors the authority to issue bonds, convertible and/or exchangeable into BBVA shares, for a
maximum total of €12 billion. The authority include the right to establish the different aspects and conditions of
each issue; to exclude the pre-emptive subscription right of shareholders in accordance with the Corporations
Act; to determine the basis and methods of conversion and/or exchange; and to increase the Banks common
stock as required to address the conversion commitments.
129
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Exercising the authority delegated by the AGM, BBVA, on April 8, 2016, BBVA S.A. has agreed to carry out the
fourth issue of perpetual contingent convertible securities, convertible into issued ordinary shares of BBVA
(Additional level I capital instruments), without pre-emption rights, for a nominal total amount of €1,000 million
(see Note 20.3).
Likewise, exercising the authority delegated by the AGM, BBVA, on February 10, 2015, BBVA S.A. has agreed to
carry out the third issue of perpetual contingent convertible securities, convertible into issued ordinary shares of
BBVA (Additional level I capital instruments), without pre-emption rights, for a nominal total amount of €1,500
million (see Note 20.3).
Exercising the authority delegated by the AGM, BBVA, in 2014, BBVA S.A. has agreed to carry out the second
issue of perpetual contingent convertible securities, convertible into issued ordinary shares of BBVA (Additional
level I capital instruments), without pre-emption rights, for a nominal total amount of €1,500 million.
Other securities
At the AGM held on March 13, 2015, in Point Three of the agenda, the shareholders resolve to delegate to the
Board of Directors, the authority to issue, within the three-year maximum period stipulated by law, on one or
several occasions, directly or through subsidiaries, with the guarantee of the Bank, any type of fixed-income
securities, documented in obligations, bonds of any kind, promissory notes, all type of covered bonds, warrants,
mortgage participation, mortgage transfers certificates and preferred securities (that are totally or partially
exchangeable for shares already issued by the Bank or by another company, in the market or which can be
settled in cash), or any other fixed-income securities, in euros or any other currency, that can be subscribed in
cash or in kind, registered or bearer, unsecured or secured by any kind of collateral, including a mortgage
guarantee, with or without incorporation of rights to the securities (warrants), subordinate or otherwise, for a
limited or indefinite period of time, up to a maximum nominal amount of €250 billion.
24. Share premium
There are no changes for years 2016 and 2015 in the balances under this heading in the accompanying balance
sheets, amounting €23,992 million due to the common stock increases carried out in 2014.
The amended Spanish Corporation Act expressly permits the use of the share premium balance to increase
capital and establishes no specific restrictions as to its use.
25. Retained earnings, Revaluation reserves and Other
The breakdown of the balance under this heading in the accompanying balance sheets is as follows:
Reserves. Breakdown by concepts
Restricted reserves:
Legal reserve
Restricted reserve for retired capital
Revaluation Royal Decree-Law 7/1996
Voluntary reserves:
Voluntary and others
Total
Millions of Euros
2016
2015
624
201
20
8.521
9.366
605
213
22
6.971
7.811
130
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
25.1 Legal reserve
Under the amended Corporations Act, 10% of any profit made each year must be transferred to the legal
reserve. These provisions must be made until the legal reserve reaches 20% of the share capital.
The legal reserve can be used to increase the common stock provided that the remaining reserve balance does
not fall below 10% of the increased capital. While it does not exceed 20% of the common stock, it can only be
allocated to offset losses exclusively in the case that there are not sufficient reserves available.
25.2 Restricted reserves
As of December 31, 2016 and 2015, the Bank’s restricted reserves are as follows:
Restricted Reserves
Restricted reserve for retired capital
Restricted reserve for Parent Company shares and loans for
those shares
Restricted reserve for redenomination of capital in euros
Total
Millions of Euros
2016
2015
88
111
2
201
88
123
2
213
The restricted reserve for retired capital originated in the reduction of the nominal par value of the BBVA shares
made in April 2000.
The most significant heading corresponds to restricted reserves related to the amount of shares issued by the
Bank in its possession at each date, as well as the amount of customer loans outstanding on those dates that
were granted for the purchase of, or are secured by, the Bank’s shares.
Finally, pursuant to Law 46/1998 on the Introduction of the Euro, a restricted reserve is recognized as a result of
the rounding effect of the redenomination of the Bank’s common stock in euros.
25.3 Revaluation and regularizations of the balance sheet
Prior to the merger, Banco de Bilbao, S.A. and Banco de Vizcaya, S.A. availed themselves of the legal provisions
applicable to the regularization and revaluation of balance sheets. Thus, on December 31, 1996, Banco Bilbao
Vizcaya, S.A. revalued its tangible assets pursuant to Royal Decree-Law 7/1996 of June 7 by applying the
maximum coefficients authorized, up to the limit of the market value arising from the existing valuations. As a
result of these updates, the increases in the cost and depreciation of tangible fixed assets were calculated and
allocated as follows.
Following the review of the balance of the “Revaluation reserve pursuant to Royal Decree-Law 7/1996 of June 7"
account by the tax authorities in 2000, this balance could only be used, free of tax, to offset recognized losses
and to increase share capital until January 1, 2007. From that date, the remaining balance of this account can
also be allocated to unrestricted reserves, provided that the surplus has been depreciated or the revalued assets
have been transferred or derecognized.
131
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
The breakdown of the calculation and movement to voluntary reserves under this heading are:
Millions of Euros
Revaluation and Regularization of the Balance Sheet
2016
2015
Legal revaluations and regularizations of tangible assets:
Cost
Less:
Single revaluation tax (3%)
Balance as of December 31, 1999
Rectification as a result of review by the tax authorities in
2000
Transfer to voluntary reserves
Total
187
(6)
181
(5)
(156)
20
187
(6)
181
(5)
(154)
22
26. Treasury shares
In 2016 and 2015 the Group companies performed the following transactions with shares issued by the Bank:
Treasury shares
Balance at beginning
+ Purchases
- Sales and other changes
+/- Derivatives over BBVA shares
+/- Other changes
Balance at the end
Of which:
Held by BBVA
Held by Corporación General Financiera, S.A.
Held by other subsidiaries
Average purchase price in euros
Average selling price in euros
Net gain or losses on transactions
(Stockholders' funds-Reserves)
2016
2015
Number of
Shares
38.917.665
379.850.939
(411.537.817)
-
-
7.230.787
-
2.789.894
4.440.893
-
5,27
5,50
-
Millions of
Euros
309
Number of
Shares
41.510.698
2.004
431.321.283
(2.263)
(1)
-
48
(433.914.316)
-
-
38.917.665
-
18
26
-
-
-
(30)
-
1.840.378
37.077.287
-
7,60
7,67
-
Millions of
Euros
350
3.273
(3.314)
-
-
309
-
19
290
-
-
-
6
The percentages of treasury stock held by the Group in 2016 and 2015 are as follows:
Treasury Stock
% treasury stock
Min
2016
Max
Closing
Min
2015
Max
Closing
0.081%
0.756%
0.110%
0.000%
0.806%
0.613%
The number of BBVA shares accepted by the Bank in pledge as of December 31, 2016 and 2015 is as follows:
Shares of BBVA Accepted in Pledge
2016
2015
Number of shares in pledge
Nominal value
% of share capital
90,731,198
92,703,291
0.49
1.38%
0.49
1.46%
132
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
The number of BBVA shares owned by third parties but managed by a company in the Group as of December
31, 2016 and 2015 is as follows:
Shares of BBVA Owned by Third Parties but Managed by the
Group
Number of shares owned by third parties
Nominal value
% of share capital
2016
2015
85,766,602
92,783,913
0.49
1.31%
0.49
1.46%
27. Accumulated other comprehensive income
The breakdown of the balance under this heading in the accompanying balance sheets is as follows:
Accumulated other comprehensive income
2016
2015
Millions of Euros
Items that will not be reclassified to profit or loss
Actuarial gains or (-) losses on defined benefit
pension plans
Non-current assets and disposal groups
classified as held for sale
Other adjustments
Items that may be reclassified to profit or loss
Hedge of net investments in foreign operations
[effective portion]
Foreign currency translation
Hedging derivatives. Cash flow hedges
[effective portion]
Available-for-sale financial assets
Non-current assets and disposal groups
classified as held for sale
Total
(43)
(43)
-
-
(319)
-
13
(127)
(205)
-
(362)
(22)
(22)
-
-
404
-
21
(75)
458
-
382
The balances recognized under these headings are presented net of tax.
28. Capital base and capital management
Capital base
As of December 31, 2016 and 2015, equity is calculated in accordance with current regulation on minimum
capital base requirements for Spanish credit institutions –both as individual entities and as consolidated group–
and how to calculate them, as well as the various internal capital adequacy assessment processes they should
have in place and the information they should disclose to the market.
The minimum capital base requirements established by the current regulation are calculated according to the
Group’s exposure to credit and dilution risk, counterparty and liquidity risk relating to the trading portfolio,
exchange-rate risk and operational risk. In addition, the Group must fulfill the risk concentration limits established
in said regulation and the internal corporate governance obligations.
133
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
As a result of the Supervisory Review and Evaluation Process (SREP) carried out by the European Central Bank
(ECB), BBVA has received a communication from the ECB requiring BBVA to maintain, on a consolidated basis,
effective from the 1st of January 2017, a phased-in total capital of 11,125% and on an individual bases, a
phased-in total capital of 10.75%.
This total capital requirement of 11.125% includes: i) the minimum CET1 capital ratio required under Pillar 1
(4.5%); ii) Pillar 1 Additional Tier 1 capital requirements (1.5%); iii) Pillar 1 Tier 2 capital requirements (2%); iv)
Pillar 2 CET1 capital requirement (1.5%); v) the capital conservation buffer (CCB) (1,25% CET1 in a phased-in
term and 2.5% in a fully loaded term) and vi) the Other Systemic Important Institution buffer (OSII) (0.375% CET1
in a phased-in term and 0.75% in a fully loaded term).
Since BBVA has been excluded from the list of global systemically important financial institutions in 2016 (which
is updated every year by the Financial Stability Board (FSB)), as of January 1, 2017, the G-SIB buffer will not
apply to BBVA in 2017, (notwithstanding the possibility that the FSB or the supervisor may include BBVA on it in
the future).
However, the supervisor has informed BBVA that it is included on the list of other systemically important financial
institutions, and a D-SIB buffer of 0.75% of the fully-loaded ratio applies at the consolidated level. It will be
implemented gradually from January 1, 2016 to January 1, 2019.
The CET1 requirement on phased-in terms stands at 7.625% on a consolidated basis and 7.25% on an individual
basis.
134
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
The Group’s bank capital in accordance with the aforementioned applicable regulation, considering entities scope
required by the above regulation, as of December 31, 2016 and 2015 is shown below: (please note that the
information for the latter period has been adapted to the new presentation format for comparison purposes):
Eligible capital resources
Capital
Share premium
Retained earnings, revaluation reserves and other reserves
Other equity instruments (net)
Treasury shares
Attributable to the parent company
Attributable dividend
Total Equity
Accumulated other comprehensive income
Non-controlling interests
Shareholders´ equity
Intangible assets
Fin. treasury shares
Indirect treasury shares
Deductions
Temporary CET 1 adjustments
Capital gains from the Available-for-sale debt instruments portfolio
Capital gains from the Available-for-sale equity portfolio
Differences from solvency and accounting level
Other adjustments and deductions
Common Equity Tier 1 (CET 1)
Additional Tier 1 before Regulatory Adjustments
Total Regulatory Adjustments of Aditional Tier 1
Tier 1
Tier 2
Other deductions
Total Capital (Total Capital=Tier 1 + Tier 2)
Millions de euros
Reconciliation of total
Reconciliation of total
equity with regulatory
equity with regulatory
capital December
capital December
2016 (*)
2015 (**)
3,218
23,992
23,641
54
(48)
3,475
(1,510)
52,821
(5,458)
8,064
55,428
(5,675)
(82)
(51)
(5,808)
(129)
(402)
273
(120)
(249)
(2,001)
47,370
6,114
(3,401)
50,083
8,810
58,893
3,120
23,992
22,512
35
(309)
2,642
(1,352)
50,640
(3,349)
8,149
55,440
(3,901)
(95)
(415)
(4,411)
(788)
(796)
8
(40)
(828)
(1,647)
48,554
5,302
(5,302)
48,554
11,646
60,200
Total Minimum equity required (**)
37,920
38,125
Provisional data
(*)
(**) Figures originally reported in the Prudential Relevance Report corresponding to the year 2015, without restatements.
Variations in the amount of Tier 1 Common Equity in the above table are mainly explained by the organic
generation of capital leaning against the recurrence of the results, net of dividends paid and remunerations; and
the efficient management and allocation of capital in line with the strategic objectives of the Group.
Additionally, there is a negative effect on the minority interests and deductions due to the regulatory phase-in
calendar of 60% in 2016 compared with 40% in 2015.
135
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
During the first semester of the year, BBVA Group has completed the additional Tier 1 capital recommended by
the Regulator (1.5% of Risk-Weighted Assets) with the issuance of perpetual securities eventually convertible into
shares, classified as additional Tier 1 equity instruments (contingent convertible) under the solvency rules and
contributing to the ratio of Tier 1 stood at 12.88%
Finally, the total capital ratio is located at 15.14% reflecting the effects discussed above.
The increase in minimum capital requirements is mainly due to the consideration of the aforementioned new
prudential capital requirements applicable to BBVA.
The comparison of the amounts as of December 31, 2016 with respect to the amounts as of December 31,
2015 according to their respective existing regulations on both periods is as follows:
Eligible capital BBVA S.A. resources
2016
2015
Millions of Euros
Core Capital
Basic equity
Additional equity
Total Equity
Minimum equity required
35,239
41,062
3,029
44,091
16,095
35,531
40,155
2,954
43,109
15,964
(*)
Provisional data and calculated according to CRD-IV
Capital management
Capital management in the BBVA Group has a twofold aim:
• Maintain a level of capitalization according to the business objectives in all countries in which it operates
and, simultaneously,
• Maximize the return on shareholders’ funds through the efficient allocation of capital to the different
units, a good management of the balance sheet and appropriate use of the various instruments forming
the basis of the Group’s equity: shares, preferred securities and subordinate debt.
This capital management is carried out determining the capital base and the solvency ratios established by the
prudential and minimum capital requirements also have to be met for the entities subject to prudential
supervision in each country.
The current regulation allows each entity to apply its own internal ratings-based (IRB) approach to risk assessment
and capital management, subject to the banking supervisor approval. The BBVA Group carries out an integrated
management of these risks in accordance with its internal policies and its internal capital estimation model has
received the Bank of Spain’s approval for certain portfolios (see 7).
136
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
29.
Commitments and guarantees given
The breakdown of the balance under these headings in the accompanying balance sheets is as follows:
Loan commitments, financial guarantees and other
commitments
Loan commitments given
of which: defaulted
Central banks
General governments
Credit institutions
Other financial corporations
Non-financial corporations
Households
Financial guarantees given
of which: defaulted
Central banks
General governments
Credit institutions
Other financial corporations
Non-financial corporations
Households
Other Commitments given
of which: defaulted
Central banks
General governments
Credit institutions
Other financial corporations
Non-financial corporations
Households
Total Loan commitments and financial guarantees
Millions of euros
2016
2015
60,863
230
1
3,111
849
3,497
38,705
14,700
18,697
176
-
102
429
10,811
7,193
162
31,306
374
12
74
8,723
4,928
17,463
106
110,866
47,751
39
1
2,547
920
3,091
35,543
5,650
20,959
149
0
61
387
14,807
5,520
183
29,395
282
15
72
8,116
5,081
16,013
98
98,105
Since a significant portion of the amounts above will reach maturity without any payment obligation materializing
for the companies, the aggregate balance of these commitments cannot be considered as an actual future
requirement for financing or liquidity to be provided by the Bank to third parties.
In 2016 and 2015 no issuances of debt securities carried out by associated entities, joint ventures or non-Group
entities have been guaranteed.
30. Other contingent assets and liabilities
As of December 31, 2016 and 2015, there were no contingent assets or liabilities for significant amounts other
than those registered in these Financial Statements.
137
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
31. Purchase and sale commitments and future payment obligations
The breakdown of the sale and purchase commitments of the Bank as of December 31, 2016 and 2015 is as
follows:
Purchase and Sale Commitments
Notes
2016
2015
Millions of Euros
Financial instruments sold with repurchase commitments
Central Banks
Credit Institutions
General governments
Other resident sectors
Non-resident sectors
Financial instruments purchased with resale commitments
Central Banks
Credit Institutions
General governments
Other resident sectors
Non-resident sectors
7
20.1
20.2
20.2
20.2
11.1
31,275
115
24,945
-
1,900
4,315
22,120
-
14,908
544
6,668
44,533
389
27,745
7,500
1,436
7,462
16,847
-
12,033
326
4,488
Future payment obligations other than those mentioned in the notes above correspond mainly to long-term (over
5 year) obligations amounting to around €2,172 million for leases payable derived from operating lease
contracts.
32. Transactions for the account of third parties
As of December 31, 2016 and 2015, the details of the most significant items under this heading are as follows:
Transactions on Behalf of Third Parties
Breakdown by concepts
Financial instruments entrusted by third parties
Conditional bills and other securities received for collection
Securities lending
Total
Millions of Euros
2016
2015
464,774
3,388
2,387
470,549
463,876
3,226
2,174
469,276
As of December 31, 2016 and 2015, the off-balance sheet customer funds managed by the Bank are as follows:
Off-Balance Sheet Customer Funds by Type
Investment companies and mutual funds
Pension funds
Saving insurance contracts
Customers portfolio under management
Total
Millions of Euros
2016
2015
37.907
19.386
8.774
8.210
74.277
34.316
18.016
7.168
7.302
66.802
138
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
33.
Interest income and expense
33.1 Interest income
The breakdown of the interest income recognized in the accompanying income statement is as follows:
Interest Income
Breakdown by Origin
Financial assets held for trading
Financial assets designated at fair value through profit or loss
Available-for-sale financial assets
Loans and receivables
Held-to-maturity investments
Hedging derivatives
Cash flow hedges (effective portion)
Fair value hedges
Other Assets
Liabilities interest income
Total
Millions of Euros
2016
2015
47
-
817
4,402
254
540
(1)
541
2
174
6,236
106
-
1,175
4,475
-
681
2
679
69
-
6,506
The amounts recognized in equity during both years in connection with hedging derivatives and the amounts
derecognized from equity and taken to the income statement during those years are disclosed in the
accompanying statements of recognized income and expenses.
33.2 Interest expenses
The following table shows the adjustments in expenses resulting from hedge accounting, broken down by type of
hedge:
Interest Expenses
Breakdown by Origin
Financial liabilities held for trading
Financial liabilities designated at fair value through profit or loss
Financial liabilities at amortised cost
Hedging derivatives and interest rate risk
Cash flow hedges
Fair value hedges
Other liabilities
Assets interest expenses
Total
Millions of Euros
2016
2015
-
-
2,122
389
(14)
403
62
140
2,713
-
-
2,700
362
(4)
366
105
-
3,167
139
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
34. Dividend income
The breakdown of the balance under this heading in the accompanying income statements is as follows:
Dividend Income
Investments in associates
Investments in jointly controlled entities
Investments in group Entities
Other shares and dividend income
Total
35. Fee and commission income
Millions of Euros
2015
2014
14
5
2,424
411
2,854
5
51
1,711
350
2,117
The breakdown of the balance under this heading in the accompanying income statements is as follows:
Fee and Commission Income
Bills receivables
Demand accounts
Credit and debit cards
Checks
Transfers and others payment orders
Insurance product commissions
Commitment fees
Contingent risks
Asset Management
Securities fees
Custody securities
Other fees and commissions
Total
Millions of Euros
2016
2015
25
144
336
7
98
124
99
170
36
89
90
668
1,886
5
123
265
6
62
107
112
178
41
106
64
681
1,751
36. Fee and commission expenses
The breakdown of the balance under this heading in the accompanying income statements is as follows:
Fee and Commission Expenses
Credit and debit cards
Transfers and others payment orders
Other fees and commissions
Total
Millions of Euros
2016
2015
132
3
218
353
103
3
183
289
140
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
37. Gains (losses) on financial assets and liabilities (net) hedge accounting
and exchange differences
The breakdown of the balance under this heading, by source of the related items, in the accompanying income
statements is as follows:
Gains or losses on financial assets and liabilities
Breakdown by Heading of the Balance Sheet
Gains or losses on derecognition of financial assets and
liabilities not measured at fair value through profit or loss, net
Available-for-sale financial assets
Loans and receivables
Other
Gains or losses on financial assets and liabilities designated at
fair value through profit or loss, net
Gains or losses on financial assets and liabilities held for
trading, net
Gains or losses from hedge accounting, net
Subtotal
Millions of Euros
2016
2015
955
955
(1)
1
-
(70)
(62)
823
775
776
-
(1)
-
151
(16)
910
Exchange differences
Total
305
1,128
224
1,134
141
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
The breakdown of the balance (excluding the exchange differences) under this heading in the accompanying
income statements by the nature of the financial instruments is as follows:
Gains or losses on financial assets and liabilities
Breakdown by nature of the Financial Instrument
Millions of Euros
2016
2015
Debt instruments
Equity instruments
Loans and advances to customers
Derivatives
Derivatives held for trading
Interest rate agreements
Security agreements
Commodity agreements
Credit derivative agreements
Foreign-exchange agreements
Other agreements
Hedging Derivatives Ineffectiveness
Fair value hedges
Hedging derivative
Hedged item
Cash flow hedges
Customer deposits
Other
Total
1,010
187
(1)
(233)
(171)
(209)
53
-
(15)
-
-
(62)
(62)
(137)
75
-
-
(140)
823
695
(522)
-
885
901
105
713
(1)
84
-
-
(16)
(16)
29
(45)
-
-
(148)
910
In addition, in 2016 and 2015, under the heading “Gains or losses on financial assets and liabilities held for
trading, net” of the income statements, net amounts of positive €151 million and positive €135 million,
respectively, are registered for transactions with foreign exchange derivatives.
38. Other operating income and expenses
The breakdown of the balance under the heading “Other operating income” and in the accompanying income
statements is as follows:
Other operating income
Real estate income
Financial income from non-financial services
Rest of operating income
Total
Millions of Euros
2016
2015
20
56
63
140
12
64
38
114
142
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
The breakdown of the balance under the heading “Other operating expenses” in the accompanying income
statements is as follows:
Other operating expenses
Contributions to guaranted banks deposits funds
Real estate agencies
Other operating expenses
Total
39. Administration costs
39.1 Personnel expenses
Millions of Euros
2016
2015
270
105
129
504
241
127
97
465
The breakdown of the balance under this heading in the accompanying income statements is as follows:
Personnel Expenses
Wages and salaries
Social security costs
Defined contribution plan expense
Defined benefit plan expense
Other personnel expenses
Total
Millions of Euros
Notes
2016
2015
22
22
1,905
386
3
46
162
2,502
1,666
337
2
45
148
2,198
The breakdown of the number of employees in the Bank as of December 31, 2016 and 2015, by categories and
gender, is as follows:
Number of Employees at the end of year
Professional Category and Gender
Management Team
Other line personnel
Clerical staff
General Services
Branches abroad
Total
2016
2015
Male
Female
Male
Female
797
11,414
1,367
3
397
13,978
232
11,211
1,859
1
255
13,558
797
10,406
1,311
3
458
12,975
224
9,771
1,462
1
285
11,743
Share-based employee remuneration
The amounts registered under the heading “Personnel expenses - Other personnel expenses” in the income
statements for the years 2016 and 2015, corresponding to the plans for remuneration based on equity
instruments in force in each year, amounted to €49 million and €30 million for BBVA, respectively. These
amounts have been registered with a balancing entry under the heading “Stockholders’ funds – Other equity
instruments” in the accompanying balance sheets, net of tax effect.
The specifications of the Bank's Group remuneration plans based on equity instruments are described below.
143
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
System of Variable Remuneration in Shares
In BBVA, the annual variable remuneration applying to all employees consists of a one incentive only, paid in
cash, awarded once a year and linked to the achievement of previously established goals and to a sound risk
management based on the design of incentives that are aligned with the company’s long-term interests and that
take into account current and future risks (hereinafter, the “Annual Variable Remuneration”).
Nevertheless, the remuneration policy of the BBVA Group, in force since 2015, has a specific settlement and
payment scheme of the Annual Variable Remuneration applicable to those employees, including the executive
directors and members of the BBVA Senior Management, performing professional activities that may have a
significant impact on the risk profile of the Group or engaged in control functions (hereinafter, the "Identified
Staff"), that includes, among others, the payment in shares of part of their Annual Variable Remuneration.
This remuneration policy was approved for the directors by the Annual General Meeting, March 13, 2015.
The specific settlement and payment scheme for the Annual Variable Remuneration of executive directors and
members of the Senior Management is described in Note 54, while the rules listed below are applicable to the
rest of the Identified Staff:
• The Annual Variable Remuneration of members of the Identified Staff will be paid in equal parts in cash and
BBVA shares.
• The payment of 40% of the Annual Variable Remuneration, - 50% in the case of the executive directors and
the members of the Senior Management - both in cash and in shares, will be deferred in its entirety for three
years. Its accrual and payment will be subject to compliance with a series of multi-year indicators related to
share performance and the Group’s basic control and risk management metrics measuring solvency, liquidity
and profitability, which will be calculated throughout the deferral period (hereinafter “Multi-year Performance
Indicators”). These Multi-year Performance Indicators may lead to a reduction in the amount deferred, and
might even bring it down to zero, but they will not be used under any circumstances to increase the
aforementioned deferred remuneration.
• All the shares delivered to these beneficiaries would be unavailable for a period of time after they have
vested, according to the rules explained in the previous paragraph. This withholding will be applied against
the net amount of the shares, after deducting any tax accruing on the shares received.
• A prohibition is also established against hedging with unavailable vested shares and shares pending
reception.
• Moreover, circumstances have been established in which the payment of the deferred Annual Variable
Remuneration may be limited or impeded ("malus" clauses), as well as the adjustment to update these
deferred parts.
•
Finally, the variable component of the remuneration corresponding to any one financial year of those in the
Identified Staff will be limited to an upper threshold of 100% of the fixed component of the total
remuneration, unless the General Meeting should resolve to raise this limit which, in any event, may not
exceed 200% of the fixed component of the total remuneration.
In this regard, the Annual General Meeting held on March 14, 2014 resolved, in line with applicable legislation,
the application of the maximum level of variable remuneration up to 200% of the fixed remuneration for a
specific group of employees whose professional activities have a material impact on the Group’s risk profile or are
engaged in control functions. Additionally, the General Meeting held on March 13, 2015, resolved to enlarge this
group, whose variable remuneration will be subject to the maximum threshold of 200% of the fixed component
of their total remuneration. This is entirely consistent with the Recommendations Report issued by the BBVA's
Board of Directors on February 3, 2015.
According to the settlement and payment scheme mentioned above, in 2016 a number of 5,187,750 shares
corresponding to the initial payment of 2015 Annual Variable Remuneration were delivered to the beneficiary
members of the Identified Staff.
Additionally, the remuneration policy prevailing until 2014 provided a specific settlement and payment scheme
for the variable remuneration of the Identified Staff that established a deferral period of three years for the Annual
Variable Remuneration, being the deferred amount paid in thirds over this period.
144
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
According to this prior scheme, in 2016 the shares corresponding to the deferred parts of the Annual Variable
Remuneration paid in shares from previous years, and their corresponding adjustments in cash, were delivered to
the beneficiary members of the Identified Staff, giving rise in 2016, of a total of 945,053 shares corresponding to
the first deferred third of the 2014 Annual Variable Remuneration were granted, and €349,670 as adjustments
for updates of the shares granted; a total of 438,082 shares corresponding to the second deferred third of the
2013 Annual Variable Remuneration, and €340,828 in adjustments for updates; and a total of 502,622 shares
corresponding to the final third of the 2012 Annual Variable Remuneration, with €551,879 in adjustments for
updates.
39.2 General and administrative expenses
The breakdown of the balance under this heading in the accompanying income statements is as follows:
Administrative Expenses.
Breakdown by main concepts
Technology and systems
Communications
Advertising
Property, fixtures and materials
Of which:Rent expenses (*)
Taxes
Other administration expenses
Total
Millions of Euros
2016
2015
483
64
139
454
325
10
595
1,745
399
61
137
430
314
21
510
1,558
(*)
The Bank does not expect to terminate the lease contracts early.
40. Depreciation
The breakdown of the balance under this heading in the accompanying income statements is as follows:
Depreciation
Tangible assets
For own use
Investment properties
Assets leased out under financial lease
Other Intangible assets
Total
Millions of Euros
Notes
2016
2015
15
16
222
220
2
-
353
575
200
191
9
-
319
519
145
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
41. Provisions or reversal of provisions
In 2016 and 2015, the net provisions charged to in this heading of the income statement were as follows:
Provisions or reversal of provisions
Notes
2016
2015
Pensions and other post employment defined benefit
obligations
Commitments and guarantees given
Other Provisions
Total
21
21
21
228
7
952
1,187
550
29
72
651
Millions of Euros
42.
Impairment or reversal of impairment on financial assets not measured
at fair value through profit or loss
The impairment losses on financial assets broken down by the nature of these assets in the accompanying
income statements are as follows:
Impairment or reversal of impairment on financial assets not
measured at fair value through profit or loss
Available-for-sale financial assets
Debt securities
Other equity instruments
Financial assets at amortized cost
Held-to-maturity investments
Loans and receivables
Of which: Recovery of written-off assets
Total
Millions of Euros
2016
2015
180
174
6
12
-
757
448
949
-
-
-
13
-
1,291
380
1,304
43.
Impairment or reversal of impairment on non-financial assets and
investments in subsidiaries, joint ventures or associates.
The impairment losses on non-financial assets and investments in subsidiaries, joint ventures or associates broken
down by the nature of these assets in the accompanying income statements is as follows:
Impairment or reversal of impairment on non-financial
assets
Millions of Euros
Notes
2016
2015
Investments in subsidiaries, joint ventures or associates
Total
14
147
147
(835)
(835)
Impairment or reversal of impairment on non-financial
assets
Intangible assets
Tangible assets
Total
Millions of Euros
Notes
2016
2015
16
15
-
16
16
-
22
22
146
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
44. Gains (losses) on derecognized of non-financial assets and subsidiaries,
net
The breakdown of the balance under this heading in the accompanying income statements is as follows:
Gains or losses on derecognition of non-financial assets and
investments in subsidiaries, joint ventures and associates, net
Gains
Disposal of investments in subsidiaries
Disposal of tangible assets and other
Losses:
Disposal of investments in subsidiaries
Disposal of tangible assets and other
Total
Millions of Euros
2016
2015
13
-
(1)
-
12
8
-
-
-
8
45. Profit or loss from non-current assets and disposal groups classified as
held for sale not qualifying as discontinued operations
The main items included in the balance under this heading in the accompanying income statements are as
follows:
Profit or (-) loss from non-current assets and disposal groups
classified as held for sale not qualifying as discontinued
operations
Gains for real estate
Of which:
Foreclosed
Sale of buildings for own use
Impairment of non-current assets held for sale
Gains on sale of available-for-sale financial assets (*)
Other gains and losses (**)
Total
(*) Corresponding to the sale of CNCB in 2015 (see Note 14).
(**) Corresponding to the sale of CIFH in 2015 (see Note 14).
Millions of Euros
Notes
2016
2015
14
19
(4)
2
(6)
(69)
-
-
(73)
62
3
59
(204)
499
403
760
46. Statements of cash flows
Cash flows from operating activities increased in 2016 by €6,281 million (€4,706 million in 2015). The most
significant causes of the increase are linked to “Loans and receivables” and “Other operating assets”.
The most significant variations in cash flows from investment activities decreased in 2016 by €1,048 million
euros(€2,259 million in 2015) corresponded to main variations in the headings “Held-to-maturity investments”
and “Non-current assets for sale”.
Cash flows from financing activities decreased in 2016 by €502 million (€302 million up in 2015), corresponded
to the most significant changes in the acquisition and disposal of own equity instruments.
147
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
The table below shows the breakdown of the main cash flows related to investing activities as of December 31,
2016 and 2015:
Main Cash Flows in Investing Activities
2016
Tangible assets
Intangible assets
Investments
Subsidiaries and other business units
Non-current assets held for sale and associated liabilities
Held-to-maturity investments
Other settlements related to investing activities
Main Cash Flows in Investing Activities
2015
Tangible assets
Intangible assets
Investments
Subsidiaries and other business units
Non-current assets held for sale and associated liabilities
Held-to-maturity investments
Other settlements related to investing activities
Millions of Euros
Cash Flows in Investment Activities
Investments (-)
Divestments (+)
(170)
(320)
(246)
-
(674)
(1,758)
-
20
-
93
-
511
1,321
175
Millions of Euros
Cash Flows in Investment Activities
Investments (-)
Divestments (+)
(211)
(298)
(4,113)
-
(1,001)
-
-
12
-
62
-
1,249
-
2,043
The heading “Non-current assets held for sale and associated liabilities” in the above tables includes transactions
of a non-cash nature related to the foreclosed assets received as payment for past-due loans.
47. Accountant fees and services
The breakdown of the fees for the services provided to the Bank by its auditors in 2016 is as follows:
Fees for Audits Conducted
Audits of the companies audited by firms belonging to the Deloitte
worldwide organization and other reports related with the audit (*)
Other reports required pursuant to applicable legislation and tax regulations
issued by the national supervisory bodies of the countries in which the
Group operates, reviewed by firms belonging to the Deloitte worldwide
organization
Fees for audits conducted by other firms
(*)
Including fees belonging to annual statutory audits (€7.9 million)
In addition, in 2016, the Bank contracted services (other than audits) as follows:
Accountant Fees. Other Services Contracted
Firms belonging to the Deloitte worldwide organization(*)
Other firms
(*)
Includes €0.03 million relating to fees for tax services
148
Millions of Euros
2016
11.7
1.1
-
Millions of Euros
2016
0.7
20.1
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
The services provided by our auditors meet the independence requirements established under Act 44/2002, of
22 November 2002, on Measures Reforming the Financial System and under the Sarbanes-Oxley Act of 2002
adopted by the Securities and Exchange Commission (SEC); accordingly they do not include the performance of
any work that is incompatible with the auditing function.
48. Related-party transactions
As a financial institution, BBVA engages in transactions with related parties in the normal course of business. All of
these transactions are of little relevance and are carried out under normal market conditions.
48.1 Transactions with significant shareholders
As of December 31, 2016 there were no shareholders considered significant (see Note 23).
48.2 Transactions with BBVA Group entities
The balances of the main aggregates in the accompanying balance sheets arising from the transactions carried
out by the Group companies, which consist of ordinary business and financial transactions carried out under
normal market conditions, are as follows:
Balances arising from transactions with Entities of the
Group
Assets:
Loans and advances to credit institutions
Loans and advances to customers
Available-for-sale financial assets
Liabilities:
Deposits from credit institutions
Customer deposits
Debt certificates
Memorandum accounts:
Financial guarantees given
Contingent commitments
Millions of Euros
2016
2015
2,422
11,909
320
2,189
18,117
-
12,466
2,596
5,649
10,502
296
11,346
14,811
-
16,570
2,081
The balances of the main aggregates in the accompanying income statements arising from the transactions
carried out by the Bank with Group companies, which consist of ordinary business and financial transactions
carried out under normal market conditions, are as follows:
Balances of Income Statement arising from transactions
with Entities of the Group
Income statement:
Financial Incomes
Financial Costs
Fee and commission income
Fee and commission expenses
Millions of Euros
2016
2015
155
316
555
13
139
562
500
58
The balance for operations with associate entities amounted to €248 million for assets, €508 million for liabilities
and €1,628 million for guarantees and contingent commitments. In the income statement, the net balance
registered in the margin of interest amounted to €1 million and in the headings fee and commission income and
expenses amounted to €4 million and €47 million, respectively.
149
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
There are no other material effects in the financial statements arising from dealings with these companies, other
than the effects arising from using the equity method and from the insurance policies to cover pension or similar
commitments, which are described in Note 22.
In addition, as part of its normal activity, the Bank has entered into agreements and commitments of various
types with shareholders of subsidiaries and associates, which have no material effects on the financial statements.
48.3 Transactions with members of the Board of Directors and Senior Management
The information on the remuneration of the members of the BBVA Board of Directors and Senior Management is
included in Note 49.
As of December 31, 2016, there were no loans granted by the Group’s entities to the members of the Board of
Directors. As of December 31, 2015 the amount availed against the loans by the Group’s entities to the
members of the Board of Directors was €200 thousand. The amount availed against the loans by the Group’s
entities to the members of Senior Management on those same dates (excluding the executive directors)
amounted to €5,573 and €6,641 thousand, respectively.
As of December 31, 2016, there were no loans granted to parties related to the members of the Board of
Directors. As of December 31, 2015, the amount availed against the loans to parties related to the members of
the Bank’s Board of Directors was €10,000 thousand.
As of December 31, 2016 and 2015 the amount availed against the loans to parties related to members of the
Senior Management amounted to €98 and €113 thousand, respectively.
As of December 31, 2016 and 2015 no guarantees had been granted to any member of the Board of Directors.
As of December 31, 2016, the amount availed against guarantees arranged with members of the Senior
Management totaled €28 thousand. As of December 31, 2015 no guarantees had been granted to any member
of the Senior Management
As of December 31, 2016 and 2015 the amount availed against commercial loans and guarantees arranged with
parties related to the members of the Bank’s Board of Directors and the Senior Management totaled €8 and
€1,679 thousand, respectively.
Additionally, during 2016, it was registered an insurance policy to ensure the responsibility of the managers of
the BBVA Group which amounted to €2,012 thousand.
48.4 Transactions with other related parties
In 2016 and 2015, the Bank did not perform any transactions with other related parties that did not belong to
the normal course of its business, that were not under normal market conditions or that were relevant for the
equity, financial situation or earnings of the Bank.
49. Remuneration and other benefits of the Board of Directors and
Members of the Bank’s Management Committee
• Remuneration of non-executive directors received in 2016
The remuneration paid to the non-executive members of the Board of Directors during 2016 is indicated below.
The figures are given individually for each non-executive director and itemised:
150
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Remuneration for non-executive
directors
Board of
Directors
Executive
Committee
Thousands of Euros
Audit &
Compliance
Committee
Risks
Committee
Remuneration
Committee
Appointments
Committee
Technology and
Cybersecurity
Committee
Total
Tomás Alfaro Drake
José Miguel Andrés Torrecillas
José Antonio Fernández Rivero
Belén Garijo López
Sunir Kumar Kapoor (1)
Carlos Loring Martínez de Irujo
Lourdes Máiz Carro
José Maldonado Ramos
José Luis Palao García-Suelto
Juan Pi Llorens
Susana Rodríguez Vidarte
James Andrew Stott (2)
Total (3)
129
129
129
129
107
129
129
129
129
129
129
107
1,502
-
-
125
-
-
125
-
167
-
-
167
-
584
71
179
-
71
-
18
71
-
-
54
-
-
464
-
107
53
-
-
80
-
-
107
27
107
160
642
11
-
32
32
-
27
-
-
32
91
-
32
257
102
31
10
-
-
-
31
41
10
-
41
-
265
(1) Sunir Kumar Kappor was appointed director upon resolution of the General Meeting held on 11 March 2016.
(2) James Andrew Stott was appointed director upon resolution of the General Meeting held on 11 March 2016.
25
-
-
-
25
-
-
-
-
25
-
25
100
338
445
350
232
132
379
231
336
278
325
443
325
3,813
(3) Includes the amounts as members of the different Committees during 2016. The composition of the Committees was changed in 31
March 2016.
In addition, Ramón Bustamante y de la Mora and Ignacio Ferrero Jordi, who ceased as directors on 11 March 2016, received in 2016
the total amount of €70 thousand and €85 thousand, respectively, as members of the Board of Directors and the different Board
Committees.
Moreover, during 2016, €132 thousand was paid in healthcare and casualty insurance premiums for non-
executive members of the Board of Directors.
• Remuneration of executive directors received in 2016
The remuneration scheme for the executive directors is in line with the general model applicable to BBVA senior
managers. This comprises a fixed remuneration and a variable remuneration, which is in turn made up of a
single incentive (hereinafter the “Annual Variable Remuneration”).
Thus, during 2016, the executive directors were paid the amount of fixed remuneration corresponding to that
year and the Annual Variable Remuneration corresponding to 2015, paid during the first quarter of the year
2016, according to the settlement and payment system set out in the current Remuneration Policy for BBVA
Directors as approved by the General Meeting held on 13 March 2015 (hereinafter, the "Settlement and
Payment System"). The Settlement and Payment System provides that:
• The Annual Variable Remuneration will be paid in equal parts in cash and in BBVA shares.
• 50% of the Annual Variable Remuneration, in cash and in shares, will be deferred in its entirety for a
three-year period, and its accrual and vesting shall be subject to compliance with a series of multi-year
indicators.
• All the shares vested under the rules explained in the previous paragraphs would be unavailable for the
period of time determined by the Board of Directors, as from the respective vesting. This withholding will
be applied with respect to the net amount of the shares, after discounting the necessary part to pay the
tax accruing on the shares received.
• No hedging strategies may be carried out on the shares received and unavailable or on the shares
pending to be received.
• Moreover, circumstances have been established in which disbursement of the Annual Variable
Remuneration may be limited or impeded ("malus" clauses).
• The deferred parts of the Annual Variable Remuneration would be adjusted to update them under the
terms established by the Board of Directors.
151
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Likewise, in application of the settlement and payment system of the Annual Variable Remuneration
corresponding to years 2014, 2013 and 2012, under the applicable policy for those years, the executive
directors have received the deferred parts of the Annual Variable Remuneration corresponding to those years,
which vested in the first quarter of year 2016.
Pursuant to the above, the remuneration paid to the executive directors during 2016 is shown below. The figures
are given individually for each executive director and itemised:
Remuneration of executive directors
Thousands of Euros
Fixed
2015 Annual
Variable
Deferred
variable
Remuneration
Remuneration in
remuneration in
Total Cash
cash (1)
cash (2)
2015 Annual
Variable
Remuneration in
BBVA shares (1)
Deferred Variable
Remuneration in
Total Shares
BBVA shares (2)
Group Executive Chairman
Chief Executive Officer (*)
Head of Global Economics, Regulation & Public
Affairs (“Head of GERPA”)
Total
1,966
1,923
800
4,689
897
530
98
1,526
893
240
47
1,180
3,756
2,693
945
7,394
135,300
79,956
14,815
230,071
103,112
27,823
5,449
136,384
238,412
107,779
20,264
366,455
(*) The variable remuneration paid to the Chief Executive Officer, who was appointed for said position on 4 May 2015, includes as well the
remuneration vested as Digital Banking Officer during the period in which he held this position (4 months).
(1) Amounts corresponding to 50% of 2015 Annual Variable Remuneration.
(2) Amounts corresponding to the sum of the deferred parts of the Annual Variable Remuneration from previous years (2014, 2013 and
2012), and their respective cash adjustments; payment or delivery of which was made in 2016, in application of the settlement and
payment system, as broken down below:
- 1st third of deferred Annual Variable Remuneration from 2014
Under this item, the executive directors received: €302 thousand and 37,392 BBVA shares in the case of the Group Executive Chairman;
€95 thousand and 11,766 BBVA shares in the case of the Chief Executive Officer; and €30 thousand and 3,681 BBVA shares in the case
of the executive director Head of GERPA.
- 2nd third of deferred Annual Variable Remuneration from 2013
Under this item, the executive directors received €289 thousand and 29,557 BBVA shares in the case of the Group Executive Chairman;
€78 thousand and 7,937 BBVA shares in the case of the Chief Executive Officer; and €17 thousand and 1,768 BBVA shares in the case
of the executive director Head of GERPA.
-
3rd third of deferred Annual Variable Remuneration from 2012
Under this item, the Group Executive Chairman received €301 thousand and 36,163 BBVA shares, while the Chief Executive Officer
received €68 thousand and 8,120 BBVA shares.
The executive directors will receive, during the first quarter of each of the next two years, the deferred amounts
that in each case correspond in application of the settlement of the deferred Annual Variable Remuneration from
previous years (2014 and 2013), and subject to the conditions established in the applicable settlement and
payment system.
Likewise, during 2016, the executive directors received payment in kind, including insurance premiums and
others, amounting to an overall total of €240 thousand, of which €17 thousand were paid to the Group
Executive Chairman; €139 thousand to the Chief Executive Officer; and €84 thousand to the executive director
Head of GERPA.
152
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
• Annual Variable Remuneration for executive directors for the year 2016
Following year-end 2016, the Annual Variable Remuneration for the executive directors corresponding to that
year has been determined applying the conditions established for that purpose at the beginning of that year, as
set forth in the Remuneration Policy for BBVA Directors as approved by the General Meeting held on 13 March
2015. Consequently, during the first quarter of 2017, the executive directors will receive 50% of the 2016
Annual Variable Remuneration, in equal parts in cash and in shares, i.e., €734 thousand and 114,204 BBVA
shares in the case of the Group Executive Chairman; €591 thousand and 91,915 BBVA shares the case of the
Chief Executive Officer; and €89 thousand and 13,768 BBVA shares the case of the executive director Head of
GERPA.
The remaining 50%, in cash and in shares, will be deferred for a three-year period, and its accrual and vesting will
be subject to compliance with multi-year indicators established by the Board of Directors at the beginning of the
year. Based on the result of each multi-year indicator during the deferred period and applying the performance
scales assigned to each of them and their weightings, the final deferred amount of the Annual Variable
Remuneration will be determined after the deferred period. The deferred Annual Variable Remuneration may be
reduced and even reach zero, but in no event may be increased. To these effect, the maximum amounts that
could be received during the first quarter of 2020 are: €734 thousand and 114,204 BBVA shares the case of the
Group Executive Chairman; €591 thousand and 91,915 BBVA shares the case of the Chief Executive Officer; and
€89 thousand and 13,768 BBVA shares the case of the executive director Head of GERPA; all subject to the
settlement and payment conditions established in the Remuneration Policy for BBVA Directors.
These amounts are recorded under the item “Other Liabilities” of the balance sheet at 31 December 2016.
• Remuneration of the members of the Senior Management received in 2016
During 2016, the remuneration paid to the members of BBVA’s Senior Management as a whole, excluding
executive directors, is shown below (itemised):
Remuneration of members of the Senior Management
Thousands of Euros
2015 Annual
Fixed
Variable
Deferred
Variable
Remuneration
Remuneration in
Remuneration in
Total Cash
cash (1)
cash (2)
2015 Annual
Variable
Remuneration in
BBVA Shares (1)
Deferred Variable
Remuneration in
Total Shares
BBVA Shares (2)
Total Members of the Senior Management (*)
11,115
2,457
1,343
14,915
370,505
155,746
526,251
(*) This section includes aggregate information regarding the members of BBVA Group’s Senior Management, excluding executive
directors, who were members of the Senior Management as of 31 December 2016 (14 members).
(1) Amounts corresponding to 50% of 2015 Annual Variable Remuneration.
(2) Amounts corresponding to the sum of the deferred parts of the Annual Variable Remuneration from previous years (2014, 2013, and
2012), and their corresponding cash adjustments; payment or delivery of which was made in 2016, to the members of the Senior
Management who had generated this right, as broken down below:
- 1st third of deferred Annual Variable Remuneration from 2014
Overall amount of €515 thousand and 63,862 BBVA shares.
- 2nd third of deferred Annual Variable Remuneration from 2013
Overall amount of €434 thousand and 44,426 BBVA shares.
- 3rd third of deferred Annual Variable Remuneration from 2012
Overall amount of €395 thousand and 47,458 BBVA shares.
During the first quarter of each of the next two years, under the applicable settlement and payment system of the
variable remuneration, all members of the Senior Management will receive the corresponding amounts,
stemming from the settlement of the deferred Annual Variable Remuneration from previous years (2014 and
2013), and subject to the conditions established in this system.
153
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Moreover, during 2016, all members of the Senior Management, with the exception of the executive directors,
received remuneration in kind, including insurance premiums and others, for a total overall amount of €664
thousand.
• System of remuneration in shares with deferred delivery for non-executive directors
BBVA has a remuneration system in shares with deferred delivery for its non-executive directors, which was
approved by the General Meeting held on 18 March 2006 and extended under General Meeting resolutions
dated 11 March 2011 and 11 March 2016, for a further 5-year period in each case.
This System is based on the annual allocation to non-executive directors of a number of "theoretical shares",
equivalent to 20% of the total remuneration in cash received by each of them in the previous year, according to
the closing prices of the BBVA share during the sixty trading sessions prior to the Annual General Meeting
approving the corresponding financial statements for each year.
These shares, where applicable, will be delivered to each beneficiary on the date they leave the position as
director for any reason other than dereliction of duty.
The number of “theoretical shares” allocated in 2016 to the non-executive directors beneficiaries of the system of
remuneration in shares with deferred delivery, corresponding to 20% of the total remuneration received in cash
by said directors during 2015, is as follows:
Tomás Alfaro Drake
José Miguel Andrés Torrecillas
José Antonio Fernández Rivero
Belén Garijo López
Carlos Loring Martínez de Irujo
Lourdes Máiz Carro
José Maldonado Ramos
José Luis Palao García-Suelto
Juan Pi Llorens
Susana Rodríguez Vidarte
Total (1)
Theoretical shares
Theoretical shares
accumulated to
allocated in 2016
31st December
2016
11,363
9,808
12,633
6,597
10,127
5,812
11,669
11,070
9,179
14,605
102,863
62,452
9,808
91,046
19,463
74,970
8,443
57,233
51,385
32,374
78,606
485,780
(1) In addition, in 2016, Ramón Bustamante y de la Mora and Ignacio Ferrero Jordi, who ceased as directors on 11
March 2016, were allocated 8,709 and 11,151 theoretical shares, respectively.
• Pension commitments
The commitments undertaken regarding pension benefits for the Chief Executive Officer and the executive
director Head of GERPA, pursuant to the Company Bylaws and their respective contracts with the Bank include a
pension system covering retirement, disability and death.
The Chief Executive Officer’s contractual conditions determine that he will retain the pension system to which he
was entitled previously as senior manager in the Group, with the benefits and the provisions being adjusted to the
new remuneration conditions derived from the position that he currently holds.
154
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
The executive director Head of GERPA retains the same pension system he has had since his appointment in
2013, which comprises a defined-contributions system of 20% per year over the fixed remuneration received
during that period to cover retirement commitments and provisions covering death and disability.
To such end, the provisions recorded as of 31 December 2016 to cover pension commitments undertaken for
the Chief Executive Officer amounted to €16,051 thousand, of which, during 2016 and according to applicable
accounting regulations, €2,342 thousand have been provisioned against earnings of the year and €836
thousand against equity, in order to adapt the interest rate assumption used for the valuation of pension
commitments in Spain. In the case of the executive director Head of GERPA, the provisions recorded as of 31
December 2016 amounted to €609 thousand, of which €310 have been provisioned against earnings of the
year. In both cases, these amounts include the provisions covering retirement, as well as death and disability.
There are no other pension obligations in favour of other executive directors.
The provisions recorded as of 31 December 2016 for pension commitments for members of the Senior
Management, excluding executive directors, amounted to €46,299 thousand, of which, during 2016 and
according to applicable accounting regulations, €4,895 thousand have been provisioned against earnings of the
year and €2,226 thousand against equity, in order to adapt the interest rate assumption used for the valuation of
pension commitments in Spain. These amounts include the provisions covering retirement, as well as death and
disability.
As a result of the entry into force of Circular 2/2016, of the Bank of Spain to the credit institutions, 15% of the
annual contributions agreed to pension systems determined on the basis of the vesting estimated for the financial
year corresponding to executive directors and BBVA’s senior managers, will be based on variable components
and will be considered as discretionary pension benefits, and in consequence will be deemed as deferred variable
remuneration, subject to the payment and retention conditions provided in the applicable regulations, as well as
malus arrangements and other applicable conditions established to the variable remuneration in the
Remuneration Policy for BBVA’s Directors.
• Extinction of contractual relationship
The Bank has no commitments to pay severance indemnity to executive directors other than to the executive
director Head of GERPA, whose contract includes, as of 31 December 2016, his right to receive an indemnity
equivalent to two times his fixed remuneration should he cease to hold his position on grounds other than his
own will, death, retirement, disability or dereliction of duty.
The contractual conditions of the Chief Executive Officer with regard to his pension arrangements determine that,
as of 31 December 2016, in the event of his ceasing to hold his position on grounds other than his own will,
retirement, disability or dereliction of duty, he will take early retirement with a pension that he may receive as a
lifelong annuity or as a capital lump sum, at his own choice. The annual amount will be calculated as a function of
the provisions which, according to the actuarial criteria applicable at any time, the Bank may have made up to
that date to cover the retirement pension commitments provided for in his contract, without this commitment in
any way compelling the Bank to set aside additional provisions. Moreover, this pension may not be greater than
75% of the pensionable base should the event occur before he reaches the age of 55, or 85% of the pensionable
base should the event occur after having reached the age of 55.
According to the proposal for a new Remuneration Policy for BBVA’s Directors to be submitted to the next Annual
General Shareholders’ Meeting in 2017, if approved, the pension scheme and the extinction of contractual
relationships of the executive directors, the Chief Executive Officer and the Head of GERPA will be amended for
2017 and following financial years, in the terms established under such Policy.
155
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
50. Other information
50.1 Environmental impact
Given the activities in which it engages, the Bank has no environmental liabilities, expenses, assets, provisions or
contingencies that could have a significant effect on its equity, financial situation and profits. Consequently, as of
December 31, 2016, there is no item in the accompanying financial statements that requires disclosure in an
environmental information report pursuant to Ministry of Economy Order JUS/206/2009, dated January 28, and
consequently no specific disclosure of information on environmental matters is included in these statements.
50.2 Breakdown of agents of credit institutions
Appendix XIII contains a list of the Bank's agents as required by article 21 of Royal Decree 84/2015, dated
February 13, of the Ministry of Economy and Finance.
50.3 Report on the activity of the Customer Care Service and the Customer
Ombudsman
The report on the activity of the Customer Care Service and the Customer Ombudsman, required pursuant to
Article 17 of Ministry of Economy Order ECO/734/2004 dated March 11, is included in the Management Report
accompanying these financial statements.
50.4 Mortgage market policies and procedures
The disclosure required by Bank of Spain Circular 5/2011 under the provisions of Spanish Royal Decree
716/2009, of April 24, (implementing certain aspects of Act 2/1981, of March 25, on the regulation of the
mortgage market and other mortgage and financial market regulations) is detailed in Appendix X.
50.5 Reporting requirements of the Spanish National Securities Market Commission
(CNMV)
Dividends paid in the year
The table below presents the dividends per share paid in cash in 2016 and 2015 (cash basis accounting,
regardless of the year in which they are accrued), but not including other shareholder remuneration such as the
“Dividend Option”. For a complete analysis of all remuneration awarded to shareholders in 2016 (see Note 3).
Dividends Paid
% Over
Euros per
("Dividend Option" not included)
Nominal
Share
Amount
(Millions of
Euros)
% Over
Euros per
Nominal
Share
Amount
(Millions of
Euros)
2016 (*)
2015
Ordinary shares
Rest of shares
Total dividends paid in cash
Dividends with charge to income
Dividends with charge to reserve or
share premium
Dividends in kind
(*)
Corresponding to two payments.
16%
-
16%
16%
-
-
0.08
-
0.08
0.08
-
-
1,028
-
1,028
1,028
-
-
16%
-
16%
16%
-
-
0.08
-
0.08
0.08
-
-
504
-
504
504
-
-
156
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Interest income by geographical area
The breakdown of the balance under the heading “Interest Income” in the accompanying income statements by
geographical area is as follows:
Interest Income
Breakdown by Geographical Area
Domestic
Foreign
European Union
Rest of OECD
Rest of countries
Total
Millions of Euros
2016
2015
5,914
322
145
85
92
6,236
6,224
282
158
47
77
6,506
Average number of employees by gender
The breakdown of the average number of employees in the Bank in 2016 and 2015, by gender, is as follows:
Average number of employees
Management Team
Other line personnel
Clerical staff
General Services
Branches abroad
Total
2016
2015
Male
Female
Male
Female
806
10,851
1,345
3
441
13,445
232
10,347
1,677
1
278
12,534
812
10,714
1,535
7
458
13,526
215
9,821
1,623
1
289
11,949
During 2016, the average number of handicap employees with disabilities greater than or equal to 33% was 151
employees
50.6 Responsible lending and consumer credit granting
BBVA has incorporated the best practices of responsible lending and consumer credit granting, and has policies
and procedures that contemplate these practices complying with the provisions of the Order of the Ministry of
Finance EHA / 2899/2011, of 28 October, transparency and customer protection of banking services, as well as
the Bank of Spain Circular 5/2012, of 27 June, on transparency of banking services and responsible lending.
Specifically, the Corporate Retail Credit Risk Policy (approved by the Executive Committee of the Board of
Directors of the Bank on April 3, 2013) and Specific Rules derived from it, establish policies, practices and
procedures in relation to responsible granting of loans and consumer credit.
In compliance with Bank of Spain Circular 3/2014, of July 30, the following summary of those policies contained
in the Corporate Retail Credit Risk Policy BBVA is provided:
• The need to adapt payment plans with sources of income generation;
• The evaluation requirements of affordability;
• The need to take into account the level of expected retirement income of the borrower;
• The need to take account of existing financial obligations payments;
•
In cases where, for commercial reasons or the type of rate/currency, the offer to the borrowers includes
contractual clauses or contracting financial products to hedge interest rate and exchange rate risks.
• The need, when there is collateral, to establish a reasonable relationship between the amount of the loan and
its potential extensions and value of collateral, regardless revaluations thereof;
157
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
• The need for extreme caution in the use of appraisal values on credit operations that have real estate as an
additional borrower's personal guarantee;
• The periodic review of the value of collateral taken to hedge loans;
• A number of elements of management in order to ensure independence in the activity of appraisal
companies;
• The need to warn customers of potential consequences in terms of cost by default interest and other
expenses that would continue in default;
• Debt renegotiation criteria (refinancing and restructurings);
• The minimum documentation that operations should have in order to be granted and during its term.
In order to maintain an effective monitoring of these policies, BBVA has the following control mechanisms:
• Validations and computer controls built into the workflows of analysis, decision and contracting operations, in
order to embed these principles in management;
• Alignment between the specifications of the product catalog with the policies of responsible lending;
• Different areas of sanction to ensure adequate hierarchy decision levels in response to the complexity of
operations;
• A reporting scheme that allows to monitor the proper implementation of the policies of responsible lending.
51. Subsequent events
The interim dividend approved on December 22, 2016 was paid out on January 12, 2017, as detailed in Note
3.
On February 1, 2017, the dividend policy was announced for the year 2017 (see Note 3)
From January 1, 2017 to the date of preparation of these financial statements, no other subsequent events not
mentioned above in these financial statements have taken place that significantly affect the Bank’s earnings or its
equity position.
52. Explanation added for translation into English
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally
accepted accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-
IFRS for banks).
158
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Appendices
159
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
APPENDIX I. BBVA Group Consolidated Financial Statements
Consolidated balance sheets as of December 31, 2016, 2015 and 2014
ASSETS
CASH, CASH BALANCES AT CENTRAL BANKS AND OTHER DEMAND
DEPOSITS
FINANCIAL ASSETS HELD FOR TRADING
Derivatives
Equity instruments
Debt securities
Loans and advances to central banks
Loans and advances to credit institutions
Loans and advances to customers
FINANCIAL ASSETS DESIGNATED AT FAIR VALUE THROUGH PROFIT OR
LOSS
Equity instruments
Debt securities
Loans and advances to central banks
Loans and advances to credit institutions
Loans and advances to customers
AVAILABLE-FOR-SALE FINANCIAL ASSETS
Equity instruments
Debt securities
LOANS AND RECEIVABLES
Debt securities
Loans and advances to central banks
Loans and advances to credit institutions
Loans and advances to customers
HELD-TO-MATURITY INVESTMENTS
HEDGING DERIVATIVES
FAIR VALUE CHANGES OF THE HEDGED ITEMS IN PORTFOLIO HEDGES OF
INTEREST RATE RISK
INVESTMENTS IN SUBSIDARIES, JOINT VENTURES AND ASSOCIATES
Joint ventures
Associates
INSURANCE OR REINSURANCE ASSETS
TANGIBLE ASSETS
Property, plants and equipment
For own use
Other assets leased out under an operating lease
Investment properties
INTANGIBLE ASSETS
Goodwill
Other intangible assets
TAX ASSETS
Current
Deferred
OTHER ASSETS
Insurance contracts linked to pensions
Inventories
Rest
NON-CURRENT ASSETS AND DISPOSAL GROUPS HELD FOR SALE
TOTAL ASSETS
(*) Presented for comparison purposes only.
160
Millions of Euros
2016
2015 (*)
2014 (*)
40,039
74,950
42,955
4,675
27,166
-
-
154
2,062
1,920
142
-
-
-
79,221
4,641
74,580
465,977
11,209
8,894
31,373
414,500
17,696
2,833
17
765
229
536
447
8,941
8,250
7,519
732
691
9,786
6,937
2,849
18,245
1,853
16,391
7,274
-
3,298
3,976
3,603
731,856
29,282
78,326
40,902
4,534
32,825
-
-
65
2,311
2,075
173
-
62
-
113,426
5,116
108,310
471,828
10,516
17,830
29,317
414,165
-
3,538
45
879
243
636
511
9,944
8,477
8,021
456
1,467
10,052
6,915
3,137
17,779
1,901
15,878
8,565
-
4,303
4,263
3,369
749,855
27,719
83,258
44,229
5,017
33,883
-
-
128
2,761
2,024
737
-
-
-
94,875
7,267
87,608
376,086
6,659
5,429
25,342
338,657
-
2,551
121
4,509
4,092
417
559
7,820
6,428
5,985
443
1,392
7,371
5,697
1,673
12,426
2,035
10,391
8,094
-
4,443
3,651
3,793
631,942
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Consolidated balance sheets as of December 31, 2016, 2015 and 2014
LIABILITIES AND EQUITY
2016
2015 (*)
2014 (*)
Millions of Euros
FINANCIAL LIABILITIES HELD FOR TRADING
Trading derivatives
Short positions
Deposits from central banks
Deposits from credit institutions
Customer deposits
Debt certificates
Other financial liabilities
FINANCIAL LIABILITIES DESIGNATED AT FAIR VALUE
THROUGH PROFIT OR LOSS
Deposits from central banks
Deposits from credit institutions
Customer deposits
Debt certificates
Other financial liabilities
FINANCIAL LIABILITIES AT AMORTIZED COST
Deposits from central banks
Deposits from credit institutions
Customer deposits
Debt certificates
Other financial liabilities
HEDGING DERIVATIVES
FAIR VALUE CHANGES OF THE HEDGED ITEMS IN PORTFOLIO
HEDGES OF INTEREST RATE RISK
LIABILITIES UNDER INSURANCE CONTRACTS
PROVISIONS
Provisions for pensions and similar obligations
Other long term employee benefits
Provisions for taxes and other legal contingencies
Provisions for contingent risks and commitments
Other provisions
TAX LIABILITIES
Current
Deferred
OTHER LIABILITIES
54,675
43,118
11,556
-
-
-
-
-
55,202
42,149
13,053
-
-
-
-
-
56,798
45,052
11,747
-
-
-
-
-
2,338
2,649
2,724
-
-
-
-
2,338
589,210
34,740
63,501
401,465
76,375
13,129
2,347
-
9,139
9,071
6,025
69
418
950
1,609
4,668
1,276
3,392
4,979
-
-
-
-
2,649
606,113
40,087
68,543
403,362
81,980
12,141
2,726
358
9,407
8,852
6,299
68
616
714
1,155
4,656
1,238
3,418
4,610
-
-
-
-
2,724
491,899
28,193
65,168
319,334
71,917
7,288
2,331
-
10,460
7,444
5,970
62
262
381
769
4,157
980
3,177
4,519
LIABILITIES INCLUDED IN DISPOSAL GROUPS CLASSIFIED AS
HELD FOR SALE
TOTAL LIABILITIES
-
-
676,428
694,573
-
580,333
(*) Presented for comparison purposes only.
161
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Consolidated balance sheets for the years ended December 31, 2016, 2015 and 2014
LIABILITIES AND EQUITY (Continued )
2016
2015 (*)
2014 (*)
Millions of Euros
SHAREHOLDERS’ FUNDS
Capital
Paid up capital
Unpaid capital which has been called up
Share premium
Equity instruments issued other than capital
Other equity
Retained earnings
Revaluation reserves
Other reserves
Reserves or accumulated losses of investments in subsidaries, joint ventures
and associates
Other
Less: Treasury shares
Profit or loss attributable to owners of the parent
Less: Interim dividends
ACCUMULATED OTHER COMPREHENSIVE INCOME
Items that will not be reclassified to profit or loss
Actuarial gains or (-) losses on defined benefit pension plans
Non-current assets and disposal groups classified as held for sale
Share of other recognised income and expense of investments in subsidaries,
joint ventures and associates
Other adjustments
Items that may be reclassified to profit or loss
Hedge of net investments in foreign operations [effective portion]
Foreign currency translation
Hedging derivatives. Cash flow hedges [effective portion]
Available-for-sale financial assets
Non-current assets and disposal groups classified as held for sale
Share of other recognised income and expense of investments in subsidaries,
joint ventures and associates
MINORITY INTERESTS (NON-CONTROLLING INTEREST)
Valuation adjustments
Rest
TOTAL EQUITY
TOTAL EQUITY AND TOTAL LIABILITIES
52,821
3,218
3,218
-
23,992
-
54
23,688
20
(67)
(67)
-
(48)
3,475
(1,510)
(5,458)
(1,095)
(1,095)
-
-
-
(4,363)
(118)
(5,185)
16
947
-
50,639
3,120
3,120
-
23,992
-
35
22,588
22
(98)
(98)
-
(309)
2,642
(1,352)
(3,349)
(859)
(859)
-
-
-
(2,490)
(274)
(3,905)
(49)
1,674
-
49,446
3,024
3,024
-
23,992
-
67
20,280
23
633
633
-
(350)
2,618
(841)
(348)
(777)
(777)
-
-
-
429
(373)
(2,173)
(46)
3,816
-
(23)
8,064
(2,246)
10,310
55,428
731,856
64
7,992
(1,333)
9,325
55,282
749,855
(796)
2,511
(53)
2,563
51,609
631,942
Millions of Euros
MEMORANDUM ITEM (OFF-BALANCE SHEET EXPOSURES)
2016
2015 (*)
2014 (*)
Financial guarantees given
Contingent commitments
(*) Presented for comparison purposes only.
50,540
49,876
117,573
135,733
33,741
106,252
162
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Consolidated income statements for the years ended December 31, 2016, 2015 and 2014
CONSOLIDATED INCOME STATEMENTS
2016
2015 (*)
2014 (*)
Millions of Euros
Interest income
Interest expe nses
NET INTEREST INCOME
Divide nd income
Share of profit or loss of entities accounted for using the equity
me thod
Fee and commission income
Fee and commission expense s
Gains or (-) losses on derecognition of financial assets and
liabilities not me asured at fair value through profit or loss, ne t
Gains or (-) losses on financial assets and liabilities held for
trading, ne t
Gains or (-) losses on financial assets and liabilities designate d at
fair value through profit or loss, net
Gains or (-) losses from hedge accounting, net
Exchange differences (net)
Other operating income
Other operating expe nses
Income on insurance and reinsurance contracts
Expense s on insurance and reinsurance contracts
GROSS INCOME
Administration costs
Personnel expense s
Other administrative expenses
De preciation
Provisions or (-) reversal of provisions
Impairment or (-) reversal of impairment on financial assets not
me asured at fair value through profit or loss
Financial assets measure d at cost
Available - for-sale financial assets
Loans and receivables
Held to maturity investments
NET OPERATING INCOME
Impairment or (-) reversal of impairment of investments in
subsidaries, joint ventures and associates
Impairment or (-) reversal of impairment on non-financial asse ts
Tangible assets
Intangible assets
Other assets
Gains (losses) on derecognized of non financial assets and
subsidiaries, net
Ne gative goodwill recognised in profit or loss
Profit or (-) loss from non-current assets and disposal groups
classifie d as held for sale not qualifying as discontinued
operations
OPERATING PROFIT BEFORE TAX
Tax expense or (-) income related to profit or loss from continuing
operation
PROFIT FROM CONTINUING OPERATIONS
Profit from discontinued operations (net)
PROFIT
Attributable to minority interest [non-controlling interests]
Attributable to owners of the parent
EARNINGS PER SHARE
Basic earnings per share from continued operations
Dilute d earnings per share from continue d operations
Basic earnings per share from discontinued operations
Dilute d earnings per share from discontinued operations
(*)Presented for comparison purposes only.
163
27,708
(10,648)
17,059
467
25
6,804
(2,086)
24,783
(8,761)
16,022
415
174
6,340
(1,729)
22,838
(8,456)
14,382
531
343
5,530
(1,356)
1,375
1,055
1,439
248
(409)
11
114
(76)
472
1,272
(2,128)
3,652
(2,545)
24,653
(11,366)
(6,722)
(4,644)
(1,426)
(1,186)
(3,801)
-
(202)
(3,597)
(1)
6,874
-
(521)
(143)
(3)
(375)
70
-
(31)
126
93
1,165
1,315
(2,285)
3,678
(2,599)
23,362
(10,836)
(6,273)
(4,563)
(1,272)
(731)
(4,272)
-
(23)
(4,248)
-
6,251
-
(273)
(60)
(4)
(209)
(2,135)
26
32
(47)
699
959
(2,705)
3,622
(2,714)
20,725
(9,414)
(5,410)
(4,004)
(1,145)
(1,142)
(4,340)
-
(35)
(4,304)
-
4,684
-
(297)
(97)
(8)
(192)
46
-
734
(453)
6,392
4,603
3,980
(1,699)
4,693
-
4,693
1,218
3,475
(1,274)
3,328
-
3,328
686
2,642
(898)
3,082
-
3,082
464
2,618
Millions of Euros
2016
2015 (*)
2014 (*)
0.50
0.50
0.50
-
-
0.37
0.37
0.37
-
-
0.40
0.40
0.40
-
-
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
Consolidated statements of changes in equity for the years ended December 31, 2016, 2015 and 2014
2016
B a la nc e s a s o f J a nua ry 1, 2 0 16
T o ta l inc o m e / e xpe ns e re c o gnize d
Ot he r c ha nge s in e quit y
Issuances o f co mmo n shares
Issuances o f preferred shares
Issuance o f o ther equity instruments
P erio d o r maturity o f o ther issued equity instruments
Co nversio n o f debt o n equity
Co mmo n Sto ck reductio n
Dividend distributio n
P urchase o f treasury shares
Sale o r cancellatio n o f treasury shares
Reclassificatio n o f financial liabilities to o ther equity instruments
Reclassificatio n o f o ther equity instruments to financial liabilities
Transfers between to tal equity entries
Increase/Reductio n o f equity due to business co mbinatio ns
Share based payments
Other increases o r (-) decreases in equity
C a pita l
S ha re
P re m ium
3 ,12 0
2 3 ,9 9 2
E quit y
ins trum e nt s
is s ue d o t he r
t ha n c a pit a l
-
9 8
9 8
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
B a la nc e s a s o f D e c e m be r 3 1, 2 0 16
3 ,2 18
2 3 ,9 9 2
O t he r E quit y
R e t a ine d
e a rnings
R e v a lua t io n
re s e rv e s
O t he r
re s e rv e s
( - ) T re a s ury
s ha re s
M illio ns o f E uro s
P ro f it o r lo s s
a t t ributa ble t o
o wne rs o f t he
pa re nt
Inte rim
div ide nds
A c c um ula t e d
o t he r
c o m pre he ns iv
e inc o m e
N o n-c o nt ro lling int e re s t
V a lua t io n
a djus t m e nt s
R e s t
T o t a l
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3 5
-
19
-
-
-
-
-
-
-
-
-
-
-
-
-
(16)
35
5 4
2 2 ,5 8 8
-
1,10 0
(9 8 )
-
-
-
-
-
93
-
(30)
-
-
1,166
-
3
(34)
2 3 ,6 8 8
2 2
-
( 2 )
-
-
-
-
-
-
-
-
-
-
-
(2)
-
-
-
2 0
(9 8 )
-
3 1
-
-
-
-
-
-
(9 3 )
-
-
-
-
126
-
-
(2)
(6 7 )
( 3 0 9 )
-
2 6 0
2 ,6 4 2
3 ,4 7 5
( 2 ,6 4 2 )
(1,3 5 2 )
-
(15 8 )
-
-
-
-
-
-
-
( 2 ,0 0 4 )
2,264
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
( 1,3 0 1)
-
-
-
-
(2,642)
1,352
-
-
-
-
-
(210)
( 3 ,3 4 9 )
(2 ,10 9 )
(1,3 3 3 )
( 9 13 )
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
9 ,3 2 5
1,2 18
( 2 3 3 )
5 5 ,2 8 1
1,6 7 1
( 1,5 2 6 )
-
-
-
-
-
-
( 2 3 4 )
-
-
-
-
-
-
-
2
-
-
-
-
-
-
( 1,5 3 5 )
( 2 ,0 0 4 )
2,234
-
-
-
-
(12)
(209)
( 4 8 )
3 ,4 7 5
( 1,5 10 )
( 5 ,4 5 8 )
( 2 ,2 4 6 )
10 ,3 10
5 5 ,4 2 8
164
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
Consolidated statements of changes in equity for the years ended December 31, 2016, 2015 and 2014
2015 (*)
Balances as of January 1, 2015
T o ta l inc o m e / e xpe ns e re c o gnize d
Ot he r c ha nge s in e quit y
Issuances o f co mmo n shares
Issuances o f preferred shares
Issuance o f o ther equity instruments
P erio d o r maturity o f o ther issued equity instruments
Co nversio n o f debt o n equity
Co mmo n Sto ck reductio n
Dividend distributio n
P urchase o f treasury shares
Sale o r cancellatio n o f treasury shares
Reclassificatio n o f financial liabilities to o ther equity instruments
Reclassificatio n o f o ther equity instruments to financial liabilities
Transfers between to tal equity entries
Increase/Reductio n o f equity due to business co mbinatio ns
Share based payments
Other increases o r (-) decreases in equity
Balances as of December 31, 2015
(*) Presented for comparison purposes only.
C a pita l
(N o t a 2 5 )
S ha re
P re m ium
( N o t e 2 6 )
E quit y
ins trum e nt s
is s ue d o t he r
t ha n c a pit a l
3 ,0 2 4
2 3 ,9 9 2
-
9 6
96
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3 ,12 0
2 3 ,9 9 2
O t he r E quit y
R e t a ine d
e a rnings
R e v a lua t io n
re s e rv e s
O t he r
re s e rv e s
( - ) T re a s ury
s ha re s
M illo ne s de e uro s
P ro f it o r lo s s
a t t ributa ble t o
o wne rs o f t he
pa re nt
Inte rim
div ide nds
A c c um ula t e d
o t he r
c o m pre he ns iv
e inc o m e
N o n-c o nt ro lling int e re s t
O t ro
re s ult a do
glo ba l
a c um ula do
Ot ro s
e le m e nt o s
T o t a l
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6 6
-
( 3 2 )
-
-
-
-
-
-
-
-
-
-
-
-
-
(48)
16
3 5
2 0 ,2 8 1
-
2 ,3 0 8
(96)
-
-
-
-
-
86
-
6
-
-
2,423
-
14
(126)
2 2 ,5 8 8
2 3
-
( 1)
-
-
-
-
-
-
-
-
-
-
-
(1)
-
-
-
2 2
6 3 3
-
( 7 3 1)
-
-
-
-
-
-
(86)
-
-
-
-
(645)
-
-
-
( 3 5 0 )
-
4 1
2 ,6 18
2 ,6 4 2
( 2 ,6 18 )
(8 4 1)
-
(512)
( 3 4 8 )
( 5 3 )
( 3 ,0 0 0 )
(1,2 8 0 )
-
-
-
-
-
-
-
-
-
(3,278)
3,319
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(2,618)
-
-
-
-
-
-
-
-
-
(1,222)
-
-
-
-
841
-
-
(131)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2 ,5 6 3
6 8 6
6 ,0 7 5
-
-
-
-
-
-
(146)
-
-
-
-
-
-
-
6,221
5 1,6 0 9
( 9 5 3 )
4 ,6 2 6
-
-
-
-
-
-
(1,368)
(3,278)
3,325
-
-
-
-
(34)
5,980
(9 8 )
( 3 0 9 )
2 ,6 4 2
(1,3 5 2 )
( 3 ,3 4 9 )
(1,3 3 3 )
9 ,3 2 5
5 5 ,2 8 1
165
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
Consolidated statements of changes in equity for the years ended December 31, 2016, 2015 and 2014
2014 (*)
Balances as of January 1, 2014
T o ta l inc o m e / e xpe ns e re c o gnize d
Ot he r c ha nge s in e quit y
Issuances o f co mmo n shares
Issuances o f preferred shares
Issuance o f o ther equity instruments
P erio d o r maturity o f o ther issued equity instruments
Co nversio n o f debt o n equity
Co mmo n Sto ck reductio n
Dividend distributio n
P urchase o f treasury shares
Sale o r cancellatio n o f treasury shares
Reclassificatio n o f financial liabilities to o ther equity instruments
Reclassificatio n o f o ther equity instruments to financial liabilities
Transfers between to tal equity entries
Increase/Reductio n o f equity due to business co mbinatio ns
Share based payments
Other increases o r (-) decreases in equity
B a la nc e s a s o f D e c e m be r 3 1, 2 0 14
C a pita l
(N o t a 2 5 )
S ha re
P re m ium
( N o t e 2 6 )
E quit y
ins trum e nt s
is s ue d o t he r
t ha n c a pit a l
O t he r E quit y
R e t a ine d
e a rnings
R e v a lua t io n
re s e rv e s
O t he r
re s e rv e s
( - ) T re a s ury
s ha re s
P ro f it o r lo s s
a t t ributa ble t o
o wne rs o f t he
pa re nt
Inte rim
div ide nds
A c c um ula t e d
o t he r
c o m pre he ns iv
e inc o m e
N o n-c o nt ro lling int e re s t
O t ro
re s ult a do
glo ba l
a c um ula do
Ot ro s
e le m e nt o s
T o t a l
M illo ne s de e uro s
2 ,8 3 5
2 2 ,111
-
18 9
189
-
1,8 8 1
1,881
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3 ,0 2 4
2 3 ,9 9 2
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5 9
-
8
-
-
-
-
-
-
-
-
-
-
-
-
-
(36)
44
6 7
19 ,2 9 1
-
9 8 9
(70)
-
-
-
-
-
91
-
5
-
-
1,044
-
7
(88)
2 6
-
( 2 )
-
-
-
-
-
-
-
-
-
-
-
4 5 0
-
18 2
-
-
-
-
-
-
(91)
-
-
-
-
(2)
277
-
-
-
-
-
(4)
6 3 3
( 6 6 )
-
( 2 8 4 )
2 ,0 8 4
2 ,6 18
( 2 ,0 8 4 )
( 7 6 5 )
-
(76)
-
-
-
-
-
-
(597)
-
-
-
-
-
-
(244)
(8 4 1)
(3 ,8 3 1)
3 ,4 8 3
-
7 0
( 12 3 )
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2 ,3 0 1
4 6 4
( 2 0 1)
-
-
-
-
-
-
(243)
-
-
-
-
-
-
-
42
4 4 ,5 6 5
6 ,4 4 2
6 0 2
2,000
-
-
-
-
-
(840)
(3,770)
3,491
-
-
-
-
(29)
(250)
( 3 4 8 )
( 5 3 )
2 ,5 6 3
5 1,6 0 9
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(2,084)
765
( 3 5 0 )
2 ,6 18
-
-
-
-
-
-
-
(3,770)
3,486
-
-
-
-
-
-
(*) Presented for comparison purposes only.
2 0 ,2 8 0
2 3
166
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Statements of Recognized Income and Expenses for the year ended December 31, 2016,
2015 and 2014.
CONSOLIDATED STATEMENTS OF RECOGNIZED INCOME AND EXPENSES
2016
2015 (*)
2014 (*)
Millions of Euros
PROFIT RECOGNIZED IN INCOME STATEMENT
OTHER RECOGNIZED INCOME (EXPENSES)
ITEMS NOT SUBJECT TO RECLASSIFICATION TO INCOME STATEMENT
Actuarial gains and losses from defined benefit pension plans
Non-current assets available for sale
Entities under the equity method of accounting
Income tax related to items not subject to reclassification to income statement
ITEMS SUBJECT TO RECLASSIFICATION TO INCOME STATEMENT
Hedge of net investments in foreign operations [effective portion]
Valuation gains or (-) losses taken to equity
Transferred to profit or loss
Other reclassifications
Foreign currency translation
Valuation gains or (-) losses taken to equity
Transferred to profit or loss
Other reclassifications
Cash flow hedges [effective portion]
Valuation gains or (-) losses taken to equity
Transferred to profit or loss
Transferred to initial carrying amount of hedged items
Other reclassifications
Available-for-sale financial assets
Valuation gains or (-) losses taken to equity
Transferred to profit or loss
Other reclassifications
Non-current assets held for sale
Valuation gains or (-) losses taken to equity
Transferred to profit or loss
Other reclassifications
Entities accounted for using the equity method
Income tax
TOTAL RECOGNIZED INCOME/EXPENSES
Attributable to minority interest [non-controlling interests]
Attributable to the parent company
(*) Presented for comparison purposes only.
4,693
(3,022)
(240)
(303)
-
-
63
(2,782)
166
166
-
-
(2,167)
(2,120)
(47)
-
80
134
(54)
-
-
(694)
438
(1,248)
116
-
-
-
-
(89)
(78)
1,671
305
1,366
3,328
(4,280)
(74)
(135)
-
8
53
(4,206)
88
88
-
-
(2,911)
(3,154)
243
-
4
47
(43)
-
-
(3,196)
(1,341)
(1,855)
-
-
-
-
-
861
948
(952)
(594)
(358)
3,082
3,359
(346)
(498)
-
(5)
157
3,705
(273)
(273)
-
-
760
761
(1)
-
(71)
(71)
-
-
-
4,306
5,706
(1,400)
-
(4)
(4)
-
-
338
(1,351)
6,441
341
6,100
167
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Consolidated statements of cash flows for the years ended December 31, 2016, 2015 and
2014
CONSOLIDATED STATEMENTS OF CASH FLOW
2016
2015 (*)
2014 (*)
Millions of Euros
A) CASH FLOW FROM OPERATING ACTIVITIES (1 + 2 + 3 + 4 + 5)
1. Profit for the year
2. Adjustments to obtain the cash flow from operating activities:
Depreciation and amortization
Other adjustments
3. Net increase/decrease in operating assets
Financial assets held for trading
Other financial assets designated at fair value through profit or loss
Available-for-sale financial assets
Loans and receivables
Other operating assets
4. Net increase/decrease in operating liabilities
Financial liabilities held for trading
Other financial liabilities designated at fair value through profit or loss
Financial liabilities at amortized cost
Other operating liabilities
5. Collection/Payments for income tax
B) CASH FLOWS FROM INVESTING ACTIVITIES (1 + 2)
1. Investment
Tangible assets
Intangible assets
Investments in joint ventures and associates
Subsidiaries and other business units
Non-current assets held for sale and associated liabilities
Held-to-maturity investments
Other settlements related to investing activities
2. Divestments
Tangible assets
Intangible assets
Investments in joint ventures and associates
Subsidiaries and other business units
Non-current assets held for sale and associated liabilities
Held-to-maturity investments
Other collections related to investing activities
(*) Presented for comparison purposes only.
168
6,623
4,693
6,784
1,426
5,358
(4,428)
1,289
(2)
14,445
(21,075)
915
1,273
361
(53)
(7)
972
(1,699)
(560)
(3,978)
(1,312)
(645)
(76)
(95)
-
(1,850)
-
3,418
795
20
322
73
900
1,215
93
23,101
3,328
18,327
1,272
17,055
(12,954)
4,691
337
3,360
(20,498)
(844)
15,674
(2,475)
120
21,422
(3,393)
(1,274)
(4,411)
(6,416)
(2,171)
(571)
(41)
(3,633)
-
-
-
2,005
224
2
1
9
1,683
-
86
(6,188)
3,082
8,315
1,145
7,170
(53,244)
(11,145)
(349)
(13,485)
(27,299)
(966)
36,557
11,151
256
24,219
931
(898)
(1,151)
(1,984)
(1,419)
(467)
-
(98)
-
-
-
833
167
-
118
-
548
-
-
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Consolidated statements of cash flows for the years ended December 31, 2016, 2015 and
2014
(Continued)
C) CASH FLOWS FROM FINANCING ACTIVITIES (1 + 2)
1. Investment
Dividends
Subordinated liabilities
Treasury stock amortization
Treasury stock acquisition
Other items relating to financing activities
2. Divestments
Subordinated liabilities
Treasury stock increase
Treasury stock disposal
Other items relating to financing activities
D) EFFECT OF EXCHANGE RATE CHANGES
E) NET INCREASE/DECREASE IN CASH OR CASH EQUIVALENTS
(A+B+C+D)
F) CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR
G) CASH AND CASH EQUIVALENTS AT END OF THE PERIOD (E+F)
Millions of Euros
2016
2015 (*)
2014 (*)
(1,113)
(4,335)
(1,599)
(502)
-
(2,004)
(230)
3,222
1,000
-
2,222
-
(3,463)
1,489
43,466
44,955
127
(5,717)
(879)
(1,419)
-
(3,273)
(146)
5,844
2,523
-
3,321
-
(6,781)
12,036
31,430
43,466
3,157
(5,955)
(826)
(1,046)
-
(3,770)
(313)
9,112
3,628
2,000
3,484
-
725
(3,457)
34,887
31,430
Millions of Euros
COMPONENTS OF CASH AND EQUIVALENT AT END OF THE YEAR
2016
2015 (*)
2014 (*)
Cash
Balance of cash equivalent in central banks (**)
Other financial assets
Less: Bank overdraft refundable on demand
TOTAL CASH AND CASH EQUIVALENTS AT END OF THE PERIOD
7,413
37,542
-
-
44,955
7,192
36,275
-
-
43,466
6,247
25,183
-
-
31,430
(*) Presented for comparison purposes only.
(**) Equivalent cash balances at central banks includes short-term deposits at central banks under the heading "Loans
and receivables" in the accompanying consolidated balance sheets.
169
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
APPENDIX II. Additional information on consolidated subsidiaries composing the BBVA Group
Additional Information on Consolidated Subsidiaries and consolidated structured entities composing the BBVA Group
Company
Location
Activity
Direct
Indirect
Total
Net
Carrying
Amount
Assets
31.12.16
Liabilities
31.12.16
Equity
31.12.16
Profit (Loss)
31.12.16
% Legal share
of participation
Millions of Euros(*)
Affiliate Entity Data
UNITED STATES
FINANCIAL SERVICES
4D INTERNET SOLUTIONS, INC
ACTIVOS MACORP, S.L. (**)
ALCALA 120 PROMOC. Y GEST.IMMOB. S.L.
ALGARVETUR, S.L. (**)(***)
AMERICAN FINANCE GROUP, INC.
ANIDA DESARROLLOS INMOBILIARIOS, S.L.
ANIDA GERMANIA IMMOBILIEN ONE, GMBH
ANIDA GRUPO INMOBILIARIO, S.L. (**)
ANIDA INMOBILIARIA, S.A. DE C.V.
ANIDA OPERACIONES SINGULARES, S.A. (****)
ANIDA PROYECTOS INMOBILIARIOS, S.A. DE C.V.
ANIDAPORT INVESTIMENTOS IMOBILIARIOS, UNIPESSOAL, LTDA
APLICA SOLUCIONES TECNOLOGICAS CHILE LIMITADA
APLICA TECNOLOGIA AVANZADA OPERADORA, S.A. DE C.V.
APLICA TECNOLOGIA AVANZADA SERVICIOS, S.A. DE C.V.
APLICA TECNOLOGIA AVANZADA, S.A. DE C.V.- ATA
AREA TRES PROCAM, S.L. (***)
ARIZONA FINANCIAL PRODUCTS, INC
ARRAHONA AMBIT, S.L. (*****)
ARRAHONA IMMO, S.L.
ARRAHONA NEXUS, S.L. (*****)
ARRAHONA RENT, S.L.U.
ARRELS CT FINSOL, S.A. (*****)
ARRELS CT LLOGUER, S.A. (*****)
ARRELS CT PATRIMONI I PROJECTES, S.A. (*****)
ARRELS CT PROMOU, S.A. (*****)
AUMERAVILLA, S.L.
BAHIA SUR RESORT, S.C.
BANCO BILBAO VIZCAYA ARGENTARIA (PORTUGAL), S.A.
BANCO BILBAO VIZCAYA ARGENTARIA CHILE, S.A.
BANCO BILBAO VIZCAYA ARGENTARIA URUGUAY, S.A.
BANCO CONTINENTAL, S.A.
BANCO DE PROMOCION DE NEGOCIOS, S.A.
BANCO INDUSTRIAL DE BILBAO, S.A.
BANCO OCCIDENTAL, S.A.
BANCO PROVINCIAL OVERSEAS N.V.
BANCO PROVINCIAL S.A. - BANCO UNIVERSAL
BANCOMER FINANCIAL SERVICES INC.
BANCOMER FOREIGN EXCHANGE INC.
BANCOMER PAYMENT SERVICES INC.
(*) Information on foreign companies at exchange rate on December 31, 2016
(**) These companies have equity loans from BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
(***) These companies have equity loans from CATALUNYACAIXA IMMOBILIARIA, S.A.
(****) This company has an equity loan from ANIDA GRUPO INMOBILIARIO, S.L.
(*****) These companies have an equity loan from UNNIM SOCIEDAD PARA LA GESTION DE ACTIVOS INMOBILIARIOS, S.A
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
99.95
100.00
68.19
100.00
46.12
99.86
99.93
100.00
100.00
55.21
100.00
100.00
100.00
23
2
14
-
20
49
-
-
166
(105)
94
31
-
4
1
203
-
928
-
53
-
9
-
-
-
-
2
1
230
827
110
913
15
97
17
52
80
2
10
1
24
90
23
19
20
467
1
1,507
119
4,097
107
103
-
14
3
340
5
928
66
234
213
9
278
48
121
38
2
1
1
87
9
41
-
411
-
1,656
-
4,195
14
96
-
9
2
137
5
-
103
101
322
-
368
61
157
50
-
-
4,028
3,808
19,508
18,295
3,051
22,269
19
2,861
20,290
-
139
18
435
917
3
10
2
2
-
383
814
-
-
1
26
2
14
(21)
20
65
1
244
116
241
85
12
-
-
-
194
-
928
(31)
103
(110)
10
(76)
(6)
(33)
(10)
2
1
218
1,106
193
1,621
19
112
18
50
138
2
6
-
(3)
2
-
(1)
-
(10)
-
(393)
3
(339)
9
(5)
-
4
-
9
-
-
(5)
30
2
(1)
(15)
(6)
(3)
(2)
-
-
2
107
(4)
358
-
24
-
2
(35)
-
4
1
SPAIN
SPAIN
SPAIN
UNITED STATES
SPAIN
GERMANY
SPAIN
MEXICO
SPAIN
MEXICO
REAL ESTATE
REAL ESTATE
REAL ESTATE
INACTIVE
REAL ESTATE
IN LIQUIDATION
INVESTMENT COMPANY
100.00
INVESTMENT COMPANY
REAL ESTATE
REAL ESTATE
-
50.63
-
-
-
-
-
-
-
-
-
-
-
-
100.00
49.37
100.00
100.00
100.00
100.00
100.00
-
100.00
100.00
100.00
100.00
100.00
100.00
100.00
PORTUGAL REAL ESTATE
CHILE
MEXICO
MEXICO
MEXICO
SPAIN
SERVICES
SERVICES
SERVICES
SERVICES
REAL ESTATE
UNITED STATES
FINANCIAL SERVICES
SPAIN
SPAIN
SPAIN
SPAIN
SPAIN
SPAIN
SPAIN
SPAIN
SPAIN
SPAIN
REAL ESTATE
REAL ESTATE
REAL ESTATE
REAL ESTATE
REAL ESTATE
REAL ESTATE
REAL ESTATE
REAL ESTATE
REAL ESTATE
INACTIVE
PORTUGAL BANKING
CHILE
BANKING
URUGUAY BANKING
PERU
BANKING
SPAIN
SPAIN
SPAIN
CURAÇAO
VENEZUELA
UNITED STATES
UNITED STATES
UNITED STATES
BANKING
BANKING
BANKING
BANKING
BANKING
FINANCIAL SERVICES
FINANCIAL SERVICES
FINANCIAL SERVICES
170
100.00
-
-
-
-
-
-
-
-
-
-
-
-
99.95
100.00
-
100.00
-
-
-
49.43
-
1.46
-
-
-
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
-
-
68.19
-
46.12
99.86
99.93
50.57
100.00
53.75
100.00
100.00
100.00
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
Additional Information on Consolidated Subsidiaries and strucuted entities composing the
BBVA Group (Continued)
% Legal share
of participation
Millions of Euros(*)
Affiliate Entity Data
Company
Location
Activity
Direct
Indirect
Total
BANCOMER TRANSFER SERVICES, INC.
BBV AMERICA, S.L.
BBVA ASESORIAS FINANCIERAS, S.A.
BBVA ASSET MANAGEMENT ADMINISTRADORA GENERAL DE FONDOS S.A.
BBVA ASSET MANAGEMENT CONTINENTAL S.A. SAF
BBVA ASSET MANAGEMENT, S.A. SOCIEDAD FIDUCIARIA (BBVA FIDUCIARIA)
UNITED STATES
FINANCIAL SERVICES
-
INVESTMENT COMPANY
100.00
SPAIN
CHILE
CHILE
FINANCIAL SERVICES
FINANCIAL SERVICES
PERU
FINANCIAL SERVICES
COLOMBIA
FINANCIAL SERVICES
BBVA ASSET MANAGEMENT, S.A., SGIIC
SPAIN
OTHER INVESTMENT COMPANIES
17.00
BBVA AUTOMERCANTIL, COMERCIO E ALUGER DE VEICULOS AUTOMOVEIS,LDA.
PORTUGAL
FINANCIAL SERVICES
BBVA AUTORENTING, S.A.
BBVA BANCO FRANCES, S.A.
BBVA BANCOMER GESTION, S.A. DE C.V.
BBVA BANCOMER OPERADORA, S.A. DE C.V.
BBVA BANCOMER SEGUROS SALUD, S.A. DE C.V.
BBVA BANCOMER SERVICIOS ADMINISTRATIVOS, S.A. DE C.V.
BBVA BANCOMER, S.A.,INSTITUCION DE BANCA MULTIPLE, GRUPO FINANCIERO BBVA BANCOMER
BBVA BRASIL BANCO DE INVESTIMENTO, S.A.
BBVA BROKER, CORREDURIA DE SEGUROS Y REASEGUROS, S.A.
BBVA BROKER, S.A.
BBVA COLOMBIA, S.A.
BBVA COMERCIALIZADORA LTDA.
BBVA COMPASS BANCSHARES, INC
BBVA COMPASS FINANCIAL CORPORATION
BBVA COMPASS INSURANCE AGENCY, INC
BBVA COMPASS PAYMENTS, INC
BBVA CONSOLIDAR SEGUROS, S.A.
BBVA CONSULTING ( BEIJING) LIMITED
BBVA CONSULTORIA, S.A.
BBVA CONSUMER FINANCE ENTIDAD DE DESARROLLO A LA PEQUEÑA Y MICRO EMPRESA, EDPYME, S.A. (BBVA
CONSUMER FINANCE - EDPYME)
BBVA CORREDORA TECNICA DE SEGUROS LIMITADA
BBVA CORREDORES DE BOLSA LIMITADA
BBVA DATA & ANALYTICS, S.L.
BBVA DINERO EXPRESS, S.A.U
BBVA DISTRIBUIDORA DE SEGUROS S.R.L.
BBVA EMISORA, S.A.
BBVA FACTORING LIMITADA (CHILE)
BBVA FINANZIA, S.p.A
BBVA FRANCES ASSET MANAGMENT S.A. SOCIEDAD GERENTE DE FONDOS COMUNES DE INVERSIÓN.
BBVA FRANCES VALORES, S.A.
BBVA FUNDOS, S.GESTORA FUNDOS PENSOES,S.A.
BBVA GLOBAL FINANCE LTD.
(*) Information on foreign companies at exchange rate on December 31, 2016
(*) Information on foreign companies at exchange rate on June 30, 2016
100.00
100.00
45.61
-
-
-
-
-
100.00
99.94
-
77.41
-
100.00
-
-
-
-
-
-
-
-
-
-
-
-
-
SPAIN
ARGENTINA
MEXICO
MEXICO
MEXICO
MEXICO
MEXICO
BRASIL
SPAIN
ARGENTINA
SERVICES
BANKING
FINANCIAL SERVICES
SERVICES
INSURANCES SERVICES
SERVICES
BANKING
BANKING
FINANCIAL SERVICES
INSURANCES SERVICES
COLOMBIA
BANKING
PERU
FINANCIAL SERVICES
CHILE
UNITED STATES
UNITED STATES
UNITED STATES
UNITED STATES
ARGENTINA
CHINA
SPAIN
CHILE
CHILE
SPAIN
SPAIN
INSURANCES SERVICES
87.78
FINANCIAL SERVICES
INVESTMENT COMPANY
FINANCIAL SERVICES
FINANCIAL SERVICES
INVESTMENT COMPANY
FINANCIAL SERVICES
SERVICES
FINANCIAL SERVICES
SECURITIES DEALER
SERVICES
FINANCIAL SERVICES
100.00
URUGUAY
FINANCIAL SERVICES
SPAIN
CHILE
ITALY
ARGENTINA
ARGENTINA
FINANCIAL SERVICES
FINANCIAL SERVICES
FINANCIAL SERVICES
FINANCIAL SERVICES
SECURITIES DEALER
PORTUGAL
PENSION FUNDS MANAGEMENT
-
-
-
100.00
-
-
-
CAYMAN ISLANDS
FINANCIAL SERVICES
100.00
171
100.00
-
100.00
100.00
100.00
100.00
83.00
-
-
30.34
100.00
100.00
100.00
100.00
100.00
-
0.06
95.00
18.06
100.00
-
100.00
100.00
100.00
12.22
100.00
100.00
100.00
100.00
100.00
100.00
-
100.00
100.00
100.00
-
100.00
100.00
100.00
-
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
75.95
100.00
100.00
100.00
100.00
100.00
100.00
100.00
95.00
95.47
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
Net
Carrying
Amount
Assets
31.12.16
Liabilities
31.12.16
Equity
31.12.16
Profit
(Loss)
31.12.16
49
479
2
15
15
30
38
5
69
157
21
135
20
25
101
991
3
18
17
33
154
18
447
9,008
36
384
26
130
52
-
1
3
2
3
84
13
402
8,016
15
249
7
105
37
981
1
9
12
25
36
5
33
769
8
49
18
20
13
10
1
6
3
6
35
-
12
223
13
86
2
5
7,301
86,242
78,939
5,691
1,612
16
-
-
39
18
-
7
5
-
32
8
-
355
16,391
15,049
1,168
-
1
11,703
12,197
250
166
63
11
-
4
17
8
62
6
2
4
64
10
6
11
6
1
-
621
170
63
154
2
5
97
13
562
4
6
4
75
50
21
20
6
18
2
128
371
3
-
100
-
-
81
5
500
2
2
-
-
40
14
6
-
1
4
11,735
247
159
46
16
2
5
18
1
72
1
4
2
75
10
15
7
3
15
5
194
189
1
5
-
174
(4)
334
2
7
17
38
-
-
(2)
7
(10)
1
-
2
-
-
(9)
7
3
2
-
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
Additional Inf ormation on Consolidated Subsidiaries and strucuted entities composing the BBVA Group (Continued)
Company
Location
Activity
Direct
Indirect
Total
Net Carrying
Assets
Liabilities
Equity
Amount
31.12.16
31.12.16
31.12.16
% Legal share
of participation
Millions of Euros(*)
Affiliate Entity Data
BBVA GLOBAL MARKETS B.V.
BBVA INMOBILIARIA E INVERSIONES, S.A.
BBVA INSTITUIÇAO FINANCEIRA DE CREDITO, S.A.
BBVA INTERNATIONAL PREFERRED, S.A.U.
BBVA INVERSIONES CHILE, S.A.
BBVA IRELAND PLC
BBVA LEASIMO - SOCIEDADE DE LOCAÇAO FINANCEIRA, S.A.
BBVA LUXINVEST, S.A.
BBVA MEDIACION OPERADOR DE BANCA-SEGUROS VINCULADO, S.A.
BBVA NOMINEES LIMITED
BBVA OP3N S.L.
BBVA OP3N, INC
BBVA PARAGUAY, S.A.
BBVA PARTICIPACIONES MEJICANAS, S.L.
BBVA PENSIONES, SA, ENTIDAD GESTORA DE FONDOS DE PENSIONES
BBVA PLANIFICACION PATRIMONIAL, S.L.
BBVA PREVISION AFP S.A. ADM.DE FONDOS DE PENSIONES
BBVA PROCUREMENT SERVICES AMERICA DEL SUR SpA
BBVA PROPIEDAD, S.A.
BBVA RE DAC
BBVA REAL ESTATE MEXICO, S.A. DE C.V.
BBVA RENTAS E INVERSIONES LIMITADA
BBVA RENTING, S.A.
BBVA SECURITIES INC.
BBVA SEGUROS COLOMBIA, S.A.
BBVA SEGUROS DE VIDA COLOMBIA, S.A.
BBVA SEGUROS DE VIDA, S.A.
BBVA SEGUROS GENERALES S.A.
BBVA SEGUROS, S.A., DE SEGUROS Y REASEGUROS
BBVA SENIOR FINANCE, S.A.U.
BBVA SERVICIOS CORPORATIVOS LIMITADA
BBVA SERVICIOS, S.A.
BBVA SOCIEDAD DE LEASING INMOBILIARIO, S.A.
BBVA SUBORDINATED CAPITAL S.A.U.
BBVA SUIZA, S.A. (BBVA SWITZERLAND)
BBVA TRADE, S.A.
BBVA U.S. SENIOR S.A.U.
BBVA VALORES COLOMBIA, S.A. COMISIONISTA DE BOLSA
BBVA WEALTH SOLUTIONS, INC.
BEEVA TEC OPERADORA, S.A. DE C.V.
(*) Information on foreign companies at exchange rate on December 31, 2016
NETHERLANDS
CHILE
FINANCIAL SERVICES
REAL ESTATE
PORTUGAL FINANCIAL SERVICES
SPAIN
CHILE
FINANCIAL SERVICES
INVESTMENT COMPANY
IRELAND
FINANCIAL SERVICES
PORTUGAL FINANCIAL SERVICES
LUXEMBOURG
SPAIN
UNITED KINGDOM
SPAIN
UNITED STATES
INVESTMENT COMPANY
FINANCIAL SERVICES
SERVICES
SERVICES
SERVICES
PARAGUAY BANKING
SPAIN
INVESTMENT COMPANY
SPAIN
SPAIN
PENSION FUNDS MANAGEMENT
FINANCIAL SERVICES
BOLIVIA
PENSION FUNDS MANAGEMENT
CHILE
SPAIN
IRELAND
MEXICO
CHILE
SPAIN
UNITED STATES
SERVICES
REAL ESTATE INVESTMENT COMPANY
INSURANCES SERVICES
FINANCIAL SERVICES
INVESTMENT COMPANY
FINANCIAL SERVICES
FINANCIAL SERVICES
COLOMBIA
INSURANCES SERVICES
COLOMBIA
CHILE
INSURANCES SERVICES
INSURANCES SERVICES
CHILE
SPAIN
SPAIN
CHILE
SPAIN
CHILE
SPAIN
INSURANCES SERVICES
INSURANCES SERVICES
FINANCIAL SERVICES
SERVICES
COMMERCIAL
FINANCIAL SERVICES
FINANCIAL SERVICES
SWITZERLAND
BANKING
SPAIN
SPAIN
INVESTMENT COMPANY
FINANCIAL SERVICES
COLOMBIA SECURITIES DEALER
UNITED STATES
MEXICO
FINANCIAL SERVICES
SERVICES
100.00
-
49.90
100.00
61.22
100.00
-
36.00
-
100.00
-
-
100.00
99.00
100.00
80.00
75.00
-
-
-
-
-
5.94
-
94.00
94.00
-
-
99.95
100.00
-
-
-
100.00
39.72
-
100.00
-
-
-
-
68.11
50.10
-
38.78
-
100.00
64.00
100.00
-
100.00
100.00
-
1.00
-
20.00
5.00
100.00
100.00
100.00
100.00
100.00
94.06
100.00
6.00
6.00
100.00
100.00
-
-
100.00
100.00
97.49
-
60.28
100.00
-
100.00
100.00
100.00
100.00
68.11
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
80.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
99.95
100.00
100.00
100.00
97.49
100.00
100.00
100.00
100.00
100.00
100.00
100.00
172
-
5
40
-
483
180
8
204
10
-
-
-
23
-
13
-
2
6
914
39
-
292
21
185
10
14
70
4
1,442
1,442
47
298
864
1,640
407
9
213
203
-
-
-
40
251
863
2
217
-
2
180
-
-
-
1,788
-
1,627
-
67
1
23
9
927
76
-
292
650
2,932
83
430
227
4
32
-
13
3
10
36
1
-
556
2,747
64
319
156
-
Profit
(Loss)
31.12.16
-
-
3
-
-
7
45
1
1,507
131
186
8
210
13
-
-
-
136
-
28
1
6
6
984
30
-
232
85
187
14
75
65
4
4
-
1
11
-
-
-
25
-
7
-
5
-
(67)
9
-
60
9
(1)
4
36
5
-
682
16,797
15,297
1,239
260
-
-
-
27
-
67
13
-
4
6
-
7,090
7,089
6
9
89
1,770
1,316
36
1
5
6
1
6
1
62
1,769
1,143
23
-
1
-
1
1
1
7
25
1
163
13
-
4
5
-
-
(1)
1
3
-
10
-
-
-
-
-
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
Additional Information on Consolidated Subsidiaries and strucuted entities composing the BBVA Group (Continued)
Company
Location
Activity
Direct
Indirect
Total
Net
Carrying
Amount
Assets
31.12.16
Liabilities
31.12.16
Equity
31.12.16
Profit
(Loss)
31.12.16
% Legal share
of participation
Millions of Euros(*)
Affiliate Entity Data
BEEVA TEC, S.A. DE C.V.
BETESE S.A DE C.V.
BILBAO VIZCAYA HOLDING, S.A.
BLUE INDICO INVESTMENTS, S.L.
CAIXA MANRESA IMMOBILIARIA ON CASA, S.L. (**)
CAIXA MANRESA IMMOBILIARIA SOCIAL, S.L. (**)
CAIXA TERRASSA SOCIETAT DE PARTICIPACIONS PREFERENTS, S.A.U.
CAIXASABADELL PREFERENTS, S.A.
CAIXASABADELL TINELIA, S.L.
CAPITAL INVESTMENT COUNSEL, INC.
CARTERA E INVERSIONES S.A., CIA DE
CASA DE BOLSA BBVA BANCOMER, S.A. DE C.V.
CATALONIA GEBIRA, S.L. (***)(****)
CATALONIA PROMODIS 4, S.A. (****)
CATALUNYACAIXA ASSEGURANCES GENERALS, S.A.
CATALUNYACAIXA CAPITAL, S.A.
CATALUNYACAIXA IMMOBILIARIA, S.A. (*****)
CATALUNYACAIXA SERVEIS, S.A.
CATALUNYACAIXA VIDA, S.A.
CB TRANSPORT ,INC.
CDD GESTIONI, S.R.L.
CETACTIUS, S.L. (**)
CIDESSA DOS, S.L.
CIDESSA UNO, S.L.
CIERVANA, S.L.
CLUB GOLF HACIENDA EL ALAMO, S.L.
COMERCIALIZADORA CORPORATIVA SAC
COMERCIALIZADORA DE SERVICIOS FINANCIEROS, S.A.
COMPASS ASSET ACCEPTANCE COMPANY, LLC
COMPASS AUTO RECEIVABLES CORPORATION
COMPASS BANK
COMPASS CAPITAL MARKETS, INC.
COMPASS CUSTODIAL SERVICES, INC.
COMPASS GP, INC.
COMPASS INVESTMENTS, INC.
COMPASS LIMITED PARTNER, INC.
COMPASS LOAN HOLDINGS TRS, INC.
COMPASS MORTGAGE CORPORATION
MEXICO
MEXICO
SPAIN
SPAIN
SPAIN
SPAIN
SPAIN
SPAIN
SPAIN
SERVICES
INVESTMENT COMPANY
INVESTMENT COMPANY
INVESTMENT COMPANY
REAL ESTATE
REAL ESTATE
FINANCIAL SERVICES
FINANCIAL SERVICES
INVESTMENT COMPANY
UNITED STATES
FINANCIAL SERVICES
SPAIN
MEXICO
SPAIN
SPAIN
SPAIN
SPAIN
SPAIN
SPAIN
SPAIN
UNITED STATES
ITALY
SPAIN
SPAIN
SPAIN
SPAIN
SPAIN
INVESTMENT COMPANY
SECURITIES DEALER
REAL ESTATE
REAL ESTATE
INSURANCES SERVICES
INVESTMENT COMPANY
REAL ESTATE
SERVICES
INSURANCES SERVICES
INACTIVE
REAL ESTATE
REAL ESTATE
INVESTMENT COMPANY
INVESTMENT COMPANY
PERU
FINANCIAL SERVICES
COLOMBIA
SERVICES
UNITED STATES
UNITED STATES
UNITED STATES
UNITED STATES
UNITED STATES
UNITED STATES
UNITED STATES
UNITED STATES
UNITED STATES
UNITED STATES
INACTIVE
INACTIVE
BANKING
INVESTMENT COMPANY
INACTIVE
INVESTMENT COMPANY
INACTIVE
INVESTMENT COMPANY
FINANCIAL SERVICES
FINANCIAL SERVICES
-
-
89.00
100.00
100.00
100.00
100.00
100.00
100.00
-
100.00
-
-
-
100.00
100.00
100.00
100.00
100.00
-
100.00
100.00
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
100.00
100.00
11.00
-
-
-
-
-
-
100.00
-
100.00
100.00
100.00
-
-
-
-
-
100.00
-
-
100.00
100.00
-
97.87
50.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
97.87
50.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
1
61
35
7
-
-
1
-
41
14
92
35
-
-
42
101
125
2
358
18
5
-
15
5
53
-
-
2
463
4
4
61
236
25
2
4
76
92
41
14
108
46
4
9
47
106
198
10
2
-
36
18
5
4
74
90
-
-
78
11
8
14
25
10
121
7
2,409
2,014
18
6
2
15
240
64
-
1
9
463
4
-
-
22
1
150
4
-
1
7
-
-
1
53
135
7
(2)
1
2
1
41
14
21
17
(3)
(2)
17
95
46
2
351
18
6
(19)
14
67
55
-
-
1
463
4
11,475
86,188
74,713
11,149
7,657
7,657
-
46
-
-
58
-
6,683
6,684
77
77
-
-
11
-
1
-
7,587
-
46
-
6,613
76
2,969
3,006
37
2,921
-
7
66
(1)
-
-
-
-
-
-
9
17
(1)
(2)
5
1
31
1
43
-
-
(1)
-
24
5
-
-
-
-
-
327
70
-
-
-
69
-
49
INVESTMENT COMPANY
100.00
REAL ESTATE
(*) Information on foreign companies at exchange rate on December 31, 2016
(**) These companies have an equity loan from BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
(***) This company has an equity loan from ARRELS CT PATRIMONI I PROYECTES, S.A.
(****) These companies have an equity loan from UNNIM SOCIEDAD PARA LA GESTION DE ACTIVOS INMOBILIARIOS, S.A.
(*****) This company has equity loans from de BANCO BILBAO VIZCAYA ARGENTARIA, S.A., EXPANSION INTERCOMARCAL, S.L. y SATICEM IMMOBILIARIA, S.L.
173
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
Additional Information on Consolidated Subsidiaries and strucuted entities composing the BBVA Group (Continued)
Company
Location
Activity
Direct
Indirect
Total
Net
Carrying
Amount
Assets
31.12.16
Liabilities
31.12.16
Equity
31.12.16
% Legal share
of participation
Millions of Euros(*)
Affiliate Entity Data
COMPASS MORTGAGE FINANCING, INC.
COMPASS MULTISTATE SERVICES CORPORATION
COMPASS SOUTHWEST, LP
COMPASS TEXAS ACQUISITION CORPORATION
COMPASS TEXAS MORTGAGE FINANCING, INC
COMPASS TRUST II
COMPAÑIA CHILENA DE INVERSIONES, S.L.
COMPLEMENTOS INNOVACIÓN Y MODA, S.L.
CONJUNT RESIDENCIAL FREIXA, S.L. (**)
CONSOLIDAR A.F.J.P., S.A.
CONSORCIO DE CASAS MEXICANAS, S.A.P.I. DE C.V.
CONTENTS AREA, S.L.
CONTINENTAL BOLSA, SDAD. AGENTE DE BOLSA, S.A.
CONTINENTAL DPR FINANCE COMPANY
CONTINENTAL SOCIEDAD TITULIZADORA, S.A.
CONTRATACION DE PERSONAL, S.A. DE C.V.
COPROMED S.A. DE C.V.
CORPORACION BETICA INMOBILIARIA, S.A. (***)(*****)
CORPORACION GENERAL FINANCIERA, S.A.
CX PROPIETAT, FII
DALLAS CREATION CENTER, INC
DATA ARCHITECTURE AND TECHNOLOGY S.L.
DESITEL TECNOLOGIA Y SISTEMAS, S.A. DE C.V.
DEUTSCHE BANK MEXICO SA FIDEICOMISO F/1859
DEUTSCHE BANK MEXICO SA FIDEICOMISO F/1860
DISTRITO CASTELLANA NORTE, S.A.
ECASA, S.A.
EL ENCINAR METROPOLITANO, S.A.
EL MILANILLO, S.A. (****)
EMPRENDIMIENTOS DE VALOR S.A.
ENTRE2 SERVICIOS FINANCIEROS, E.F.C., S.A.
ESPAIS CERDANYOLA, S.L. (*****)
ESPAIS SABADELL PROMOCIONS INMOBILIARIES, S.A.
ESPANHOLA COMERCIAL E SERVIÇOS, LTDA.
ESTACION DE AUTOBUSES CHAMARTIN, S.A.
EUROPEA DE TITULIZACION, S.A., S.G.F.T.
EXPANSION INTERCOMARCAL, S.L.
F/253863 EL DESEO RESIDENCIAL
F/403035-9 BBVA HORIZONTES RESIDENCIAL
FACILEASING EQUIPMENT, S.A. DE C.V.
(*) Information on foreign companies at exchange rate on December 31, 2016
(**) This company has an equity loan from EXPANSION INTERCOMARCAL, S.L.
(***) This company has an equity loan from BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
(****) This company has an equity loan from ANIDA OPERACIONES SINGULARES, S.A.
(*****) These companies have equity loans from CATALUNYACAIXA IMMOBILIARIA, S.A.
100.00
100.00
100.00
100.00
100.00
100.00
0.03
100.00
100.00
53.89
99.99
100.00
100.00
100.00
100.00
100.00
100.00
100.00
-
-
100.00
51.00
100.00
100.00
100.00
75.54
100.00
99.05
100.00
100.00
-
97.51
100.00
-
51.00
-
-
65.00
65.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
99.99
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
67.94
100.00
51.00
100.00
100.00
100.00
75.54
100.00
99.05
100.00
100.00
100.00
97.51
100.00
100.00
51.00
87.86
100.00
65.00
65.00
100.00
-
4
-
4
5,515
5,515
2
-
-
2
-
-
580
781
-
2
3
16
7
11
-
-
-
-
-
-
-
-
3
2
12
1
5
-
-
-
3
6
6
-
1
5
-
4
510
35
-
-
1
-
-
82
17
6
8
3
9
-
7
-
-
2
26
-
-
136
136
1
8
-
20
1,578
61
7
2
1
16
16
123
19
7
8
7
9
12
8
-
-
41
27
1
-
-
3
-
15
-
-
7
1
-
16
16
15
2
-
1
4
-
15
-
-
-
3
-
-
-
51
411
301
-
-
46.11
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
100.00
-
87.86
100.00
-
-
-
Profit
(Loss)
31.12.16
-
-
61
-
-
-
-
-
-
(1)
(1)
-
1
-
-
-
-
(1)
22
(1)
(1)
-
-
-
-
(2)
6
-
-
-
-
-
-
-
-
3
-
-
-
21
-
4
5,455
2
-
-
781
-
(1)
1
4
6
5
-
1
4
-
5
1,556
62
2
-
1
-
-
110
11
6
7
3
9
(3)
8
-
-
36
26
1
-
90
FINANCIAL SERVICES
INACTIVE
FINANCIAL SERVICES
INACTIVE
FINANCIAL SERVICES
INACTIVE
-
-
-
-
-
-
INVESTMENT COMPANY
99.97
PERU
SECURITIES DEALER
CAYMAN ISLANDS
FINANCIAL SERVICES
PERU
FINANCIAL SERVICES
INVESTMENT COMPANY
100.00
REAL ESTATE INVESTMENT COMPANY
67.94
UNITED STATES
UNITED STATES
UNITED STATES
UNITED STATES
UNITED STATES
UNITED STATES
SPAIN
SPAIN
SPAIN
ARGENTINA
MEXICO
SPAIN
MEXICO
MEXICO
SPAIN
SPAIN
SPAIN
UNITED STATES
SPAIN
MEXICO
MEXICO
MEXICO
SPAIN
CHILE
SPAIN
SPAIN
SPAIN
SPAIN
SPAIN
IN LIQUIDATION
REAL ESTATE
IN LIQUIDATION
REAL ESTATE
SERVICES
SERVICES
SERVICES
REAL ESTATE
SERVICES
SERVICES
SERVICES
FINANCIAL SERVICES
FINANCIAL SERVICES
REAL ESTATE
FINANCIAL SERVICES
REAL ESTATE
REAL ESTATE
REAL ESTATE
REAL ESTATE
BRASIL
IN LIQUIDATION
SPAIN
SPAIN
SPAIN
MEXICO
MEXICO
MEXICO
SERVICES
FINANCIAL SERVICES
INVESTMENT COMPANY
REAL ESTATE
REAL ESTATE
FINANCIAL SERVICES
174
URUGUAY FINANCIAL SERVICES
FINANCIAL SERVICES
100.00
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
Additional Information on Consolidated Subsidiaries and strucuted entities composing the BBVA Group (Continued)
Company
Location
Activity
Direct
Indirect
Total
Net Carrying
Amount
Assets
31.12.16
Liabilities
31.12.16
Equity
31.12.16
Profit
(Loss)
31.12.16
% Legal share
of particpation
Millions of Euros(*)
Affiliate Entity Data
FACILEASING S.A. DE C.V.
FIDEICOMISO 28991-8 TRADING EN LOS MCADOS FINANCIEROS
FIDEICOMISO F/29764-8 SOCIO LIQUIDADOR DE OPERACIONES FINANCIERAS DERIVADAS
FIDEICOMISO F/403112-6 DE ADMINISTRACION DOS LAGOS
FIDEICOMISO HARES BBVA BANCOMER F/ 47997-2
FIDEICOMISO LOTE 6.1 ZARAGOZA
FIDEICOMISO N.989, EN THE BANK OF NEW YORK MELLON, S.A. INSTITUCION DE BANCA MULTIPLE, FIDUCIARIO (FIDEIC.00989 6 EMISION)
FIDEICOMISO Nº 711, EN BANCO INVEX, S.A.,INSTITUCION DE BANCA MULTIPLE, INVEX GRUPO FINANCIERO, FIDUCIARIO (FIDEIC. INVEX 1ª EMISION)
FIDEICOMISO Nº 752, EN BANCO INVEX, S.A.,INSTITUCION DE BANCA MULTIPLE, INVEX GRUPO FINANCIERO, FIDUCIARIO (FIDEIC. INVEX 2ª EMISION)
FIDEICOMISO Nº 847, EN BANCO INVEX, S.A.,INSTITUCION DE BANCA MULTIPLE, INVEX GRUPO FINANCIERO, FIDUCIARIO (FIDEIC. INVEX 4ª EMISION)
FIDEICOMISO SCOTIABANK INVERLAT S A F100322908
FINANCEIRA DO COMERCIO EXTERIOR S.A.R.
FINANCIERA AYUDAMOS S.A. DE C.V., SOFOMER
FODECOR, S.L.
FORUM COMERCIALIZADORA DEL PERU, S.A.
FORUM DISTRIBUIDORA DEL PERU, S.A.
FORUM DISTRIBUIDORA, S.A.
FORUM SERVICIOS FINANCIEROS, S.A.
FUTURO FAMILIAR, S.A. DE C.V.
G NETHERLANDS BV
GARANTI BANK SA
GARANTI BILISIM TEKNOLOJISI VE TIC. TAS
GARANTI DIVERSIFIED PAYMENT RIGHTS FINANCE COMPANY
GARANTI EMEKLILIK VE HAYAT AS
GARANTI FACTORING HIZMETLERI AS
GARANTI FILO SIGORTA ARACILIK HIZMETLERI A.S.
GARANTI FILO YONETIM HIZMETLERI A.S.
GARANTI FINANSAL KIRALAMA A.S.
GARANTI HIZMET YONETIMI A.S
GARANTI HOLDING BV
GARANTI KONUT FINANSMANI DANISMANLIK HIZMETLERI AS (GARANTI MORTGAGE)
GARANTI KULTUR AS
GARANTI ODEME SISTEMLERI A.S.(GOSAS)
GARANTI PORTFOY YONETIMI AS
GARANTI YATIRIM MENKUL KIYMETLER AS
GARANTI YATIRIM ORTAKLIGI AS
GARANTIBANK INTERNATIONAL NV
GARRAF MEDITERRANIA, S.A. (**)
GESCAT LLEVANT, S.L. (***)
GESCAT LLOGUERS, S.L. (****)
(*) Information on foreign companies at exchange rate on December 31, 2016
(**) This company has an equity loan from UNNIM SOCIEDAD PARA LA GESTION DE ACTIVOS INMOBILIARIOS, S.A.
(***) This company has an equity loan from CATALUNYACAIXA IMMOBILIARIA, S.A.
(****) This company has an equity loan from BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
MEXICO
MEXICO
MEXICO
MEXICO
MEXICO
FINANCIAL SERVICES
FINANCIAL SERVICES
FINANCIAL SERVICES
REAL ESTATE
REAL ESTATE
COLOMBIA
REAL ESTATE
MEXICO
MEXICO
MEXICO
MEXICO
MEXICO
FINANCIAL SERVICES
FINANCIAL SERVICES
FINANCIAL SERVICES
FINANCIAL SERVICES
REAL ESTATE
-
-
-
-
-
-
-
-
-
-
-
PORTUGAL
INACTIVE
100.00
MEXICO
SPAIN
FINANCIAL SERVICES
REAL ESTATE
PERU
SERVICES
PERU
FINANCIAL SERVICES
CHILE
CHILE
MEXICO
FINANCIAL SERVICES
FINANCIAL SERVICES
SERVICES
NETHERLANDS
INVESTMENT COMPANY
ROMANIA
TURKEY
BANKING
SERVICES
CAYMAN ISLANDS
FINANCIAL SERVICES
TURKEY
TURKEY
TURKEY
TURKEY
TURKEY
TURKEY
INSURANCES SERVICES
FINANCIAL SERVICES
FINANCIAL SERVICES
SERVICES
FINANCIAL SERVICES
FINANCIAL SERVICES
NETHERLANDS
INVESTMENT COMPANY
TURKEY
TURKEY
TURKEY
TURKEY
TURKEY
TURKEY
NETHERLANDS
SPAIN
SPAIN
SPAIN
SERVICES
SERVICES
FINANCIAL SERVICES
FINANCIAL SERVICES
FINANCIAL SERVICES
INVESTMENT COMPANY
BANKING
REAL ESTATE
REAL ESTATE
REAL ESTATE
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
100.00
100.00
100.00
100.00
100.00
100.00
59.99
100.00
100.00
100.00
100.00
100.00
59.99
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
-
100.00
60.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
84.91
81.84
100.00
100.00
100.00
99.40
100.00
100.00
100.00
100.00
100.00
100.00
99.97
100.00
100.00
100.00
-
100.00
100.00
100.00
100.00
60.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
84.91
81.84
100.00
100.00
100.00
99.40
100.00
100.00
100.00
100.00
100.00
100.00
99.97
100.00
100.00
100.00
100.00
175
107
109
92
3
45
7
14
1
-
-
-
-
5
-
-
2
8
33
213
1
340
276
28
-
303
41
-
3
238
-
195
-
-
-
14
18
-
730
646
3
45
7
15
2
-
-
-
1
-
115
115
25
13
67
12
-
-
1
25
251
25
13
67
8
-
2
1
-
17
219
1,599
1,400
3
357
1,983
20
3,417
491
781
1
319
1,481
2
341
1
1
7
17
91
10
2
48
1,732
3
3,417
137
731
-
309
1,232
1
-
-
-
3
3
72
-
68
2
43
7
13
2
(5)
-
-
(1)
5
-
92
(1)
2
8
27
144
1
302
253
16
-
281
44
-
6
234
2
341
-
-
5
10
12
9
546
4,823
4,276
532
-
-
-
16
14
7
16
16
16
-
(2)
(9)
16
-
2
-
1
-
5
(1)
-
-
-
-
15
-
(2)
-
5
55
-
7
(2)
1
-
74
6
-
4
16
(1)
-
-
-
(1)
4
6
1
15
-
-
-
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
Additional Information on Consolidated Subsidiaries and strucuted entities composing the BBVA Group
% Legal share
of participation
Company
Location
Activity
Direct
Indirect
Total
Millions of Euros(*)
Affiliate Entity Data
Assets
Liabilities
Equity
31.12.16
31.12.16
31.12.16
POLAND
SPAIN
SPAIN
SPAIN
SPAIN
SPAIN
SPAIN
SPAIN
SPAIN
REAL ESTATE
REAL ESTATE
REAL ESTATE
REAL ESTATE
FINANCIAL SERVICES
100.00
-
100.00
100.00
100.00
PENSION FUNDS MANAGEMENT
60.00
SERVICES
SERVICES
REAL ESTATE
COLOMBIA
IN LIQUIDATION
MEXICO
UNITED STATES
UNITED STATES
UNITED STATES
UNITED STATES
SPAIN
SPAIN
SPAIN
SPAIN
SPAIN
MEXICO
FINLAND
UNITED STATES
UNITED STATES
UNITED STATES
MEXICO
FINANCIAL SERVICES
FINANCIAL SERVICES
INVESTMENT COMPANY
FINANCIAL SERVICES
FINANCIAL SERVICES
REAL ESTATE
REAL ESTATE
REAL ESTATE
REAL ESTATE
REAL ESTATE
FINANCIAL SERVICES
FINANCIAL SERVICES
IN LIQUIDATION
SERVICES
SERVICES
REAL ESTATE
-
100.00
-
-
-
-
100.00
100.00
-
90.00
-
100.00
100.00
100.00
100.00
50.00
100.00
100.00
35.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
-
-
100.00
100.00
-
-
100.00
60.46
100.00
100.00
-
-
-
100.00
-
99.98
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
100.00
100.00
-
-
48.00
100.00
-
-
-
-
100.00
Net
Carrying
Amount
9
-
-
-
3
9
1
2
12
2
21
226
4
32
2
15
375
-
1,012
-
6,678
8,720
35
(42)
44
12
-
-
-
-
-
8
13
8
436
431
26
13
5
13
8
3
-
16
1
40
-
8
-
-
35
63
44
12 -
-
2
-
1
2
13
3
9
436
431
38
14
4
46
91
8
9
-
56
-
80
-
8
3
2
100.00
100.00
100.00
100.00
100.00
60.00
100.00
100.00
100.00
90.00
99.98
100.00
100.00
100.00
100.00
50.00
100.00
100.00
35.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
-
100.00
100.00
100.00
100.00
100.00
48.00
100.00
100.00
60.46
100.00
100.00
100.00
Profit
(Loss)
31.12.16
-
-
(2)
(37)
1
7
-
2
(17)
-
11
(1)
(20)
(355)
3
21
1
7
398
-
6,745
1,974
35
(40)
44
12
(6)
-
(1)
(12)
(1)
8
6
9
430
426
31
11
1
(8)
16
8
4
-
52
-
45
-
8
(14)
(121)
-
(2)
-
-
-
-
-
(1)
-
1
(4)
(1)
6
5
(5)
2
2
14
(3)
-
(1)
-
2
-
1
-
-
(1)
(4)
1
3
42
618
-
3
1
6
632
-
1
-
105
-
6
2
1
14
3
5
-
1
-
-
13
1
1
40
78
-
6
-
2
-
34
-
-
18
127
GESCAT POLSKA, SP. ZOO
GESCAT SINEVA, S.L. (**)
GESCAT, GESTIO DE SOL, S.L. (***)
GESCAT, VIVENDES EN COMERCIALITZACIO, S.L. (**)(***)
GESTIO D'ACTIUS TITULITZATS, S.A.
GESTION DE PREVISION Y PENSIONES, S.A.
GESTION Y ADMINISTRACION DE RECIBOS, S.A. - GARSA
GOBERNALIA GLOBAL NET, S.A.
GRAN JORGE JUAN, S.A.
GRANFIDUCIARIA
GRUPO FINANCIERO BBVA BANCOMER, S.A. DE C.V.
GUARANTY BUSINESS CREDIT CORPORATION
GUARANTY PLUS HOLDING COMPANY
GUARANTY PLUS PROPERTIES LLC-2
GUARANTY PLUS PROPERTIES, INC-1
HABITAT ZENTRUM, S.L. (****)
HABITATGES FINVER, S.L. (*****)
HABITATGES INVERCAP, S.L. (*****)
HABITATGES INVERVIC, S.L. (*****)
HABITATGES JUVIPRO, S.L. (******)
HIPOTECARIA NACIONAL, S.A. DE C.V.
HOLVI PAYMENT SERVICE OY
HOMEOWNERS LOAN CORPORATION
HUMAN RESOURCES PROVIDER, INC
HUMAN RESOURCES SUPPORT, INC
INMESP DESARROLLADORA, S.A. DE C.V.
INMUEBLES Y RECUPERACIONES CONTINENTAL S.A
PERU
REAL ESTATE
INNOVATION 4 SECURITY, S.L.
INPAU, S.A. (**)
INVERAHORRO, S.L.
INVERCARTERA INTERNACIONAL, S.L.
INVERPRO DESENVOLUPAMENT, S.L.
INVERSIONES ALDAMA, C.A.
INVERSIONES BANPRO INTERNATIONAL INC. N.V.
INVERSIONES BAPROBA, C.A.
INVERSIONES DE INNOVACION EN SERVICIOS FINANCIEROS, S.L.
INVERSIONES P.H.R.4, C.A.
INVESCO MANAGEMENT Nº 1, S.A.
INVESCO MANAGEMENT Nº 2, S.A.
IRIDION SOLUCIONS IMMOBILIARIES, S.L. (***)
(*) Information on foreign companies at exchange rate on December 31, 2016
(**) These companies have equity loans from CATALUNYACAIXA IMMOBILIARIA, S.A.
(***) These companies have equity loans from BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
(****) This company has an equity loan from EXPANSION INTERCOMARCAL, S.L.
(*****) These companies have equity loans from INVERPRO DESENVOLUPAMENT, S.L.
(******) This company has equity loans from UNNIM SOCIEDAD PARA LA GESTION DE ACTIVOS INMOBILIARIOS, S.A
SPAIN
SPAIN
SPAIN
SPAIN
SPAIN
VENEZUELA
CURAÇAO
VENEZUELA
SPAIN
VENEZUELA
LUXEMBOURG
LUXEMBOURG
SPAIN
SERVICES
REAL ESTATE
INVESTMENT COMPANY
INVESTMENT COMPANY
INVESTMENT COMPANY
IN LIQUIDATION
INVESTMENT COMPANY
FINANCIAL SERVICES
INVESTMENT COMPANY
INACTIVE
FINANCIAL SERVICES
FINANCIAL SERVICES
REAL ESTATE
176
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
Additional Information on Consolidated Subsidiaries composing the BBVA Group (Continued) and consolidated structured entities
% Legal share
of participation
Millions of Euros(*)
Affiliate Entity Data
Company
Location
Activity
Direct
Indirect
Total
Assets
Liabilities
Equity
31.12.16
31.12.16
31.12.16
JALE PROCAM, S.L.
L'EIX IMMOBLES, S.L. (*****)(******)
LIQUIDITY ADVISORS, L.P
MADIVA SOLUCIONES, S.L.
MILLENNIUM PROCAM, S.L. (****)
MISAPRE, S.A. DE C.V.
MOMENTUM SOCIAL INVESTMENT HOLDING, S.L.
MOTORACTIVE IFN SA
MOTORACTIVE MULTISERVICES SRL
MULTIASISTENCIA OPERADORA S.A. DE C.V.
MULTIASISTENCIA SERVICIOS S.A. DE C.V.
MULTIASISTENCIA, S.A. DE C.V.
NEWCO PERU S.A.C.
NOET, INC.
NOIDIRI, S.L. (***)
NOVA EGARA-PROCAM, S.L. (****)
NOVA TERRASSA 3, S.L. (****)
OPCION VOLCAN, S.A.
OPERADORA DOS LAGOS S.A. DE C.V.
OPPLUS OPERACIONES Y SERVICIOS, S.A.
OPPLUS S.A.C (En liquidacion)
PARCSUD PLANNER, S.L. (******)
PARTICIPACIONES ARENAL, S.L.
PECRI INVERSION S.L.
PENSIONES BBVA BANCOMER, S.A. DE C.V., GRUPO FINANCIERO BBVA BANCOMER
PHOENIX LOAN HOLDINGS, INC.
PI HOLDINGS NO. 1, INC.
PI HOLDINGS NO. 3, INC.
PORTICO PROCAM, S.L.
PRO-SALUD, C.A.
PROCAMVASA, S.A.
PROMOCION EMPRESARIAL XX, S.A.
PROMOCIONES Y CONSTRUCCIONES CERBAT, S.L.U.
PROMOTORA DEL VALLES, S.L. (******)
PROMOU CT 3AG DELTA, S.L. (******)
PROMOU CT EIX MACIA, S.L. (******)
PROMOU CT GEBIRA, S.L. (******)
PROMOU CT OPENSEGRE, S.L. (**)(******)
PROMOU CT VALLES, S.L.
(*) Information on foreign companies at exchange rate on December 31, 2016
(**) This company has an equity loan from ARRELS CT PROMOU, S.A.
(***) This company has an equity loan from BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
(****) These companies have equity loans from CATALUNYACAIXA IMMOBILIARIA, S.A.
(*****) This company has an equity loan from PROMOTORA DEL VALLES, S.L.
(******) These companies have equity loans from UNNIM SOCIEDAD PARA LA GESTION DE ACTIVOS INMOBILIARIOS, S.A.
50.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
-
100.00
-
100.00
100.00
100.00
100.00
-
100.00
100.00
100.00
-
100.00
100.00
100.00
100.00
100.00
58.86
51.00
-
100.00
100.00
100.00
100.00
100.00
100.00
100.00
SPAIN
SPAIN
REAL ESTATE
REAL ESTATE
UNITED STATES
FINANCIAL SERVICES
SPAIN
SPAIN
MEXICO
SPAIN
ROMANIA
ROMANIA
MEXICO
MEXICO
MEXICO
SERVICES
REAL ESTATE
FINANCIAL SERVICES
INVESTMENT COMPANY
FINANCIAL SERVICES
SERVICES
INSURANCES SERVICES
INSURANCES SERVICES
INSURANCES SERVICES
PERU
INVESTMENT COMPANY
UNITED STATES
SERVICES
SPAIN
SPAIN
SPAIN
MEXICO
MEXICO
SPAIN
REAL ESTATE
REAL ESTATE
REAL ESTATE
REAL ESTATE
SERVICES
SERVICES
PERU
IN LIQUIDATION
-
-
-
-
-
-
-
-
-
-
-
-
100.00
-
100.00
-
-
-
-
100.00
-
-
-
REAL ESTATE
INACTIVE
OTHER INVESTMENT COMPANIES
100.00
INSURANCES SERVICES
FINANCIAL SERVICES
FINANCIAL SERVICES
FINANCIAL SERVICES
REAL ESTATE
INACTIVE
REAL ESTATE
-
-
-
-
-
-
-
INVESTMENT COMPANY
100.00
REAL ESTATE
REAL ESTATE
REAL ESTATE
REAL ESTATE
REAL ESTATE
REAL ESTATE
REAL ESTATE
-
-
-
-
-
-
-
SPAIN
SPAIN
SPAIN
MEXICO
UNITED STATES
UNITED STATES
UNITED STATES
SPAIN
VENEZUELA
SPAIN
SPAIN
SPAIN
SPAIN
SPAIN
SPAIN
SPAIN
SPAIN
SPAIN
177
100.00
1,198
1,199
Net
Carrying
Amount
-
-
50.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
58.86
51.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
9
-
2
7
38
-
-
1
22
124
-
-
1
4
16
1
1
1
-
8
98
197
312
90
1
25
-
-
8
9
-
-
3
-
-
2
4
20
2
-
2
7
157
10
1
3
29
921
-
-
1
12
18
1
29
1 -
7
8
98 -
44
26
-
1
1
-
-
135
10
1
2
7
-
-
12
-
8
2
-
10
9
-
4,040
334
3,843
22
90
1
25
-
-
8
25
160
10
6
8
28
9
-
-
-
-
-
-
-
266
12
2
12
46
8
Profit
(Loss)
31.12.16
-
(2)
6
-
-
-
-
5
-
-
-
6
86
-
-
-
-
(2)
-
3
(1)
(1)
41
6
-
-
-
-
-
-
(8)
-
3
-
(2)
-
(40)
(4)
1,192
1
-
2
7
17
-
-
1
16
835
-
(11)
1
4
17
-
16
1 -
(2)
8 -
99
156
306
90 -
1
25
-
-
8
25
(98)
(2)
1
(3)
(16)
2
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
Additional Information on Consolidated Subsidiaries composing the BBVA Group (Continued) and consolidated structured entities
% Legal share
of participation
Millions of Euros(*)
Affiliate Entity Data
Company
Location
Activity
Direct
Indirect
Total
Assets
Liabilities
Equity
31.12.16
31.12.16
31.12.16
PROMOU GLOBAL, S.L. (**)(*****)
PRONORTE UNO PROCAM, S.A. (****)
PROPEL VENTURE PARTNERS US FUND I, L.P.
PROV-INFI-ARRAHONA, S.L. (*****)
PROVINCIAL DE VALORES CASA DE BOLSA, C.A.
PROVINCIAL SDAD.ADMIN.DE ENTIDADES DE INV.COLECTIVA, C.A.
PROVIURE BARCELONA, S.L. (****)
PROVIURE CIUTAT DE LLEIDA, S.L. (****)
PROVIURE PARC D'HABITATGES, S.L. (****)
PROVIURE, S.L. (****)
SPAIN
SPAIN
REAL ESTATE
REAL ESTATE
UNITED STATES
VENTURE CAPITAL
SPAIN
VENEZUELA
VENEZUELA
SPAIN
SPAIN
SPAIN
SPAIN
REAL ESTATE
SECURITIES DEALER
FINANCIAL SERVICES
REAL ESTATE
REAL ESTATE
REAL ESTATE
REAL ESTATE
PROVIVIENDA ENTIDAD RECAUDADORA Y ADMIN.DE APORTES, S.A.
BOLIVIA PENSION FUNDS MANAGEMENT
PUERTO CIUDAD LAS PALMAS, S.A.
QIPRO SOLUCIONES S.L.
RALFI IFN SA
RENTRUCKS, ALQUILER Y SERVICIOS DE TRANSPORTE, S.A.
RESIDENCIAL CUMBRES DE SANTA FE, S.A. DE C.V.
RPV COMPANY
RWHC, INC
S.B.D. NORD, S.L. (****)
SATICEM GESTIO, S.L. (***)
SATICEM HOLDING, S.L.
SATICEM IMMOBILIARIA, S.L.
SATICEM IMMOBLES EN ARRENDAMENT, S.L. (***)
SCALDIS FINANCE, S.A.
SEGUROS BBVA BANCOMER, S.A. DE C.V., GRUPO FINANCIERO BBVA BANCOMER
SEGUROS PROVINCIAL, C.A.
SERVICIOS CORPORATIVOS BANCOMER, S.A. DE C.V.
SERVICIOS CORPORATIVOS DE SEGUROS, S.A. DE C.V.
SERVICIOS EXTERNOS DE APOYO EMPRESARIAL, S.A DE C.V.
SERVICIOS TECNOLOGICOS SINGULARES, S.A.
SIMPLE FINANCE TECHNOLOGY CORP.
SOCIEDAD DE ESTUDIOS Y ANALISIS FINANCIERO.,S.A.
SOCIEDAD GESTORA DEL FONDO PUBLICO DE REGULACION DEL MERCADO HIPOTECARIO, S.A.
SPORT CLUB 18, S.A.
STATE NATIONAL CAPITAL TRUST I
STATE NATIONAL STATUTORY TRUST II
TEXAS LOAN SERVICES, LP.
TEXAS REGIONAL STATUTORY TRUST I
TEXASBANC CAPITAL TRUST I
TEXTIL TEXTURA, S.L.
(*) Information on foreign companies at exchange rate on December 31, 2016
(**) This company has an equity loan from ARRELS CT PROMOU, S.A.
(***) These companies have equity loans from BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
(****) These companies have equity loans from CATALUNYACAIXA IMMOBILIARIA, S.A.
(*****) These companies have equity loans from UNNIM SOCIEDAD PARA LA GESTION DE ACTIVOS INMOBILIARIOS, S.A.
SPAIN
SPAIN
ROMANIA
SPAIN
MEXICO
REAL ESTATE
SERVICES
FINANCIAL SERVICES
INACTIVE
REAL ESTATE
CAYMAN ISLANDS
FINANCIAL SERVICES
UNITED STATES
FINANCIAL SERVICES
SPAIN
SPAIN
SPAIN
SPAIN
SPAIN
BELGIUM
MEXICO
VENEZUELA
MEXICO
MEXICO
MEXICO
SPAIN
REAL ESTATE
REAL ESTATE
REAL ESTATE
REAL ESTATE
REAL ESTATE
INVESTMENT COMPANY
INSURANCES SERVICES
INSURANCES SERVICES
SERVICES
SERVICES
SERVICES
SERVICES
UNITED STATES
FINANCIAL SERVICES
SPAIN
SPAIN
SPAIN
UNITED STATES
UNITED STATES
UNITED STATES
UNITED STATES
UNITED STATES
SPAIN
SERVICES
INACTIVE
INVESTMENT COMPANY
FINANCIAL SERVICES
FINANCIAL SERVICES
FINANCIAL SERVICES
FINANCIAL SERVICES
FINANCIAL SERVICES
COMMERCIAL
178
-
-
-
-
-
-
-
-
-
-
-
-
-
-
100.00
-
-
-
-
100.00
100.00
100.00
100.00
-
-
-
-
-
-
-
-
100.00
77.20
100.00
-
-
-
-
-
-
100.00
100.00
100.00
100.00
90.00
100.00
100.00
100.00
100.00
100.00
100.00
96.64
100.00
100.00
-
100.00
100.00
100.00
100.00
-
-
-
-
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
-
-
-
100.00
100.00
100.00
100.00
100.00
68.67
100.00
100.00
100.00
100.00
90.00
100.00
100.00
100.00
100.00
100.00
100.00
96.64
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
77.20
100.00
100.00
100.00
Net
Carrying
Amount
-
-
21
-
-
-
-
-
-
-
2
-
5
40
1
14
-
771
-
-
5
6
-
4
94
5
22
18
-
-
2
1
2
4
7
36
11
97
2
14
1,469
771
1
9
6
19
26
18
124
15
1
22
-
-
2
1
2
3
5
59
3
83
-
-
1,469
-
1
90
-
-
85
-
388
3,347
2,959
1
4
2
7
1
53
104
-
14
-
-
1
7
10
20
1
66
108
-
14
15
10
-
2
8
14
-
13
5
-
-
14
10
-
47
24
-
100.00
1,208
1,208
100.00
100.00
68.67
1
1
2
49
25
-
Profit
(Loss)
31.12.16
15
-
(2)
2
-
-
-
-
-
1
-
(16)
3
4
-
5
-
16
-
(3)
1
8
(3)
-
217
(1)
-
-
1
-
(92)
(3)
-
(1)
-
-
9
-
-
-
(45)
(10)
23
(6)
-
-
-
-
1
(1)
2
(7)
6
10
1
9
-
754
-
(78)
5
11
(57)
18
171
1
4
2
5
1
146
107
-
15
-
-
1,199
1
1
-
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
Additional Information on Consolidated Subsidiaries composing the BBVA Group (Continued) and consolidated structured entities
% Legal share
of participation
Millions of Euros(*)
Affiliate Entity Data
Company
Location
Activity
Direct
Indirect
Total
Net Carrying
Amount
Assets
31.12.16
Liabilities
31.12.16
Equity
31.12.16
Profit (Loss)
31.12.16
TMF HOLDING INC.
TRIFOI REAL ESTATE SRL
TUCSON LOAN HOLDINGS, INC.
TURKIYE GARANTI BANKASI A.S
UNITARIA GESTION DE PATRIMONIOS INMOBILIARIOS
UNIVERSALIDAD TIPS PESOS E-9
UNNIM SOCIEDAD PARA LA GESTION DE ACTIVOS INMOBILIARIOS, S.A. (**)
URBANIZADORA SANT LLORENC, S.A.
VALANZA CAPITAL S.A. UNIPERSONAL
VOLJA LUX, SARL
VOLJA PLUS SL
VOLKSWAGEN FINANCIAL SERVICES COMPAÑIA FINANCIERA S.A.
(*) Information on foreign companies at exchange rate on December 31, 2016
(**) This company has an equity loan from BBVA, S.A.
UNITED STATES
ROMANIA
UNITED STATES
TURKEY
SPAIN
INVESTMENT COMPANY
REAL ESTATE
FINANCIAL SERVICES
BANKING
REAL ESTATE
COLOMBIA
FINANCIAL SERVICES
-
-
-
39.90
-
-
100.00
60.60
100.00
100.00
100.00
100.00
-
100.00
100.00
-
-
-
71.78
-
51.00
100.00
100.00
100.00
39.90
100.00
100.00
100.00
60.60
100.00
71.78
75.40
51.00
15
1
57
22
1
57
7
-
-
13
1
55
2
-
2
6,177
76,017
66,433
8,191
1,393
2
-
-
-
1
-
1
3
60
941
-
7
1
2
16
110
-
29
1,102
-
-
1
-
78
3
28
(32)
-
7
1
(17)
32
-
3
(129)
-
-
(1)
19
-
REAL ESTATE
INACTIVE
SERVICES
INVESTMENT COMPANY
-
INVESTMENT COMPANY
75.40
FINANCIAL SERVICES
-
SPAIN
SPAIN
SPAIN
LUXEMBOURG
SPAIN
ARGENTINA
179
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
APPENDIX III. Additional information on investments and jointly controlled companies accounted for under the
equity method of consolidation in the BBVA Group (includes the most significant companies that together
represent 99.71% of total investments in these companies)
Including the most significant entities, jointly representing 99.71% of all investment in this group
% Legal share
of participation
Company
Location
Activity
Direct
Indirect
Total
Millions of Euros(*)
Affiliate Entity Data
Net
Carrying
Amount
Assets
31.12.16
Liabilities
31.12.16
Equity
31.12.16
ADQUIRA ESPAÑA, S.A.
ADQUIRA MEXICO, S.A. DE C.V.(*)
ALTURA MARKETS, SOCIEDAD DE VALORES, S.A.(*)
ATOM BANK PLC
AUREA, S.A. (CUBA)
AVANTESPACIA INMOBILIARIA, S.L.(*)
BANK OF HANGZHOU CONSUMER FINANCE CO LTD
CANCUN SUN & GOLF COUNTRY CLUB, S.A.P.I. DE C.V.
COMPAÑIA ESPAÑOLA DE FINANCIACION DEL DESARROLLO S.A.
COMPAÑIA MEXICANA DE PROCESAMIENTO, S.A. DE C.V.(*)
CORPORACION IBV PARTICIPACIONES EMPRESARIALES, S.A.(*)
DESARROLLOS METROPOLITANOS DEL SUR, S.L.(*)
FERROMOVIL 3000, S.L.(*)
FERROMOVIL 9000, S.L.(*)
FIDEICOMISO 1729 INVEX ENAJENACION DE CARTERA (*)
FIDEICOMISO F 403853- 5 BBVA BANCOMER SERVICIOS ZIBATA (*)
FIDEICOMISO F/00185 FIMPE - FIDEICOMISO F/00185 PARA EXTENDER A LA SOCIEDAD LOS BENEFICIOS DEL ACCESO A
LA INFRAESTRUCTURA DE LOS MEDIOS DE PAGO ELECTRONICOS
FIDEICOMISO F/402770-2 ALAMAR(*)
INVERSIONES PLATCO, C.A.(*)
METROVACESA PROMOCION Y ARRENDAMIENTO S.A.
METROVACESA SUELO Y PROMOCION, S.A.
PARQUE RIO RESIDENCIAL, S.L.(*)
PROMOCIONS TERRES CAVADES, S.A.(*)
PSA FINANCE ARGENTINA COMPAÑIA FINANCIERA, S.A.(*)
RCI COLOMBIA S.A., COMPAÑIA DE FINANCIAMIENTO (*)
REAL ESTATE DEAL II, S.A.(*)
REDSYS SERVICIOS DE PROCESAMIENTO, S.L.
ROMBO COMPAÑIA FINANCIERA, S.A.
SERVICIOS ELECTRONICOS GLOBALES, S.A. DE C.V.
SERVIRED SOCIEDAD ESPAÑOLA DE MEDIOS DE PAGO, S.A.
SOCIEDAD ADMINISTRADORA DE FONDOS DE CESANTIA DE CHILE II, S.A.
TELEFONICA FACTORING ESPAÑA, S.A.
TESTA RESIDENCIAL SOCIMI SAU
VITAMEDICA ADMINISTRADORA, S.A. DE C.V (*)
(*) Joint venture entities accounted for using the equity method
(**)Information on foreign companies at exchange rate on December 31, 2016
(2) Non-current assets for sale
(3) Figures according to the budget
SPAIN
MEXICO
SPAIN
COMMERCIAL
COMMERCIAL
SECURITIES DEALER
UNITED KINGDOM
BANKING
CUBA
SPAIN
CHINA
MEXICO
SPAIN
MEXICO
SPAIN
SPAIN
SPAIN
SPAIN
MEXICO
MEXICO
MEXICO
MEXICO
REAL ESTATE
REAL ESTATE
BANKING
REAL ESTATE
FINANCIAL SERVICES
SERVICES
INVESTMENT COMPANY
REAL ESTATE
SERVICES
SERVICES
REAL ESTATE
REAL ESTATE
FINANCIAL SERVICES
REAL ESTATE
VENEZUELA
FINANCIAL SERVICES
SPAIN
SPAIN
SPAIN
REAL ESTATE
REAL ESTATE
REAL ESTATE
SPAIN
ARGENTINA
COLOMBIA FINANCIAL SERVICES
REAL ESTATE
BANKING
SPAIN
SPAIN
ARGENTINA
MEXICO
SPAIN
CHILE
SPAIN
SPAIN
MEXICO
IN LIQUIDATION
FINANCIAL SERVICES
BANKING
SERVICES
FINANCIAL SERVICES
28.72
PENSION FUNDS MANAGEMENT
-
FINANCIAL SERVICES
REAL ESTATE
SERVICES
30.00
10.46
-
180
-
-
50.00
29.46
-
-
30.00
-
16.67
-
-
-
-
-
-
-
-
-
-
15.90
15.90
-
-
-
-
20.06
20.00
-
-
19
5
1,738
229
11
2
1,700
137
40.00
50.00
-
-
49.00
30.01
-
33.33
-
50.00
50.00
50.00
20.00
20.00
32.25
30.00
28.50
42.40
50.00
4.62
4.62
50.00
39.11
50.00
49.00
-
0.00
40.00
46.14
0.00
48.60
-
3.04
51.00
40.00
50.00
50.00
29.46
49.00
30.01
30.00
33.33
16.67
50.00
50.00
50.00
20.00
20.00
32.25
30.00
28.50
42.40
50.00
20.52
20.52
50.00
39.11
50.00
49.00
20.06
20.00
40.00
46.14
28.72
48.60
30.00
13.50
51.00
3
2
19
43
5
18
20
23
19
6
29
11
4
3
57
33
4
8
4
10
73
71
75
122
12
126
41
459
298
177
184
14
19
9
67
208
326
1,080
10
4
21
17
4
8
19
6
11
11
4
91
2
21
15
191
139
23
146
329
12
49
28
77
831
12
-
12
5
35
5
-
25
20
437
282
-
58
-
-
1
-
68
2
-
148
104
5
106
284
-
12
6
62
366
8
Profit
(Loss)
31.12.16
1
-
8
(36)
-
-
(1)
(4)
8
1
-
(1)
(4)
(3)
-
27
(1)
-
(5)
-
-
-
-
14
(2)
(6)
7
7
2
8
2
8
3
1
(2)
(2)
(3)
7
3
30
129
9
60
68
44
109
11
101
23
25
19
177
98
15
19
13
326
1,013
20
15
28
37
23
32
37
10
29
20
7
462
3
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
APPENDIX IV. Changes and notification of investments and divestments in the BBVA Group in 2016
Acquisitions or Increases of Interest Ownership in Consolidated Subsidiaries
Company
Type of
Transaction
Activity
PROPEL VENTURE PARTNERS US FUND I, L.P.
FOUNDING
VENTURE CAPITAL
BBVA NOMINEES LIMITED
BBVA COMPASS PAYMENTS, INC
HOLVI PAYMENT SERVICE OY
RENTRUCKS, ALQUILER Y SERVICIOS DE TRANSPORTE, S.A.
ESPAIS CERDANYOLA, S.L.
FIDEICOMISO F/403112-6 DE ADMINISTRACION DOS LAGOS
FIDEICOMISO SCOTIABANK INVERLAT S A F100322908
OPERADORA DOS LAGOS S.A. DE C.V.
BBVA CONSUMER FINANCE ENTIDAD DE DESARROLLO A LA PEQUEÑA Y
MICRO EMPRESA, EDPYME, S.A. (BBVA CONSUMER FINANCE - EDPYME)
FORUM COMERCIALIZADORA DEL PERU, S.A.
FORUM DISTRIBUIDORA DEL PERU, S.A.
BBVA OP3N S.L.
HABITATGES FINVER, S.L.
DATA ARCHITECTURE AND TECHNOLOGY S.L
NEW CO PERU SAC
VOLJA PLUS SL
DALLAS CREATION CENTER, INC
BBVA OP3N, INC
GRUPO FINANCIERO BBVA BANCOMER, S.A. DE C.V.
VOLKSWAGEN FINANCIAL SERVICES COMPAÑIA FINANCIERA S.A.
FIDEICOMISO LOTE 6.1 ZARAGOZA
BBVA BROKER, S.A.
CX PROPIETAT, FII
GARANTI YATIRIM ORTAKLIGI AS
NOET, INC.
CATALONIA GEBIRA, S.L.
GARRAF MEDITERRANIA, S.A.
ACQUISITION
SERVICES
FOUNDING
ACQUISITION
ACQUISITION
ACQUISITION
ACQUISITION
ACQUISITION
ACQUISITION
ACQUISITION
ACQUISITION
ACQUISITION
FOUNDING
INVESTMENT COMPANY
FINANCIAL SERVICES
FINANCIAL SERVICES
REAL ESTATE
REAL ESTATE
REAL ESTATE
SERVICES
FINANCIAL SERVICES
SERVICES
FINANCIAL SERVICES
SERVICES
ACQUISITION
REAL ESTATE
FOUNDING
SERVICES
SPLIT
INVESTMENT COMPANY
DILUTION EFFECT
INVESTMENT COMPANY
FOUNDING
FOUNDING
ACQUISITION
ACQUISITION
ACQUISITION
FOUNDING
SERVICES
SERVICES
FINANCIAL SERVICES
FINANCIAL SERVICES
REAL ESTATE
INSURANCES SERVICES
ACQUISITION
REAL ESTATE INVESTMENT FUND
CONTROL RIGHTS
INVESTMENT COMPANY
FOUNDING
ACQUISITION
ACQUISITION
SERVICES
REAL ESTATE
REAL ESTATE
Millions of Euros
% of Voting Rights
Price Paid in the
Transactions +
Expenses directly
attributable to
the
Transactions
Fair Value of
Equity
Instruments
issued for the
Transactions
% Participation
(net)
Acquired
in the Period
Total Voting
Rights
Controlled after
the
Transactions
Effective Date
for the
Transaction
(or Notification
Date)
Category
2
-
43
9
-
14
-
2
-
3
1
1
-
-
-
-
-
2
-
1
17
1
-
-
-
-
-
2
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
100.00%
5.00%
100.00%
100.00%
0.68%
47.51%
50.00%
50.00%
50.00%
15.68%
15.68%
15.68%
100.00%
50.00%
51.00%
100.00%
0.46%
100.00%
100.00%
0.01%
51.00%
59.99%
95.00%
0.19%
3.30%
100.00%
18.33%
9.42%
100.00%
100.00%
100.00%
100.00%
100.00%
97.51%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
51.00%
100.00%
75.40%
100.00%
100.00%
99.98%
51.00%
59.99%
95.00%
67.93%
99.97%
100.00%
100.00%
100.00%
14-Jan-16
29-Jan-16
01-Mar-16
04-Mar-16
29-Mar-16
31-Mar-16
31-Mar-16
31-Mar-16
31-Mar-16
29-Apr-16
29-Apr-16
29-Apr-16
01-Jul-16
14-Jul-16
28-Jul-16
31-Jul-16
31-Jul-16
01-Aug-16
05-Aug-16
07-Sep-16
26-Sep-16
27-Oct-16
01-Nov-16
30-Nov-16
30-Nov-16
01-Dec-16
15-Dec-16
29-Dec-16
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
181
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
Disposals or Reduction of Interest Ownership in Consolidated Subsidiaries
Company
Type of
Transaction
Activity
ANIDA SERVICIOS INMOBILIARIOS, S.A. DE C.V.
MERGER
SERVICES
HIPOTECARIA NACIONAL MEXICANA INCORPORATED
LIQUIDATION
REAL ESTATE
ARRAHONA GARRAF, S.L.
ECOARENYS, S.L.
IMOBILIARIA DUQUE DE AVILA, S.A.
LIQUIDATION
REAL ESTATE
NON CONTROL
REAL ESTATE
DISPOSAL
REAL ESTATE
FIDEICOMISO Nº 781, EN BANCO INVEX, S.A.,INSTITUCION DE BANCA
MULTIPLE, INVEX GRUPO FINANCIERO, FIDUCIARIO (FIDEIC. INVEX 3ª
EMISION)
MERGER
FINANCIAL
SERVICES
BBVA GEST, S.G.DE FUNDOS DE INVESTIMENTO MOBILIARIO, S.A.
LIQUIDATION
SECURITIES DEALER
PROXIMA ALFA INVESTMENTS HOLDINGS (USA) INC.
PROXIMA ALFA INVESTMENTS HOLDINGS (USA) II INC.
PROXIMA ALFA INVESTMENTS (USA) LLC
UNIDAD DE AVALUOS MEXICO, S.A. DE CV
HOLDING CONTINENTAL, S.A.
LIQUIDATION
LIQUIDATION
LIQUIDATION
DISPOSAL
SPLIT
COMPANY
COMPANY
SERVICES
SERVICES
COMPANY
EUROPEA DE TITULIZACION, S.A., S.G.F.T.
DILUTION EFFECT
SERVICES
CATALUNYA BANC, S.A.
CATALUNYACAIXA INVERSIO, SGIIC, S.A.
CATALUNYACAIXA MEDIACIO , S.L.
MERGER
MERGER
MERGER
BANKING
INVESTMENT
SERVICES
BBVA ELCANO EMPRESARIAL, S.A. EN LIQUIDACION
LIQUIDATION
IN LIQUIDATION
BBVA ELCANO EMPRESARIAL II, S.A. EN LIQUIDACION
LIQUIDATION
IN LIQUIDATION
BANCO DEPOSITARIO BBVA, S.A.
GARANTI BANK MOSCOW
UNO-E BANK, S.A.
MERGER
DISPOSAL
MERGER
BANKING
BANKING
BANKING
M illio ns o f E uro s
% o f V o t ing R ight s
Profit (Loss)
in the
Transaction
(*)
Total Voting
Changes in the
% Participation
Rights
Equity due to the
Sold
Controlled after
transaction
in the Period
the
Disposal
-
-
(1)
9
(1)
-
-
3
-
-
18
-
-
-
-
-
-
-
-
8
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
100.00%
100.00%
100.00%
50.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
50.00%
1.14%
99.10%
100.00%
100.00%
45.00%
45.00%
100.00%
100.00%
100.00%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
87.86%
Effective Date
for the
Transaction
Category
(or Notification
Date)
31-Jan-16
31-Jan-16
21-Mar-16
31-Mar-16
22-Apr-16
30-May-16
09-Jun-16
30-Jun-16
30-Jun-16
30-Jun-16
29-Jul-16
31-Jul-16
31-Aug-16
09-Sep-16
13-Sep-16
06-Oct-16
25-Oct-16
26-Oct-16
11-Nov-16
05-Dec-16
09-Dec-16
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
182
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
Business Combinations and Other Acquisitions or Increases of Interest Ownership in Associates and Joint-Ventures Accounted for Under the Equity Method
Company
Type of Transaction
Activity
METROVACESA, S.A. (*)
METROVACESA, S.A. (*)
METROVACESA, S.A. (*)
CAPITAL INCREASE (**)
REAL ESTATE
PARTIAL SPLIT
TOTAL SPLIT
METROVACESA SUELO Y PROMOCION, S.A.
SPLIT
ATOM BANK PLC
ACQUISITION
RCI COLOMBIA S.A., COMPAÑIA DE FINANCIAMIENTO
FOUNDING
FINANCIAL SERVICES
PARQUE RIO RESIDENCIAL, S.L.
CAPIPOTA PRODUCTIONS S.L.
FIDEICOMISO DE ADMINISTRACION REDETRANS
IBV SOURCE - PRESTAÇAO DE SERVIÇOS
INFORMATICOS, ACE
LA ESMERALDA DESARROLLOS, S.L.
AVANTESPACIA INMOBILIARIA, S.L.
FOUNDING
ACQUISITION
ACQUISITION
FOUNDING
ACQUISITION
FOUNDING
METROVACESA PROMOCION Y ARRENDAMIENTO S.A (*) SPLIT
TESTA RESIDENCIAL SOCIMI SAU (*)
FIDEICOMISO F/404180-2 BBVA BANCOMER SERVICIOS
GOLF ZIBATA
SPLIT
ACQUISITION
REAL ESTATE
REAL ESTATE
REAL ESTATE
REAL ESTATE
BANKING
REAL ESTATE
COMMERCIAL
SERVICES
SERVICES
REAL ESTATE
REAL ESTATE
REAL ESTATE
REAL ESTATE
M illio ns o f E uro s
% o f V o t ing R ight s
P ric e P a id in t he
T ra ns a c t io ns +
E xpe ns e s D ire c t ly
A t t ribut a ble t o t he
T ra ns a c t io ns
F a ir V a lue o f
E quit y
Ins t rum e nt s
Is s ue d f o r t he
T ra ns a c t io ns
% P a rt ic ipa t io n
( N e t )
A c quire d
in t he P e rio d
T o t a l V o t ing
R ight s
C o nt ro lle d A f t e r
t he
T ra ns a c t io ns
E f f e c t iv e D a t e f o r
t he T ra ns a c t io n
( o r N o t if ic a t io n
D a t e )
Category
344
(208)
(502)
208
56
9
10
-
1
-
-
12
67
91
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1.10%
20.52%
17-Feb-16
ASSOCIATED
-
-
20.52%
29.46%
49.00%
50.00%
25.00%
25.07%
49.00%
25.00%
30.01%
20.52%
13.49%
-
-
20.52%
29.46%
49.00%
50.00%
25.00%
25.07%
49.00%
50.00%
30.01%
20.52%
13.49%
01-Mar-16
ASSOCIATED
26-Oct-16
ASSOCIATED
01-Mar-16
ASSOCIATED
29-Apr-16
ASSOCIATED
01-Jun-16
JOINT VENTURE
14-Jun-16
JOINT VENTURE
30-Jun-16
JOINT VENTURE
30-Jun-16
JOINT VENTURE
31-Jul-16
JOINT VENTURE
21-Sep-16
JOINT VENTURE
20-Oct-16
JOINT VENTURE
26-Oct-16
ASSOCIATED
26-Oct-16
ASSOCIATED
30.00%
30.00%
01-Dec-16
JOINT VENTURE
(*) First there was partial split of the of soil activity and promotion in favor of the society of new constitution Metrovacesa Suelo y Promoción, S.A. and in October was the total split of the society in favor of
Testa Residencial SOCIMI SAU, Merlin Properties, SOCIMI, S.A. and the new constitution company Metrovacesa Promotion and Leasing S.A
(**) Non-monetary contribution.
183
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
Disposal or Reduction of Interest Ownership in Associates and Joint-Ventures Companies Accounted for Under the Equity Method
Company
Type of Transaction
Activity
BALMA HABITAT, S.L.
ECUALITY E-COMMERCE QUALITY, S.A.S.P.
FIDEICOMISO SCOTIABANK INVERLAT SA F100322742
I+D MEXICO, S.A. DE C.V.
OPERADORA HITO URBANO, S.A.DE C.V
OPERADORA MIRASIERRA, S.A. DE C.V.
PROBIS AIGUAVIVA, S.L.
AMBIT D'EQUIPAMENTS, S.A.
CAPASATUS, S.L
CRUILLA CENTRE, S.L.
EUGESA PROCAM, S.L.
HARMONIA BADALONA, S.L.
HARMONIA PLA DE PONENT, S.L.
IMMOCENTRE 3000, S.L.
LANDOMUS, S.L.
L'ERA DE VIC, S.L.
NOU MAPRO, S.A.
SARDENYA CENTRE, S.L.
TAGE CENTRE PROMOCIONS IMMOBILIARIES, S.L.
VERTIX PROCAM PATRIMONIAL, S.L.
VISOREN CENTRE, S.L.
INMOBILIARIA MONTE BOADILLA, S.L.
SANYRES SUR, S.L.
UNION SANYRES, S.L.
VIC CONVENT, S.L.
KUARS CENTRE, S.L.
P.R.ALBIRSA, S.L.
S.C.I. MAGNAN SAINT PHILIPPE
METROVACESA, S.A. (*)
FIDEICOMISO F 404015-0 BBVA BANCOMER LOMAS III
FIDEICOMISO F/70191-2 LOMAS DE ANGELOPOLIS II
PARQUE REFORMA SANTA FE, S.A. de C.V.
TENEDORA DE VEHICULOS, S.A.
BRUNARA, SICAV, S.A.
NON CONTROL
NON CONTROL
DISPOSAL
DISPOSAL
DISPOSAL
DISPOSAL
NON CONTROL
NON CONTROL
NON CONTROL
NON CONTROL
NON CONTROL
NON CONTROL
NON CONTROL
NON CONTROL
NON CONTROL
NON CONTROL
NON CONTROL
NON CONTROL
NON CONTROL
NON CONTROL
NON CONTROL
NON CONTROL
DISPOSAL
DISPOSAL
DISPOSAL
DISPOSAL
LIQUIDATION
LIQUIDATION
LIQUIDATION
DISPOSAL
DISPOSAL
DISPOSAL
LIQUIDATION
DISPOSAL
REAL ESTATE
COMMERCIAL
REAL ESTATE
SERVICES
SERVICES
SERVICES
REAL ESTATE
REAL ESTATE
REAL ESTATE
REAL ESTATE
REAL ESTATE
REAL ESTATE
REAL ESTATE
REAL ESTATE
REAL ESTATE
REAL ESTATE
REAL ESTATE
REAL ESTATE
REAL ESTATE
REAL ESTATE
REAL ESTATE
REAL ESTATE
SERVICES
REAL ESTATE
REAL ESTATE
REAL ESTATE
REAL ESTATE
REAL ESTATE
REAL ESTATE
REAL ESTATE
REAL ESTATE
REAL ESTATE
SERVICES
VARIABLE CAPITAL
M illio ns o f
E uro s
% o f V o t ing R ight s
P ro f it ( Lo s s )
in t he
T ra ns a c t io n
% P a rt ic ipa t io n
S o ld
in t he P e rio d
T o t a l V o t ing
R ight s
C o nt ro lle d a f t e r
t he
D is po s a l
E f f e c t iv e D a t e f o r
t he T ra ns a c t io n
( o r N o t if ic a t io n
D a t e )
Category
-
-
5
16
-
-
(1)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2
-
9
-
-
(2)
7
4
2
-
-
50.00%
28.00%
33.78%
50.00%
35.00%
35.00%
50.00%
35.00%
50.00%
49.04%
55.00%
45.00%
22.33%
40.00%
50.00%
40.00%
50.00%
50.00%
50.00%
100.00%
40.00%
51.00%
33.05%
33.36%
25.00%
40.00%
50.00%
25.00%
20.52%
25.00%
25.00%
30.00%
35.00%
30.36%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
31-Mar-16
JOINT VENTURE
31-Mar-16
ASSOCIATED
31-Mar-16
JOINT VENTURE
31-Mar-16
JOINT VENTURE
31-Mar-16
JOINT VENTURE
31-Mar-16
JOINT VENTURE
31-Mar-16
JOINT VENTURE
30-Apr-16
ASSOCIATED
30-Apr-16
30-Apr-16
30-Apr-16
ASSOCIATED
JOINT VENTURE
JOINT VENTURE
30-Apr-16
JOINT VENTURE
30-Apr-16
30-Apr-16
30-Apr-16
30-Apr-16
30-Apr-16
30-Apr-16
30-Apr-16
30-Apr-16
30-Apr-16
01-Jul-16
01-Jul-16
01-Jul-16
14-Jul-16
08-Sep-16
14-Sep-16
30-Sep-16
26-Oct-16
29-Nov-16
30-Nov-16
20-Dec-16
22-Dec-16
31-Dec-16
ASSOCIATED
JOINT VENTURE
JOINT VENTURE
JOINT VENTURE
JOINT VENTURE
JOINT VENTURE
JOINT VENTURE
JOINT VENTURE
JOINT VENTURE
JOINT VENTURE
JOINT VENTURE
JOINT VENTURE
ASSOCIATED
JOINT VENTURE
JOINT VENTURE
ASSOCIATED
ASSOCIATED
ASSOCIATED
JOINT VENTURE
ASSOCIATED
ASSOCIATED
ASSOCIATED
3.71%
(*) First there was partial split of the of soil activity and promotion in favor of the society of new constitution Metrovacesa Suelo y Promoción, S.A. and in October was the total split of the society in favor of
Testa Residencial SOCIMI SAU, Merlin Properties, SOCIMI, S.A. and the new constitution company Metrovacesa Promotion and Leasing S.A
184
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
Changes in other Companies quoted recognize as Available-For-Sale
Company
Type of Transaction
Activity
% of voting rights
% P a rt ic ipa t io n
A c quire d ( S o ld)
in t he P e rio d
Totally Controlled
after Transaction
E f f e c t iv e D a t e f o r
t he T ra ns a c t io n
( o r N o t if ic a t io n
D a t e )
MERLIN PROPERTIES SOCIMI, S.A
SPLIT METROVACESA
REAL ESTATE
6.44%
6.44%
02-Nov-16
185
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
APPENDIX V.Fully consolidated subsidiaries with more than 10% owned by non-Group shareholders as of December
31, 2016
Company
Activity
Direct
Indirect
Total
% of Voting Rights
Controlled by the Bank
BANCO CONTINENTAL, S.A.
BANCO PROVINCIAL S.A. - BANCO UNIVERSAL
INVERSIONES BANPRO INTERNATIONAL INC. N.V.
PRO-SALUD, C.A.
INVERSIONES P.H.R.4, C.A.
BANCO BILBAO VIZCAYA ARGENTARIA CHILE, S.A.
BBVA INMOBILIARIA E INVERSIONES, S.A.
TEXTIL TEXTURA, S.L.
COMERCIALIZADORA CORPORATIVA SAC
DISTRITO CASTELLANA NORTE, S.A.
GESTION DE PREVISION Y PENSIONES, S.A.
ESTACION DE AUTOBUSES CHAMARTIN, S.A.
F/403035-9 BBVA HORIZONTES RESIDENCIAL
F/253863 EL DESEO RESIDENCIAL
DATA ARCHITECTURE AND TECHNOLOGY S.L
VOLKSWAGEN FINANCIAL SERVICES COMPAÑIA FINANCIERA S.A.
FIDEICOMISO LOTE 6.1 ZARAGOZA
HABITATGES INVERVIC, S.L.
TURKIYE GARANTI BANKASI A.S
GARANTI EMEKLILIK VE HAYAT AS
GARANTI YATIRIM ORTAKLIGI AS
FODECOR, S.L.
PROCAMVASA, S.A.
JALE PROCAM, S.L.
VOLJA LUX, SARL
HABITAT ZENTRUM, S.L.
VOLJA PLUS SL
BANKING
BANKING
INVESTMENT COMPANY
NO ACTIVITY
NO ACTIVITY
BANKING
REAL ESTATE
COMMERCIAL
FINANCIAL SERVICES
REAL ESTATE
PENSION FUND MANAGEMENT
SERVICES
REAL ESTATE
REAL ESTATE
SERVICES
FINANCIAL SERVICES
REAL ESTATE
REAL ESTATE
BANKING
INSURANCES
INVESTMENT COMPANY
REAL ESTATE
REAL ESTATE
REAL ESTATE
INVESTMENT COMPANY
REAL ESTATE
INVESTMENT COMPANY
186
-
1
48
-
-
-
-
-
-
-
60
-
-
-
-
-
-
-
40
-
-
-
-
-
-
-
75
46
54
-
59
60
68
68
69
50
76
-
51
65
65
51
51
60
35
-
85
100
60
51
50
72
50
-
46
55
48
59
60
68
68
69
50
76
60
51
65
65
51
51
60
35
40
85
100
60
51
50
72
50
75
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 54).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
APPENDIX VI. BBVA Group’s structured entities. Securitization funds
Securitization Fund (consolidated)
Company
2 PS Interamericana
AYT CAIXA SABADELL HIPOTECARIO I, FTA
AYT HIPOTECARIO MIXTO IV, FTA
AYT HIPOTECARIO MIXTO, FTA
BACOMCB 07
BACOMCB 08
BACOMCB 08-2
BBVA CONSUMO 6 FTA
BBVA CONSUMO 7 FTA
BBVA CONSUMO 8 FT
BBVA EMPRESAS 4 FTA
BBVA LEASING 1 FTA
BBVA PYME 10 FT
BBVA RMBS 1 FTA
BBVA RMBS 10 FTA
BBVA RMBS 11 FTA
BBVA RMBS 12 FTA
BBVA RMBS 13 FTA
BBVA RMBS 14 FTA
BBVA RMBS 15 FTA
BBVA RMBS 16 FT
BBVA RMBS 17 FT
BBVA RMBS 2 FTA
BBVA RMBS 3 FTA
BBVA RMBS 5 FTA
BBVA RMBS 9 FTA
BBVA UNIVERSALIDAD E10
BBVA UNIVERSALIDAD E11
BBVA UNIVERSALIDAD E12
BBVA UNIVERSALIDAD E9
BBVA UNIVERSALIDAD N6
BBVA-5 FTPYME FTA
BBVA-6 FTPYME FTA
BBVA-FINANZIA AUTOS 1 FTA
BMERCB 13
FTA IM TERRASSA MBS-1
FTA TDA-22 MIXTO
FTA TDA-27
FTA TDA-28
GAT ICO FTVPO 1, F.T.H
GC FTGENCAT TARRAGONA 1 FTA
HIPOCAT 10 FTA
HIPOCAT 11 FTA
HIPOCAT 6 FTA
HIPOCAT 7 FTA
HIPOCAT 8 FTA
HIPOCAT 9 FTA
Instrumentos de Titulización Hip- Junior
TDA 19 FTA
TDA 20-MIXTO, FTA
TDA 23 FTA
TDA TARRAGONA 1 FTA
BBVA CHILE S.A.
BBVA, S.A.
BBVA, S.A.
BBVA, S.A.
BBVA BANCOMER, S.A.,INSTIT. BANCA
BBVA BANCOMER, S.A.,INSTIT. BANCA
BBVA BANCOMER, S.A.,INSTIT. BANCA
BBVA, S.A.
BBVA, S.A.
BBVA, S.A.
BBVA, S.A.
BBVA, S.A.
BBVA, S.A.
BBVA, S.A.
BBVA, S.A.
BBVA, S.A.
BBVA, S.A.
BBVA, S.A.
BBVA, S.A.
BBVA, S.A.
BBVA, S.A.
BBVA, S.A.
BBVA, S.A.
BBVA, S.A.
BBVA, S.A.
BBVA, S.A.
BBVA COLOMBIA, S.A.
BBVA COLOMBIA, S.A.
BBVA COLOMBIA, S.A.
BBVA COLOMBIA, S.A.
BBVA COLOMBIA, S.A.
BBVA, S.A.
BBVA, S.A.
BBVA, S.A.
BBVA BANCOMER, S.A.,INSTIT. BANCA
BBVA, S.A.
BBVA, S.A.
BBVA, S.A.
BBVA, S.A.
BBVA, S.A.
BBVA, S.A.
BBVA, S.A.
BBVA, S.A.
BBVA, S.A.
BBVA, S.A.
BBVA, S.A.
BBVA, S.A.
BANCO CONTINENTAL, S.A.
BBVA, S.A.
BBVA, S.A.
BBVA, S.A.
BBVA, S.A.
Millions of Euros
Origination
Date
Total Securitized
Total Securitized
Exposures at the
Exposures as of December
Origination Date
31, 2016 (*)
Oct-04
Jul-08
Jun-05
Mar-04
Dec-07
Mar-08
Dec-08
Oct-14
Jul-15
Jul-16
Jul-10
Jun-10
Dec-15
Feb-07
Jun-11
Jun-12
Dec-13
Jul-14
Nov-14
May-15
May-16
Nov-16
Mar-07
Jul-07
May-08
Apr-10
Mar-09
May-09
Aug-09
Dec-08
Aug-12
Nov-06
Jun-07
Apr-07
Jun-13
Jul-06
Dec-04
Dec-06
Jul-07
Mar-04
Jun-08
Jul-06
Mar-07
Jul-03
Jun-04
May-05
Nov-05
Dec-07
Mar-04
Jun-04
Mar-05
Dec-07
31
300
100
100
121
53
267
299
1,450
700
1,700
2,500
780
2,500
1,600
1,400
4,350
4,100
700
4,000
1,600
1,800
5,000
3,000
5,000
1,295
23
15
25
44
67
1,900
1,500
800
497
525
112
275
250
40
283
1,500
1,600
850
1,400
1,500
1,000
24
200
100
300
397
3
98
24
17
-
-
-
181
1,433
652
133
97
507
1,206
1,292
1,140
3,685
3,596
569
3,659
1,544
-
4,090
1,627
2,695
950
-
-
-
-
14
30
43
3
-
53
31
109
128
127
50
408
417
143
296
361
277
2
36
20
76
148
Securitization Fund (not consolidated)
Company
Millions of Euros
Origination
Date
Total Securitized
Total Securitized
Exposures at the
Exposures as of
Origination Date
December 31, 2016 (*)
FTA TDA13
FTA TDA-18 MIXTO
(*) Solvency Scope
BBVA, S.A.
BBVA, S.A.
Dec-00
Nov-13
84
91
13
15
187
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
APPENDIX VII. Details of the outstanding subordinated debt and preferred
securities issued by the Bank as of December 31, 2016 and 2015
Fix (F) or
Variable (V)
Maturit y dat e
F
V
F
V
V
V
V
V
F
V
V
V
V
V
V
12/22/2016
1/28/2020
8/9/2021
8/9/2021
2/15/2017
2/16/2022
Perpetual
3/3/2033
7/4/2023
6/10/2024
Perpetual
Perpetual
Perpetual
Perpetual
Perpetual
Issue Type and data
2016
2015
Interest rate
in f orce in
Millions of Euros
Non-convertible
July-96
January-05
Augus t-06
Augus t-06
Fe bruary-07
Fe bruary-07
March-07
March-08
July-08
June -09
Convert ible
May-13
Fe bruary-14
Fe bruary-15
April-16
Subtotal
Subordinated deposit s
Pref erred St ock
De ce m be r-07
Total
2015
0.00%
0.72%
0.78%
0.78%
0.14%
4.50%
1.00%
6.03%
6.20%
4.95%
9.00%
7.00%
6.75%
8.88%
1.95%
27
44
37
42
70
255
75
125
100
5
1,378
1,500
1,500
-
5,158
3,105
14
8,277
-
49
40
46
70
255
67
125
100
5
1,423
1,500
1,500
1,000
6,180
2,943
14
9,137
188
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
APPENDIX VIII. Balance sheets held in foreign currency as of December 31,
2016 and 2015
2016
Assets -
Financial assets held for trading
Available-for-sale financial assets
Loans and receivables
Investments in subsidaries, joint ventures and
associates
Tangible assets
Other Assets
Total
Liabilities -
Financial assets held for trading
Financial liabilities at amortized cost
Other Liabilities
Total
2015
Assets -
Financial assets held for trading
Available-for-sale financial assets
Loans and receivables
Investments in subsidaries, joint ventures and
associates
Tangible assets
Other Assets
Total
Liabilities -
Financial assets held for trading
Financial liabilities at amortized cost
Other Liabilities
Total
Millions of Euros
USD
Pounds
Sterling
Other
Currencies
TOTAL
1,017
4,513
14,548
218
6
2,672
22,974
795
23,094
246
24,135
195
554
1,786
52
4
572
3,163
124
2,977
66
3,167
476
797
2,554
25,137
1
80
29,045
228
2,736
41
3,005
1,688
5,864
18,888
25,407
11
3,324
55,182
1,147
28,807
353
30,307
Millions of Euros
USD
Pounds
Sterling
Other
Currencies
TOTAL
1,365
5,963
14,318
1,216
7
3,804
26,673
1,025
27,668
(168)
28,525
135
1,688
1,804
-
6
-
3,633
103
4,623
64
4,790
478
1,014
1,755
24,506
1
252
28,006
299
1,050
139
1,488
1,978
8,665
17,877
25,722
14
4,056
58,312
1,427
33,341
35
34,803
189
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
APPENDIX IX. Income statement corresponding to the first and second half of
2016 and 2015
Income Statements for December 31, 2016 and 2015 of
BBVA, S.A
INTEREST AND SIMILAR INCOME
INTEREST AND SIMILAR EXPENSES
NET INTEREST INCOME
DIVIDEND INCOME
FEE AND COMMISSION INCOME
FEE AND COMMISSION EXPENSES
GAINS OR (-) LOSSES ON FINANCIAL ASSETS AND LIABILITIES
DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS, NET
GAINS OR (-) LOSSES ON FINANCIAL ASSETS AND LIABILITIES
HELD FOR TRADING, NET
GAINS OR (-) LOSSES ON DERECOGNITION OF FINANCIAL ASSETS
AND LIABILITIES NOT MEASURED AT FAIR VALUE THROUGH
PROFIT OR LOSS, NET
GAINS OR (-) LOSSES FROM HEDGE ACCOUNTING, NET
EXCHANGE DIFFERENCES (NET)
OTHER OPERATING INCOME
OTHER OPERATING EXPENSES
GROSS INCOME
ADMINISTRATION COSTS
Personnel expenses
General and administrative expenses
DEPRECIATION
PROVISIONS OR (-) REVERSAL OF PROVISIONS
IMPAIRMENT OR (-) REVERSAL OF IMPAIRMENT ON FINANCIAL
ASSETS NOT MEASURED AT FAIR VALUE THROUGH PROFIT OR
LOSS
NET OPERATING INCOME
(IMPAIRMENT OR (-) REVERSAL OF IMPAIRMENT OF
INVESTMENTS IN SUBSIDARIES, JOINT VENTURES AND
ASSOCIATES)
IMPAIRMENT OR (-) REVERSAL OF IMPAIRMENT ON NON-
FINANCIAL ASSETS
GAINS (LOSSES) ON DERECOGNIZED ASSETS NOT CLASSIFIED AS
NON-CURRENT ASSETS HELD FOR SALE
NEGATIVE GOODWILL RECOGNISED IN PROFIT OR LOSS
PROFIT OR (-) LOSS FROM NON-CURRENT ASSETS AND DISPOSAL
GROUPS CLASSIFIED AS HELD FOR SALE NOT QUALIFYING AS
DISCONTINUED OPERATIONS
OPERATING PROFIT BEFORE TAX
Tax expense or (-) income related to profit or loss from
continuing operation
PROFIT FROM CONTINUING OPERATIONS
Profit from discontinued operations (net)
PROFIT
Millions of Euros
Six months
Six months
Six months
Six months
ended June 30,
ended December
ended June 30,
ended December
2016
31, 2016
2015
31, 2015
2,457
(874)
1,584
1,951
831
(152)
-
(139)
355
(20)
305
66
(224)
4,556
(1,922)
(1,101)
(821)
(263)
(191)
(484)
1,695
(66)
(2)
-
-
(76)
1,552
(23)
1,529
-
1,529
2,821
(1,165)
1,657
1,580
892
(149)
-
242
432
(4)
148
57
(112)
4,741
(1,890)
(1,106)
(783)
(256)
(308)
(791)
1,497
(170)
(10)
-
-
431
1,748
(103)
1,644
-
1,644
3,779
(1,840)
1,939
903
1,056
(201)
-
70
600
(42)
-
74
(280)
4,118
(2,325)
(1,402)
(923)
(311)
(996)
(465)
21
(81)
(15)
13
-
3
(60)
193
133
-
133
3,684
(2,002)
1,682
537
859
(141)
-
(91)
344
(11)
76
58
(354)
2,960
(1,867)
(1,092)
(775)
(263)
(343)
(513)
(26)
1,006
(12)
8
-
330
1,305
(85)
1,219
-
1,219
190
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
APPENDIX X. Information on data derived from the special accounting
registry
Information required pursuant to Circular 5/2011 of the Bank of Spain is indicated as follows.
a) Mortgage market policies and procedures
The Bank has express policies and procedures in place regarding its activities in the mortgage market, which
provide for full compliance with applicable regulations.
The mortgage origination policy is based in principles focused on assessing the adequate ratio between the
amount of the loan, and the payments, and the income of the applicant. Applicants must in all cases prove
sufficient repayment ability (present and future) to meet their repayment obligations, for both the mortgage debt
and for other debts detected in the financial system. Therefore, the applicant’s repayment ability is a key aspect
within the credit decision-making tools and retail risk acceptance manuals, and has a high weighting in the final
decision.
During the mortgage risk transaction analysis process, documentation supporting the applicant’s income (payroll,
etc.) is required, and the applicant’s position in the financial system is checked through automated database
queries (internal and external). This information is used for calculation purposes in order to determine the level of
indebtedness/compliance with the remainder of the system. This documentation is kept in the transaction’s file.
In addition, the mortgage origination policy assesses the adequate ratio between the amount of the loan and the
appraisal value of the mortgaged asset. The policy also establishes that the property to be mortgaged be
appraised by an independent appraisal company as established by Circular 3/2010 and Circular 4/2016. BBVA
selects those companies whose reputation, standing in the market and independence ensure that their appraisals
adapt to the market reality in each region. Each appraisal is reviewed and checked before the loan is granted by
BBVA staff and, in those cases where the loan is finally granted, it is kept in the transaction’s file.
As for issues related to the mortgage market, the Group’s Finance Division annually defines the wholesale finance
issue strategy, and more specifically mortgage bond issues, such as mortgage covered bonds or mortgage
securitization. The Assets and Liabilities Committee (“ALCO”) tracks the budget monthly. The volume and type of
assets in these transactions is determined in accordance with the wholesale finance plan, the trend of the Bank’s
“Loans and receivables” outstanding balances and market conditions.
The Board of the Bank authorizes each of the issues of Mortgage Transfer Certificate and/or Mortgage
Participation issued by BBVA to securitize loans and mortgage loans, as well as the establishment of a Base
Prospectus for the issue of fixed-income securities through which the mortgage-covered bonds are implemented,
based on the agreements for the issue of fixed-income securities approved by the Annual General Meeting.
As established in article 24 of Royal Decree 716/2009, the volume of outstanding mortgage-covered bonds
issued by a bank may not exceed 80% of a calculation base determined by adding the outstanding principal of all
the loans and mortgage loans in the bank’s portfolio that are eligible and are not covered by the issue of
Mortgage Bonds, Mortgage Participations or Mortgage Transfer Certificates. For these purposes, in accordance
with the aforementioned Royal Decree 716/2009, in order to be eligible, loans and mortgage loans must: (i) be
secured by a first mortgage on the freehold; (ii) the loan’s amount may not exceed 80% of the appraisal value for
home mortgages, and 60% for other mortgage lending; (iii) be established on assets exclusively and wholly
owned by the mortgagor; (iv) have been appraised by an independent appraisal company unrelated to the Group
and authorized by the Bank of Spain; and (v) the mortgaged property must be covered at least by a current
damage insurance policy.
The Bank has set up a series of controls for mortgage covered bonds, which regularly control the total volume of
issued mortgage covered bonds issued and the remaining eligible collateral, to avoid exceeding the maximum
limit set by Royal Decree 716/2009, and outlined in the preceding paragraph. In the case of securitizations, the
preliminary portfolio of loans and mortgage loans to be securitized is checked according to an agreed procedures
engagement, by the Bank’s external auditor as required by the Spanish Securities and Exchange Commission.
There is also a series of filters through which some mortgage loans and credits are excluded in accordance with
legal, commercial and risk concentration criteria.
191
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
b)
Quantitative information on activities in the mortgage market
The quantitative information on activities in the mortgage market required by Bank of Spain Circular 5/2011 is
shown below.
b.1) Ongoing operations
Mortgage loans.
Eligibility for the purpose of the mortgage market
Millions of Euros
2016
2015
Nominal value of outstanding loans and mortgage loans
Minus: Nominal value of all outstanding loans and mortgage loans that form part of the
portfolio, but have been mobilized through mortgage bond holdings or mortgage transfer
certificates.
(A)
(B)
113,977
98,555
(33,677)
(25,650)
Nominal value of outstanding loans and mortgage loans, excluding securitized loans
(A)-(B)
80,300
72,905
Of which:
Loans and mortgage loans which would be eligible if the calculation limits set forth in
Article 12 of Spanish Royal Decree 716/2009 were not applied.
Minus: Loans and mortgage loans which would be eligible but, according to the criteria set
forth in Article 12 of Spanish Royal Decree 716/2009, cannot be used to collateralize any
issuance of mortgage bonds.
(C)
(D)
-
46,987
40,373
(2,268)
(2,213)
Eligible loans and mortgage loans that, according to the criteria set forth in Article 12 of
Spanish Royal Decree 716/2009, can be used as collateral for the issuance of mortgage
bonds
Issuance limit: 80% of eligible loans and mortgage loans that can be used as collateral
Issued Mortgage-covered bonds
Outstanding Mortgage-covered bonds
Capacity to issue mortgage-covered bonds
Memorandum items:
Percentage of overcollateralization across the portfolio
Percentage of overcollateralization across the eligible used portfolio
Nominal value of available sums (committed and unused) from all loans and mortgage
loans.
Of which:
Potentially eligible
Ineligible
(C)-(D)
(E )
(F)
(E)-(F)
44,719
35,775
29,085
24,670
6,690
276%
154%
2,917
2,237
680
38,160
30,528
28,362
25,220
2,166
-
257%
135%
1,999
-
1,361
638
Nominal value of all loans and mortgage loans that are not eligible, as they do not meet
the thresholds set in Article 5.1 of Spanish Royal Decree 716/2009, but do meet the rest
of the eligibility requirements indicated in Article 4 of the Royal Decree.
25,282
25,350
Nominal value of the replacement assets subject to the issue of mortgage-covered bonds.
-
-
192
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Mortgage loans.
Eligibility for the purpose of the mortgage market
Total loans
Issued mortgage participations
Of which: recognized on the balance sheet
Issued mortgage transfer certificates
Of which: recognized on the balance sheet
Mortgage loans as collateral of mortgages bonds
Loans supporting the issuance of mortgage-covered bonds
Non elegible loans
Comply requirements to be elegible except the limit provided for
under the article 5.1 of the Spanish Royal Decree 716/2009
Rest
Elegible loans
That can not be used as collateral for issuances
That can be used as collateral for issuances
Loans used to collateralize mortgage bonds
Loans used to collateralize mortgage-covered bonds
(1)
(2)
(3)
(4)
1-2-3-4
Millions of Euros
December
2016
December
2015
113,977
2,865
695
30,812
28,778
80,300
33,313
25,282
8,031
46,987
2,268
44,719
-
44,719
98,555
-
-
25,650
25,612
-
72,905
32,532
25,350
7,182
40,373
2,213
38,160
-
38,160
Mortgage loans. Classification of the nominal
values according to different characteristics
Total mortgage
Eligible
loans
Loans(*)
Elegibles that
can be used as
collateral for
issuances (**)
Total mortgage
loans
Eligible
Loans(*)
Elegibles that
can be used as
collateral for
issuances (**)
Millions of Euros
2016
2015
TOTAL
By source of the operations
Originated by the bank
Subrogated by other institutions
Rest
By Currency
In euros
In foreign currency
By payment situation
Normal payment
Other situations
By residual maturity
Up to 10 years
10 to 20 years
20 to 30 years
Over 30 years
By Interest Rate
Fixed rate
Floating rate
Mixed rate
By Target of Operations
For business activity
From wich: public housing
For households
By type of guarantee
Secured by completed assets/buildings
Residential use
From wich: public housing
Commercial
Other
Secured by assets/buildings under construction
Residential use
From wich: public housing
Commercial
Other
Secured by land
Urban
Non-urban
80,300
46,987
44,719
72,905
40,373
38,160
74,220
904
5,176
79,422
878
61,264
19,036
19,762
30,912
19,899
9,727
4,460
75,840
-
20,913
6,958
59,387
75,806
61,338
5,607
5,453
9,015
1,914
1,457
57
286
171
2,580
-
2,580
42,641
685
3,661
46,594
393
40,685
6,302
12,722
22,417
9,375
2,473
1,680
45,307
-
8,614
1,894
38,373
46,240
39,494
3,338
2,563
4,183
413
290
11
61
62
334
-
334
40,451
678
3,590
44,341
378
40,389
4,330
11,765
21,646
8,910
2,398
1,559
43,160
-
6,926
740
37,793
44,237
38,139
3,213
2,289
3,809
295
187
10
53
55
187
-
187
64,852
554
7,499
72,331
574
56,192
16,713
18,457
24,926
18,399
11,123
3,169
69,736
-
20,741
8,623
52,164
66,807
56,563
5,607
9,645
599
2,125
1,642
84
483
-
3,973
1,590
2,383
34,629
459
5,285
40,013
360
34,987
5,386
11,536
17,896
8,379
2,562
944
39,429
-
7,690
2,072
32,683
39,203
34,269
3,354
4,574
360
367
235
5
132
-
803
334
469
32,477
457
5,226
37,811
349
34,330
3,830
10,402
17,317
7,963
2,478
759
37,401
-
5,912
768
32,248
37,461
33,066
3,104
4,046
349
277
158
4
119
-
422
105
317
(*) Not taking into account the thresholds established by Article 12 of Spanish Royal Decree 716/2009
(**) Taking into account the thresholds established by Article 12 of Spanish Royal Decree 716/2009
193
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
December 2016
Less than or
Nominal value of the total mortgage loans
equal to 40%
Millions of Euros
Loan to Value (Last available appraisal risk)
Over 40% but
Over 60% but
less than or
equal to 60%
less than or
equal to 80%
Over 80%
Total
Home mortgages
Other mortgages
Total
12,883
2,150
15,033
15,921
1,986
17,907
14,047
14,047
-
-
42,851
4,136
46,987
Millions of Euros
Loan to Value (Last available appraisal risk)
December 2015
Nominal value of the total mortgage
loans
Less than or
equal to 40%
Over 40% but
less than or
equal to 60%
Over 60% but
less than or
equal to 80%
Over 80%
Total
Home mortgages
Other mortgages
Total
9,364
2,657
12,021
12,730
2,932
15,662
12,690
12,690
-
-
34,784
5,589
40,373
Elegible and non elegible mortgage loans.
Changes of the nominal values in the period
Balance at the begining
Retirements
Held-to-maturity cancellations
Anticipated cancellations
Subrogations to other institutions
Rest
Additions
Originated by the bank
Subrogations to other institutions
Rest
Balance at the end
Millions of Euros
2016
2015
Eligible (*) Non eligible
Eligible (*) Non eligible
40,373
7,458
3,552
1,479
37
2,390
14,072
10,051
283
3,738
46,987
32,532
11,489
2,084
1,971
30
7,404
12,270
9,523
162
2,585
33,313
42,920
36,907
5,772
4,175
1,236
23
338
3,225
2,529
14
682
40,373
9,218
2,487
2,268
20
4,443
4,843
3,794
12
1,037
32,532
(*) Not taking into account the thresholds established by Article 12 of Spanish Royal Decree 716/2009
Mortgage loans supporting the issuance of mortgage-covered
bonds
Nominal value.
Potentially eligible
Ineligible
Total
Millions of Euros
December
2016
December
2015
2,237
680
2,917
1,361
638
1,999
194
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
b.2) Liabilities operations
Issued Mortgage Bonds
Nominal value
residual
Nominal value
Average
maturity
Average
residual
maturity
Millions of Euros
December 2016
December 2015
Mortgage bonds
Mortgage-covered bonds (*)
Of which:Non recognized as liabilities on balance
Of Which: outstanding
Debt securities issued through public offer
Residual maturity up to 1 year
Residual maturity over 1 year and less than 2 years
Residual maturity over 2 years and less than 3 years
Residual maturity over 3 years and less than 5 years
Residual maturity over 5 years and less than 10 years
Residual maturity over 10 years
Debt securities issued without public offer
Residual maturity up to 1 year
Residual maturity over 1 year and less than 2 years
Residual maturity over 2 years and less than 3 years
Residual maturity over 3 years and less than 5 years
Residual maturity over 5 years and less than 10 years
Residual maturity over 10 years
Deposits
Residual maturity up to 1 year
Residual maturity over 1 year and less than 2 years
Residual maturity over 2 years and less than 3 years
Residual maturity over 3 years and less than 5 years
Residual maturity over 5 years and less than 10 years
Residual maturity over 10 years
Mortgage participations
Mortgage transfer certificates
Issued through public offer
Issued without public offer
(*) Including mortgage-covered bonds hold by the BBVA Group's companies
-
29,085
4,414
24,670
20,773
8,272
-
-
4,801
7,500
200
4,321
150
-
-
1,550
2,500
121
3,991
460
791
380
671
839
850
695
28,778
28,778
-
-
28,362
3,142
25,220
21,523
4,500
6,772
-
2,051
8,000
200
2,765
-
150
-
-
2,500
115
4,074
1,064
460
639
422
849
640
-
25,612
25,612
-
196
286
286
293
293
-
Given the characteristics of the type of covered bonds issued by the Bank, there is no substituting collateral
related to these issues.
The Bank does not hold any derivative financial instruments relating to mortgage bond issues, as defined in the
aforementioned Royal Decree.
c)
Quantitative information on internationalization covered bonds
Below is the quantitative information of BBVA SA internationalization covered bonds required by Bank of Spain
Circular 4/2015.
c.1) Assets operations
Principal outstanding payment of loans.
Nominal value
Eligible loans according to article 34.6 y 7 of the Law 14/2013
Minos: Loans that support the issuance of internationalization bonds
Minos: NPL to be deducted in the calculation of the issuance limit, according to
Article 13 del Royal Decree 579/2014
Total Loans included in the base of all issuance limit
2,631
-
29
2,602
195
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
c.2) Liabilities operations
INTERNATIONALIZATION COVERED BONDS
Nominal value
(1) Debt securities issued through public offer (a)
of which: Treasury shares
Residual maturity up to 1 year
Residual maturity over 1 year and less than 2 years
Residual maturity over 2 years and less than 3 years
Residual maturity over 3 years and less than 5 years
Residual maturity over 5 years and less than 10 years
Residual maturity over 10 years
(2) Debt securities issued without public offer (a)
of which: Treasury shares
Residual maturity up to 1 year
Residual maturity over 1 year and less than 2 years
Residual maturity over 2 years and less than 3 years
Residual maturity over 3 years and less than 5 years
Residual maturity over 5 years and less than 10 years
Residual maturity over 10 years
(3) Deposits (b)
Residual maturity up to 1 year
Residual maturity over 1 year and less than 2 years
Residual maturity over 2 years and less than 3 years
Residual maturity over 3 years and less than 5 years
Residual maturity over 5 years and less than 10 years
Residual maturity over 10 years
TOTAL: (1) + (2) + (3)
Coverage ratio of internationalization covered bonds on loans (c )
1,500
1,500
-
-
1,500
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,500
Porcentaje
58%
(a) Balance that includes all internationalization covered bonds issued by the entity pending amortization, although they are
not recognized in the liability (because they have not been placed to third parties or have been repurchased).
(b) Nominative bonds.
(c) Percentage that results from the value of the quotient between the nominal value of the issued and non-overdue bonds,
even if they are not recognized in the liability, and the nominal value balance pending collection of the loans that serve as
guarantee
Given the characteristics of the Bank's internationalization covered bonds, there are no substitute assets assigned
to these issuances.
196
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
d)
Territorial bonds
d.1) Assets operations
Loans that serves as collateral for the territorial bonds
Total
Nominal Value(b)
Spanish
Residents
Residents in
other countries
of the
European
Economic Area
Central Governments
Regional Governments
Local Governments
Total loans
(b) Principal pending payment of loans.
d.2) Liabilities operations
570
9,836
7,771
18,177
505
9,805
7,771
18,081
65
31
-
96
TERRITORIAL BONDS
Nominal value
Territorial bonds issued (a)
Issued through a public offering
Of which: Treasury stock
Residual maturity up to 1 year
Residual maturity over 1 year and less than 2 years
Residual maturity over 2 years and less than 3 years
Residual maturity over 3 years and less than 5 years
Residual maturity over 5 years and less than 10 years
Residual maturity over 10 years
Other issuances
Of which: Treasury stock
Residual maturity over 1 year and less than 2 years
Residual maturity over 2 years and less than 3 years
Residual maturity over 3 years and less than 5 years
Residual maturity over 5 years and less than 10 years
Residual maturity over 10 years
Coverage ratio of the territorial bonds on loans (b)
10,739
10,589
9,489
1,049
-
-
8,500
1,040
-
150
-
-
150
-
-
-
Percentage
59%
(a) Includes the nominal value of all loans that serve as collateral for the territorial bonds, regardless of the item in
which they are included in the balance sheet. Principal pending payment of loans. The territorial bonds include all the
instruments issued by the entity pending amortization, although they are not recognized in the liability (because they
have not been placed to third parties or have been repurchased).
(b) Percentage that results from the value of the quotient between the nominal value of the issued and non-overdue
bonds, even if they are not recognized in the liability, and the nominal value balance pending collection of the loans
that serve as guarantee
197
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 54).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
APPENDIX XI. Risks related to the developer and real-estate sector in Spain
a) Policies and strategies established by the Group to deal with risks related to
the developer and real-estate sector
BBVA has teams specializing in the management of the Real-Estate Sector risk, given its economic importance
and specific technical component. This specialization is not only in the Risk-Acceptance teams, but throughout
the handling, commercial, problematic management and legal aspects, and includes the research department
(BBVA Research), which helps determine the medium/long-term vision needed to manage this portfolio.
Specialization has been increased and the management teams in the areas of recovery and the Real Estate Unit
itself have been reinforced.
The portfolio management policies, established to address the risks related to the developer and real-estate
sector, aim to accomplish, among others, the following objectives: to avoid concentration in terms of customers,
products and regions; to estimate the risk profile for the portfolio; and to anticipate possible worsening of the
portfolio.
Specific policies for analysis and admission of new developer risk transactions
In the analysis of new operations, the assessment of the commercial operation in terms of the economic and
financial viability of the project has been once of the constant points that have helped ensure the success and
transformation of construction land operations for our customers’ developments.
As regards the participation of the Risk Acceptance teams, they have a direct link and participate in the
committees of areas such as Recoveries and the Real Estate Unit. This guarantees coordination and exchange of
information in all the processes.
The following strategies have been implemented with customers: avoidance of large corporate transactions,
which had already reduced their share in the years of greatest market growth; non-participation in the second-
home market; commitment to public housing financing; and participation in land operations with a high level of
urban development security, giving priority to land open to urban development.
Risk monitoring policies
The base information for analyzing the real estate portfolios is updated monthly. The tools used include the so-
called “watch-list”, which is updated monthly with the progress of each client under watch, and the different
strategic plans for management of special groups. There are plans that involve an intensification of the review of
the portfolio for financing land, while, in the case of ongoing promotions, they are classified for monitoring
purposes based on the rate of progress of the projects.
These actions have enabled the Bank to anticipate possible impairment situations, by always keeping an eye on
BBVA’s position with each customer (whether or not as first creditor).In this regard, key aspects include
management of the risk policy to be followed with each customer, contract review, deadline extension, improved
collateral, rate review (repricing) and asset purchase.
Proper management of the relationship with each customer requires knowledge of various aspects such as the
identification of the source of payment difficulties, an analysis of the company’s future viability, the updating of
the information on the debtor and the guarantors (their current situation and business course, economic-financial
information, debt analysis and generation of funds), and the updating of the appraisal of the assets offered as
collateral.
BBVA has a classification of debtors in accordance with legislation in force in each country, usually categorizing
each one’s level of difficulty for each risk.
Based on the information above, a decision is made whether to use the refinancing tool, whose objective is to
adjust the structure of the maturity of the debt to the generation of funds and the customer’s payment capacity.
As for the policies relating to risk refinancing with the developer and real-estate sector, they are the same as the
general policies used for all of the Group’s risks. In the developer and real estate sector, they are based on clear
solvency and viability criteria for projects, with demanding terms for guarantees and legal compliance. The policy
on refinancing uses outstanding risk rather than nonperforming assets, with a refinancing tool that standardizes
criteria and values up to a total of 19 variables when considering any refinancing operation.
198
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
In the case of refinancing, the tools used for enhancing the Bank’s position are: the search for new intervening
parties with proven solvency and initial payment to reduce the principal debt or outstanding interest; the
improvement of the debt bond in order to facilitate the procedure in the event of default; the provision of new or
additional collateral; and making refinancing viable with new conditions (period, rate and repayments), adapted to
a credible and sufficiently verified business plan.
Policies applied in the management of real estate assets in Spain
The policy applied for managing these assets depends on the type of real-estate asset, as detailed below.
In the case of completed homes, the final aim is the sale of these homes to private individuals, thus diluting the
risk and beginning a new business cycle. Here, the strategy has been to help subrogation (the default rate in this
channel of business is notably lower than in any other channel of residential mortgages) and to support our
customers’ sales directly, using BBVA’s own channel (BBVA Services and our branches), creating incentives for
sale and including sale orders for BBVA that set out sale prices which are notably lower than initial ones. In
exceptional case we have even accepted partial haircuts, with the aim of making the sale easier.
In the case of ongoing construction work, our strategy has been to help and promote the completion of the
works in order to transfer the investment to completed homes. The whole developer Works in Progress portfolio
has been reviewed and classified into different stages with the aim of using different tools to support the strategy.
This includes the use of developer accounts-payable financing as a form of payment control, the use of project
monitoring supported by the Real Estate Unit itself, and the management of direct suppliers for the works as a
complement to the developer’s own management.
With respect to land, our presence at advanced stages in land development, where risk of rustic land is not
significant, simplifies our management. Urban management and liquidity control to tackle urban planning costs
are also subject to special monitoring.
199
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
b)
Quantitative information on activities in the real-estate market in Spain
Lending for real estate development according to the purpose of the loans as of December 31, 2016 and 2015
is shown below:
December 2016
Financing Allocated to Construction and Real Estate
Development and its Coverage
Financing to construction ans real estate development
(including land) (Business in Spain)
Of which: Impaired assets
Memorandum item:
Write-offs
Memorandum item:
Total loans and advances to customers, excluding the Public
Sector (Business in Spain)
Total consolidated assets (total business)
Impairment and provisions for normal exposures
December 2015
Financing Allocated to Construction and Real Estate
Development and its Coverage
Financing to construction ans real estate development
(including land) (Business in Spain)
Of which: Impaired assets
Memorandum item:
Write-offs
Memorandum item:
Total loans and advances to customers, excluding the Public
Sector (Business in Spain)
Total consolidated assets (total business)
Impairment and provisions for normal exposures
Gross
Amount
Millions of Euros
Drawn Over
the Guarantee
Value
Accumulated
impairment
3,449
2,680
3,181
3,086
7,930
5,095
2,061
178,163
418,447
2,025
Millions of Euros
Gross
Amount
Drawn Over
the Guarantee
Value
Accumulate
d
impairment
3,863
2,884
3,470
3,277
8,882
5,797
1,536
168,355
397,303
233
200
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
The following is a description of the real estate credit risk based on the types of associated guarantees:
Financing Allocated by credit institutions to
Construction and Real Estate Development and lending
for house purchase
Without secured loan
With secured loan
Terminated buildings
Homes
Other
Buildings under construction
Homes
Other
Land
Urbanized land
Rest of land
Total
Millions of Euros
December
December
2016
2015
801
7,129
3,875
2,954
921
760
633
127
2,494
1,196
1,298
7,930
995
7,887
4,458
3,785
673
647
631
16
2,782
1,472
1,310
8,882
As of December 31, 2016 and 2015, 48.9% and 50.2% of loans to developers were guaranteed with buildings
(76.2% and 84.9%, are homes), and only 31.5% and 61.3% by land, of which 48.0% and 52.9% are in urban
locations, respectively.
The table below provides the breakdown of the financial guarantees given as of December 31, 2016 and 2015:
Financial guarantees given
Houses purchase loans
Without mortgage
Millions of Euros
2016
2015
62
18
57
23
The information on the retail mortgage portfolio risk (housing mortgage) as of December 31, 2016 and 2015 is
as follows:
Financing Allocated by credit institutions to
Construction and Real Estate Development and lending
for house purchase December 2016
Houses purchase loans
Without mortgage
With mortgage
Millions of Euros
Gross amount
Of which:
impaired loans
87,874
1,935
85,939
4,938
93
4,845
201
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Financing Allocated by credit institutions to
Construction and Real Estate Development and lending
for house purchase December 2015
Houses purchase loans
Without mortgage
With mortgage
Millions of Euros
Gross amount
Of which:
impaired loans
76,187
943
75,244
3,970
18
3,952
The loan to value (LTV) ratio of the above portfolio is as follows:
December 2016
LTV Breakdown of mortgage to households
for the purchase of a home
(Business in Spain)
Gross amount
of which: Impaired loans
Total risk over the amount of the last valuation available (Loan To Value -LTV)
Millions of Euros
Less than or
equal to 40%
Over 40% but
less than or
Over 60% but
less than or
equal to 60%
equal to 80%
Over 80% but
less than or
equal to
100%
Over 100%
Total
13,780
306
18,223
447
20,705
747
15,967
962
17,264
2,383
85,939
4,845
December 2015
LTV Breakdown of mortgage to households
for the purchase of a home
(Business in Spain)
Gross amount
of which: Impaired loans
Total risk over the amount of the last valuation available (Loan To Value -LTV)
Millions of Euros
Less than or
equal to 40%
Over 40% but
less than or
equal to 60%
Over 60% but
less than or
equal to 80%
Over 80% but
less than or
equal to
100%
Over 100%
Total
14,728
144
22,060
229
26,153
447
6,597
703
5,706
2,429
75,244
3,952
Outstanding home mortgage loans as of December 31, 2016 had an average LTV of 47%.
202
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
The breakdown of foreclosed, acquired, purchased or exchanged assets from debt from loans relating to
business in Spain, as well as the holdings and financing to non-consolidated entities holding such assets is as
follows:
Millions of Euros
December 2016
Of wich: Valuation
Information about Assets Received in Payment of Debts
(Business in Spain)
Gross
Value
Provisions
adjustments on impaired
Carrying
assets, at the time of
Amount
foreclosure
Real estate assets from loans to the construction and real
estate development sectors in Spain.
Terminated buildings
Homes
Other
Buildings under construction
Homes
Other
Land
Urbanized land
Rest of land
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Real estate assets from mortgage financing for households for
the purchase of a home
Rest of foreclosed real estate assets
Equity instruments, investments and financing to non-
consolidated companies holding said assets
Total
3,745
1,856
1,080
6,681
2,184
1,006
542
3,732
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
823
244
444
1,511
1,561
850
538
2,949
Information about Assets Received in Payment of Debts
(Business in Spain)
Gross
Value
Provisions
adjustments on impaired
Carrying
assets, at the time of
Amount
foreclosure
Millions of Euros
December 2015
Of wich: Valuation
Real estate assets from loans to the construction and real
estate development sectors in Spain.
Terminated buildings
Homes
Other
Buildings under construction
Homes
Other
Land
Urbanized land
Rest of land
Real estate assets from mortgage financing for households for
the purchase of a home
Rest of foreclosed real estate assets
Equity instruments, investments and financing to non-
consolidated companies holding said assets
Total
36
36
36
-
-
2,970
1,368
895
5,269
7
7
7
-
-
1,431
678
532
2,648
4
4
4
-
-
29
29
-
29
-
-
-
-
-
-
412
148
433
997
1,539
690
363
2,621
As of December 31, 2016, there was not real estate assets from financing for construction and real estate
development companies. As of December 31, 2015, it amounted 36 million euros.
203
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
The gross book value of real-estate assets from mortgage lending to households for home purchase as of
December 31, 2016 and 2015, amounted to €3,745 and €2,970 million, respectively, with an average
coverage ratio of 58.3% and 48.2%, respectively.
As of December 31, 2016 and 2015, the gross book value of the BBVA Group’s total real-estate assets (business
in Spain), including other real-estate assets received as debt payment, was €5,601 and €4,374 million,
respectively. The coverage ratio was 57.0% and 48.4%, respectively.
204
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
APPENDIX XII. Refinanced and
requirements under Bank of Spain Circular 6/2012
restructured operations and other
REFINANCING AND RESTRUCTURING OPERATIONS
a) Policies and strategies established by the Group to deal with risks related to
refinancing and restructuring operations.
Refinancing/restructuring operations (see definition in the Glossary) are carried out with customers who have
requested such an operation in order to meet their current loan payments if they are expected, or may be
expected, to experience financial difficulty in making the payments in the future.
The basic aim of a refinanced/restructured operation is to provide the customer with a situation of financial
viability over time by adapting repayment of the loan incurred with the Group to the customer’s new situation of
fund generation. The use of refinancing or restructuring with for other purposes, such as for delaying loss
recognition, is contrary to BBVA Group policies.
The BBVA Group’s refinancing/restructuring policies are based on the following general principles:
• Refinancing and restructuring is authorized according to the capacity of customers to pay the new
installments. This is done by first identifying the origin of the payment difficulties and then carrying out an
analysis of the customers’ viability, including an updated analysis of their economic and financial situation and
capacity to pay and generate funds. If the customer is a company, the analysis also covers the situation of
the industry in which it operates.
• With the aim of increasing the solvency of the operation, new guarantees and/or guarantors of demonstrable
solvency are obtained where possible. An essential part of this process is an analysis of the effectiveness of
both the new and original guarantees submitted.
•
This analysis is carried out from the overall customer or group perspective, and not only from the perspective
of a specific operation.
• Refinancing and restructuring operations do not in general increase the amount of the customer’s loan,
except for the expenses inherent to the operation itself.
•
•
The capacity to refinance and restructure loan is not delegated to the branches, but decided on by the risk
units.
The decisions adopted are reviewed from time to time with the aim of checking full compliance with
refinancing and restructuring policies.
These general principles are adapted in each case according to the conditions and circumstances of each
geographical area in which the Group operates, and to the different types of customers involved.
In the case of retail customers (private individuals), the main aim of the BBVA Group’s policy on
refinancing/restructuring loan is to avoid default arising from a customer’s temporary liquidity problems by
implementing structural solutions that do not increase the balance of customer’s loan. The solution required is
adapted to each case and the loan repayment is made easier, in accordance with the following principles:
• Analysis of the viability of operations based on the customer’s willingness and ability to pay, which may be
reduced, but should nevertheless be present. The customer must therefore repay at least the interest on the
operation in all cases. No arrangements may be concluded that involve a grace period for both principal and
interest.
• Refinancing/restructuring of operations is only allowed on those loans in which the BBVA Group originally
entered into.
• Customers subject to refinancing or restructuring operations are excluded from marketing campaigns of any
kind.
205
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
In the case of wholesale customers (basically businesses and corporations), refinancing/restructuring is authorized
according to an economic and financial viability plan based on:
•
Forecast future income, margins and cash flows over a sufficiently long period (around five years) to allow
entities to implement cost adjustment measures (industrial restructuring) and a business development plan
that can help reduce the level of leverage to sustainable levels (capacity to access the financial markets).
• Where appropriate, the existence of a divestment plan for assets and/or business segments that can generate
cash to assist the deleveraging process.
•
The capacity of shareholders to contribute capital and/or guarantees that can support the viability plan.
In accordance with the Group’s policy, the conclusion of a loan refinancing/restructuring operation does not imply
the loan is reclassified from "impaired" or " standard under special monitoring" to outstanding risk; such a
reclassification must be based on the analysis mentioned earlier of the viability and effectiveness of the new
guarantees submitted.
The Group maintains the policy of including risks related to refinanced/restructured loans as either:
•
•
"Impaired assets", as although the customer is up to date with payments, they are classified as impaired for
reasons other than their default when there are significant doubts that the terms of their refinancing may not
be met; or
"Normal-risk assets" (although as mentioned in the table in the following section, they continue to be classified
as " standard under special monitoring" until the conditions established for their consideration as outstanding
risk are met).
The conditions established for “standard under special monitoring” to be reclassified out of this category are as
follows:
•
•
•
•
The customer must have paid past-due amounts (principal and interest) since the date of the renegotiation or
restructuring of the loan;
At least two years must have elapsed since the renegotiation or restructuring of the loan;
The customer must have paid at least 10% of the outstanding principal amount of the loan as well as all the
past-due amounts (principal and interest) that were outstanding as of the date of the renegotiation or
restructuring of the loan; and
It is unlikely that the customer will have financial difficulties and, therefore, it is expected that the customer
will be able to meet its loan payment obligations (principal and interest) in a timely manner.
The internal models used to determine allowances for loan losses consider the restructuring or renegotiation of a
loan, as well as re-defaults on a loan, by assigning a lower internal rating to restructured/renegotiated loans than
the average internal rating assigned to non-restructured/renegotiated loans. This downgrade results in an increase
in the probability of default (PD) assigned to restructured/renegotiated loans (with the resulting PD being higher
than the average PD of the non- renegotiated loans in the same portfolios).”
206
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
b) Quantitative information on refinancing and restructuring operations.
DECEMBER 2016
BALANCE OF FORBEARANCE
(Millions of Euros)
TOTAL
Unsecured loans
Secured loans
Maxim um am ount of
secured loans that can
be considered
Number of
Gross
Number of
Gross carrying
Real estate
Rest of
operations
carrying
operations
amount
mortgage
secured
amount
secured
loans
Accumulated
impairment or
accumulated
losses in fair
value due to
credit risk
C re dit ins t it ut io ns
G e ne ra l G o v e rnm e nt s
O t he r f ina nc ia l c o rpo ra t io ns a nd
indiv idua l e nt re pre ne urs
N o n- f ina nc ia l c o rpo ra t io ns a nd
indiv idua l e nt re pre ne urs
Of which: financing the co nstructio n
and pro perty (including land)
R e s t ho m e s
T o t a l
22
237
8
46
109
37
38,045
3,508
19,776
1,096
50,760
89,064
324
610
4,172
5,046
70,157
90,079
103
4
8,016
4,382
7,968
16,091
76
2
22
2
(4)
(2)
4,539
3,222
(4,715)
1,853
4,051
8,668
2,370
3,354
6,600
(2,553)
(975)
(5,696)
Unsecured loans
Secured loans
Of w hich: IMPAIRED
Number of
Gross
Number of
Gross carrying
Real estate
Rest of
operations
carrying
operations
amount
mortgage
secured
amount
secured
loans
Maxim um am ount of
secured loans that can
be considered
Accumulated
impairment or
accumulated
losses in fair
value due to
credit risk
C re dit ins t it ut io ns
G e ne ra l G o v e rnm e nt s
O t he r f ina nc ia l c o rpo ra t io ns a nd
indiv idua l e nt re pre ne urs
N o n- f ina nc ia l c o rpo ra t io ns a nd
indiv idua l e nt re pre ne urs
Of which: financing the co nstructio n
and pro perty (including land)
R e s t ho m e s
T o t a l
11
109
8
4
51
19
18,693
2,465
12,383
877
25,156
43,969
299
355
2,832
4,158
32,839
45,292
31
2
6,249
3,853
3,837
10,119
27
1
3,056
1,387
1,748
4,832
3
1
2,968
2,312
1,808
4,780
(4)
(1)
(4,597)
(2,500)
(849)
(5,451)
207
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
The table below provides a roll forward of refinanced assets during 2016:
Refinanced assets Roll forward
Normal
Millions of euros
Impaired
TOTAL
December 2016
Balance at the beginning
Contributions by mergers
(+) Additions
(-) Decreases (payments or repayments)
(-) Foreclosures
(-) Write-offs
(+)/(-) Other
Ending Balance
Risk
Coverage
Risk
Coverage
Risk
Coverage
12,213
1,261
662
(1,440)
-
-
(5,384)
7,312
674
29
98
(302)
-
-
(254)
245
12,550
1,681
1,122
9
(167)
(1,174)
276
12,951
5,219
1,005
466
(584)
(82)
(795)
222
5,451
24,763
2,942
1,784
(2,777)
(167)
(1,174)
(5,108)
20,263
5,893
1,033
564
(886)
(82)
(795)
(32)
5,696
208
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
c) Loans and advances to customers by activity (carrying amount)
December 2016
1 Government agencies
2 Other financial institutions
3 Non-financial institutions and individual entrepreneurs
3.1 Construction and property development
3.2 Construction of civil works
3.3 Other purposes
3.3.1 Large companies
3.3.2 SMEs (**) and individual entrepreneurs
4 Rest of households and NPISHs (***)
4.1 Housing
4.2 Consumption
4.3 Other purposes
6 TOTAL
MEMORANDUM:
Forbereance operations (****)
Millions of Euros
TOTAL (*)
Of which:
Mortgage loans
Of which:
Secured loans
Less than or equal to
40%
Collateralized Credit Risk. Loan to value
Over 40% but
Over 60% but
Over 80% but
less than or
less than or
less than or
Over 100%
equal to 60%
equal to 80%
equal to 100%
21,763
16,010
79,347
4,233
8,909
66,205
45,139
21,066
96,770
86,422
7,240
3,108
213,890
440
311
16,295
3,972
1,933
10,390
2,625
7,765
86,075
84,619
377
1,079
103,121
544
6,672
2,090
10
71
2,009
1,002
1,007
373
81
118
174
9,679
32
21
4,996
1,026
342
3,628
751
2,877
14,689
14,246
151
292
19,738
108
63
4,659
1,050
453
3,156
781
2,375
19,049
18,610
108
331
23,879
101
87
3,937
993
332
2,612
768
1,844
21,138
20,771
102
265
25,263
636
6,789
2,008
520
223
1,265
382
883
16,016
15,709
79
228
25,449
107
23
2,785
393
654
1,738
945
793
15,556
15,364
55
137
18,471
14,567
12,056
84
2,048
2,162
2,381
2,002
3,547
The amounts included in this table are net of impairment losses.
Small and medium enterprises
(*)
(**)
(***) Nonprofit institutions serving households.
(****) Net of provisions
209
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
d) Concentration of risks by activity and geographical area (carrying amount)
December 2016
TOTAL(*)
Spain
Millions of Euros
European Union
Other
America
Other
Credit institutions
Government agencies
Central Administration
Other
Other financial institutions
Non-financial institutions and individual entrepreneurs
Construction and property development
Construction of civil works
Other purposes
Large companies
SMEs and individual entrepreneurs
Other households and NPISHs
Housing
Consumer
Other purposes
TOTAL
81,156
66,207
42,917
23,290
72,137
119,402
4,864
12,576
101,962
78,790
23,172
96,937
86,423
7,240
3,274
435,839
23,090
51,813
28,861
22,952
35,681
78,796
4,861
9,250
64,685
42,263
22,422
96,140
85,755
7,227
3,158
285,520
36,501
13,086
12,916
170
15,567
21,892
3
2,128
19,761
19,310
451
451
361
5
85
87,497
11,220
841
798
43
20,654
12,920
-
885
12,035
11,779
256
104
91
4
9
45,739
10,345
467
342
125
235
5,794
-
313
5,481
5,438
43
242
216
4
22
17,083
(*) The definition of risk for the purpose of this statement includes the following items on the public balance sheet: Loans and advances to credit institutions, Loans and advances to customers, Debt
securities, Equity instruments, Other equity securities, Derivatives, Derivatives – Hedge accounting derivatives, Investments in subsidiaries, joint ventures and associates and guarantees given and
Contingent risks. The amounts included in this table are net of impairment losses.
210
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
December 2016
TOTAL (*)
Andalucia
Aragon
Asturias
Baleares
Canarias
Cantabria
Castilla La
Mancha
Castilla y León
Cataluña
Millions of Euros
Credit institutions
Government agencies
Central Administration
Other
Other financial institutions
Non-financial institutions and individual entrepreneurs
Construction and property development
Construction of civil works
Other purposes
Large companies
SMEs and individual entrepreneurs
Other households and NPISHs
Housing
Consumer
Other purposes
TOTAL
Credit institutions
Government agencies
Central Administration
Other
Other financial institutions
Non-financial institutions and individual entrepreneurs
Construction and property development
Construction of civil works
Other purposes
Large companies
SMEs and individual entrepreneurs
Other households and NPISHs
Housing
Consumer
Other purposes
TOTAL
23,090
51,813
28,861
22,952
35,681
78,796
4,861
9,250
64,685
42,263
22,422
96,140
85,755
7,227
3,158
285,520
905
2,576
2,576
78
5,376
542
384
4,450
1,382
3,068
13,636
12,116
1,194
326
22,571
326
983
983
8
1,156
65
64
1,027
460
567
1,491
1,324
130
37
3,964
Millions of Euros
-
624
624
1
668
50
31
587
371
216
1,382
1,159
163
60
2,675
17
752
752
37
1,980
54
157
1,769
1,239
530
2,149
1,958
158
33
4,935
-
739
739
3
2,011
237
157
1,617
492
1,125
3,932
3,311
535
86
6,685
2,110
155
155
2
382
12
26
344
143
201
907
807
66
34
3,556
1
676
676
1
1,110
116
73
921
327
594
2,825
2,520
242
63
4,613
-
1,057
1,057
44
1,302
69
68
1,165
395
770
3,095
2,701
277
117
5,498
-
244
244
1
601
32
32
537
94
443
1,470
1,272
161
37
2,316
154
1,396
1,396
92
2,008
208
194
1,606
932
674
3,273
2,744
349
180
6,923
16,873
4,492
4,492
32,830
31,567
1,384
2,444
27,739
24,456
3,283
14,796
13,462
812
522
100,558
-
321
321
5
1,176
40
71
1,065
398
667
1,959
1,702
212
45
3,461
10
387
387
-
1,175
24
81
1,070
770
300
540
476
47
17
2,112
-
1,733
1,733
150
4,136
349
266
3,521
1,167
2,354
9,188
8,212
742
234
15,207
1,504
2,562
2,562
535
6,045
185
300
5,560
4,322
1,238
3,031
2,636
250
145
13,677
-
36
36
-
256
10
11
235
78
157
374
328
33
13
666
1,190
4,126
4,126
1,894
17,704
1,452
4,882
11,370
5,225
6,145
31,322
28,339
1,785
1,198
56,236
Ceuta y
Melilla
-
93
93
-
143
32
9
102
12
90
770
688
71
11
1,006
December 2016
Extremadura
Galicia
Madrid
Murcia
Navarra
Comunidad
Valenciana
País Vasco
La Rioja
(*) The definition of risk for the purpose of this statement includes the following items on the public balance sheet: Loans and advances to credit institutions, Loans and advances to
customers, Debt securities, Equity instruments, Derivatives, Derivatives, Derivatives – Hedge accounting, Investments in subsidiaries, joint ventures and associates and guarantees
given. The amounts included in this table are net of impairment losses.
211
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
APPENDIX XIII. Agency Network
ABAD CAMPELO MARIA CONCEPCION
ALDA CLEMENTE MARIA LUISA
ALTOLAGUIRRE AGUIRREBENGOA MARIA JOSEFA
ABELENDA MONTES MANUEL
ALFONSO ALFONSO MARIA LOURDES
ALTURA PLATA PASTORA
ABELLA LOPEZ ROGELIO
ABRAHAM MORA JUAN PEDRO
ABREU PEÑA ANDRES SERGIO
ADAN ROLDAN FRANCISCO DE ASIS
ALMENDROS ESTEBAN ESTEBAN
ALVAREZ ALVAREZ LORETO
ALONSO ALBARRAN IRMA
ALONSO BAJO LORENZO
ALONSO CUESTA LETICIA
ALVAREZ LEBRIJO JOSE MARIA
ALVAREZ RODRIGUEZ CAMILO VALENTIN
ALVARO CAMPILLO EVA MARIA
ADROVER BAZ MARIA DOLORES
ALONSO DIEZ JOSE CARLOS
AMABLE MENDEZ LAZARO
AGUILAR VELASCO MARIA PAZ
ALONSO FERNANDEZ AGUSTIN
AMADOR MONTESDEOCA JUAN LUIS
AGUILERA RUIZ MANUEL
AGUT RODRIGO OMAR
ALAMILLO ALVAREZ CRISTINA
ALAMO MARTINEZ GUILLERMO
ALONSO FERNANDEZ LUIS MIGUEL
AMBRONA LAIRADO JOSE MARIA
ALONSO GARCIA CARMELO HONORIO
AMENEIROS GARCIA JOSE
ALONSO HEVIA AMPARO
ALONSO JUAREZ JAVIER
AMOEDO GONZALEZ DANIEL
AMOEDO MOLDES MARIA JOSE
ALARCON CINTAS ANTONIO
ALONSO PAREDES JOSE IGNACIO
AMOROSO ABUIN DELFINA
ALARCON COROMINAS SERGIO LUIS
ALONSO RAMOS MARIA CAMINO
ANDRADA RINCON SOLEDAD
ALBELLA ESTEVE MARIA MERCEDES
ALONSO VALLE ESTEBAN
ANDRES SANTA JOSE
ALBENDIZ GONZALEZ IRENE
ALONSO ZAPICO JUAN DE DIOS
ANDRES SIERRA FERNANDO IGNACIO
ALBERDI ZUBIZARRETA EDUARDO
ALONSO ZARRAGA MIKEL
ANGLADA BLANQUER AGUSTIN
ALBIÑANA BOLUDA AMPARO
ALCACER FABRA FRANCISCO
ALONSO BUENAPOSADA ARIAS ARGÜELLO MARIA CONSUELO
ANGOITIA LIZARRALDE MARIA DEL CARMEN
ALSINA MARGALL MIREIA
ANTUÑA SCHUTZE MARTA
ALCANTARA IZQUIERDO CRISTINA
ALTARRIBA GUITART MARIA ALBA
ARANDA GARRANCHO ANA MARIA
212
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
ARANDA GONZALEZ DOLORES
ARASANZ LAPLANA JOSE ANTONIO
ARCHS PRETEL FRANCISCO
ARCOS GONZALEZ FELIX
ARUFE ESPIÑA PABLO
ARUMI RAURELL XAVIER
BARDERA CALVO GEMMA MARIA
BARO CLARIANA SERGI
ASEGUINOLAZA AZCARGORTA MARIA JUNCAL
BARQUIN VITORERO BEATRIZ
ASHTON SPARROWHAWK GILLIAN PAMELA
BARRAGAN ZAPATA MARGARITA
ARESTI MUGICA REGINA MARIA
ASTILLERO GARCIA MIGUEL ANGEL
BARRAN CARIDAD JOSE MANUEL
AREVALO AREVALO MARÍA DEL CARMEN
AVELLANEDA GARCIA ANGEL FERNANDO
BARRIENTOS CHOCARRO JOSE CARLOS
ARIAS DELGADO MARIA MERCEDES
AYALA GONZALEZ VICTOR RAMON
BARTOMEU FERRANDO JOAN
ARIAS TORRES MIGUEL
ARIZA GIL JESUS
ARJANDAS DARYNANI DILIP
ARNELA MAYO ISMAEL
AYUELA LOBATO JUAN JESUS
AYZAGAR SOTO JAVIER
BACHS RABASCALL JOSEP
BASCO RIBES MARIA NORMA
BASCUÑANA GARCIA AGUSTIN
BASTANTE PATON RAMON FELIX
BADAMMAL SUNDERDAS PRAKASH CHAINANI
BATALLER CAMACHO MARIA
AROSTEGUI ARGALUZA MARIA VICTORIA
BADILLO SUAREZ MARIA SANDRA
BATISTA MEDEROS ANTONIO DAVID
ARRANZ MAGDALENO JUAN ALBERTO
BAHAMONDE GONZALEZ JORGE JUAN
BATISTE ANGLES AMADEO
ARRAYAS LINERO RAFAEL
ARROYO AVILA BEATRIZ
BALIBREA LUCAS MIGUEL ANGEL
BAUZA MARTORELL FELIO JOSE
BALLARIN ALAMAN ANGELES
BEHOBIDE PERALTA JORGE
ARROYO DIAZ CARLOS HUGO
BALLESTER MARTORELL MARTI
BELTRAN ANDREU MANUEL JORGE
ARROYO ROMERO CARLOS GUSTAVO
BALLESTER VAZQUEZ IGNACIO JAVIER
BENEDI LOPEZ CARLOS JAVIER
ARROYO ROMERO FRANCISCO JAVIER
BALSEIRO PEREZ DE VILLAR RICARDO
BENGOCHEA BOTIN VICENTE
ARROYO SANTIAGO MANUEL
ARROYO SOBRINO DAVID
BAÑUELOS DIEZ MARTA LUISA
BENITEZ CENTENO ANTONIO
BARAHONA VIÑES JORDI
BENITO MARIJUAN ANTONIO JOSE
ARTAJO JARQUE FERNANDO MARIA
BARBA VALDIVIESO MARIA ISABEL
BERNABEU JUAN ANTONIO JOSE
ARTEAGA PARDO JOSE
ARTIÑANO DEL RIO PABLO
ARTOLA MARTINEZ ANDER
BARCELO BLANCH MARIA LOURDES
BERNIER RUIZ DE GOPEGUI MARIA ISABEL
BARCIA CARMONA RAFAEL
BARDAJI PLANA AGUSTIN
BERROCAL URBANO FRANCISCO JESUS
BERTOMEU GONZALEZ KILIAN
213
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
BLANCO IGLESIAS IGNACIO
BLANCO QUINTANA FLORA
CABRERA MARTIN MIGUEL ANGEL
CABRERA SUAREZ LUIS RICARDO
CARBAJO ALONSO ROMAN
CARBO ROYO JOSE JORGE
BLANCO RODRIGUEZ JUAN ANTONIO
CABRITO FERNANDEZ JUAN CRUZ
CARBONELL ALSINA CHANTAL
BLANES SURROCA KILIAN
CACERES GONZALEZ JOSE ANTONIO
CARBONELL CHANZA FRANCISCO
BLASCO SAMPIETRO FRANCISCO JAVIER
CALDERON CARDEÑOSA MARIA LUISA
CARBONELL FUENTE JONATAN
BLAZQUEZ DE LA IGLESIA OSCAR
CALDERON MORILLO MARIA LUISA
CARCELLER SUAREZ RAMON
BOADO ORORBIA LEOPOLDO
BONDIA VIVES YESICA
BONILLO GOMEZ LOURDES
BORRAS SALAS CRISTOBAL
BOTELLO NUÑEZ FELIPE
CALLE DELGADO FELIX
CALVO HERNAN ALICIA
CAMACHO MARTIN ANTONIA
CAMACHO MARTINEZ PEDRO
CAMOS COLOM MIQUEL
CARCOLE ARDEVOL JOSE
CARDENAS SANCHEZ GABRIEL
CARDENO CHAPARRO FRANCISCO MANUEL
CARDERO TABARES SUSANA
CARNE SALES MARIA JOSE
BRAVO MASA Mª INMACULADA
CAMPOMANES IGLESIAS MARIA TERESA
CARNICER SOSPEDRA DAVID
BRIONES PEREZ DE LA BLANCA FERNANDO
CAMPOS CARRERO MARIA JOSEFA
CARO VIEJO JUAN ANTONIO
BRIONES SERRANO CLARA MARIA
BRITO PADRON INMACULADA
CAMPOS CRESPO PRISCILA
CAMPS ALBERCH ENRIC
CARPENA MARTINEZ MARIA BELINDA
CARRASCAL PRIETO LUIS EUSEBIO
BRU FORES RAUL
CAMPS CARBONELL JOAQUIN
CARRASCO GONZALEZ MARIA DEL AMOR
BRUNET COMAS FRANCESCA MARIA
BULLON DE DIEGO FRANCISCO JAVIER
CANO LOBATO BEATRIZ
CANO PEREZ ANTONIO
CARRASCO MARTIN ELOY
CARRASCO MARTINEZ RAMON
BURGOS BLANCO JUAN MARIA
CANTARERO MARTINEZ BARTOLOME
CARREÑO FALCON PEDRO
BUSTAMANTE FONTES MAYDA LOURDES
CAÑAS AYUSO FRANCISCO
CARRIL GONZALEZ BARROS ALEJANDRO SERGIO
CABALLERO MARTINEZ JUAN RAMON
CAO GONZALEZ NIEVES ESPERANZA
CARRILLO TEJEDO JAIRO
CABRADILLA ANTOLIN LEONILA
CABRERA CABRERA VICENTE
CAPDEVILA PLA RICARDO
CAPELLES LOPEZ JAVIER
CARRION MARTINEZ ANTONIO
CARTAGENA CUESTA MARIO
CABRERA LLAMAS FRANCISCO JAVIER
CAPISTROS LOPEZ HUERTA LAURA
CARULLA FELICES JORDI
214
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
CASADO GALLARDO GERARDO
CEJUDO RODRIGUEZ JUAN CARLOS
COMAS BERRADRE ANA
CASADO HERRERO JOSEFA
CELDRAN CARMONA JOSE MARIA
CONTRERAS AMOEDO JAVIER
CASADO RODRIGUEZ MARIA MARBELLA
CERCUNS CANDALIGA JOSEFINA
CORBACHO SOLANCE MARIA MAGDALENA
CASALS REIG IRMA
CASAS GRACIA CRISTINA
CASAS ROYO SATURIO
CASILLAS VIGARA JUAN
CERDAN GARCIA INMACULADA
CORCUERA BRIZUELA JOSE MARIA
CERDEIRA BRAVO DE MANSILLA ALFONSO
CORDERO DE OÑA FRANCISCO
CERON ORTIZ JOSE MARIA
CORDOBA PARODI JUAN ANTONIO
CERQUEIRA CRUCIO FERNANDO
CORDOBA TEJADA MANUEL
CASSO MAYOR FRANCISCA
CERRATO LLERENA MARIA DE LOS ANGELES
CORONADO MANSILLA DIEGO
CASTANY SANTANACH MARIA ANGELES
CERRATO RUIZ MARIA LUISA
CASTELL AMENGUAL MARIA
CERVERA AMADOR ANTONIO
CASTELLANO ESCOBAR MARIA BEGOÑA
CERVERA GASCO NURIA PILAR
CASTELLANO GARCIA PABLO JOSE
CERVERO MARINA DANIEL
CASTELLANO CARDALLIAGUET PABLO
CERVIÑO OTERO MARIA LUZ
CASTELLANOS JARQUE MANUEL
CESPEDES CAPO MIGUEL
CORTES MACHIN PATRICIA
COSCULLUELA SIN JOSE LUIS
COSTA CALAF MONTSERRAT
COSTA CAMBRA ANGEL
COSTA GARCIA ROSA MARIA
COSTA PARIS JOSE LUIS
CASTILLO BLANCA ENRIQUE
CHACON MACIAS ELADIO SALVADOR
CREIXANS PONS JOSE MARIA
CASTILLO MARZABAL FRANCISCO JOSE
CHAVARRI GONZALEZ ALVARO
CREIXELL GALLEGO XAVIER
CASTILLO ORTEGA NICOLAS
CID GUERREROS ROBERTO CARLOS
CRESPO CRESPO ANGEL MANUEL
CASTILLO YBARRA MARIA DEL CARMEN
CISTERO BOFARULL MARIA
CRESPO GOMEZ LUCAS
CASTRESANA URIARTE RODOLFO
CIUDAD BRONCANO JUAN FRANCISCO
CRESPO MINCHOLED YOLANDA
CASTRILLO PEREZ TRINIDAD
CLAPES ESQUERDA RAMON LUIS
CRESPO SANTIAGO MARIA GLORIA
CASTRO VEGA XOSE
CLEMENTE BLANCO PAULA ANDREA
CRIADO ANAYA LUIS
CAZORLA EGEA ALEJANDRO JUVENAL
CLIMENT MARTOS MARIA ROSARIO
CUENCA OLIVEIRA ANTONIO
CEBRIAN CLAVER JOSE JUAN
CEJAS MARMOL ALBA MARIA
COBO RIVAS RAMON
CUESTA GONZALEZ DE LA ALEJA JAVIER VICENTE
COCA LOZA Mª DOLORES GENOVEVA
CUÑAT ALVAREZ OSSORIO JUAN LUIS
215
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
CURROS NEIRA FRANCISCO JAVIER
DEL POZO SANCHEZ SUSANA
DOMINGUEZ NAVARRO JAVIER
DALMAU GOMEZ JORDI
DEL RIO SERRANO JUAN FELIX
DOMINGUEZ RODES JUAN LUIS
DE ANDRES DE PABLOS MARIA ESTHER
DEL RIO USABEL IDOIA
DE ARRIBA ARES ALVARO
DELGADO GARCIA JOSE LUIS
DONAIRE MOLANO LUIS
DORDA VENTURA ANTONI
DE ASTOBIZA AGUADO IGNACIO
DELGADO GARCIA MANUEL ANTONIO
DRIS MOHAMED SAMIR
DE BLAS GUASP ALBERTO BARTOLOME
DELGADO OJEDA MARIA ANGELES
DUQUE MEDRANO JUAN CARLOS
DE DIEGO MARTI FRANCISCO JOSE
DELGADO RUIZ DIEGO
DURAN VIDAL ANNA
DE EUGENIO FERNANDEZ JOAQUIN
DIAZ RODRIGUEZ PALMERO JAVIER ADOLFO
ECHANIZ LIZAUR MARIA BELEN
DE FALGUERA MARTINEZ-ALARCON ANTONIO
DIAZ FLORES JUAN FRANCISCO
EDO SANZ MARIA LOURDES
DE GUILLERMO DE SAN SEGUNDO MARIA SONSOLES
DIAZ FRANCO MARIA ANTONIA
EGURROLA IRAOLA JESUS MIGUEL
DE HARO GONZALEZ MARIA LUISA
DIAZ GARCIA MARINA
DE LA CALLE PALACIOS TEODORO
DIAZ GONZALEZ LUIS MIGUEL
DE LA FUENTE TORRES ANAIS BEATRIZ
DIAZ LORENZO LORENZO
ELGUEA OMATOS EMILIO
ENRICH SASTRE ILENIA
ENRIQUE SAAVEDRA CESAR
DE LA HOZ REGULES FCO. JAVIER
DIAZ RISCO MARIA LUISA
ESCALONA BELINCHON JOSE ANTONIO
DE LA SIERRA PEÑA ANDRES
DIAZ SANTAMARIA MARIA VEGA
ESCOFET BOIX ISABEL
DE LA TORRE DEL CASTILLO CANDELARIA
DIAZ DE ESPADA LOPEZ DE GAUNA LUIS MARIA
ESCRIBANO BUENO JOSE ALBERTO
DE LA TORRE PEREZ NOELIA
DE MARCOS MARDONES IÑIGO
DE PABLO SAN MIGUEL JAVIER
DIAZ-ROMERAL MARTIARENA JOSE MARIA
ESCUDERO NAHARRO ROQUE JAVIER
DIENTE ALONSO SERGIO
DIEZ AMORETTI FRANCISCO
ESCUDERO SANCHEZ RAFAEL PEDRO
ESCUTIA DOTTI MARIA VICTORIA
DE PASCUAL MASPONS AGUSTIN
DIEZ MELGOSA EDUARDO JOSE
ESPALLARGAS MONTSERRAT MARIA TERESA
DE QUINTANA PEREZ ANNA
DE SOLA FABREGAS FRANCESC
DOBLAS GEMAR ANTONIO
DOMINGO BALTA MARIANO
DEHESA SAINZ DE LOS TERREROS ANGELA
DOMINGUEZ CANELA INES
DEL BARCO ASENCIO MANUEL LUIS
DOMINGUEZ JARA RAFAEL JESUS
ESPARCIA CUESTA FELISA
ESPASA ROIG YOLANDA
ESPINAR MEDINA RICARDO
ESPINILLA ORTIZ ROSARIO
216
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
ESPIÑA GALLEGO ANA MARIA
FERNANDEZ MARTIN MARIA ISABEL
FERRERA HERNANDEZ FRANCISCO MIGUEL
ESPUNY CURTO MARIA NATIVIDAD
FERNANDEZ MORAY EVA MARIA
FILGUEIRAS VERDEAL MARIA TERESA
ESQUIROZ RODRIGUEZ ISIDRO
FERNANDEZ MORO TATIANA
ESTEBAN TAVIRA ANTONIO
FERNANDEZ ONTAÑON DANIEL
ESTEFANIA LARRAÑAGA GUILLERMINA
FERNANDEZ PIÑEIRO ALBERTO
ESTELLE PEREZ VICENTE
FERNANDEZ PLACIN ERIC
FIRVIDA PLAZA BELEN
FISHER COLLETTE
FLORES MOLERO GREGORIO
FLORES PUIGVERT MARÇAL
ESTEVANEZ MOLINA VICENTE
FERNANDEZ QUILEZ BEGOÑA MONICA
FLUVIA PEIRO MARIOLA
EUGENIO CUBEROS ANGEL ENRIQUE
FERNANDEZ RIOS MARIA GORETTI
FOMBELLA ALVARADO ROSA MARIA
EZQUERRO TEJADO MARIA DOLORES
FERNANDEZ RIVERO JAVIER
FONTAN ZUBIZARRETA RAFAEL
FABRA VERGE TERESA ROSARIO
FERNANDEZ RODRIGUEZ ALEJANDRO
FONTECHA ALVAREZ MARIA VICENTA
FARIÑAS MARTINEZ JOSE ANTONIO
FERNANDEZ RODRIGUEZ MARIA TERESA
FONTES RODRIGUEZ DOMINGO
FARRE BOSCH CRISTINA
FELEZ MARTIN FERMIN
FERNANDEZ SILVA DIEGO MARIA
FORCADA RIFA DAVID
FERNANDEZ SOUTO MARIA TERESA
FORCEN LOPEZ MARIA ESTHER
FELIPE FONTANILLO MARIA DEL PILAR
FERNANDEZ VAZQUEZ HECTOR
FRANCES MAESTRE FRANCISCA
FELPETO PRIETO MARIA TERESA
FERNANDEZ VEIGA MANUEL
FRANCES MICO CARMELO
FEO CLEMENTE ALEJANDRO
FERNANDEZ DE TEJADA ALMEIDA CARLOS ENRIQUE
FRANCO ALADRÉN JUAN CARLOS
FERNANDEZ ALARCON MARGARITA
FERNANDEZ-LERGA GARRALDA JESUS
FRANCO MARTINEZ JUAN JOSE
FERNANDEZ ALMANSA ANGEL ALEJANDRINO
FERNANDEZ-MARDOMINGO BARRIUSO MIGUEL JOSE
FUCHS KARL JOHANN MAX
FERNANDEZ CAMALEÑO MARIA JULIA
FERRADAS GONZALEZ JESUS
FUENTE RODRIGUEZ MARIA PILAR
FERNANDEZ COLIN MIGUEL MARCELO
FERNANDEZ CONTRERAS JOAQUIN
FERRE REVILLA NATALIA
FERREIRA FRAGA JULIAN
FUENTES AYUS ANTONIO
FUENTESECA FERNANDEZ MIGUEL
FERNANDEZ DOMINGUEZ PABLO
FERREIRO CASTRO MARIA TERESA
FUSTER AMADES MAGDALENA ROSA
FERNANDEZ FERNANDEZ ANTONIO
FERREIRO GARCIA MARIA CRISTINA
GABIÑO DIAZ JUAN ANTONIO
FERNANDEZ LOPEZ MIGUEL ANGEL
FERRER GELABERT GABRIEL
GAGO COMES PABLO
217
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
GAITAN PERLES JUAN JOSE
GARCIA GARCIA JOSE MIGUEL
GARRIDO GOMEZ ISABEL
GALAN MERCHAN MARIA OLALLA
GARCIA GARCIA REMEDIOS
GALEANO BARRADO MARCOS
GALINDO GOMEZ ANGEL
GALINDO SANCHO PALMIRA
GARCIA GONZALEZ PILAR
GARCIA LAZARO VANESA
GARCIA LORENZO JAVIER
GALLARDO AROZENA MARGARITA
GARCIA MEJIAS JUAN ANTONIO
GALLARDO GALLARDO BEATRIZ ANA
GARCIA MUÑOZ MARIA OLGA
GALVEZ RUIZ PEDRO FRANCISCO
GAMBOA DONES SUSANA
GAMEZ MARTINEZ ANTONIO MANUEL
GARCIA OVALLE OSCAR
GARCIA PEREZ ALICIA
GARCIA PEREZ OLGA
GASCON VAL JESUS
GENE TICO REMEI
GENESTAR BOSCH ANDRES
GEORKIAN BABAYAN LEILA
GIJON EXPOSITO NATALIA
GIL BELMONTE CONRADO
GIL BELMONTE SUSANA
GIL FERNANDEZ JUAN JOSE
GIL RODRIGUEZ RICARDO
GANDARA DUQUE MARIA DE LOS MILAGROS
GARCIA PERIS SANTIAGO DAVID
GIL TIO JULIA
GARATE MINTEGUI FRANCISCO
GARCIA PUJADAS MONTSERRAT
GIL UREÑA MARIA CARMEN
GARAY GURBINDO FELICIDAD MARIA ANGELES
GARCIA RIAL FELIPE
GIL USON MARTA
GARCIA ALVAREZ-REMENTERIA ANTONIO
GARCIA RODRIGUEZ ANA ISABEL
GIMENO CACHO MARIA CRISTINA
GARCIA BASCUÑANA MARÍA CRISTINA
GARCIA RODRIGUEZ JOSE FERNANDO
GIMENO MARTINEZ AURELIO
GARCIA CACERES JULIO
GARCIA CANAL JAVIER
GARCIA ROSALES JUAN ANTONIO
GINE ABAD FRANCISCO JOSE
GARCIA RUBIO ELENA
GINES LAHERA DARIO ALFONSO
GARCIA CASO ENCARNACION
GARCIA SAAMEÑO JUAN JOSE
GODOY GARCIA FRANCISCO JAVIER
GARCIA CERRATO JOSE IGNACIO
GARCIA SANCHEZ LUIS
GOMEZ ANDRES JUAN JOSE
GARCIA DAUDER VICENTE
GARCIA DEL HOYO VIRGINIA
GARCIA SIERRA JOSE MANUEL
GOMEZ ASUA ASIER
GARCIA HIERRO JIMENEZ FRANCISCO JAVIER
GOMEZ DE MAINTENANT MARTA MARIA
GARCIA DIAZ MARIA DEL CARMEN
GARCIA-TRESPALACIOS GOMEZ PABLO
GOMEZ EBRI CARLOS
GARCIA DIAZ RAMON JESUS
GARCIA-VALENCIANO LOPEZ LUIS
GARCIA FONDON CONSTANTINO
GARRIDO ARAN FRANCISCO
GOMEZ GOMEZ DAMIAN
GOMEZ LOBO JUAN
218
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
GOMEZ MARTINEZ ALBERTO
GOMEZ MARTINEZ LUIS
GOMEZ VALVERDE ANTONIO
GOMEZ VAZQUEZ MARIA JESUS
GOMEZ VELILLA MARIA BRIGIDA
GONZALEZ GONZALEZ VICTOR JAVIER
GRANDA RODRIGUEZ DE LA FLOR ARMANDO
GONZALEZ GUTIERREZ PEDRO ROMAN
GRAÑA RAMOS ABEL
GONZALEZ JIMENEZ FRANCISCO
GRAÑON LOPEZ LUIS ALBERTO
GONZALEZ JUSTO CARLA
GONZALEZ LUIS JULIAN
GRASSA VARGAS FERNANDO
GRELA CASTRO MARCELINO
GOMEZ-LANDERO GUIJARRO MARIA LUISA
GONZALEZ MARIN MANUEL
GROS JAQUES ENRIQUE MANUEL
GOMIS JIMENEZ CARLOS
GONZALEZ MAYO GONZALO
GUARAS JIMENEZ MARIA RESURRECCION
GONZALEZ AGUILERA JOSE MIGUEL
GONZALEZ MOLANO FRANCISCO JAVIER
GUELL MERRY DEL VAL IGNACIO
GONZALEZ ALONSO LUIS MIGUEL
GONZALEZ MONTERO CONCEPCION
GUERRA CEBALLOS JUAN LUIS
GONZALEZ ALONSO REBECA
GONZALEZ ALVAREZ NOELIA
GONZALEZ MONZON MARIO
GUERRA GARCIA DE CELIS JOSE JUAN
GONZALEZ MOSQUERA FERNANDO
GUERRA MENGUAL MARCOS
GONZALEZ ARANDA FRANCISCO JAVIER
GONZALEZ PARRA RICARDO
GUERRERO VERGARA JOSE ANTONIO
GONZALEZ BENAVIDES MARIA LIBERTAD
GONZALEZ PAVON FRANCISCO JOSE
GUIJARRO BACO JUAN JOSE
GONZALEZ BORINAGA IVANA
GONZALEZ PEREZ ANA RUTH
GONZALEZ CARDOSA INMACULADA
GONZALEZ RAMIREZ JOSE
GUIJARRO CRUZ MARTA
GUILLEN RUIZ EMILIO
GONZALEZ COCA MARIA DE LA ENCINA
GONZALEZ RODRIGUEZ FRANCISCO
GUMBAU RODA JAIME JOSE
GONZALEZ DIAZ VICTORINO
GONZALEZ SOCAS ANTONIA MARINA
GUTIERREZ GALENDE IGNACIO
GONZALEZ ESPARZA JUANA MARIA
GONZALEZ SOCORRO MARIA ESTHER
GUTIERREZ GARCIA AZAHARA
GONZALEZ FEO SERGIO
GONZALEZ FREIJO ROSALIA
GONZALEZ GARCIA JUSTO
GONZALEZ GARCIA SERGIO
GONZALEZ TABOADA JOSE
GUTIERREZ LORENZO ANGEL
GONZALO SAINZ FRANCISCO JAVIER
GUTIERREZ PASTOR JUAN CARLOS
GOÑI IDARRETA ANA MARIA
GOPAR MARRERO PABLO
GUZMAN GARCIA MARIA JESUS
GUZMAN GONZALEZ EMILIANO
GONZALEZ GONZALEZ JOSE MANUEL
GORDO GAMIZ MARIA LUISA
HENCHE MUÑOZ GREGORIA
GONZALEZ GONZALEZ MARIA ANGELES
GOROSTARZU DIAZ MIGUEL ANGEL
HERAS HERNANDEZ FERNANDO
219
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
HERAS TERREROS ALFREDO
IBAÑEZ SANCHEZ JAVIER
HEREDERO POL OSCAR EDUARDO
IBAÑEZ ZORRILLA MARIA IZASKUN
JIMENEZ RAMOS IGNACIO
JIMENEZ THOMAS EMILIO
JORDAN CHIVELI IGNACIO
HERMO MARTINEZ MARTA
HERMOSO NUÑEZ PEDRO
IGEA JARDIEL MANUEL
IGLESIAS GONZALEZ MARIA ARANZAZU
JOVER BENAVENT ENRIQUE
HERNANDEZ ALEJANDRO JOSE MANUEL
IGLESIAS LORENZO LUCIANO
HERNANDEZ FERRERA JOSE ALBERTO
IGLESIAS MARTIN SANTIAGO
JUAN TORTOSA FEDERICO
JUANOLA COCH MARTI
HERNANDEZ LIEBANAS FRANCISCO
IGLESIAS SEXTO JOSE LUIS
JUESAS FERNANDEZ ENRIQUE
HERNANDEZ MANRESA JOSEFA
ILIEVA NENKOVA KATIA
JULIAN SANZ MARIA
HERNANDEZ MANRIQUE CARLOS MANUEL
INFANTES ALCANTARA MANUEL ALEJANDRO
JUNQUERA FRESCO BEATRIZ INMACULADA
HERNANDEZ PRIETO MIGUEL ANGEL
IRIGOYEN GARCIA VICTORIA EUGENIA
JURADO CORDOBES RICARDO JESUS
HERNANDEZ SANCHEZ JOSE RAMON
ISACH GRAU ANA MARIA
KNUCHEL FRITZ
HERNANDEZ SANCHEZ MARIA ISABEL
ISERTE MUÑOZ FRANCISCO JAVIER
LABAT PASCUAL CRISTINA
HERRAIZ ARGUDO CONSUELO
HERRERA MORENO MONICA
HEVIA PATALLO TERESA
HIDALGO GOMEZ VALENTINA
IVARS PERIS PABLO JOSE
IZQUIERDO DOLS MIGUEL
JAEN CLAVEL LEONARDO
JANER VALENTI IGNACIO
LABORDA CARNICER FELIPE
LADRON GALAN FRANCISCO
LAFUENTE ALVAREZ JOSE ANTONIO
LAGUNA SEBASTIANES FRANCISCO MANUEL
HIDALGO PEREZ JOSE ANTONIO
JANQUIN ROMERO JEAN CLAUDE
LALANZA PINA VALERO BLAS
HORNOS CASTRO JAVIER
HORTELANO GARCIA RICARDA
HU LU SIKE
JARA GUERRERO FRANCISCO
LALMOLDA SANZ PABLO
JIMENEZ ARROYO BLAS
JIMENEZ BETANZOS DAVID
LAMBERT JONATHAN RAYMOND
LAMY GARCIA ANTONIO
HUERTAS FERNANDEZ JUAN ANTONIO
JIMENEZ CALERO CONSUELO
LANAU ALTEMIR RAMON ANGEL
HUGUET CABRERA SERGIO
IBAÑEZ IBAÑEZ LUIS
JIMENEZ LORENTE MANUEL
LANAU SERRA MARIA FRANCISCA
JIMENEZ MARQUEZ MARIA DOLORES
LANERO PEREZ MIGUEL ANGEL
IBAÑEZ NIETO ADORACION MAR
JIMENEZ PINEDA MERCEDES
LARA MARTINEZ CARLOS
220
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
LARA VIDAL FRANCISCO JOSE
LOPEZ CARCAS EDUARDO
LOPEZ TORRES PATRICIA
LARROSA ESCARTIN ANA BELEN
LOPEZ DELGADO MARIA DEL PILAR
LORENZO SEGOVIA SUSANA
LASO CASTAÑERA JOSE FRANCISCO
LOPEZ FERNANDEZ FERNANDO
LORENZO VELEZ JUAN
LEGARDA REY ENRIQUE
LEÑA CAMACHO ROSA MARIA
LOPEZ FERNANDEZ RAQUEL
LOPEZ FRAILE LUIS ANTONIO
LEON ACOSTA MANUEL TOMAS
LOPEZ GARCIA ANTONIO
LEON ALCAIDE ROBERTO CARLOS
LOPEZ GARCIA ANTONIO PEDRO
LEON ANTOÑANZAS MARIO
LEON CRISTOBAL JOSE LUIS
LOPEZ GRANADOS JOSE MARIA
LOPEZ HERNANDEZ ALVARO
LORENZO VILLAMISAR JESUS MANUEL
LORES FANDIÑO JUAN JOSE
LOSADA LOPEZ ANTONIO
LOUBET MENDIOLA JAVIER
LOZANO ROSA FAUSTINO
LUGILDE VELEZ JOSE LUIS
LIARTE BENEDI MARIA INMACULADA
LOPEZ LOMA ALFONSO FRANCISCO
LUJAN FALCON JUAN CARLOS
LIMIÑANA MARTINEZ LORENZO
LOPEZ LOPEZ MARIA DEL MAR
LUNA ARIZA RAFAEL IGNACIO
LIMONCHI LOPEZ HERIBERTO
LOPEZ LOZANO ROSA MARIA
LUNA GARCIA MINA ANTONIO FERMIN
LINARES LOPEZ RAMÓN
LLAMAS ABADIÑO EDUARDO
LOPEZ LUQUE IGNACIO
LUQUE FERNANDEZ JULIA
LOPEZ MANCIÑEIRAS MARIA CARMEN
MACHIN CARREÑO FELIX ALBERTO
LLAMAZARES GALVAN ALBERTO
LOPEZ MARTINEZ MANUELA
MACIA LOPEZ MARIA DEL PILAR
LLANDRICH LLANDRICH MARIA DEL CARMEN
LOPEZ MERINO ANTONIO
MACIAS FONTANILLO ISAAC SANTIAGO
LLEONART CATEURA PERE
LLOBET VILA AUGUSTO
LOPEZ PEREZ MANUEL TRAJANO
MACIAS GUERRERO MANUEL
LOPEZ PRO DIEGO
MADRONA MARTINEZ MIRIAM
LLORENTE VARON JUAN CARLOS
LOPEZ RASCON MARIA JESUS
MAESTRE RODRIGUEZ JUAN JESUS
LLUCH RODRIGUEZ CRISTINA
LOMAS PEREZ JESUS MARIA
LOPE CARVAJAL JUAN JESUS
LOPEZ ARIAS MARIA EUGENIA
LOPEZ BERGUA MARTI
LOPEZ RUBAL ANTONIO
MAGAÑA PLAZA PEDRO ANTONIO
LOPEZ SARALEGUI ELENA MARIA TRINIDAD
MALMAGRO BLANCO ANTONIO
LOPEZ SEGURA JUAN FRANCISCO
MALUENDA URGEL NURIA
LOPEZ SEQUERA PEDRO
LOPEZ TAPIA ISIDRO
MANTEIGA ROSENDE JOSE MANUEL
MARANDI ASSL MOHAMMAD
221
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
MARAÑON OTEIZA MARIA CRISTINA
MARTINEZ BERMUDEZ JOSE FRANCISCO
MATA MARCO CARMEN
MARCHANTE GARCIA MARTA MARIA
MARTINEZ CASTRO MANUEL FRANCISCO
MAYA MONTERO ANGEL
MARCOS SALVATIERRA MONTSERRAT
MARTINEZ GAMEZ CARMEN MARIA
MAYORAL MURILLO FRANCISCO JAVIER EUSEBIO
MARGALIDA GATNAU JOSE MARIA
MARTINEZ GARCIA CARLOS
MAYORDOMO PULPON ALBERTO
MARIN RUIZ MARIA CARMEN
MARIN ZAFRA ADOLFO
MARTINEZ GARCIA PEDRO RAFAEL
MAZA HURTADO YLENIA
MARTINEZ GIMENEZ RAFAEL PABLO
MAZO ORTEGA MARIA NURIA
MARQUES GONZALEZ MARIA FRANCISCA
MARTINEZ GOMEZ MIGUEL AMARO
MAZON GINER JOSE FERNANDO
MARQUES MENENDEZ JOSE LUIS
MARTINEZ GONZALEZ VANESA
MECIA FERNANDEZ RAMON
MARQUEZ PEREZ LAURA
MARTINEZ HERNAEZ MARIA DOLORES
MEDINA VALLES JUAN CARLOS
MARQUEZ GOMEZ NATIVIDAD
MARTINEZ MARTOS LUIS CARLOS
MELCHOR GOMEZ CANDIDO DANIEL
MARRERO GONZALEZ PLACIDO VICTOR
MARTINEZ MOYA DIEGO
MENDEZ BANDERAS LUIS FELIPE
MARTI SALA ESTHER
MARTI TORRENTS MIQUEL
MARTIN CARLOSENA RAFAEL
MARTIN GRANADOS JUAN
MARTINEZ PARRA ENRIQUE
MENDEZ HERNANDEZ CAYETANO
MARTINEZ PEÑARRUBIA JOSE CARLOS
MENDEZ ZAPATA MARIA DEL PILAR
MARTINEZ PEREZ JOSE FRANCISCO
MENDIZABAL GOIBURU AGUSTIN
MARTIN HERNANDEZ PEDRO MARIA
MARTINEZ PUJANTE ALFONSO
MARTINEZ PEREZ JOSE MARIA
MERA RANCAÑO MANUEL
MERELAS CASTRO SONIA
MARTIN JIMENEZ ANSELMO
MARTINEZ RIVADAS FRANCISCO
MERINO MARTINEZ CESAR JOAQUIN
MARTIN LOPEZ CARLOS FRANCISCO
MARTINEZ VECINO MARIA CONCEPCION
MESA VIÑAS ARGEO
MARTIN MAYOR ANTONIO
MARTIN NADAL ALBERTO
MARTINEZ VERA MARIA ESTRELLA
MESANZA QUERAL ALBERTO GUILLERMO
MARTINEZ VILLAR FRANCISCO
MIALDEA CARRASCO JULIA
MARTIN RAMIREZ FRANCISCO
MAS NEBOT JOSE MARIA
MIER ROMAN SILVIA
MARTIN SANCHEZ IGNACIO
MARTIN VIZAN MILAGROS
MASDEU BALLART MONTSERRAT
MIGUEL HERNANDEZ JAVIER
MASIP ESCALONA DAVID
MIGUEL BENITO JOSE ANDRES
MARTINEZ ANDRES MARIA ANGELES
MASSOT PUNYED MONTSERRAT
MILAN MILAN JUAN MANUEL
222
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
MINER GUERRERO JAVIER
MIÑO PEREZ JOSE IGNACIO
MORALEDA GALAN RAFAEL
MUÑOZ GARRIDO MARIA DEL VALLE
MORCILLO GARCIA JOSE LUIS
MUÑOZ PINEDA FRANCISCO ANTONIO
MODINO MARTINEZ MANUEL ANGEL
MORCILLO GRANADO FRANCISCO
MUÑOZO CHAMORRO NARCISO
MODOL RUIZ CRISTINA
MOLINA HERRIEGA MIGUEL
MOLINA LOPEZ RAFAEL
MOREIRA GARCIA JULIO CESAR
MUR CEREZA ALVARO JESUS
MORENES SOLIS MARIA ROCIO
MURCIA LOPEZ LORENA ALEJANDRA
MORENO CAMPOS JOAQUIN
MURGA PEINADO JOSE ALBERTO
MOLINA LUCAS MARIA ALMUDENA
MORENO DE MIGUEL VICENTE
MURO ALCORTA MARIA ANTONIA
MOLINA ROBLES JOSE CARLOS
MORENO DEL PINO NICOLAS
MUSA MOHAMED ABDELAZIZ
MOLL BRAGAGIA ANALINA
MORENO MAROTO LUIS MIGUEL
MUZAS BALCAZAR JESUS ANGEL
MOLLEJA BELLO MARIA CARMEN
MORENO SILVERIA MARIA ISABEL
MYLNIKAVA LIUDMILA
MOLPECERES MOLPECERES ANGEL
MORGA GUIRAO MARIA PILAR
NACHER NAVARRO MARIA VANESSA
MONCHONIS TRASCASAS PEDRO
MORGADE VIÑAS JOSE MANUEL
NAHARRO GATA MANUEL
MONROY CABAÑAS JULIAN
MONROY REY PATRICIA
MORODO PASARIN PURA
NARANJO PEREZ JUAN CARLOS
MOROTE ESPADERO RAFAEL MANUEL
NAVARRO CUESTA ESTER
MONSERRAT OBRADOR RAFAEL
MORSO PELAEZ JOSE RAMON
NAVARRO MARQUEZ JOSE MANUEL
MONTANER ARBONA FRANCISCO
MORUNO GONZALEZ MIGUEL ANGEL
NAVARRO MORALES JOAQUIN
MONTEAGUDO NAVARRO MARIA
MOSQUERA ARJONA JESUS
NAVARRO SAENZ MARIA MAR
MONTERO BEJARANO FRANCISCO JAVIER
MOUZO CASTIÑEIRA JESUS ANTONIO
NAVARRO UNAMUNZAGA FRANCISCO JAVIER
MONTES SADABA FRANCISCO JAVIER
MUIÑO DIAZ MARIA DEL MAR
NAZABAL ORTUETA PABLO
MONTESINOS CONTRERAS VICENTE
MUNGUIA TORRES JUAN MIGUEL
NEGRETE LEAL LUIS MANUEL
MONTIEL GUARDIOLA MARIA JOSEFA
MUNTADAS PUIG XAVIER
MOR FIGUERAS JOSE ANTONIO
MUÑIZ HORMAECHE SANTIAGO
MORA GIRONA JOSE MANUEL
MUÑOZ BERZOSA JOSE RAMON
NEIRA ALIAGA FERNANDO
NIETO GONZALEZ RUFINO
NIKIFOROVA NATALIYA
MORACHO MUÑOZ JOSE ANGEL
MUÑOZ BONET JOAQUIN BERNARDO
NODA MORALES HECTOR JOSE
223
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
NOVELLA MORALES MANUEL
ORTIZ GARCIA JUAN ANTONIO
NOVO MARTINEZ ALBA
NOVOSELOVA ELENA
ORTIZ GARCIA RAFAEL
PARENT FITE JAUME
PARNAU BOSCH JOAN
ORTIZ MARTIN FRANCISCO EULOGIO
PARRA ASENSIO MARIA TERESA
NUÑEZ MAILLO VICENTE JESUS
ORTS BERENGUER JUAN JOSE MARIA
PARRA MAIQUEZ JOAQUINA
NUÑEZ NAYA ANTONIO JOSE
ORTUÑO FERNANDEZ JOSE LUIS
PARREÑO MENDEZ MARIA JOSE
NUÑO NUÑO AZUCENA
OGAZON GOMEZ YON ANDONI
OLIVA PAPIOL ENRIQUE
OLIVER GUASP BARTOLOME
OLIVER MOMPO JOSE
OLMEDO APARICIO CARLOS
OLMO BARONA ANDRES
ORTUÑO CAMARA JOSE LUIS
ORUS RODES RICARDO
OSTROWSKA JOANNA
OTERO ALVAREZ JULIA
PASTOR GOMEZ PASCUAL
PASTOR MARCO JOSE LUIS
PATIÑO ROBLES MARIA CONCEPCION
PAULINO CARCELLES LUIS MIGUEL
OUTEIRIÑO VAZQUEZ JOSE MARIA
PAZ BARKBY ALISON SUSAN
OVIEDO PEREZ ZULEMA
PAZ GRANDIO FRANCISCO JOSE
PABLOS MUÑOZ MARIA JESUS
PAZOS SANCHEZ JAVIER
OLMO CONTRERAS FRANCISCO JAVIER
PADILLA CABRERA ROMINA DEL CARMEN
PEDEVILLA BURKIA ADOLFO
OLMO HUERTAS ANA MARIA
PADILLA MOLINA MARIA
PELLICER BARBERA MARIANO
OLMOS LOPEZ MARCOS
PADILLA ORTEGA GENOVEVA
PENA DIAZ JOSE MANUEL
ORDEN MONTOLIO SANDRA DE LA
PADRON GARCIA HERCILIO JOSE
ORDOYO CASAS ANA MARIA
PAEZ ORDOÑEZ SERGIO
PEÑA NAVAL JESUS
PEÑA PEÑA MANUEL
ORRIOLS GESE JORDI
ORTEGA AGULLO JOSE
PALAU DE LA NOGAL JORGE IVAN
PEÑA LOPEZ MILAGROS
PALAZON GARCIA JOSE MIGUEL
PEÑAS BRONCHALO JOSE MIGUEL
ORTEGA ALTUNA FERNANDO MARIA
PANDAVENES CANAL AZUCENA MARIA
PEÑATE SANTANA DUNIA
ORTEGA JIMENEZ FRANCISCO
PANIAGUA VALDES MILAGROS
PERALES LLOBREGAT ANGEL RAFAEL
ORTEGA MUÑOZ CARLOS MANUEL
PARDINES GARCIA ANTONIO
ORTIZ ACUÑA FRANCISCO
ORTIZ ALVAREZ BENITO
PARDO CANO FRANCISCO JAVIER
PAREDES VERA GRACIA
224
PERDOMO PEÑA PATRICIA
PEREA PRIETO JOSE LUIS
PEREZ ABAD JAUME
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
PEREZ ALVAREZ LAURA
PEREZ ANDREU ALEJANDRO
PIZA PROHENS BARTOMEU ANTONI
RAMIREZ JORQUERA MIGUEL ANGEL
PLA NAVARRO EMILIA
RAMIREZ LOPEZ AGUSTIN
PEREZ CAMACHO MIGUEL ANGEL
PLAMBECK ANDERL WALTER
RAMIREZ RUBIO JOSE RAMON
PEREZ CHAVARRIA JOAQUIN MIGUEL
PLANAS VIDAL PERE DOMINGO
RAMIREZ TORNES ALAIN LAZARO
PEREZ CORDOBA VICTOR MIGUEL
PLANELLA SARGATAL ORIOL
PEREZ DOMENECH JOSE MANUEL
PLANELLS ROIG JOSE VICENTE
RAMOS CAGIAO AMPARO
RAMOS CALDERON RAUL
PEREZ FERNANDEZ MARIA DOLORES
PLANO IZAGUIRRE JOSE DANIEL
RAMOS ROMERO JUAN JESUS
PEREZ GOMEZ CARMEN BEGOÑA
POLO PRIETO BORJA
RAMOS SOBRIDO JOSE ANDRES
PEREZ GUTIERREZ SANTIAGO
PEREZ IGLESIAS SUSANA
PEREZ MAGALLARES EMILIO
PEREZ MALON MARIA BELEN
PEREZ MASCUÑAN JORGE
PEREZ PEREZ JOSE MANUEL
PONCE VELAZQUEZ JOSEFA
PORRAS JURADO JUAN
PORTILLA ARROYO ALICIA
POTAPOVICH IGOR
POUS ANDRES JUAN
RANEDO VITORES MARIA MILAGROS
RANZ YARRITU JAVIER
RATON BELLO MIGUEL ANGEL
RAVELO RAMIREZ JUAN ALFONSO
REBOLLO CAMBRILES JUAN ROMAN
PRADA PRADA MARIA CARMEN
RECAJ ERRUZ ENRIQUE CLEMENTE
PEREZ POYATOS EMILIO JOSE
PRADO PAREDES ALEJANDRO
RECIO CEÑA TOMAS
PEREZ SANTOS ALFONSO
PEREZ SOTO PABLO MANUEL
PRIETO BENITEZ ANTONIO
PRIETO RICO MAURO
RECUENCO BENEDICTO JOSEFINA MATILDE
REGA RODRIGUEZ MARIA LUISA
PEREZ-ARCOS ALONSO JUANA MARIA
PUERTAS VALLES MARIA LUISA
REGLERO BLANCO MARIA ISABEL
PEROLADA VALLDEPEREZ ANDRES
PERTUSA MONERA ENCARNACIÓN
PEYUS SANCHEZ PALOMA
PUIG SEMPERE FILOMENA
PUJOL HUGUET AMADEU
PUJOLS SERRA RAMON
PINILLA VELA FRANCISCO JAVIER
PUP ANCA
PINTOR ZAMORA GUADALUPE
PISONERO PEREZ JAVIER
QUERO GUTIERREZ CARIDAD
QUIRALTE FUENTES RUBEN
225
REIFS PEREZ MANUEL
REINA GARCIA ANA ESTHER
RELAÑO CAÑAVERAS CRISTOBAL
REMENTERIA LECUE AITOR
REMON ROCA RAMON TOMAS
REMON SAENZ CESAR
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
RETAMERO VEGA MANUEL
RODRIGUEZ ALVAREZ MARIA ISABEL
ROJI BOULANDIER SERGIO
REVUELTA GUTIERREZ LAURA
RODRIGUEZ CAÑIZARES ANTONIO JAVIER
ROLDAN SACRISTAN JESUS HILARIO
REY FERRIN PAULA
REY GONZALEZ NICOLAS
REY PAZ ROCIO
RODRIGUEZ CIFUENTES IVAN
RODRIGUEZ DELGADO RENE
RODRIGUEZ GALVAN MARIA
ROMAN BERMEJO MARIA ISABEL
ROMAN CAMPOS MARIA ETELVINA
ROMAN CIVIDANES CONSTANTINO
REYES BLANCO FRANCISCO JAVIER
RODRIGUEZ GROVA AMELIA
ROMERO ARIAS TATIANA
REYES BLANCO RAFAEL
RODRIGUEZ LLOPIS MIGUEL ANGEL
ROMERO EXPOSITO VANESA
REYES CARRION JUAN CARLOS
RODRIGUEZ LOPEZ OLGA
ROMERO MENDEZ JUAN ANTONIO
REYES LANZAROTE FRANCISCA
RODRIGUEZ MARTINEZ NEUS
ROMERO MORENO MANUEL RAMON
REYES QUINTANA VICTORIO JESUS
RODRIGUEZ MARTINEZ RAFAEL
ROMERO RODRIGUEZ JOSE GIL
REZA MONTES FRANCISCO JAVIER
RODRIGUEZ MUÑOZ JOAQUIN JOSE
ROMERO SIERRA BENJAMIN
RIBAS RUBIO PEDRO
RIBERA AIGE JOSEFA
RODRIGUEZ OTERO MIRIAN
ROPERO MONTERO MIGUEL ANGEL
RODRIGUEZ PEREZ MARIA JOSE
ROS PEREZ XAVIER
RINCON GUTIERREZ MARIA PILAR
RODRIGUEZ RODRIGUEZ JUAN CARLOS
ROSILLO PAREDES MARIA MERCEDES
RIOJA ROMAN RAQUEL
RODRIGUEZ RODRIGUEZ MARIA
ROTGER LLINAS DANIEL
RIOLOBOS GALLEGO MERCEDES
RODRIGUEZ RODRIGUEZ MARIA DEL CARMEN
ROYO ESCARTIN RAQUEL
RIPOLL BARRACHINA ENRIQUE
RODRIGUEZ RODRIGUEZ SUSANA
ROYO GARCIA FRANCISCO JAVIER
RIVAS ANORO FERNANDO
RIVAS CASTRO JOSE CARLOS
RIVAS FERNANDEZ RAFAEL
RIVAS URBANO JOSE
RIVERO RIVERO SAMUEL
ROBLES SANCHEZ ROSA MARIA
RODES BIOSCA CARLOS RAFAEL
RODRIGUEZ ROGEL MANUEL ALEJANDRO
RODRIGUEZ RUIZ JUAN ANTONIO
ROGADO ROLDAN ROSA
ROYO RUIZ JOSE LUIS
ROZAS NEIRA ADRIAN
RUA PIRAME ENRIQUE
ROGET LEMUS JOSE MANUEL
RUANO BECEDAS MARIA CRISTINA
ROIG FENOLLOSA JUAN BAUTISTA
RUANO CAMPS ANTONI
ROJAS SOLER FRANCISCO
ROJAS TRONCOSO PEDRO
RUBIALES REGORDAN RAFAEL
RUBIO ALESANCO ALEJANDRO
226
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
RUBIO BERNARDEAU ANTONIA MILAGROSA
SALAET FERRES MARISA
SANCHEZ ROMERO BENITO
RUBIO GARCIA EMILIA
SALAMERO MORENO JOAQUIN
SANCHEZ SAN VICENTE GUILLERMO JESUS
RUBIO RODENAS MARIA LOURDES
SALAS SEGUI BARTOLOME
SANCHEZ SECO VIVAR CARLOS JAVIER
RUBIO SIERRA FRANCISCO JOSE
RUIPEREZ MATOQUE PIERRE
RUIZ CASAS JUAN BAUTISTA
RUIZ DEL RIO ROSA MARIA
RUIZ ESCALONA ANTONIO
RUIZ JARILLO MARIA JOSE
RUIZ LUQUE HERNAN
RUIZ MORENO EVA
RUIZ NOGALES LIDIA
RUIZ PEREZ MARIA VICTORIA
RUIZ TARI ROGELIO
SABATE NOLLA TERESA
SABES TORQUET JUAN CARLOS
SAENZ GIL DE GOMEZ DAVID
SAEZ NICOLAS JOSE RAMON
SALMERON TOLOSA MONICA
SALMON ALONSO JOSE LUIS
SANCHIS MARTIN LAURA
SANTANA GONZALEZ TEODOMIRO
SALVIA FABREGAT MARIA PILAR
SANTANDREU ROSSELLO PERE
SAMPER CAMPANALS PILAR
SANTOS HERRERA MERCEDES
SAMPER JIMENEZ JUAN ANGEL
SANTOS MACIAS MARIA ESTHER
SAN EMETERIO GAYO JAVIER
SANCHEZ BURUAGA MARTA
SANTOS MAYORDOMO RUBEN
SANTOS PAEZ SILVIA
SANCHEZ ELIZALDE JUAN FRANCISCO
SANTOS ROMAN MARIA NURIA
SANCHEZ FERNANDEZ ELENA MARIA
SANTOS GARCIA MANUEL
SANCHEZ GARCIA ALICIA
SANCHEZ GARCIA YOLANDA
SANCHEZ HERNANDEZ IVAN
SANCHEZ HERRERA PATRICIA
SANCHEZ LOPEZ MIGUEL
SANZ CALDERON FRANCISCO JAVIER
SANZ EMPERADOR JESUS ANGEL
SANZ FUENTES LUIS ALBERTO
SARDA ANTON JUAN IGNACIO
SARRI SOLE FRANCESC XAVIER
SARROCA GIL MOISES
SAUN FUERTES MARIA JOSE
RUIZ-ESTELLER HERNANDEZ GUSTAVO
SANCHEZ GONZALEZ HELENA
SANCHEZ IGLESIAS JOSE FRANCISCO
SARRIO TIERRASECA LEON
SAINZ TAJADURA MARIA VICTORIA
SANCHEZ MESA FRANCISCO
SAINZ-EZQUERRA LANAS SANTIAGO
SANCHEZ NAVARRO JOSE ANTONIO
SAURA MARTINEZ PEDRO
SAIZ SEPULVEDA FRANCISCO JAVIER
SANCHEZ PEÑA MIGUEL ANGEL
SECO FERNANDEZ LUIS ALBERTO
SALA AZORIN AURORA
SALADICH OLIVE LUIS
SANCHEZ POUSADA JULIA
SEGOVIA GOMEZ JUAN ANTONIO
SANCHEZ RODRIGUEZ Mª TERESA CARMEN
SEGURA MASSOT MARIA TERESA
227
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
SEOANE MENDEZ ROBERTO
SOLER PORTA MARIANO
TORRES DIAZ ANTONIO
SERNA MINONDO MARIA ANTONIA
SOMOZA RODRIGUEZ ESCUDERO OSCAR JOSE FELIX
TORRES MONTEJANO FELIX
TORRES PEREZ JOSE ARISTIDES
TOVAR GELABERT MARIA ENCARNACION
TRABA PUENTE SANDRA
TRILLO PEREZ PATRICIA
TRUJILLO AYMES PHILIPPE
TUÑON GARCIA JOSE GIL
SERRANO QUEVEDO RAMON
SERRANO RODRIGUEZ RAFAEL
SERRANO VACAS JUAN CARLOS
SOSA BLANCO SERVANDO
SOSA LOZANO JOSE RAUL
SOTO PASTOR RAFAEL
SERRANO DOMINGUEZ FRANCISCO JAVIER
SOUSA LAMAS ANGELES
SOUSA TEJEDA ALEJANDRA
SUAREZ CUETOS MANUEL
SERRANO ROJAS JOSE MANUEL
SETAYESH SHAHNAZ
SEVA VERA JAVIER
SEVILLA CAÑON ROBERTO
SEVILLANO MARTINEZ JUAN
SIERRA TORRE MIGUEL
SUAREZ DEL POZO JUAN ANTONIO
TUTUSAUS LASHERAS MONTSERRAT
SUAREZ RODRIGUEZ ASCENSION
UCAR ESTEBAN ROSARIO
SUAREZ RODRIGUEZ Mª DEL CARMEN
UREÑA FERNANDEZ FEDERICO
SUBIRATS ESPUNY MARIA DOLORES
URIAGUERECA CARRILERO FRANCISCO JAVIER
SIGNES CASANOVES BERNARDO CRISTOBAL
SUBIRON GARAY RAFAEL
URRERO SANTIAGO LUIS
SILVA FERNANDEZ CRISTINA
TABACO MARTIN JUAN ANTONIO
VACA DELGADO ANDRES JESUS
SILVA HUERTAS MIGUEL ANGEL
TABORGA ONTAÑON ANTONIO JOAQUIN
VADILLO ALMAGRO MARIA VICTORIA
SILVERA BARRIOS MARIA ISABEL
TARIN BOSCH JUAN JESUS
VALCARCEL GRANDE FRANCISCO JAVIER
SIMON BENITO JOSE JUAN
TELLECHEA ABASCAL PEDRO MANUEL
VALCARCEL LOPEZ ALFONSO
SIMON MARTIN ANTONIO MIGUEL
TENA LAGUNA LORENZO
VALENCIA MUÑOZ JOSE JAVIER
SINDIN RODRIGUEZ NOELIA
SINTAS NOGALES FRANCISCO
TIRADO ZARCO ESMERALDA
VALENCIA TRENADO MANUEL RODRIGO
TOIMIL SOMESO MARIA DOLORES
VALIENTE GARCIA DEL CASTILLO ANTONIO
SISNIEGA REVUELTA MARIA JESUS
TOLEDO VALIENTE MARIA GLORIA
SMITH BASTERRA FRANCISCO JAVIER
TORMOS MARTINEZ ISIDRO
VALLS BENAVIDES IGNACIO
VAN CAMP VANESSA IRMA
SOBRINO BRUY MANUEL
SOLER ASCASO Mª LOURDES
TORRECILLAS BELMONTE JOSE MARIA
VAQUERO GOMEZ JOSE MANUEL
TORRENS SERRA JOAN ANTONI
VAZQUEZ DIEGUEZ JOSE ANDRES
228
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
VAZQUEZ FERREIRO ALFONSO
VIÑAO BALLARIN MARIA ANGELES
ABONA GESTION SERVICIOS INTEGRADOS, S.L.
VAZQUEZ FIGUEIRAS JULIA
VAZQUEZ SANTOS CRISTINA
VEGA GARCIA CRISTIAN
VEIGUELA LASTRA CARLOS MARIA
VISEN ARTEMIZA
VIVER MIR JAIME JAVIER
VIZAN ALONSO AURORA
WALS FERNANDEZ PETRA
ACEGA ASESORES, S.L.
ACENTEJO CONSULTORES, S.A.L.
ACERTIUS SUMA CAPITAL, S.L.
ACEVES Y VILLANUEVA, S.L.
VELASCO FERNANDEZ ALFONSO
WERHEIT SCHUH HERMANN JOSEF
ACOFIRMA, S.L.
VELASCO LOZANO FRANCISCO
WHITE ORR ROBERT HENRY
ACOSTA Y RUIZ CONSULTING ASEGURADOR, S.L.
VELASCO ROCA IGNACIO
WU ZOU REBECA
ACREMUN, S.L.
VENZAL CONTRERAS FRANCISCO JAVIER
YANES CARRILLO MARIA JESUS
ACTIVIDADES FINANCIERAS Y EMPRESARIALES, S.L.
VERDU CASTELL JOSEP MANEL
YUSTE SORIANO MARIA BELEN
ACTUARIOS Y SERVICIOS FINANCIEROS, S.L.
VERGEL CRESPO MARIA ISABEL
ZARATE IBARRA TEODULO LORENZO
ADA PROMOCIONES Y NEGOCIOS, S.A.
VICENTE GONZALEZ ANGEL
ZUBIZARRETA UNCETA AITOR
ADA SEQUOR, S.L.
VICENTE ROJAS MARIA INMACULADA
ZUECO GIL JESUS ANGEL
ADLANTA SERVICIOS PROFESIONALES, S.L.
VICENTE SOLDEVILA JOSE MIGUEL
ZURAWKA ERHARD RUDOLF
ADMI-EXPRES-GMC, S.L.
VIDAL JAMARDO LUIS RAMON
ZURDO RUBIO MARIA CRISTINA
ADMINISTRACION DIRECCION Y TECNOLOGIA CONSULTING, S.L.
VIDAL TROITIÑO MARIA DE LA CONCEPCION
3IMPULSA, S.C.P.
ADMINISTRACION LEGAL DE COMUNIDADES, S.L.
VIDAL ARAGON DE OLIVES GERARDO IGNACIO
3J LAVALL BUSINESS & SOLUTIONS, S.L.
ADMINISTRACIONES TERESA PATRICIA CELDRAN, S.L.
VILA BARCELO ALFONS
A 5 ASESORES CONSULTORES, S.L.
ADMINISTRADORES COMMUNITY GROUP, S.L.
VILLACE MEDINA JUAN CARLOS
A&J SANMARTIN DE PRADAS CONSULTORES, S.L.
ADMINISTRADORES DE BIENES Y ASESORES CONTABLES, S.L.
VILLAGRASA ROS ANTONIO
VILLEGAS SABIO RAMON
VILLORO OLLE ROGER
VINYES SABATA MERCÉ
VIÑA ARASA RICARDO
ABADIA EXPLOTACIONES HOTELERAS, S.L.
ADOE ASESORES, S.L.
ABBANTIA ABOGADOS BILBAO, S.L.
ADOLFO SANCHEZ ASESORES TRIBUTARIOS, S.L.
ABEMPATRI, S.L.
ADVICE LABOUR FINANCE SOCIETY, S.L.
ABOGADOS & ASESORES EUROPEOS, S.L.
AEMTIA ASSESSORS, S.L.U.
ABOGAP SERVICIOS INTEGRALES, S.L.U.
AEQUUS ABOGADOS, S.L.
229
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
AESTE, S.L.
ALF CONSULTORES Y SERVICIOS FINANCIEROS Y SEGUROS, S.L.
ANGMAR 2015, S.L.U.
AFIANZA FINANCIERA, S.L.
ALFREDO RUIZ ASESOR FINANCIERO, S.L.
ANTEQUERA ASESORES, S.L.
AFIANZA GESTION EMPRESARIAL, S.L.
ALGESORES NAVARRO Y ASOCIADOS, S.L.
ANTONIO ALEGRET GALLART, S.L.
AFISEG II, S.L.
ALIVIA SERVICIOS INTEGRALES, S.L.
ANTONIO PONS Y ASOCIADOS, S.C.
AFITEC INVERSIONES, S.L.
ALKAIMENA, S.L.
APEKONO 1964, S.L.
AFYSE INIESTA ASESORES, S.L.
ALL ABOUT FUNDS, S.L.
APF3 SERVICIOS DE ASESORIA, S.L.
AGENCIA FERRERO Y LAGARES, S.L.
ALLES IST MOGLICH, S.L.
APISA ADMINISTRACION DE INMUEBLES, S.L.
AGENCIA JOSE OLIVA-JOV, S.L.
ALONSO Y SERODIO ASESORES, S.L.
APUNTES CONTABLES, S.L.
AGENCIA ROMERO OGANDO, S.L.
ALPEREZG SERVICIOS PARA EMPRESAS, S.L.
ARAGESTIN, S.L.
AGORA PROFESS, S.L.
AGRAMUNT BUILDING, S.L.
ALPHALYNX CAPITAL, S.L.
ARANE PROMOCION Y GESTION, S.L.
ALQABALA GRUPO GESTOR, S.L.
ARANZABAL SERVICIOS FINANCIEROS, S.L.
AGUSTIN FERNANDEZ CRUZ AFC, S.L.
ALTER FORMA ABOGADOS, S.L.
ARBO MASNOU ASSESSORIA, S.L.U.
AIMER AGRONOMIA, S.L.U.
ALVAMAR GESTIONES Y CONTRATACIONES, S.L.
ARCAYANA CONSULTING, S.L.
AIRU ASESORES, S.L.
AISM, S.L.
ALZAGA ASESORES, S.L.
ALZO CAPITAL, S.L.
AKIRO SERVICIOS EMPRESARIALES, S.L.
AMTEMIS ASSESSORS, S.L.
ALARCON BUENO, S.L.
AN ASESORES DEZA, S.L.
ARCO R ASESORES, S.C.
ARDORA CORPORATE, S.L.
ARES CONSULTORES, S.L.
ARGIGES BERMEO, S.L.
ALBA & ARCOS ASOCIADOS, S.L.
ANAI INTEGRA, S.L.
ARILLA CIUDAD ASESORES, S.L.
ALBA ASESORIA INTEGRAL, S.L.
ANDAL DE ASESORAMIENTO Y GESTION, S.L.
ARIS GESTION FINANCIERA, S.L.
ALBOA 17.8, S.L.
ALC ASESORES, S.C.
ALCES GRUPO ASEGURADOR, S.L.
ANDEX CONSULTORES, S.L.
ARRAUT Y ASOCIADOS, S.L.
ANDIPLAN, S.L.
ANDISARU, S.L.
ARTI INVERSIONES Y PATRIMONIOS, S.L.
ASDE ASSESSORS, S.L.
ALDAIA 94, S.L.
ANDUGAR-CARBONELL ABOGADOS, S.L.
ASEBIL - HERBLA ASESORES, S.L.
ALEXA ESTRATEGIA EMPRESARIAL, S.L.
ANGLIRU INVERSIONES, S.L.
ASECAN GESTION INTEGRAL, S.L.U.
230
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
ASECOLAFI LAFUENTE, S.L.
ASESORIA ADOLFO SUAREZ, S.L.
ASESORIA ENRIQUE YAÑEZ, S.L.
ASEDIEM PROFESIONALES, S.L.N.E.
ASESORIA ANTONIO JIMENEZ LOPEZ, C.B.
ASESORIA ERAKIN AHOLKULARITZA, S.L.
ASEDORA BSB, S.L.
ASEFISTEN, S.L.
ASESORIA AREGUME, S.L.U.
ASESORIA EUROBILBAO, S.L.
ASESORIA ASETRA, S.L.
ASESORIA EXPANSION 2001, S.L.
ASEGI SERVICIOS FINANCIEROS, S.L.
ASESORIA ATAGESA, S.L.
ASESORIA FINANCIERA CUBICA, S.L.
ASEM INDAFISA GESTION EMPRESARIAL, S.L.
ASESORIA ATAMAN, S.L.
ASESORIA FINANCIERA IBAIGANE, S.L.
ASEMRECA, S.L.
ASEMVA 1999, S.L.
ASEMYL, S.L.
ASER FINANCIEROS, S.L.
ASESORIA AUDITORIA ASCOR, S.L.
ASESORIA FINANCIERA LUGO, S.L.
ASESORIA BASTIAS, S.L.
ASESORIA BELLAVISTA, S.L.
ASESORIA BERCONTA, S.L.
ASESORIA FINANCIERO CONTABLE CLOT, S.L.
ASESORIA FISCAL CONTABLE Y LABORAL TRIBUTO, S.L.
ASESORIA FISCAL LULL, S.L.
ASES ASESORES Y CONSULTORES, S.L.
ASESORIA BLANCO, S.L.
ASESORIA FISCAL SANTIAGO, C.B.
ASESCON GESTION INTEGRAL, S.L.
ASESORIA CAMINO, S.L.
ASESORIA GAMASERVI, S.L.
ASESORAMIENTO FINANCIERO E INMOBILIARIO MADRID 2002, S.L.
ASESORIA CARRETERO JOVANI, S.L.
ASESORIA GARCIA LOPEZ, S.L.
ASESORAMIENTO PROFESIONAL CANARIO, S.L.
ASESORIA CATALAN FABO, S.L.
ASESORIA GESTION PATRIMONIAL DE ENTIDADES RELIGIOSAS, S.L.
ASESORAMIENTO, CONTABILIDAD Y SERVICIOS ADMINISTRATIVOS, S.L.
ASESORIA CAUDELI, S.L.
ASESORES DE EMPRESA AFILCO, S.L.
ASESORIA CERVANTES, S.L.
ASESORIA GILMARSA, S.L.
ASESORIA GOARTE, S.L.
ASESORES DE EMPRESA Y GESTION ADMINISTRATIVA MARIN & MARIN, S.L.
ASESORIA CM, C.B.
ASESORIA GONZALEZ VALDES, S.L.
ASESORES DO BAIXO MIÑO, S.L.
ASESORIA DE EMPRESAS CARANZA, S.L.
ASESORIA GORROTXA ASEGUROAK, S.L.
ASESORES E INVERSORES EPILA, S.L.
ASESORIA DE EMPRESAS RC, S.L.
ASESORIA HERGON, S.L.
ASESORES MOLINA, S.L.
ASESORIA DEL VALLE, C.B.
ASESORIA HIDALGO JUAREZ, S.L.
ASESORES Y CONSULTORES AFICO, S.L.
ASESORIA DEUSTO, S.L.
ASESORIA INFIS, S.L.
ASESORES Y CONSULTORES, C.B.
ASESORIA EMPRESARIAL CATALANA, S.L.
ASESORIA INTEGRAL DE FARMACIAS Y EMPRESAS, S.L.L.
ASESORIA & CONSULTORIA, S.C.P.
ASESORIA EMPRESARIAL LAS MARINAS, S.L.
ASESORIA INTEGRAL RONDA, S.L.
ASESORIA A.B., C.B.
ASESORIA EMPRESARIAL POSE, S.L.
ASESORIA JIMENEZ, S.C.
231
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
ASESORIA JOSE ADOLFO GARCIA, S.L.
ASESORIA VIA LIGHT, S.L.U.
ASSESSORIA CAMATS GARDEL CORREDURIA DE SEGUROS, S.L.
ASESORIA JURIDICA Y DE EMPRESAS, S.L.
ASESORIA VICO, S.L.
ASSESSORIA COSTA BRAVA, S.L.
ASESORIA LABORAL FISCAL JURIDICA MMB, S.L.
ASESORIA Y FINANZAS DEL ORIENTE, S.L.
ASSESSORIA DOMINGO VICENT, S.L.
ASESORIA Y SEGUROS PUERTO DE LA TORRE, S.L.
ASSESSORIA EUROCOMPTE LLORET, S.L.
ASESORIA Y SERVICIOS DE GESTORIA CABELLO, S.L.
ASSESSORIA I SERVEIS CAN BORRELL, S.L.
ASESORIA LABORDA, S.C.
ASESORIA LASER, S.L.
ASESORIA LEMA Y GARCIA, S.L.
ASESORIA LIZARDI, S.L.
ASESORIA ZUBIRI, S.L.
ASESORIAS ISADOR, S.L.
ASESORIA MANCISIDOR, MURGA Y BRATOS, S.L.
ASESORIAS NAPOLES, S.L.
ASESORIA MARCOS FERNANDEZ, S.L.
ASESORIA MERCANTIL DE ZALLA, S.L.
ASESORIA MERCANTIL, S.L.
ASESORIA MERFISA, C.B.
ASESORIA MONTERO Y SOLANO, S.L.
ASESORIA OLIVER TORRENS, S.L.
ASESPA , S.L.
ASETUR, C.B.
ASEVALLES, S.L.
ASFIPA , S.L.
ASFITO, S.L.
ASIEXCAN, S.R.L.
ASESORIA ONLINE GRG, S.L.
ASOCIADOS BILBOINFORM 2000, S.L.
ASSESSORIA MARGARIT, S.L.P
ASSESSORIA PONENT, S.L.
ASSESSORIA VISERTA, S.L.
ASSESSORS EMPRESARIALS ASEMAX, S.L.P.U.
ASSESSORS FINANCERS CASTELLAR XXI, S.L.L.
ASSESSORS GOMEZ & CAMPOS, S.L.
ASSPE VILANOVA, S.L.
ASTILSUR 2012, S.L.
ASUNFIN, S.L.
AT. VIGO, S.L.
ASESORIA PANIAGUA, S.L.
ASESORIA RA-ES, S.L.
ASSECOM BIZKAIA S. COOP. PEQUEÑA
ATENCION Y GESTION PROFESIONAL, S.L.
ASSESMERCAT, S.L.P.
AUDAL CONSULTORES AUDITORES, S.L.
ASESORIA RAMILO E BOTANA, S.L.
ASSESSORAMENT EMPRESARIAL CABRE I ASSOCIATS, S.L.
AUDICONMUR, S.L.
ASESORIA RANGEL 2002, S.L.
ASSESSORAMENT INTEGRAL MAESTRAT, S.L.
AULES ASESORES, S.L.
ASESORIA SAGASTIZABAL, S.L.
ASSESSORAMENT MIRA MARTINEZ, S.L.
AUREA JURISTAS Y ASESORES FISCALES, S.L.P.
ASESORIA SANCHEZ & ALCARAZ, S.L.
ASSESSORAMENTS I SERVEIS LLEIDA, S.L.
AURELIO ALVAREZ SALAMANCA, S.L.
ASESORIA SORIANO GRANADA, S.L.
ASSESSORIA AREA ECONOMICA LEGAL, S.L.
AURVIR & PEÑA CONSULTORES, S.L.
ASESORIA TOLEDO DE SACEDON, S.L.
ASSESSORIA BAIX PENEDES, S.L.
AVANT PERSONAL SERVICES, S.L.
ASESORIA VELSINIA, S.L.
ASSESSORIA BUFET JURIDIC SM&TA, S.L.
AVANTIS ASESORES JURIDICOS, S.L.
232
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
AVARUA CONSULTING, S.L.
BENIDORM NCS CONSULTING EMPRESARIAL, S.C.V.
BRAVOSOL GESTION, S.L.
AVENTA, S.L.U.
AVENTIS ASESORES, S.L.
BERNAD GESTION FINANCIERA, S.L.
BROKER F2, S.L.
BERNAOLA ASEGURO ARTEKARITZA , S.L.
BROKERMAM NOVA CORREDURIA DE SEGUROS, S.L.
AXENTES FINANCEIROS DE BALTAR, S.L.
BETRIU ADVOCATS, S.C.P.
BUFET ENRIC LLINAS, S.L.P.
AYCE CONSULTING, S.L.
BG ASESORIA DE FINANZAS E INVERSIONES, S.L.
BUFET JORDI DOMINGO, S.L.P.
AYUDA Y CREDITO CONSULTORES, S.L.
BHEX ASESORES, S.L.P.
BUFET MILARA, S.L.
AZ BILBAO GESTION INTEGRAL, S.L.
BILBAO CONSULTORES GLOBALES, S.L.
BUFET PUIG I ASSOCIATS, S.L.P.
B&S GLOBAL OPERATIONS CONSULTING, S.A.
BINIPOL 2001, S.L.
BUFETE CANOVAS, S.C.P.
BADALONA ASESORES, S.C.C.L.
BIOK ZERBITZUAK, S.L.
BUFETE CHAMIZO GALAVIS, S.L.
BAENA ASESORES Y CONSULTORES EMPRESARIALES, S.L.
BIRMANI PROMOCIONS, S.L.
BUFETE MADRIGAL Y ASOCIADOS, S.L.
BAFINCA ESTUDIO FINANCIERO, S.L.
BIZKAIBOLSA, S.A.
BUFETE MARTINEZ GARCIA, C.B.
BAGUR CARRERAS ASSESSORS, S.L.
BKBM CONSULTING INVESTMENT, S.L.
BUFETE ROMERO Y MONGE, S.L.
BAILEN ASESORES CONSULTORES, S.L.
BL ECONOMISTES, S.L.P.
BUFETE VARGAS DE LA CAL Y ASOCIADOS, S.C.
BANESFIN, S.L.
BARBESULA MAR, S.L.
BLADYDUNA, S.L.
BUSBAC SERVEIS, S.L.
BLAI GABINET DE SERVEIS, S.L.
BUSINESS, DEVELOPMENT AND KNOWLEDGE, S.L.
BARREIROS Y ASOCIADOS CONSULTORES, S.L.
BLANCO & MARTIN ASESORES, S.L.
BARRENA CARABALLO, S.L.U.
BLANCO PARRONDO, C.B.
C. BURGOS GATON, S.L.
CACERES PORRAS, C.B.
BASCUAS ASESORES, S.L.
BLANCO Y PARADA ASESORES, S.L.
CADENAS DE LLANO, S.L.
BAZAR NAVAS, S.L.
BELCASTI, S.L
BENALWIND, S.L.
BLAUSERVEIS PROFESSIONALS, S.L.
CAFARES, S.L.U.
BOALAR INVESTMENT, S.L.
BONMATI COMPTABLE, S.L.
CAMPDEPADROS CORREDURIA D'ASSEGURANCES, S.L.
CAMPOS DE PALACIOS ASESORES CORREDURIA DE SEGUROS, S.L.
BENAVIDES & MUÑOZ ASSOCIATS, S.L.
BOSCH BATLE CONSULTORIA, S.L.
CANOVAS 1852, S.L.
BENCHMARK 5 V'S, S.L.
BOUTIQUE DEL SEGURO BALEAR CORREDURIA DE SEGUROS, S.L.
CANTELAR Y SAINZ DE BARANDA, S.L.
BENGOETXEA Y ASOCIADOS , S.L.P.
BRAIN STAFF, S.L.
CANTOS Y PASTOR CONSULTING, S.L.
233
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
CAÑADA SANCHEZ, S.L.
CHOGUY, S.L.
CONSULTORES GRUPO DELTA PAMPLONA, S.L.
CAÑELLAS BROS ASSESSORS, S.L.P.
CLAVE OPTIMA BUSINESS, S.L.U.
CONSULTORES LEONESES, S.L.
CAPAFONS Y CIA, S.L.
CLAVELL & SAINZ DE LA MAZA ASESORES, S.L.
CONSULTORIA ADMINISTRATIVA DE EMPRESAS CADE, S.L.
CAPON CONSULTORES, S.L.
CLUB AVOD, S.L.
CONSULTORIA CIUDADANA EN GESTION Y SEGUROS, S.L.U.
CARRETERO E IZQUIERDO ASOCIADOS, S.L.
CLUSTER ASESORES, S.L.
CONSULTORIA FINANCIERA GARCIA CRUZ, S.L.
CARRO FERNANDEZ ASESORES, S.L.
CLUSTER BUSINESS GROUP, S.L.
CONSULTORIA FINANCIERA PONTEVEDRA, S.L.
CATDINV CORPORATE FINANCE, S.L.L.
CODELVA GESTION, S.L.
CONSULTORIA ORTIZ & ASOCIADOS, S.L.
CAUCE CONSULTORES DE NEGOCIO, S.L.
COLLET I DURAN, S.L.
CONSULTORIA PIÑERO, C.B.
CAURIA PROMOCIONES, S.L.
COLON DE CARVAJAL SOLANA CARDONA ABOGADOS, S.L.P.
CONSULTORIA SANTA FE, S.L.
CE CONSULTING ABOGADOS VIGO, S.L.P.
COMES & ASOCIADOS ASESORES, S.L.P.
CONTABILIDADES INFORMATIZADAS DE SAN ANTONIO, S.L.
CEASA ASESORES FISCALES, S.L.
COMPAÑÍA VIZCAINA DE ASESORIA, S.L.
CONTAS, C.B. LA ESTRADA
CECEA INTER, S.L.
COMPASS CONSULTING SPAIN, S.L.
CORSAN FINANCE, S.L.
CENTRAL INTERNACIONAL DE SERVICIOS Y ASESORAMIENTO, S.L.
CONFIANZ, S.A.P.
COSENOR INSURANCE BROKER, S.L.
CENTRE ASSESSOR TERRAFERMA, S.L.
CONFIDENTIAL GESTION, S.L.
COSTAS NUÑEZ ASESORES, S.L.
CENTRE CORPORATIU INI 6, S.L.
CONMEDIC GESTIONS MEDICAS, S.L.
COVIBAN ASESORES INMOBILIARIOS, S.L.
CENTRE FINANCER BERENGUER SAPENA XABIA, S.L.
CONSULTING DONOSTI, S.L.
COWORKING HOSPITALET, S.L.
CENTRE GESTOR, S.L.
CONSULTING EMPRESARIAL CASARES, S.L.
CREDYCAU DOHER SURESTE, S.L.U.
CENTRO ASESOR MONTEHERMOSO, S.L.
CONSULTING JL ARBILLAGA, S.L.P.U.
CRITERION SONSULTING, S.L.
CENTRO DE ESTUDIOS ROMO & CAMPOS, S.L.
CONSULTOR FINANCIERO Y TRIBUTARIO, S.A.
CROSS ASESORES, S.L.
CENTRO DE NEGOCIOS ASERGALICIA, S.L.
CONSULTORES DEL NORTE, S.L.
CUBERO PATRIMONIOS, S.L.
CERTIS MEDIUM, S.L.
CERTOVAL, S.L.
CONSULTORES ECONOMICOS Y PATRIMONIALES AAA, S.L.
CUELLAR MERCANTIL ASESORIA, S.L.
CONSULTORES EMPRESARIALES TORRES ALBA, S.L.
CUTTER BUSINESS, S.L.
CHAMORRO MULTISERVICIOS, S.L.
CONSULTORES FINANCIEROS LABORALES, S.L.
DANTE ASSESSORS, S.R.L.
CHICLANA 9, S.L.
CONSULTORES FINANCIEROS Y PSICOLOGIA JURIDICA, S.L.
DARA SPORTS, S.L.
234
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
DE CAMBRA AGOGADOS, S.L.
EFILSA, S.C.
ESTUDIO FINANCIERO AVANZADO, S.L.
DE LA FUENTE & MARTIN ALONSO ABOGADOS, S.L.
EKO - LAN CONSULTORES, S.L.
ESTUDIO FISCAL BARCELONA, S.L.
DEEP TIMER, S.L.
EL PINOS GESTION LABORAL, S.C.
EUROFISC CONSULTING, S.L.
DELFOS ASESORIA FISCAL, S.L.
EL ROBLE PROTECCION, S.L.
EUROFOMENTO EMPRESARIAL, S.L.
DESPACHO ABACO, S.A.
ELISENDA VILA ADVOCATS, S.L.P.
EUROGESTION XXI, S.L.
DESPACHO J.M. COARASA, S.L.
EMASFA, S.L.
DESPACHO, TRAMITACION Y GESTION DE DOCUMENTOS, S.L.
ENERGIA Y DATOS, S.L.
EUROMAULE, S.L.
EUROTAX ABOGADOS, S.L.
DIAZ GARCIA ASESORES Y CONSULTORES, S.L.U.
ENRIQUE AMOR CORREDURIA DE SEGUROS, S.L.
EVALUACION CUANTITATIVA, S.L.
DIAZ Y FERRAZ ASOCIADOS, S.L.
ENTIDAD INTEGRAL DE ACCION Y AYUDA SOCIAL 'EIA'
EXAMERON, S.L.
DIMANA ASESORES, S.L.
DINAPIXEL, S.L.
ENTORNOS RURALES Y URBANOS, S.L.
F. D. PANTIGA, S.L.
EPC ASSESORS LEGALS I TRIBUTARIS, S.L.
FAMILYSF SALUFER, S.L.
DOBLE A AVILA ASESORES, S.L.
EROSMARVAL 2013, S.L.
FARIZO ASESORES, S.L.U.
DOMENECH GIMENO GESTIO, S.L.
ERUDITISSIMUS DISCIPLINA IURIS, S.L.
FARMASERVICIOS Y CONSULTORIA, S.L.
DOMUS AVILA, S.L.
ESCAMILLA ASESORES, S.L.
DORRONSORO URDAPILLETA, S.L.
ESCOBAR Y SANCHEZ ABOGADOS, S.L.
DOSA ILERGESTION, S.L.
DOWNTOWN IBIZA, S.L.
ESCRIBANO ABOGADOS, S.L.
ESCRIVA & SANCHEZ CONSULTORES, S.L.P.
FASE ASESORES, S.L.
FASER 89, S.L.
FAUSBE 2005, S.L.
FELEZ BIELSA, S.L.
DUPLA CONSULTORES, S.L.
ESCRIVA DE ROMANI, S.L.
FELIX AHOLKULARITZA, S.L.
DURFERAL, S.L.
ESCUDEIRO Y RODRIGUEZ VILA, S.L.P.
FEMIDA CONSULTING, S.L.
E.C. ASESORES 2006, S.L.
ESINCO CONSULTORIA, S.L.
FERNANDEZ GALBIS, RAMIREZ DE CARTAGENA Y BRAZO, S.L.
ECBATAN, S.L.
ECONOMIALEGAL, S.L.
EDISATEL ASESORES, S.L.
ESTANY DE PEGUERA, S.L.
ESTHA PATRIMONIOS, S.L.
FERNANDEZ SERRA, S.L.
FERNANDO BAENA, S.L.
ESTRADA DA GRANXA 6, S.L.
FERPAPER, S.L.
EDUARDO ALBERDI ZUBIZARRETA Y OTRA, C.B.
ESTRATEGIA FINANCIERA EMPRESARIAL, S.L.
FICOTEC ASESORAMIENTO, S.L.
235
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
FINACO ASESORES, S.L.
FUENTES & GESCOM, S.L.
GARO ASESORIA CONSULTORIA Y AUDITORIA, S.L.
FINANCIAL AGENTS GANIVET, S.L.
FUSTER Y G. ANDRES ASOCIADOS, S.L.
GARRIDO ABOGADOS, S.L.P.
FINANCIAL LIFE PLANNING, S.L.
FINANCIAL PREMIUM CATALUNYA, S.L.
FINANCIAL TOOLS BCN, S.L.
FINANCIERA 2000 ASD, S.L.
G & G ASESORES, C.B.
G Y G ABOGADOS, S.L.
G&P, C.B.
GARVIN Y FISAC CONSULTORES, S.L.
GARZON SERVICIOS EMPRESARIALES, S.L.
GASEM SERVICIOS, S.L.
GABINET ADMINISTRATIU RAMON GOMEZ, S.L.
GAVAMAR 2011, S.L.
FINANCIERA AGRICOLA DEL PONIENTE, S.L.
GABINET D'ECONOMISTES ASSESSORS FISCALS, C.B.
GAYCA ASESORES, S.L.
FINANCIERA MAYORGA, S.L.
GABINETE AFIMECO ASESORES, S.A.L.
GEMMA HERNANDEZ, C.B.
FINANCO CONSULTORES, S.L.
GABINETE ASESOR THALES, S.L.
GENERAL DE SERVEIS LA SEGARRA, S.L.
FINANSER CONSULTORES, S.L.
GABINETE EMPRESARIAL SALMANTINO, C.B.
GENERAL MEAT, S.L.
FINCAS DELLAKUN, S.L.
GABINETE JURIDICO GESFYL, S.L.
GEP HIPOTECAS, S.L.
FISCOGEST CONSULTING EMPRESARIAL, S.L.U.
GABINETE JURIDICO-FINANCIERO SERRANO, S.L.
GESAL ASESORIA, S.L.
FISCOPYME, S.L.
FISLAC ASESORES, S.L.
FOCUS PARTNERS, S.L.
FORMATEDAT, S.L.
FORNIES & GUELBENZU, S.L.
FORUARGI, S.L.
FORUMLEX XXI, S.L.
GABINETE LAREU Y SEOANE, S.L.
GESCOFI OFICINAS, S.L.
GAIZKA MUNIATEGUI MUSATADI - IKER BILBAO ZUAZUA, C.B.
GESDIA ASESORES, S.L.U.
GALATEA SYSTEMS, S.L.
GESLALIN, S.L.
GALILEA MARTINEZ ASESORES, S.L.
GESMADRID ABOGADOS, S.L.P.
GALIOT ASESORES, S.L.
GALMES SUREDA, S.L.
GAMTRIS 2006, S.L.
GESMUÑOZ GESTORIA ADMINISTRATIVA, S.L.P.
GESPIME ROMERO MIR, S.L.
GESPYME GESTIO I ASSESSORAMENT DE PYMES, S.L.
FRANCES Y BARCELO, C.B.
GARCES SUAREZ ASESORES, S.L.
GESTICONTA 2000, S.L.
FRANCIAMAR, S.L.
GARCIA LOPEZCONSULTORES, S.L.P.U.
GESTINSERVER CONSULTORES, S.L.U.
FRANCISCO JOSE PEÑUELA SANCHEZ, S.L.
GARCIA LUCHENA ASESORES, S.L.
GESTIO I ASSESSORAMENT OROPESA, S.L.
FRANK ASESORES, S.L.
FRESNO CAPITAL, S.L.
GARCIA MATEO ASESORES, S.L.U.
GESTION ASCEM, S.L.
GARFE, ASESORAMIENTO Y GESTION EMPRESARIAL, S.L.
GESTION DE INVERSIONES Y PROMOCIONES ELKA CANARIAS, S.L.
236
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
GESTION ESTUDIO Y AUDITORIA DE EMPRESAS GEA, S.L.
GESTORIA ADMINISTRATIVA PALOP ALCAIDE, S.L.P.
GLOBAL TAX GESTION, S.L.
GESTION FINANCIERA CONSULTORA EMPRESARIAL, S.L.
GESTORIA ADMINISTRATIVA SAN JOSE, S.L.
GONZALEZ & PARDAVILA, S.C.
GESTION FINANCIERA MIGUELTURRA, S.L.
GESTORIA ARANA, S.L.
GONZALEZ & SANTIBAÑEZ GESTION, S.L.
GESTION I ASSEGURANCES PERSONALIZADES, S.L.
GESTORIA ARENYS, S.L.P.
GESTION INTEGRAL CONTRERAS, S.L.P.U.
GESTORIA ASFER, S.L.
GRACIA-HERNANDEZ-LAPEÑA ASESORIA Y CONSULTORIA INTEGRADAS,
S.L.
GESTION INTEGRAL DE EMPRESAS FUSTER, S.L.
GESTORIA CORDOVA OF.TRAMIT. Y GESTION ADMTVA., S.L.
GESTION PARERA, S.L.
GESTORIA ESTRADA OSONA, S.L.P.
GESTION Y FINANZAS ZARAGOZA, S.A.
GESTORIA GARCIA NAVARRO, S.L.P.
GESTION Y SERVICIOS JOVER, S.L.
GESTORIA GARCIA POVEDA, S.R.L.
GESTION Y SERVICIOS SAN ROMAN DURAN, S.L.
GESTORIA HERMANOS FRESNEDA, S.L.
GESTIONA E INNOVA SERVICIOS ADMINISTRATIVOS, S.L.U.
GESTORIA IVORRA, S.L.P.U.
GESTIONA MADRIDEJOS, S.L.
GESTORIA JUAN AMER, S.L.
GESTIONAMOS 64, S.L.
GESTORIA LLURBA GARZON, S.L.
GESTIONES MARTIN BENITEZ, S.L.
GESTORIA MALINGRE GRANDE, S.L.
GESTIONES ORT-BLANC, S.L.
GESTORIA MONTSERRAT, S.L.
GESTIONES Y SOLUCIONES EFFICAX, S.L.
GESTORIA PARETS, S.L.
GESTIONS EMPRESARIALS CABIROL, S.L.
GESTORIA PARIS, S.L.
GESTIOR CONSULTING, S.A.
GESTITRAMI FINANCIAL, S.L.
GESTMILENIUM VALORES, S.L.
GESTORIA POUSA Y RODRIGUEZ, S.L.
GESTORIA ROYO LOPEZ, S.L.
GESTORIA RUIZ MILLAN, S.L.
GESTORA DE SERVICIOS ECOFIN, S.L.
GESTVILL ASESORIA VILA-REAL, S.L.U.
GESTORDIZ, S.L.L.
GIL MANSERGAS, C.B.
GESTORED CONSULTING, S.L.
GIL MAYORAL CORREDURIA DE SEGUROS, S.L.
GESTORIA ADMINISTRATIVA LASTRA, S.L.
GLOBAL MARKETING CONSULTIG Y GESTION, S.L.
237
GRADO CONSULTORES, S.L.
GRAN CANARIA ELEGANCE 7, S.L.
GRANADOS ASSESSORS CONSULTORS, S.L.
GROS MONSERRAT, S.L.
GRUP DE GESTIO PONENT DOS ASSEGURANCES, S.L.
GRUP SBD ASSESSORAMENT I GESTIO, S.L.
GRUPAMERO ADMINISTRACION, S.L.
GRUPO 1 ASESORES, S.C.A.
GRUPO BABAC, S.L.
GRUPO DTM CONSULTING, S.L.
GRUPO FERRERO DE ASESORIA , S.L.
GRUPO FINANCIERO TALAMANCA 11, S.L.
GRUPO SURLEX, S.L.
GRUPODOMO 2002, S.L.L.
GUADALPICO, S.L.
GUERIANO, S.L.
GUILLEN & GIL BUSINESS & CONSULTING, S.L.
GURRIA Y ASOCIADOS, S.C.
GUTIERREZ DE GUEVARA, S.L.
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
HELP CONTROL DE GESTION, S.L.
INGARBO, S.L.
INVERSIONES TECNICAS GRUPO CHAHER, S.L.
HERAS GABINETE JURIDICO Y DE GESTION, S.L.
INICIATIVA EMPRENDEDORA, S.L.U.
INVERSIONES TRAVESERA, S.A.
HERCA CONSULTING, S.L.
HERNEZ GESTORES, S.L.
HERVI, C.B.
INLASTIME, S.L.
INVERSIONES Y GESTION AINARCU, S.L.
INMOBILIARIA DONADAVI, S.L.
INVERSORA MARTIARTU, S.L.
HEVIAN CONSULTORES FINANCIEROS, S.L.
INMONAEVA, S.L.
INMOGEST2012, S.L.
INVERSUR 4 CUATROS, S.L.
INVERTIA SOLUCIONES, S.L.
HIDALGO GESTIO, S.L.
INNOVACIONES FINANCIERAS, S.L.
INVEST FINANZAS, S.L.U.
IB2CLOUD, S.L.
IBERBRIT, S.L.
INPOL DESARROLLOS URBANISTICOS, S.L.
INVESTIMENTOS XURDE PABLO, S.L.
INSERVICE D & B, S.L.
IRDIN AUTOMOTIVE,S.L.
IBERBROKERS ASESORES LEGALES Y TRIBUTARIOS, S.L.
INSTITUTO DE ASESORAMIENTO EMPRESARIAL INSESA, S.L.
ISDAGAR 2000, S.L.
IBERFIS GESTION FINANCIERA, S.L.
INSUAS SARRIA, S.L.
ISLA CONSULTING 2014, S.L.
IBERGEST ASESORIA, S.L.L.
INTASSE EMPRESARIAL, S.L.
ITSASADARRA, S.L.
IBERKO ECONOMIA Y GESTION, S.L.
INTEGRIA ENERGIA EMPRESAS EUROZONA, S.L.
ITZEA, S.L.
IBEROS CAPITAL ADVISORS, S.L.
INTELIGENT CENTER SERVICE, S.L.
IURIS ASSESSORS VIFE, S.L.P.
ICIAR VILLANUEVA CORREDURIA DE SEGUROS, S.L.
INVAL 02, S.L.
IXPE ASSESSORS 94, S.L.
IGLESIAS MACEDA BARCO ABOGADOS, C.B.
INVERGESTION MALLORCA, S.L.
IZQUIERDO - PARDO, S.L.P.
IGNACIO CONSTANTINO, S.L.
ILLESLEX, S.L.
INVERGU 2914, S.L.
INVERSAN BROKERS, S.L.
J B CONSULTING FINANCIERO, S.L.
J L COLOMINA C CEBRIAN ERNESTO ANTON, C.B.
ILURCE ASESORES Y CONSULTORES, S.L.
INVERSIONES 16 DE SERVICIOS FINANCIEROS E INMOBILIARIOS, S.L.
J. A. GESTIO DE NEGOCIS, S.A.
INCOS, COMERCIALIZADORA PARA EMPRESAS DE SERVICIOS, S.L.
INVERSIONES BARCARES 55, S.L.
INDICE GESTION, S.L.
INVERSIONES CASTUERA, S.L.
J. MIR CONSULTORIA, S.L.
J. RETA ASOCIADOS, S.L.
INDOS INGENIEROS DE SISTEMAS, S.L.
INVERSIONES GEFONT, S.L.
J.F. BONIFACIO SERVICIOS INTEGRALES, S.L.
INFEM, S.L.
INFOGES PYME, S.L.
INVERSIONES IZARRA 2000, S.L.
J.M. CORUJO ASESORES, S.L.
INVERSIONES MARTINEZ ESPINOSA E HIJOS, S.L.
JARVEST GESTION DE INVERSIONES, S.L.
238
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
JAVIER CARRETERO Y ASOCIADOS, S.L.
JAYLA CELA, S.L.
JBAUTE, S.L.U.
LABUTIKE, S.L.
LACOASFI , S.L.
LIVACE, S.L.
LLADO ADVOCATS ASSOCIATS, S.L.P.
LAJUSER GESTIONES Y ASESORAMIENTOS, S.L.
LLANA CONSULTORES, S.L.
JEST ASESORES DE EMPRESA Y PARTICULARES, SL
LAMPER IBERICA, S.L.
JESTERSA INVERSIONES, S.L.
LAR CENTRO EMPRESARIAL, S.A.
JESUS FELIU CONSULTORS, S.L.
LARA MARCOS ASESORES, S.C.
LLEDO YANGUAS, S.L.
LLIRIA HOME, S.L.
LLUCIA GUITERAS, S.L.
JGBR ABOGADOS Y ASESORES TRIBUTARIOS, S.L.
LARRE & ASOCIADOS, S.C.P.
LLUIS GARRUDO Y ASOCIADOS, S.L.
JM MORROS I ASSOCIATS, S.L.
LARREY ASESORES, S.L.
LOBERA LOPEZ ASESORES, S.L.
JO FINANCIAL LINK SPAIN, S.L.
LAUKI AHOLKULARITZA, S.L.
JOAN MAYANS I ASSOCIATS, S.L.
JOANA JAREÑO, S.L.
LAUKIDE ABOGADOS, C.B.
LAZARO & POUSADA, S.C.
LOGARILL & ASOCIADOS, S.L
LOGROSA SOLUCIONES, S.L.
LOSADA Y MORELL, S.L.
JOSE ANGEL ALVAREZ, S.L.U.
LDG GROUP MULTIFAMILY OFFICE, S.L.
LOVENSA INVERSIONES, S.L.
JOSE ANTONIO MANRIQUE RULLO, S.L.
LEAL SLP ASESORIA LABORAL FISCAL Y CONTABLE
LTA ASESORES LEGALES Y TRIBUTARIOS, S.L.
JOSE MARIA GARCIA FRAU, S.L.
LEASBA CONSULTING, S.L.
LUCENTUM ASESORES, S.L.
JOSFRAN ASSESSORS, S.L.
JUAN JOSE ORTIZ, S.L.
LEASING E INVERSION EMPRESARIAL, S.L.
LUIS F. SIMO, S.L.
LECONDIS, S.L.
LUNA, C.B.
JUAN MIGUEL MARQUEZ HORRILLO EMPRESA DE SERVICIOS, S.L.
LEFISUR ASESORES, S.L.
M DE MONTAÑEZ ANALISIS ASEGURADORES, S.L.L.
JURIDIC COMTIGEST, S.L.
KANKEL INVERSIONES, S.L.
KANOPA, S.L.
KONTULAN AHOLKULARITZA, S.L.
LEMERODRI, S.L.
M&B PLUS ASESORES, S.L.L.
LEMES ASESORES FISCALES, S.L.
M. L. BROKERS, S.L.
LENADER, S.L.
LEO GESTION, S.L.U.
M.C.I. BUREAU CONSULTING DE GESTION, S.L.
MAC PRODUCTOS DE INVERSION Y FINANCIACION, S.L.
KREA MARKETING AND CONSULTING, S.L.
LEXEL ESTUDI LEGAL, S.L.
MAINCTA, C.B.
L.G.A. CONSULTORES, S.L.
LABORANTIA, S.L.
LINEA CONTABLE, S.L.
LIT & PITARCH, S.L.
MARBAR ASESORES 2014, S.L.
MARCELINO DIAZ Y BARREIROS, S.L.
239
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
MARDEBONI, S.L.P.
MEXICO NOROESTE GESTION EMPRESARIAL, S.L.
NAVES DIAZ ASSOCIATS, S.L.
MARESME CONSULTORS, S.L.
MG ECONOMISTES, S.L.U.P.
MARIA CARMEN PEREZ AZNAR, S.L.P.
MI CONSULTORIA, S.L.
NEGOCIOS DIZMOR, S.L.
NEGOCONT BILBAO 98, S.L.
MARIA COBIAN Y ASOCIADOS, S.L.
MICYD CONSULTING, S.L.
NEWLAM INVEST, S.L.
MARIN Y MATEO ABOGADOS, S.L.P.
MIQUEL VALLS ECONOMISTES & ASSOCIATS, S.L.P.
NICCALIA, S.L.
MARISCAL CONSULTING, S.L.
MIRO ASSESSORS GESTORIA ADMINISTRATIVA, S.L.P.
NOBEL GROUP 2011, S.L.
MARKETING INTERNACIONAL CONSULTORES, S.A.
MISE MIGUEZ, S.L.
NORMA-3 ON LINE, S.L.
MARKETPLACE CONSULTING, S.L.
MITECA PROMOCIONES E INVERSIONES, S.L.
NOVAGESTION AVANZADA, S.L.
MARNAT INVERSIONES,S.L.
MITJAVILA Y ASOCIADOS ESTUDIO JURIDICO FISCAL, S.L.
NOVAGESTION MARINA BAIXA, S.L.
MARQUES BARO, S.L.
MOLINA CONSULTING GROUP, S.L.P.
OBJETIVO MERCADO, S.L.
MARTIN GARCIA -ESTRADA ABOGADOS, S.C.
MON JURIDIC RDJ, S.L.
OBLA 2012 CONSULTING, S.L.
MARTIN PEREZ ASSESSMENT, S.L.P.
MONTE AZUL CASAS, S.L.
OCIEX ESPAÑA, S.L.L.
MARTIN VALENCIANO, FERNANDO 000680010S, S.L.N.E.
MONTORI HUALDE ASOCIADOS, S.L.L.
OFICINA PALMA, ASESORIA Y FORMACION, S.L.
MATARO DE GESTIONS I SERVEIS EMPRESSARIALS, S.L.
MORA MAG, S.A.
OFICINA SUPORT, S.L.
MATEO59 AGENTE DE SEGUROS VINCULADO, S.L.
MORAN CASTELL-BLANCH LAW AND TAX FIRM, S.L.
OFICINAS ADMINISTRATIVAS FELIX, S.L.
MATTS ASSESSORS LEGALS I ECONOMISTES, S.L.
MORERA GESTIO EMPRESARIAL, S.L.
OFICINAS EMA, S.L.
MAYBE CONSULTORIA INTEGRAL DE EMPRESAS, S.C.A.
MORERA & VALLEJO ESTUDIOS FINANCIEROS, S.L.
OLAZABAL Y ASOCIADOS, S.C.
MAYTE COSTAS ASESORES, S.L.
MORILLO & PEREZ GESTION 2012, S.L.
OLCADIA INVERSIONES, S.L.
MB ASESORES 2012, S.L.P.
MORILLO MUÑOZ, C.B.
OLIVAR Y CUADRADO ASESORES, S.L.
MEDICAL CONSULTING PROFESIONAL, S.L.
MUGA Y LOPEZ ASESORES, S.L.
OLIVERAS TARRES, S.C.
MELGAREJO Y VIÑALS ASESORES, C.B.
MUNDOFINANZ CONSULTORES, S.L.
OMEGA GESTION INTEGRAL, S.L.
MENDOZA MORANTE E INCLAN, S.L.P.
MUÑOZ VIÑOLES, S.L.
OMEGA GESTION Y FORMACION, S.L.
MERIDIAN ASESORES, S.L.
NANOBOLSA, S.L.
MESA IZQUIERDO ASOCIADOS, S.L.
NASH ASESORES, S.L.U.
OMF ASESORES, S.L.
ONRRISA, S.L.
240
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
OPERATIVO CONSULTING, S.L.U.
PILAR RAMON ALVAREZ, S.L.
PUERTAS Y GALERA CONSULTING, S.L.
OPTIMA SAT, S.L.
PIME ASSESSORAMENT I QUALITAT, S.L.
PYME BUSSINES TWO, S.L.
ORDENACIONES CONTABLES, S.L.
PIÑOL & PUJOL ASSESSORIA D'EMPRESES, S.L.
PYME'S ASESORIA, S.L.
OREGUI ASESORES, S.L.
ORIBIO ASESORES, S.L.
ORTEGAL A ESTACA, S.L.
OSYPAR GESTION, S.L.
OTC ORIENTA PYMES, S.L.
OURENOFIX, S.L.
P V 1, S.L.
PADIMIAN GESTION, S.L.
PLANNING ASESORES, S.C.
QLEY AUDITORES CONSULTORES, S.L.
PLEYA GLOBAL SERVICE, S.L.
QUALIFIED EXPERIENCE, S.L.
PLUSIERS CONCEP, S.L.
POGGIO, S.A.
POISY, S.L.
POLO ACCIONES, S.L.
POPIN DE LOS MARES, S.L.
POU ADVOCATS, S.L.P.
QUALITY ASEGURA2,S.L.
QUEIJA CONSULTORES, S.L.
QUINTELA Y PEREZ ASESORES, S.L.
R Y B ASESORES, S.L.
R. & J. ASSESSORS D' ASSEGURANCES ASEGUR XXI, S.L.
RACA INVERSIONES Y GESTION, S.L.
PALACIOS DIAZ CONSULTORES, S.L.
POUSADA Y CORTIZAS, S.L.
RCI EXPANSION FINANCIERA, S.L.U.
PARERA CONSULTING GROUP, S.L.
POZA SOTO INVESTIMENTOS, S.L.
REAMOBA, S.L.
PATRIAL, S.A.
PAUDIM CONSULTORES, S.L.
PAYMER INVERSIONES, S.L.
PB GESTION, S.L.
PEDRO LOPEZ PINTADO E HIJOS, S.L.
PRESTACIONS DE ASESORAMENTO EMPRESARIAL, S.L.
RED DE ASESORES ALCAMAN, S.L.
PREVENALICANTE 2015, S.L.
REDIS INVERSIONS, S.L.
PREVISION PERSONAL CORREDURIA DE SEGUROS, S.A.
REDTAX, S.L.
PROELIA, S.L.
PROGESEM, S.L.
RENTA INMOBILIARIA ARAGONESA, S.L.
RENTA JUBILADOS, S.L.
PERE ARAÑO PLANAS ASSESSORS, S.L.P.
PROGRESO 21 CONSULTORES TECNICOS Y ECONOMICOS, S.L.
RENTABILIDAD VALOR Y UTILIDAD, S.L.
PERELLO Y TOMAS, S.L.
PROINVER PARTNERS, S.L.
PEREZ ASESORIA Y SERVICIOS EMPRESARIALES, S.L.
PROYECTOS DE ASESORIA GLOBAL, S.L.
RENTEK 2005, S.L.
REYMONDEZ , S.L.
PEREZ SIERRA ASESORES, S.L.
PROYECTOS INTEGRALES FINCASA, S.L.
RGR ACTIVOS E INVERSIONES, S.L.
PERNIA CONSULTORES, S.L.
PROYECTOS PINTON, S.L.
RIOJAMACRAL, S.L.
PERUCHET GRUP CONSULTOR D'ENGINYERIA, S.C.P.
PUENTE & B GESTION INTEGRAL, S.L.
ROALGA GESTION DE RIESGOS, S.L.
241
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
ROBIPAL 2016, S.L.
SACRISTAN ASESORES, S.L.
SEMPERE & PICO ASESORES, S.L.
ROCA VILA I JURADO ASSOCIATS, S.L.P.
SAENZ DE TEJADA ASESORES, S.L.
SENDA GESTION, S.L.
ROCAN ASESORES HUETOR-TAJAR, S.L.
SAFE SERVICIOS DE ASESORAMIENTO FISCAL DE LA EMPRESA, S.L.
SERBANASER 2000, S.L.
ROCHE BLASCO Y ROCHE ASESORES, S.L.
SAFIN 2062, S.L.
SERCOM ARAGON S.XXI, S.L.
RODAEL INVERSIONES, S.L.
SAFOR CONSULTORES INMOBILIARIOS, S.L.
SERGESA ASSESSORS, S.L.
RODON I VERGES ASSOCIATS, S.L.
SAGEM XX, S.L.
ROLO GESTION E INVERSION, S.L.
SAINZ Y ASOCIADOS, S.L.
ROMERO & BURGOS ASESORES, C.B.
SALES HERMANOS, C.B.
SERJACAT, S.L.
SERKA ASESORES, S.L.
SERTE RIOJA, S.A.P.
ROS PETIT, S.A.
SALOR XVI, C.B.
SERVEIS FINANCERS DE CATALUNYA, S.L.
ROSADO PROIMAGEN, S.L.
SANTAMANS ASESORES LEGALES Y TRIBUTARIOS, S.L.
SERVICAT ASESORES, S.L.
ROSVEGA, S.L.
ROY ASSESSORS, S.L.
RUALI CONSULTANTS, S.L.
RUIZ ASESORES, S.C.
S B CONSULTING VALENCIA, S.L.
SANTIVERI GESTIO I ASSESSORAMENT, S.L.
SERVICIOS DE ASESORAMIENTO Y GESTION ATENEA, S.L.
SAPRO INVESTMENT, S.L.
SERVICIOS FINANCIEROS ALENAT, S.L.
SAR NARON, S.L.
SARA Y LETICIA, S.L.
SARCASA, S.L.
SERVICIOS FINANCIEROS AZMU, S.L.
SERVICIOS FINANCIEROS CONTABLES 2000, S.L.
SERVICIOS FINANCIEROS GABIOLA, S.L.
S&B CONSULTORES DE CANTABRIA, S.L.
SAURINA DELGADO ADVOCATS, S.L.
SERVICIOS INTEGRALES CANARIOS, S.L.
S.A.G. MEN, S.L.
SAYAR & RIVAS ASOCIADOS, S.L.
S.C. BUSINESS ADVISORS, S.L.
SB GESTION IMPUESTOS, S.A.
S.C.L. ECONOMISTAS CANARIOS
SECI ASESORAMIENTO INTEGRAL 2050, S.L.
S.M. ASESORES ARAÑUELO, S.L.
SEGURALIA 2050, S.L.
SAAVEDRA Y ASOCIADOS ASESORIA EMPRESARIAL, S.L.
SEGURBAN SERVICIOS DE INTERMEDIACION, S.L.
SABALLS GESTIO, S.L.
SEGUROS E INVERSIONES DEL CID & VILLAFAINA, S.L.
SABATER Y SALVADADOR ABOGADOS, S.L.
SEGURVITAL CORREDURIA DE SEGUROS, S.L.
SACHEL 82, S.L.
SELUCON, C.B.
242
SERV. INTEGRALES DE GEST. INMOB., ASESORIA LEGAL Y
MEDIOAMBIENTE, S.L.
SERVICIOS JURIDICOS VENTANOVA, C.B.
SERVICIOS JURIDICOS Y ADMINISTRACION GRUPO ROPASA, S.L.
SERVICONTA ALCOY, S.L.
SERVIGEST GESTION EMPRESARIAL, S.L.
SFT SERVICIOS JURIDICOS, S.L.P.
SIERRA FERNANDEZ ASESORES, S.L.
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
SIGNES ASESORES, S.L.
SIGNIA CONSULTORS, S.L.
SILBERT-4, S.L.
SILJORINE, S.L.
TAPIAS & BELLIDO CONSULTING, S.L.
TOPE MEDITERRANEA ASSEGURANCES, S.L.
TARIN MOMPO, S.L.P.
TORRE DE LA CUESTA CORREDURIA DE SEGUROS, S.L.
TARRAKO IDEX CORPORATION, S.L.
TRAMITES FACILES SANTANDER ASESORES Y CONSULTORES, S.L.L.
TARSIUS FINANCIAL ADVICE, S.L.
TRAMITS I FORMES, S.L.
SILLERO MARQUEZ & ASOCIADOS, S.L.
TAX SAN SEBASTIAN, S.L.
TRAYSERCAN, S.L.
SIP CONSULTORS, S.C.C.L.
TECFIS, S.L.
TRES U EMPRESA DE SERVICIOS PROFESIONALES, S.L.
SIRVAL, S.A.
SISTEMA ASESORES FERROL, S.L.
TECNICOS AUDITORES CONTABLES Y TRIBUTARIOS EN SERV. DE
ASESORAM., S.L.
TRILLO PALACIOS ASESORES, S.L.
TECNICOS DE APROVISIONAMIENTO Y ASESORAMIENTO SISTEMATICO, S.L.
TURBON ASESORES LEGALES Y TRIBUTARIOS, S.L.
SISTEMAS INTEGRADOS DE GESTION PARA LA EMPRESA ANDALUZA, S.L.
SOBALER Y RODRIGUEZ ASESORIA Y GESTION, S.L.
SOCOGADEM, S.L.
SOLIVIS, S.L.
SOLUCIONES FISCALES DE GALICIA, S.L.L.
SOLYGES CIUDAD RODRIGO, S.L.U.
SOMOZA SIMON Y GARCIA, C.B.
SPI SERVICIOS JURIDICOS EMPRESARIALES, S.L.
SSD ASESORES 1963, S.L.
STM NUMMOS, S.L.
SUMA LEGAL, S.L.
T & P SAFOR GESTIO, S.L.
T.S. GESTIO, S.L.
TACASA BIAR, S.L.
TALLER DE PROJECTES GRUP XXI, S.L.L.
TAMG, S.C.
TECNIFISCAL, S.L.
TECNOCORDOBA ASESORES TRIBUTARIOS, S.L.L.
TEIKEL WEALTH MANAGEMENT, S.L.
TELEMEDIDA Y GAS, S.L.
TETIAROA GESTION Y CONSULTING 2011, S.L.
THE GADO GROUP. S.L.
THINKCO CONSULTORIA DE NEGOCIO, S.L.
TIGALMA , S.L.
TIO & CODINA ASSESSOR D'INVERSIONS, S.L.
TIRAMAT INVERSIONS, S.L.
TODOPYME, S.L.
TOLL SERVICIOS ECONOMICOS Y FISCALES, S.L.
TOLOCONSULTING, S.L.
TOMAS SECO ASESORES, S.L.
TOP TEN FRANQUICIAS, S.L.
243
TWOINVER IBERICA, S.L.
TXIRRIENA, S.L.
UGARTE ASOCIADOS SERVICIOS EMPRESARIALES, S.L.
UNIGLOBAL CONSULTING, S.L.
UNIPRASA, S.L.P.
URBANSUR GLOBAL, S.L.
URIBITARTE FINANCIAL, S.L.
USKARTZE, S.L.
V.S. SERVICOS JURIDICOS, S.L.
VACCEOS GESTORES, S.L.
VALDIVIA ASESORES, S.L.
VALOR AFEGIT OSONA, S.L.
VARELA Y LOPEZ ASESORES, S.L.L.
VASALLO RAPELA ASESORES, S.L.
VEJERIEGA CONSULTING, S.L.
VERUM MANAGEMENT, S.L.
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain Circular 4/2004, and as amended thereafter, which
adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
VICENTE JUAN ASESORES, S.L.
VICENTE OYA AMATE Y DOS MAS, C.B.
VIGUE PUJOL, S.L.
VILA ABELLO ASESORES, S.L.
VILAR AVIÑO ASESORES, S.L.P.
VILAR RIBA, S.A.
VINTERGEST SERVICIOS INTEGRALES, S.L.
VIÑAS GRABOLEDA ASSESORS, S.L.
VITARSA ESTATE, S.L.
VIVIAL ASESORAMIENTO Y ALQUILERES, S.L.
WEISSE KUSTE, S.L.
WIZNER FAMILY OFFICE, S.L.
XESDEZA, S.L.
XESPRODEM ASESORES, S.L.L.
XESTADEM, S.L.
XESTION CERCEDA, S.L.
YBIS XXI, S.L.
YLLANA Y CABRERIZO CONSULTORES, S.L.
ZALTYS, S.L.
ZATOSTE,S.L.
ZONA JURIDICA AGENTE, S.L.
ZUBIZUA, S.L.
ZUIKER Y ASOCIADOS, S.L.
244
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
APPENDIX XIV. Meger by buyout with Catalunya Banc, S.A. , Banco
Depositario BBVA, S.A. y Unoe Bank, S.A
a)
Balance sheet of Catalunya Banc, S.A. (December 31, 2015)
1. CASH AND BALANCES WITH CENTRAL BANKS
602,141 1. FINANCIAL LIABILITIES HELD FOR TRADING
A SSETS
Tho usand o f
Euros
Liabilities
2.FINANCIAL ASSETS HELD FOR TRADING
2.1.Loans and advances to credit institutions
2.2.Loans and advances to cus tomers
2.3.Debt s ecurities
2.4.Equity ins truments
2.5.Trading derivatives
3.OTHER FINANCIAL ASSETS DESIGNATED AT FAIR VALUE THROUGH
PROFIT OR LOSS
3.1.Loans and advances to credit institutions
3.2.Loans and advances to cus tomers
3.3.Debt s ecurities
3.4.Equity ins truments
4. AVAILABLE-FOR-SALE FINANCIAL ASSETS
4.1.Debt s ecurities
4.2.Equity ins truments
5.LOANS AND RECEIVABLES
202,511
1.1.Depos its from central banks
1.2.Depos its from credit ins titutions
1.3.Cus tomer depos its
4,857
1.4.Debt certificates
1.5.Trading derivatives
197,654
1.6.Short pos itions
1.7.Other financial liabilities
2.OTHER FINANCIAL LIABILITIES DESIGNATED AT FAIR VALUE
THROUGH PROFIT OR LOSS
2.1.Depos its from central banks
2.2.Depos its from credit ins titutions
2.3.Cus tomer depos its
5,430,528
2.4.Debt certificates
5,420,321
2.5.Subordinated liabilities
10,207
2.6.Other financial liabilities
32,570,033 3.FINANCIAL LIABILITIES AT AMORTIZED COST
5.1.Loans and advances to credit institutions
5,398,871
3.1.Depos its from central banks
5.2.Loans and advances to cus tomers
21,134,351
3.2.Depos its from credit ins titutions
5.3.Debt s ecurities
6.HELD-TO-MATURITY INVESTMENTS
7.FAIR VALUE CHANGES OF THE HEDGED ITEMS IN PORTFOLIO HEDGES
OF INTEREST RATE RISK
8.HEDGING DERIVATIVES
9.NON-CURRENT ASSETS HELD FOR SALE
10.INVESTMENTS
10.1.Ass ociates
10.2.Joint ventures
10.3.Subs idiaries
6,036,811
3.3.Cus tomer depos its
3.4.Debt certificates
23,801
3.5.Subordinated liabilities
721,673
3.6.Other financial liabilities
4.FAIR VALUE CHANGES OF THE HEDGED ITEMS IN PORTFOLIO
HEDGES OF INTEREST RATE RISK
336,312
716,957 5.HEDGING DERIVATIVES
3,415 6.LIABILITIES ASSOCIATED WITH NON-CURRENT ASSETS HELD FOR SALE
8.PROVISIONS
713,542
8.1.Provis ions for pensions and s imilar obligations
11.INSURANCE CONTRACTS LINKED TO PENSIONS
204,635
8.2.Provis ions for taxes and other legal contingencies
13.TANGIBLE ASSETS
13.1.Property, plants and equipment
13.1.For own us e
13.1.2.Other as s ets leas ed out under an operating leas e
13.2.Inves tment properties
14.INTANGIBLE ASSETS
14.1.Goodwill
14.2.Other intangible as s ets
15.TAX ASSETS
15.1.Current
15.2.Deferred
16.OTHER ASSETS
TOTAL ASSETS
711,617
8.3.Provis ions for contingent ris ks and commitments
557,070
8.4.Other provis ions
557,070 9.TAX LIABILITIES
9.1.Current
154,547
9.2.Deferred
5,808 11.OTHER LIABILITIES
TOTAL LIABILITIES
5,808
EQUITY
3,643,667 1. STOCKHOLDERS’ FUNDS
26,886 1.1.Common Stock
3,616,781
1.1.1.Iss ued
113,123
1.1.2.Unpaid and uncalled (-)
45,282,806 1.2.Share premium
1.3.Reserves
1.4.Other equity instruments
1.4.1.Equity component of compound financial instruments
1.4.3. Other equity instuments
1.5. Less: Treasury stock
1.6.Income attributed to the parent company
1.7.Less: Dividends and remuneration
2.VALUATION ADJUSTMENTS
2.1.Available-for-s ale financial ass ets
2.2.Cas h flow hedging
2.3.Hedging of net investment in foreign transactions
2.4.Exchange differences
2.5.Non-current as s ets held-for-sale
2.7.Other valuation adjus tments
TOTAL EQUITY
TOTAL LIABILITIES AND EQUITY
1.CONTINGENT RISKS
2.CONTINGENT COMMITMENTS
245
Tho usand o f
Euro s
240,750
240,750
39,483,794
734,158
5,620,840
29,464,026
3,458,760
206,010
358,149
489,183
1,600,411
379,854
13,400
135,490
1,071,667
261,054
381
260,673
88,182
42,521,523
2,603,532
1,978,783
1,978,783
8,323,677
-7,613,579
7,174
-78,175
157,751
287,292
-134,100
4,559
2,761,283
45,282,806
807,758
6,482,185
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
b)
Balance sheet of Banco Depositario BBVA, S.A. (December 31, 2015)
ASSETS
Thousand of Euros
LIABILITIES
Thousand of Euros
1.
2.
CASH AND BALANCES WITH CENTRAL BANKS................................................................................
1.
FINANCIAL LIABILITIES HELD FOR TRADING ......................................................................................
FINANCIAL ASSETS HELD FOR TRADING ..........................................................................................
1.1.
Deposits from central banks.............................................................................................................
2.1.
2.2.
2.3.
Loans and advances to credit institutions .................................................................................
1.2.
Deposits from credit institutions.......................................................................................................
Loans and advances to customers............................................................................................
1.3.
Customer deposits............................................................................................................................
Debt securities ...........................................................................................................................
1.4.
Debt certificates...............................................................................................................................
2.4.
Equity instruments ......................................................................................................................
1.5.
Trading derivatives...........................................................................................................................
2.5.
Trading derivatives......................................................................................................................
1.6.
Short positions..................................................................................................................................
3.
OTHER FINANCIAL ASSETS DESIGNATED AT FAIR VALUE
THROUGH PROFIT OR LOSS
1.7.
Other financial liabilities....................................................................................................................
3.1.
Loans and advances to credit institutions .................................................................................
2.
OTHER FINANCIAL LIABILITIES DESIGNATED AT FAIR VALUE
THROUGH PROFIT OR LOSS
3.2.
3.3.
3.4.
Loans and advances to customers ...........................................................................................
2.1.
Deposits from central banks.............................................................................................................
Valores representativos de deuda.............................................................................................
2.2.
Deposits from credit institutions.......................................................................................................
Debt securities ...........................................................................................................................
2.3.
Customer deposits............................................................................................................................
4.
AVAILABLE-FOR-SALE FINANCIAL ASSETS ...................................................................................
2.4.
Debt certificates...............................................................................................................................
4.1.
4.2.
Debt securities............................................................................................................................
2.5.
Subordinated liabilities......................................................................................................................
Equity instruments ......................................................................................................................
2.6.
Other financial liabilities....................................................................................................................
5.1.
5.2.
5.3.
7.
8.
9.
5.
LOANS AND RECEIVABLES .................................................................................................................
Loans and advances to credit institutions .................................................................................
Loans and advances to customers............................................................................................
4,252,843
4,251,213
1,630
3.
FINANCIAL LIABILITIES AT AMORTIZED COST .................................................................................
3.1.
Deposits from central banks.............................................................................................................
3.2.
Deposits from credit institutions.......................................................................................................
Debt securities ...........................................................................................................................
3.3.
Customer deposits............................................................................................................................
6.
HELD-TO-MATURITY INVESTMENTS..................................................................................................
3.4.
Debt certificates...............................................................................................................................
FAIR VALUE CHANGES OF THE HEDGED ITEMS IN
PORTFOLIO HEDGES OF INTEREST RATE RISK
3.5.
Subordinated liabilities .....................................................................................................................
HEDGING DERIVATIVES .......................................................................................................................
3.6.
Other financial liabilities ...................................................................................................................
NON-CURRENT ASSETS HELD FOR SALE...........................................................................................
10.
EQUITY METHOD...................................................................................................................................
10.1.
Associates..................................................................................................................................
4.
5.
6.
FAIR VALUE CHANGES OF THE HEDGED ITEMS IN PORTFOLIO
HEDGES OF INTEREST RATE RISK
HEDGING DERIVATIVES..........................................................................................................................
LIABILITIES ASSOCIATED WITH NON-CURRENT ASSETS HELD
FOR SALE
10.2.
Jointly controlled entities.............................................................................................................
8.
PROVISIONS............................................................................................................................................
10.3.
Subsidiaries ................................................................................................................................
INSURANCE CONTRACTS LINKED TO PENSIONS...............................................................................
TANGIBLE ASSETS...............................................................................................................................
11.
13.
13.1.
Property, plants and equipment...................................................................................................
13.1.1.
For ow n use...................................................................................................................
8.1.
8.2.
8.3.
Provisions for pensions and similar obligations ...............................................................................
Provisions for taxes and other legal contingencies.........................................................................
Provisions for contingent exposures and commitments...................................................................
8.4.
Otras provisiones.............................................................................................................................
9.
TAX LIABILITIES.....................................................................................................................................
10
10
10
13.1.2.
Other assets leased out under an operating lease........................................................
9.1.
Current .............................................................................................................................................
13.2.
Investment properties..................................................................................................................
9.2.
Deferred ..........................................................................................................................................
14.
INTANGIBLE ASSETS............................................................................................................................
39
11.
OTHER LIABILITIES.................................................................................................................................
14.1.
Goodw ill......................................................................................................................................
TOTAL LIABILITIES............................................................................
14.2.
Other intangible assets...............................................................................................................
15.
TAX ASSETS.........................................................................................................................................
15.1.
Current........................................................................................................................................
15.2.
Deferred......................................................................................................................................
16.
OTHER ASSETS ....................................................................................................................................
TOTAL ASSETS..............................................................................
39
709
348
361
109
4,253,710
4,193,498
42,483
4,147,672
3,343
44
43
1
8,000
8,000
4,055
4,205,597
48,113
5,412
5,412
138
15,079
1.
STOCKHOLDERS’ FUNDS........................................................................................................................
1.1.
Common Stock/Fondo de dotación (a)..............................................................................................
EQUITY
1.1.1.
1.1.2.
Issued....................................................................................................................
Unpaid and uncalled (-)........................................................................................
Share premium..................................................................................................................................
Reserves .........................................................................................................................................
Other equity instruments..................................................................................................................
1.4.1.
1.4.3.
Equity component of compound financial instruments...........................................
Other equity instruments .......................................................................................
Less: Treasury stock......................................................................................................................
1.2.
1.3.
1.4.
1.5.
1.6.
Income attributed..............................................................................................................................
27,484
1.7.
Less: Dividends and remuneration.................................................................................................
2.
VALUATION ADJUSTMENTS ................................................................................................................
2.1.
Available-for-sale financial assets...................................................................................................
2.2.
Cash flow hedging ..........................................................................................................................
2.3.
Hedging of net investment in foreign transactions ..........................................................................
2.4.
Exchange differences......................................................................................................................
2.5.
2.7.
Non-current assets held-for-sale ...................................................................................................
Other valuation adjustments.............................................................................................................
TOTAL EQUITY...................................................................................
TOTAL LIABILITIES AND EQUITY......................................................
48,113
4,253,710
MEMORANDUM ITEM
1.
2.
CONTINGENT RISK..................................................................................................................................
49
CONTINGENT COMMITMENTS..............................................................................................................
246
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
c)
Balance sheet of Unoe Bank, S.A. (December 31, 2015)
1.
2.
3.
4.
5.
6.
7.
8.
9.
ASSETS
Thousand of Euros
LIABILITIES
Thousand of Euros
CASH AND BALANCES WITH CENTRAL BANKS................................................................
73,422
1.
FINANCIAL LIABILITIES HELD FOR TRADING ........................................................................................
FINANCIAL ASSETS HELD FOR TRADING .........................................................................
2.1.
2.2.
2.3.
2.4.
2.5.
Loans and advances to credit institutions .................................................
Loans and advances to customers............................................................
Debt securities ...........................................................................................
Equity instruments ......................................................................................
Trading derivatives......................................................................................
OTHER FINANCIAL ASSETS DESIGNATED AT FAIR VALUE
THROUGH PROFIT OR LOSS
1.1.
1.2.
1.3.
1.4.
1.5.
1.6.
1.7.
Deposits f rom central banks............................................................................................
Deposits f rom credit institutions.......................................................................................
Customer deposits...........................................................................................................
Debt certif icates...............................................................................................................
Trading derivatives...........................................................................................................
Short positions.................................................................................................................
Other f inancial liabilities....................................................................................................
Loans and advances to credit institutions .................................................
2.
OTHER FINANCIAL LIABILITIES DESIGNATED AT FAIR VALUE
THROUGH PROFIT OR LOSS
3.1.
3.2.
3.3.
3.4.
Loans and advances to customers ...........................................................
Valores representativos de deuda.............................................................
Debt securities ...........................................................................................
AVAILABLE-FOR-SALE FINANCIAL ASSETS ..................................................................
4.1.
4.2.
Debt securities............................................................................................
Equity instruments ......................................................................................
LOANS AND RECEIVABLES ................................................................................................
5.1.
5.2.
5.3.
Loans and advances to credit institutions .................................................
Loans and advances to customers............................................................
Debt securities ...........................................................................................
HELD-TO-MATURITY INVESTM ENTS..................................................................................
FAIR VALUE CHANGES OF THE HEDGED ITEM S IN
PORTFOLIO HEDGES OF INTEREST RATE RISK
HEDGING DERIVATIVES ......................................................................................................
NON-CURRENT ASSETS HELD FOR SALE...........................................................................
10.
EQUITY M ETHOD..................................................................................................................
10.1.
10.2.
10.3.
Associates..................................................................................................
Jointly controlled entities.............................................................................
Subsidiaries ................................................................................................
11.
13.
INSURANCE CONTRACTS LINKED TO PENSIONS..............................................................
TANGIBLE ASSETS..............................................................................................................
13.1.
Property, plants and equipment...................................................................
13.1.1.
13.1.2.
For ow n use.....................................................................
Other assets leased out under an operating lease..........
13.2.
Investment properties..................................................................................
342
342
1,374,000
304,468
1,069,532
10
4.
8,771
5.
95
6.
8.
8,676
11
11
11
9.
2.1.
2.2.
2.3.
2.4.
2.5.
2.6.
Deposits f rom central banks............................................................................................
Deposits f rom credit institutions.......................................................................................
Customer deposits...........................................................................................................
Debt certif icates...............................................................................................................
Subordinated liabilities......................................................................................................
Other f inancial liabilities....................................................................................................
3.
FINANCIAL LIABILITIES AT AMORTIZED COST ....................................................................................
3.1.
3.2.
3.3.
3.4.
3.5.
3.6.
Deposits f rom central banks............................................................................................
Deposits f rom credit institutions.......................................................................................
Customer deposits...........................................................................................................
Debt certif icates...............................................................................................................
Subordinated liabilities .....................................................................................................
Other f inancial liabilities ...................................................................................................
FAIR VALUE CHANGES OF THE HEDGED ITEMS IN PORTFOLIO
HEDGES OF INTEREST RATE RISK
HEDGING DERIVATIVES............................................................................................................................
LIABILITIES ASSOCIATED WITH NON-CURRENT ASSETS HELD
FOR SALE
PROVISIONS..............................................................................................................................................
8.1.
8.2.
8.3.
8.4.
Provisions f or pensions and similar obligations ..............................................................
Provisions f or taxes and other legal contingencies.........................................................
Provisions f or contingent exposures and commitments..................................................
Otras provisiones.............................................................................................................
TAX LIABILITIES.......................................................................................................................................
9.1.
9.2.
Current ............................................................................................................................
Deferred ..........................................................................................................................
14.
INTANGIBLE ASSETS...........................................................................................................
1,425
11.
OTHER LIABILITIES...................................................................................................................................
14.1.
14.2.
Goodw ill......................................................................................................
Other intangible assets...............................................................................
15.
TAX ASSETS.........................................................................................................................
15.1.
15.2.
Current........................................................................................................
Def erred......................................................................................................
16.
OTHER ASSETS ...................................................................................................................
TOTAL ASSETS..................................................................................
1,425
10,759
115
10,644
4,112
1,472,852
TOTAL LIABILITIES.................................................................................................
EQUITY
1.
STOCKHOLDERS’ FUNDS..........................................................................................................................
1.1.
Common Stock/Fondo de dotación (a).............................................................................
1.1.1.
1.1.2.
Issued....................................................................................................
Unpaid and uncalled (-)........................................................................
Share premium.................................................................................................................
Reserves .........................................................................................................................
Other equity instruments..................................................................................................
1.4.1.
1.4.3.
Equity component of compound f inancial instruments..........................
Other equity instruments ......................................................................
Less: Treasury stock......................................................................................................
Income attributed..............................................................................................................
Less: Dividends and remuneration.................................................................................
1.2.
1.3.
1.4.
1.5.
1.6.
1.7.
2.
VALUATION ADJUSTMENTS ...................................................................................................................
2.1.
2.2.
2.3.
2.4.
2.5.
2.7.
Available-f or-sale f inancial assets..................................................................................
Cash flow hedging ..........................................................................................................
Hedging of net investment in f oreign transactions ..........................................................
Exchange diff erences......................................................................................................
Non-current assets held-f or-sale ..................................................................................
Other valuation adjustments.............................................................................................
TOTAL EQUITY.........................................................................................................
TOTAL LIABILITIES AND EQUITY...........................................................................
1,267,510
517,160
747,053
3,297
143
13
130
4,856
4,830
26
9,850
1,282,359
190,477
80,317
80,317
21,649
61,975
26,536
16
16
190,493
1,472,852
MEMORANDUM ITEM
1.
2.
CONTINGENT RISK....................................................................................................................................
CONTINGENT COMM ITMENTS.................................................................................................................
2,356,419
247
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
d)
List of goods transferred subject to amortization
LIST OF GOODS TRANSFERRED BY CATALUNYA BANC, S.A.- Millions of Euros
Previous
years
2004 2005 2006 2007 2008 2009 2010 ### 2012 2013 2014 2015 TOTAL
Property
Fixtures
Computer equipment
Furniture
444
173
9
18
8
16
1
2
24
22
6
3
4
16
5
3
70
31
8
4
1
27
4
3
1
6
2
1
2
3
4
1
-
6
5
-
-
13
1
-
TOTAL GROSS COST
644
27
55
28 113
35
10
10
11
14
-
3
2
-
5
-
3
3
-
6
-
8
17
-
554
327
67
35
25
983
Property Accrued depreciation
Fixtures Accrued depreciation
Computer equipment Accrued depreciation
Furniture Accrued depreciation
(80)
(256)
(48)
(33)
TOTAL ACCRUED DEPRECIATION AS OF DECEMBER 31, 2015
(417)
TOTAL NET COST AS OF DECEMBER 31, 2015
566
The breakdown of transferred assets that are subject to amortization for Banco Depositario and Uno-e is not
shown because the assets of their balance sheets as of December 31, 2015 did not reach 1 million euros.
248
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Glossary
Additional Tier 1
Capital
Includes: Preferred stock and convertible perpetual securities and deductions
Adjusted acquisition
cost
The acquisition cost of the securities less accumulated amortizations, plus interest
accrued, but not net of any other valuation adjustments.
Amortized cost
Associates
Available-for-sale
financial assets
The amortized cost of a financial asset is the amount at which it was measured at initial
recognition minus principal repayments, plus or minus, as warranted, the cumulative
amount taken to profit or loss using the effective interest rate method of any difference
between the initial amount and the maturity amount, and minus any reduction for
impairment or change in measured value.
Companies in which the Group has a significant influence, without having control.
Significant influence is deemed to exist when the Group owns 20% or more of the voting
rights of an investee directly or indirectly.
Available-for-sale (AFS) financial assets are debt securities that are not classified as held-to-
maturity investments or as financial assets designated at fair value through profit or loss
(FVTPL) and equity instruments that are not subsidiaries, associates or jointly controlled
entities and have not been designated as at FVTPL.
Basic earnings per
share
Calculated by dividing “Profit attributable to Parent Company” corresponding to ordinary
shareholders of the entity by the weighted average number of shares outstanding
throughout the year (i.e., excluding the average number of treasury shares held over the
year).
Basis risk
Risk arising from hedging exposure to one interest rate with exposure to a rate that
reprices under slightly different conditions.
Business combination
A business combination is a transaction, or any other event, through which a single
entity obtains the control of one or more businesses.
Cash flow hedges
Those that hedge the exposure to variability in cash flows attributable to a particular risk
associated with a recognized asset or liability or a highly probable forecast transaction
and could affect profit or loss.
Commissions
income
significant
Income and expenses relating to commissions and similar fees are recognized in the
consolidated income statement using criteria that vary according to their nature. The
are:
most
· Fees and commissions relating linked to financial assets and liabilities measured at
fair value
recognized when collected
· Fees and commissions arising from transactions or services that are provided over
a period of time, which are recognized over the life of these transactions or services.
· Fees and commissions generated by a single act are accrued upon execution of
that act.
through profit or
loss, which are
connection
expense
items
and
this
in
249
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
The indirect method has been used for the preparation of the consolidated statement of
cash flows. This method starts from the entity’s consolidated profit and adjusts its
amount for the effects of transactions of a non-cash nature, any deferrals or accruals of
past or future operating cash receipts or payments, and items of income or expense
associated with cash flows classified as investment or finance. As well as cash, short-
term, highly liquid investments subject to a low risk of changes in value, such as cash
and deposits
in central banks, are classified as cash and equivalents.
When preparing these financial statements the following definitions have been used:
· Cash flows: Inflows and outflows of cash and equivalents.
· Operating activities: The typical activities of credit institutions and other activities that
cannot be classified as investment or financing activities.
· Investing activities: The acquisition, sale or other disposal of long-term assets and
other investments not included in cash and cash equivalents or in operating activities.
· Financing activities: Activities that result in changes in the size and composition of the
Group’s equity and of liabilities that do not form part of operating activities.
The consolidated statements of changes in equity reflect all the movements generated in
each year in each of the headings of the consolidated equity, including those from
transactions undertaken with shareholders when they act as such, and those due to
changes in accounting criteria or corrections of errors, if any.
The applicable regulations establish that certain categories of assets and liabilities are
recognized at their fair value with a charge to equity. These charges, known as
“Valuation adjustments” (see Note 31), are included in the Group’s total consolidated
equity net of tax effect, which has been recognized as deferred tax assets or liabilities, as
appropriate.
The consolidated statements of recognized income and expenses reflect the income and
expenses generated each year. Such statement distinguishes between income and
expenses recognized in the consolidated income statements and “Other recognized
income (expenses)” recognized directly in consolidated equity. “Other recognized income
(expenses)” include the changes that have taken place in the year in the “Valuation
adjustments” broken down by item.
The sum of the changes to the heading “Other comprehensive income ” of the
consolidated total equity and the consolidated profit for the year comprise the “Total
recognized income/expenses of the year”.
Consolidated
statements of cash
flows
Consolidated
statements of
changes in equity
Consolidated
statements of
recognized income
and expenses
Contingencies
Current obligations of the entity arising as a result of past events whose existence
depends on the occurrence or non-occurrence of one or more future events
independent of the will of the entity.
Contingent
commitments
Possible obligations of the entity that arise from past events and whose existence
depends on the occurrence or non-occurrence of one or more future events
independent of the entity’s will and that could lead to the recognition of financial assets.
250
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Control
An investor controls an investee when it is exposed, or has rights, to variable returns
from its involvement with the investee and has the ability to affect those returns through
its power over the investee. An investor controls an investee if and only if the investor
has all the following:
a) Power; An investor has power over an investee when the investor has existing
rights that give it the current ability to direct the relevant activities, i.e. the activities that
significantly affect the investee’s returns.
b) Returns; An investor is exposed, or has rights, to variable returns from its
involvement with the investee when the investor’s returns from its involvement have the
potential to vary as a result of the investee’s performance. The investor’s returns can be
only positive, only negative or both positive and negative.
c) Link between power and returns; An investor controls an investee if the investor
not only has power over the investee and exposure or rights to variable returns from its
involvement with the investee, but also has the ability to use its power to affect the
investor’s returns from its involvement with the investee.
Correlation risk
Correlation risk is related to derivatives whose final value depends on the performance of
more than one underlying asset (primarily, stock baskets) and indicates the existing
variability in the correlations between each pair of assets.
Credit Valuation
Adjustment (CVA)
An adjustment to the valuation of OTC derivative contracts to reflect the creditworthiness
of OTC derivative counterparties.
Current tax assets
Taxes recoverable over the next twelve months.
Current tax liabilities
Corporate income tax payable on taxable profit for the year and other taxes payable in
the next twelve months.
Debit Valuation
Adjustment (DVA)
An adjustment made by an entity to the valuation of OTC derivative liabilities to reflect
within fair value the entity’s own credit risk.
Debt certificates
Obligations and other interest-bearing securities that create or evidence a debt on the
part of their issuer, including debt securities issued for trading among an open group of
investors, that accrue interest, implied or explicit, whose rate, fixed or benchmarked to
other rates, is established contractually, and take the form of securities or book-entries,
irrespective of the issuer.
Deferred tax assets
Taxes recoverable in future years, including loss carry forwards or tax credits for
deductions and tax rebates pending application.
Defined benefit plans
Post-employment obligation under which the entity, directly or indirectly via the plan,
retains the contractual or implicit obligation to pay remuneration directly to employees
when required or to pay additional amounts if the insurer, or other entity required to
pay, does not cover all the benefits relating to the services rendered by the employees
when insurance policies do not cover all of the corresponding post-employees benefits.
Defined contribution
plans
Defined contribution plans are retirement benefit plans under which amounts to be paid
as retirement benefits are determined by contributions to a fund together with
investment earnings thereon. The employer's obligations in respect of its employees
current and prior years' employment service are discharged by contributions to the fund.
Deposits from central
banks
Deposits of all classes, including loans and money market operations, received from the
Bank of Spain and other central banks.
251
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Deposits from credit
institutions
Deposits of all classes, including loans and money market operations received, from
credit entities.
Deposits from
customers
Redeemable cash balances received by the entity, with the exception of debt certificates,
money market operations through counterparties and subordinated liabilities, which are
not received from either central banks or credit entities. This category also includes cash
deposits and consignments received that can be readily withdrawn.
Derivatives
The fair value in favor (assets) or again (liabilities) of the entity of derivatives not
designated as accounting hedges.
Derivatives - Hedging
derivatives
Derivatives designated as hedging instruments in an accounting hedge. The fair value or
future cash flows of those derivatives is expected to offset the differences in the fair value
or cash flows of the items hedged.
Diluted earnings per
share
Calculated by using a method similar to that used to calculate basic earnings per share;
the weighted average number of shares outstanding, and the profit attributable to the
parent company corresponding to ordinary shareholders of the entity, if appropriate, is
adjusted to take into account the potential dilutive effect of certain financial instruments
that could generate the issue of new Bank shares (share option commitments with
employees, warrants on parent company shares, convertible debt instruments, etc.).
Dividends and
retributions
Dividend income collected announced during the year, corresponding to profits
generated by investees after the acquisition of the stake.
Early retirements
Employees that no longer render their services to the entity but which, without being
legally retired, remain entitled to make economic claims on the entity until they formally
retire.
Economic capital
Methods or practices that allow banks to consistently assess risk and attribute capital to
cover the economic effects of risk-taking activities.
Effective interest rate
Discount rate that exactly equals the value of a financial instrument with the cash flows
estimated over the expected life of the instrument based on its contractual period as well
as its anticipated amortization, but without taking the future losses of credit risk into
consideration.
Employee expenses
All compensation accrued during the year in respect of personnel on the payroll, under
permanent or temporary contracts, irrespective of their jobs or functions, irrespective of
the concept, including the current costs of servicing pension plans, own share based
compensation schemes and capitalized personnel expenses. Amounts reimbursed by the
state Social Security or other welfare entities in respect of employee illness are deducted
from personnel expenses.
Equity
The residual interest in an entity's assets after deducting its liabilities. It includes owner or
venturer contributions to the entity, at incorporation and subsequently, unless they meet
the definition of liabilities, and accumulated net profits or losses, fair value adjustments
affecting equity and, if warranted, non-controlling interests.
Equity instruments
An equity instrument that evidences a residual interest in the assets of an entity, that is
after deducting all of its liabilities.
Equity instruments
issued other than
capital
Includes equity instruments that are financial instruments other than “Capital” and “Equity
component of compound financial instruments”.
252
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Equity Method
Is a method of accounting whereby the investment is initially recognized at cost and
adjusted thereafter for the post-acquisition change in the investor’s share of the investee’s
net assets. The investor’s profit or loss includes its share of the investee’s profit or loss
and the investor’s other comprehensive income includes its share of the investee’s other
comprehensive income.
Exchange/translation
differences
Exchange differences (P&L): Includes the earnings obtained in currency trading and the
differences arising on translating monetary items denominated in foreign currency to the
functional currency. Exchange differences (valuation adjustments): those recorded due to
the translation of the financial statements in foreign currency to the functional currency
of the Group and others recorded against equity.
Exposure at default
EAD is the amount of risk exposure at the date of default by the counterparty.
Fair value
The price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date.
Fair value hedges
Derivatives that hedge the exposure to changes in the fair value of assets and liabilities or
firm commitments that have not be recognized, or of an identified portion of said assets,
liabilities or firm commitments, attributable to a specific risk, provided it could affect the
income statement.
Financial guarantees
Contracts that require the issuer to make specified payments to reimburse the holder for
a loss it incurs when a specified debtor fails to make payment when due in accordance
with the original or modified terms of a debt instrument, irrespective of its
instrumentation. These guarantees may take the form of deposits, technical or financial
guarantees, insurance contracts or credit derivatives.
Financial guarantees
given
Transactions through which the entity guarantees commitments assumed by third
parties in respect of financial guarantees granted or other types of contracts.
Financial instrument
A financial instrument is any contract that gives rise to a financial asset of one entity and
to a financial liability or equity instrument of another entity.
Financial liabilities at
amortized cost
Financial liabilities that do not meet the definition of financial liabilities designated at fair
value through profit or loss and arise from the financial entities' ordinary activities to
capture funds, regardless of their instrumentation or maturity.
Method used for the consolidation of the accounts of the Group’s subsidiaries. The assets
and liabilities of the Group entities are incorporated line-by-line on the consolidate
balance sheets, after conciliation and the elimination in full of intragroup balances,
including amounts payable and receivable.
Group entity income statement income and expense headings are similarly combined
line by line into the consolidated income statement, having made the following
consolidation eliminations:
a) income and expenses in respect of intragroup transactions are eliminated in full.
b) profits and losses resulting from intragroup transactions are similarly eliminated.
The carrying amount of the parent's investment and the parent's share of equity in each
subsidiary are eliminated.
Goodwill acquired in a business combination represents a payment made by the acquirer
in anticipation of future economic benefits from assets that are not able to be individually
identified and separately recognized.
Foreign currency hedge of a net investment in a foreign operation.
Consolidation method
Goodwill
Hedges of net
investments in foreign
operations
253
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Financial assets and liabilities acquired or incurred primarily for the purpose of profiting
from variations in their prices in the short term.
Held for trading
(assets and liabilities)
This category also includes financial derivatives not qualifying for hedge accounting, and
in the case of borrowed securities, financial liabilities originated by the firm sale of
financial assets acquired under repurchase agreements or received on loan (“short
positions”).
Held-to-maturity
investments
Held-to-maturity investments are financial assets traded on an active market, with fixed
maturity and fixed or determinable payments and cash flows that an entity has the
positive intention and financial ability to hold to maturity.
A financial asset is deemed impaired, and accordingly restated to fair value, when there
is objective evidence of impairment as a result of one or more events that give rise to:
Impaired financial
assets
a) A measurable decrease in the estimated future cash flows since the initial
recognition of those assets in the case of debt instruments (loans and receivables and
debt securities).
b) A significant or prolonged drop in fair value below cost in the case of equity
instruments.
Income from equity
instruments
Dividends and income on equity instruments collected or announced during the year
corresponding to profits generated by investees after the ownership interest is acquired.
Income is recognized gross, i.e., without deducting any withholdings made, if any.
Insurance contracts
linked to pensions
Inventories
The fair value of insurance contracts written to cover pension commitments.
Assets, other than financial instruments, under production, construction or development,
held for sale during the normal course of business, or to be consumed in the production
process or during the rendering of services. Inventories include land and other properties
held for sale at the real estate development business.
Investment properties
Investment property is property (land or a building—or part of a building—or both) held
(by the owner or by the lessee under a finance lease) to earn rentals or for capital
appreciation or both, rather than for own use or sale in the ordinary course of business.
Joint control
Joint venture
Leases
The contractually agreed sharing of control of an arrangement, which exists only when
decisions about the relevant activities require the unanimous consent of the parties
sharing control.
A joint arrangement whereby the parties that have joint control of the arrangement have
rights to the net assets of the arrangement. A joint venturer shall recognize its interest in
a joint venture as an investment and shall account for that investment using the equity
method in accordance with IAS 28 Investments in Associates and Joint Ventures.
A lease is an agreement whereby the lessor conveys to the lessee in return for a
payment or series of payments the right to use an asset for an agreed period of time, a
stream of cash flows that is essentially equivalent to the combination of principal and
interest payments under a loan agreement.
a) A lease is classified as a finance lease when it substantially transfers all the risks and
rewards incidental to ownership of the asset forming the subject-matter of the contract.
b) A lease will be classified as operating lease when it is not a financial lease.
254
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Liabilities included in
disposal groups
classified as held for
sale
The balance of liabilities directly associated with assets classified as non-current assets
held for sale, including those recognized under liabilities in the entity's balance sheet at
the balance sheet date corresponding to discontinued operations.
Liabilities under
insurance contracts
The technical reserves of direct insurance and inward reinsurance recorded by the
consolidated entities to cover claims arising from insurance contracts in force at period-
end.
Loans and advances
to customers
Loans and receivables, irrespective of their type, granted to third parties that are not
credit entities.
Loans and receivables
Financial instruments with determined or determinable cash flows and in which the
entire payment made by the entity will be recovered, except for reasons attributable to
the solvency of the debtor. This category includes both the investments from the typical
lending activity (amounts of cash available and pending maturity by customers as a loan
or deposits lent to other entities, and unlisted debt certificates), as well as debts
contracted by the purchasers of goods, or users of services, that form part of the entity’s
business. It also includes all finance lease arrangements in which the consolidated
subsidiaries act as lessors.
Loss given default
(LGD)
It is the estimate of the loss arising in the event of default. It depends mainly on the
characteristics of the counterparty, and the valuation of the guarantees or collateral
associated with the asset.
Mortgage-covered
bonds
Financial asset or security created from mortgage loans and backed by the guarantee of
the mortgage loan portfolio of the entity.
Non performing
financial guarantees
given
The balance of non performing risks, whether for reasons of default by customers or for
other reasons, for financial guarantees given. This figure is shown gross: in other words,
it is not adjusted for value corrections (loan loss reserves) made.
Non-controlling
interests
The net amount of the profit or loss and net assets of a subsidiary attributable to
associates outside the group (that is, the amount that is not owned, directly or indirectly,
by the parent), including that amount in the corresponding part of the consolidated
earnings for the period.
Non-current assets
and disposal groups
held for sale
A non-current asset or disposal group, whose carrying amount is expected to be realized
through a sale transaction, rather than through continuing use, and which meets the
following requirements:
a) it is immediately available for sale in its present condition at the balance sheet
the asset.
date,
b) the sale is considered highly probable.
i.e. only normal procedures are required
the sale of
for
Non-monetary assets
Assets and liabilities that do not provide any right to receive or deliver a determined or
determinable amount of monetary units, such as tangible and intangible assets, goodwill
and ordinary shares subordinate to all other classes of capital instruments.
Option risk
Risks arising from options, including embedded options.
255
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Other financial
assets/liabilities at fair
value through profit
or loss
Instruments designated by the entity from the inception at fair value with changes in
profit or loss.
An entity may only designate a financial instrument at fair value through profit or loss, if
doing so more relevant information is obtained, because:
a) It eliminates or significantly reduces a measurement or recognition inconsistency
(sometimes called "accounting mismatch") that would otherwise arise from measuring
assets or liabilities or recognizing the gains and losses on them on different bases. It
might be acceptable to designate only some of a number of similar financial assets or
financial liabilities if doing so a significant reduction (and possibly a greater reduction than
other allowable designations) in the inconsistency is achieved.
b) The performance of a group of financial assets or financial liabilities is managed
and evaluated on a fair value basis, in accordance with a documented risk management
or investment strategy, and information about the group is provided internally on that
basis to the entity´s key management personnel.
These are financial assets managed jointly with “Liabilities under insurance contracts”
measured at fair value, in combination with derivatives written with a view to significantly
mitigating exposure to changes in these contracts' fair value, or in combination with
financial liabilities and derivatives designed to significantly reduce global exposure to
interest rate risk.
These headings include customer loans and deposits effected via so-called unit-linked life
insurance contracts, in which the policyholder assumes the investment risk.
This heading is broken down as follows:
Other Reserves
i) Reserves or accumulated losses of investments in subsidiaries, joint ventures and
associate: include the accumulated amount of income and expenses generated by the
aforementioned investments through profit or loss in past years.
ii) Other: includes reserves different from those separately disclosed in other items and
may include legal reserve and statutory reserve.
Other retributions to
employees long term
Includes the amount of compensation plans to employees long term
Own/treasury shares The amount of own equity instruments held by the entity.
Post-employment
benefits
Retirement benefit plans are arrangements whereby an enterprise provides benefits for
its employees on or after termination of service.
Potential problem risk
All debt instruments and contingent risks which do not meet the criteria to be classified
individually as non-performing or written-off, but show weaknesses that may entail for
the entity the need to assume losses greater than the hedges for impairment of risks
subject to special monitoring.
256
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Probability of default
(PD)
Property, plant and
equipment/tangible
assets
Provisions
Provisions for
contingent liabilities
and commitments
Provisions for
pensions and similar
obligation
It is the probability of the counterparty failing to meet its principal and/or interest
payment obligations. The PD
rating/scoring of each
counterparty/transaction.
is associated with
the
Buildings, land, fixtures, vehicles, computer equipment and other facilities owned by the
entity or acquired under finance leases.
Provisions include amounts recognized to cover the Group’s current obligations arising
as a result of past events, certain in terms of nature but uncertain in terms of amount
and/or cancellation date.
Provisions recorded to cover exposures arising as a result of transactions through which
the entity guarantees commitments assumed by third parties in respect of financial
guarantees granted or other types of contracts, and provisions for contingent
commitments, i.e., irrevocable commitments which may arise upon recognition of
financial assets.
including
Constitutes all provisions
commitments assumed vis-à-vis beneficiaries of early retirement and analogous schemes.
retirement benefits,
recognized
to cover
Provisions or (-)
reversal of provisions
Provisions recognized during the year, net of recoveries on amounts provisioned in prior
years, with the exception of provisions for pensions and contributions to pension funds
which constitute current or interest expense.
Refinanced Operation
An operation which is totally or partially brought up to date with its payments as a result
of a refinancing operation made by the entity itself or by another company in its group.
Refinancing Operation
An operation which, irrespective of the holder or guarantees involved, is granted or used
for financial or legal reasons related to current or foreseeable financial difficulties that the
holder(s) may have in settling one or more operations granted by the entity itself or by
other companies in its group to the holder(s) or to another company or companies of its
group, or through which such operations are totally or partially brought up to date with
their payments, in order to enable the holders of the settled or refinanced operations to
pay off their loans (principal and interest) because they are unable, or are expected to be
unable, to meet the conditions in a timely and appropriate manner.
Repricing risk
Risks related to the timing mismatch in the maturity and repricing of assets and liabilities
and off-balance sheet short and long-term positions.
Restructured
Operation
An operation whose financial conditions are modified for economic or legal reasons
related to the holder's (or holders') current or foreseeable financial difficulties, in order to
enable payment of the loan (principal and interest), because the holder is unable, or is
expected to be unable, to meet those conditions in a timely and appropriate manner,
even if such modification is provided for in the contract. In any event, the following are
considered restructured operations: operations in which a haircut is made or assets are
received in order to reduce the loan, or in which their conditions are modified in order to
extend their maturity, change the amortization table in order to reduce the amount of
the installments in the short term or reduce their frequency, or to establish or extend the
grace period for the principal, the interest or both; except when it can be proved that the
conditions are modified for reasons other than the financial difficulties of the holders and,
are similar to those applied on the market on the modification date for operations
granted to customers with a similar risk profile.
257
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Retained earnings
Accumulated net profits or losses recognized in the income statement in prior years and
retained in equity upon distribution.
Share premium
The amount paid in by owners for issued equity at a premium to the shares' nominal
value.
Shareholders' funds
Contributions by stockholders, accumulated earnings recognized in the income
statement and the equity components of compound financial instruments.
Short positions
Financial liabilities arising as a result of the final sale of financial assets acquired under
repurchase agreements or received on loan.
Is the power to participate in the financial and operating policy decisions of the investee
but is not control or joint control of those policies. If an entity holds, directly or indirectly
(i.e. through subsidiaries), 20 per cent or more of the voting power of the investee, it is
presumed that the entity has significant influence, unless it can be clearly demonstrated
that this is not the case. Conversely, if the entity holds, directly or indirectly (i.e. through
subsidiaries), less than 20 per cent of the voting power of the investee, it is presumed
that the entity does not have significant influence, unless such influence can be clearly
demonstrated. A substantial or majority ownership by another investor does not
necessarily
influence.
The existence of significant influence by an entity is usually evidenced in one or more of
the following ways:
significant
preclude
having
entity
from
an
Significant influence
a) representation on the board of directors or equivalent governing body of the
investee;
b) participation in policy-making processes, including participation in decisions about
dividends or other distributions
c) material transactions between the entity and its investee;
d) interchange of managerial personnel; or
e) provision of essential technical information.
Subordinated liabilities
Financing received, regardless of its instrumentation, which ranks after the common
creditors in the event of a liquidation.
Companies over which the Group exercises control. An entity is presumed to have
control over another when it possesses the right to oversee its financial and operational
policies, through a legal, statutory or contractual procedure, in order to obtain benefits
from its economic activities. Control is presumed to exist when the parent owns, directly
or indirectly through subsidiaries, more than one half of an entity's voting power, unless,
exceptionally, it can be clearly demonstrated that ownership of more than one half of an
entity's voting rights does not constitute control of it. Control also exists when the parent
is:
owns half or
a) an agreement that gives the parent the right to control the votes of other
shareholders;
the voting power of an entity when
less of
there
Subsidiaries
b) power to govern the financial and operating policies of the entity under a
statute or an agreement; power to appoint or remove the majority of the members of
the board of directors or equivalent governing body and control of the entity is by that
board or body;
c) power to cast the majority of votes at meetings of the board of directors or
equivalent governing body and control of the entity is by that board or body.
Tax liabilities
All tax related liabilities except for provisions for taxes.
258
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles
(Bank of Spain Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 52).
This English version is a translation of the original in Spanish for information purposes only. In the event of a discrepancy, the original
Spanish-language version prevails.
Territorials bonds
Financial assets or fixed asset security issued with the guarantee of portfolio loans of the
public sector of the issuing entity
Tier 1 Capital
Includes: Common stock, parent company reserves, reserves
companies, non-controlling interests, deduction and others and attributed net income
in consolidated
Tier 2 Capital
Includes: Subordinated, preferred shares, generic countable and non- controlling interest
Unit-link
This is life insurance in which the policyholder assumes the risk. In these policies, the
funds for the technical insurance provisions are invested in the name of and on behalf of
the policyholder in shares of Collective Investment Institutions and other financial assets
chosen by the policyholder, who bears the investment risk.
Value at Risk (VaR) is the basic variable for measuring and controlling the Group’s market
risk. This risk metric estimates the maximum loss that may occur in a portfolio’s market
positions
level
particular
VaR figures are estimated following two methodologies:
confidence
horizon
given
time
and
for
a
Value at Risk (VaR)
· VaR without smoothing, which awards equal weight to the daily information for the
immediately preceding last two years. This is currently the official methodology for
measuring market risks vis-à-vis limits compliance of the risk.
· VaR with smoothing, which weights more recent market information more heavily.
This is a metric which supplements the previous one.
VaR with smoothing adapts itself more swiftly to the changes in financial market
conditions, whereas VaR without smoothing is, in general, a more stable metric that will
tend to exceed VaR with smoothing when the markets show less volatile trends, while it
will tend to be lower when they present upturns in uncertainty.
Yield curve risk
Risks arising from changes in the slope and the shape of the yield curve.
259
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain
Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 51). This English version is a translation of the original in
Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Management Report for the year ended December 31, 2016
Introduction ...................................................................................................................... 2
1.
2. Economic outlook .............................................................................................................. 2
3. Balance sheet, business activity and earnings ........................................................................ 3
4. Risk management .............................................................................................................. 3
5. BBVA Group solvency and capital ratios ................................................................................ 3
6. Environmental information .................................................................................................. 3
Environmental commitment ......................................................................................................... 3
6.1.
6.2.
Aims of the environmental policy .................................................................................................. 3
6.3. Main environmental actions in 2016 ............................................................................................. 4
7. Customer Care Service and Customer Ombudsman ............................................................... 4
Report on the activity of the Customer Care Service department ...................................................... 5
Report on the activity of BBVA´s Customer Ombudsman ................................................................ 6
Innovation and Technology ................................................................................................. 7
8.
9. Other information .............................................................................................................. 8
Capital and treasury stock ............................................................................................................ 8
Shareholder remuneration and allocation of earnings ...................................................................... 8
Average period for payment to suppliers ....................................................................................... 9
10. Subsequent events ............................................................................................................ 9
11. Annual corporate governance report .................................................................................... 9
9.1.
9.2.
9.3.
7.1.
7.2.
1
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain
Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 51). This English version is a translation of the original in
Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Management report for the year ended December 31, 2016
1. Introduction
Banco Bilbao Vizcaya Argentaria, S.A. (the “Bank” or “BBVA”) is a private-law entity governed by the rules and
regulations applicable to banks operating in Spain. The Bank conducts its business through branches and offices
located throughout Spain and abroad.
The management report of BBVA, S.A. has been prepared from the individual accounting and management
records of Banco Bilbao Vizcaya Argentaria, SA
BBVA is the parent company of the BBVA Group (hereinafter, “the Group”). It is an internationally diversified group
with a significant presence in the business of traditional retail banking, asset management and wholesale banking.
The financial information included in this management report is presented in accordance with the criteria
established by the Bank of Spain Circular 4/2004, of December 22, on Public and Confidential Financial
Reporting Rules and Formats for Financial Statements, and its subsequent amendments.
2. Economic outlook
Global growth is expected to be slightly higher than 3% in 2017 and 2018, sustained by support from central
banks, relative calm on the financial markets and the recovery of emerging economies. The key in this scenario
of weak economic growth within a context of reduced global trade and a greater aversion to the spread of
globalization lies in addressing the economic consequences of some of the risks linked to economic policies. First,
there is the uncertainty in connection with the economic policy of the new administration in the United States,
particularly regarding protectionism and its potential global effects. Second, while the impact of Brexit (the
referendum at the end of June resulting in a victory for those wanting the United Kingdom to leave the European
Union) has not had a systemic impact, there is nevertheless lingering uncertainty regarding the negotiations
related to it, which could weigh heavily on economic confidence in 2017. An additional factor is concern with
respect to the results of a very busy electoral calendar throughout Europe.
The 2017 outlook for Spain is one of moderate growth of up to 2.7%, in light of the weakening of some support
factors such as fiscal policy and an increase in oil prices.
The recovery in the rest of Europe faces the risk of a slowdown associated with political uncertainty or the
reversal of the reforms implemented in some countries. In this context, we expect a GDP growth of 1.7% in
2016 and 1.6% in 2017.
In the United States, there are still major doubts regarding economic policy, particularly with respect to trade
agreements, as well as the rate of interest rate hikes by the Fed and their resulting impact on emerging
economies. In light of the foregoing, the average growth in 2016 will slow to 1.6% and then increase slightly
above 2% in 2017. In this scenario, the Fed is expected to conduct a gradual normalization process in a context
characterized by the uncertainty of the external environment together with the Fed's own concerns regarding the
trending growth in productivity and the economy's potential GDP growth.
The key for emerging economies is management of their vulnerability to sudden movements of capital. There has
been increased inflationary pressure in Turkey, which could lead to a tougher monetary policy in an environment
of moderate growth of approximately 2.5% in 2016 and 2017. The pace of economic growth in Mexico could
have tapered off slightly to below 2% in 2016 and this slowdown may become more pronounced, down to 1%
in 2017, given the uncertainty associated with the trade measures adopted by the United States. The GDP of
South America as a whole could contract by over 2% in 2016, though it should recover and post growth of
slightly over 1% in 2017 thanks to the increased contribution from the foreign sector, the end of the downturn in
Brazil, private investment in Argentina and the plans for public-sector investment in countries such as Peru and
Colombia.
However, in the more medium and longer term, the greatest risk for the global economy remains linked to the
imbalances in China's economy. In this regard, concerns regarding a substantial slowdown in 2016 were allayed
after reports of 6.6% growth (6.9% in 2015). However, the outlook continues to be for a gradual slowdown to
around 6% in 2017. In the long term, doubts regarding the prospects of growth remain, given the slow progress
of structural reforms in some key areas, particularly in state-owned companies.
2
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain
Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 51). This English version is a translation of the original in
Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
3. Balance sheet, business activity and earnings
The key figures in the Bank’s balance sheet with respect to its main business are as follow:
The Bank's total balance sheet as of December 31, 2016 stood at €418,447 million (€397,303 million in 2015).
At the close of 2016, “Loans and receivables – Loans and advances to customers” amounted to €213,890
million, compared with €197,422 million for the previous year. As of December 31, 2016, customer deposits
stood at €207,946 million (€190,222 million in 2015).
In 2016, the Bank had a net profit after tax of €1,662 million euros (€2,864 million in 2015). Operating
expenses increased from €3,756 million in 2015 to €4,247 million in 2016. Gross income for 2016 totaled
€8,674 million, compared with €7,701 million in 2015. Net interest income in 2016 stood at €3,523 million
(€3,339 million in 2015).These changes are mainly explicated by the merger process of BBVA, S.A (absorbing
company), Catalunya Banc, S.A. and Unoe Bank, S.A. during 2016.
4. Risk management
BBVA's risk management system is outlined in Note 5, Risk Management, of the accompanying Financial
Statements.
5.
BBVA Group solvency and capital ratios
The BBVA Group’s capital ratios
BBVA Group's solvency and capital ratios required by the regulation in force are outlined in Note 28 of the
accompanying Financial Statements.
6.
Environmental information
6.1. Environmental commitment
Sustainable development is a priority for BBVA Group, given that as a financial institution it has a considerable
impact on the environment, whether through the consumption of natural resources, management of its
buildings, use of paper, travel, etc. (direct impact), or through the environmental consequences of BBVA Group
products and services, particularly those related to financing, asset management and supply chain activities
(indirect impact).
This commitment is set out in the Group's Environmental Policy, whose scope is global and affects all the activities
carried out by the Group, i.e. banks and activities of subsidiaries in which BBVA has effective control.
6.2. Aims of the environmental policy
The objectives of the BBVA Group's environmental policy are as follows:
• To comply with prevailing environmental legislation where the BBVA Group operates.
• To continuously improve the identification and management of environmental risks in the Group’s financial
and investment operations.
• To integrate the environmental variables into the development of financial products and services.
• To reach Eco-efficiency in the use of natural resources, setting and fulfilling objectives for improvement as
set out in the Global Eco-efficiency Plan.
• To manage direct impacts through an environmental management system based on ISO 14001 and other
recognized environmental certifications.
• To have a positive influence on the environmental behavior of stakeholders through communication and
raising awareness of the importance of the environment as an additional input in business and human
management practice.
• To inform, raise awareness of, and train employees in environmental issues.
• To provide support for sponsorship, voluntary work and environmental research.
3
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain
Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 51). This English version is a translation of the original in
Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
6.3. Main environmental actions in 2016
The main environmental actions that the BBVA Group carried out in 2016 are as follows:
•
•
•
Launch of the third Global Eco-efficiency Plan 2016-2020, which establishes objectives in terms of
environmental management and sustainable construction, energy and climate change, water, paper and
waste. The previous Global Eco-efficiency Plan successfully concluded in 2015, far exceeding the targets set:
reduce electricity consumption by 14%, water consumption by 23%, paper consumption by 43% and CO2
emissions by 16%; and increase the number of employees working in buildings that have been awarded
environmental certification by 33% (compared with 2012 data).
Improved environmental risk management systems in project finance through Equator Principles and in
determining borrower credit profiles through the tool Ecorating.
Leadership in financing renewable energy project at international level.
• Active participation in the green bond market.
•
Social and environmental risk training for the Group’s risk analysts.
• Activity with multilateral institutions that contribute to regional development through the project finance and
trading operations, mainly in the agricultural and energy efficiency sectors.
•
Support for major international initiatives to fight against climate change such as CDP, Green Bonds
Principles, Global Investor Statement on Climate Change, declaration of the European Financial Services
Roundtable in support of a response to climate change and the Joint Declaration on Energy Efficiency in the
financial sector, promoted by UNEP FI.
• Development of ambitious environmental sponsorship programs, particularly through the BBVA Foundation.
Worth noting are the BBVA Foundation Frontiers of Knowledge awards in the Ecology, Conservation Biology
and Climate Change categories, each provided with €400,000, as well as the BBVA Foundation Award for
Biodiversity Conservation which carry a total cash prize of €580,000
• Environmental awareness-raising activities with the Group's employees.
As of December 31, 2016, there are no items in the BBVA Group’s consolidated Financial Statements that
warranted inclusion in the separate environmental information document set out in the Ministry of Economy
Order dated October 8, 2001.
7.
Customer Care Service and Customer Ombudsman
The activities of the Customer Care Service and Customer Ombudsman in 2016 complied with Article 17 of
Ministerial Order ECO/734/2004 of 11 March, issued by the Spanish Ministry of the Economy regarding
customer care departments and services and the customer ombudsman in financial institutions; they also
followed BBVA Group's Customer Protection Charter in Spain, which the BBVA Board of Directors approved in
2015, regulating the activities and powers of the Customer Care Service and Customer Ombudsman.
Thus, BBVA's Customer Care Service relays complains and complaints addressed to the Customer Ombudsman
and, initially, to the Customer Care Service, except for matters falling within the powers of the Customer
Ombudsman as established in the aforementioned Charter.
4
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain
Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 51). This English version is a translation of the original in
Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
7.1. Report on the activity of the Customer Care Service department
In 2016, the Customer Care Service consolidated the proposals initiated in 2015 and, in keeping with the
European guidelines on complaints established by the pertinent authorities the European Securities and Markets
Authority (ESMA) and the European Banking Authority (EBA), worked on detected recurring, system-related or
potential problems at the institution. Two key functions of the BBVA quality strategy are anticipation and root
cause analysis. The Customer Care Service is a fundamental element for detecting and subsequently proposing
action plans to improve customer experience and meet regulatory requirements.
The grievances and complaints handled are classified:
Type of Complaint to the Customer Care Service
Percentage of
Complaints
Assets products
Operations
Commisions and expenses
Customer information
Investments - Derivatives
Collection and payment services
Financial and welfare products
Other
Total
26.0%
29.0%
0.0%
8.0%
8.0%
10.0%
6.0%
13.0%
100%
The complaints handled in 2016, broken down by the nature of their final resolution, are as follows:
Resolution for Complaints to the
Customer Service Center
In favor of the person submitting the complaint
Partially in favor of the person submitting the complaint
In favor of the BBVA Group
Total
Number of
Complaints
6,373
2,511
9,594
18,478
Quality governance has become one of the essential levers driving the corporate strategy and objectives that
have been defined for service quality. In this regard, the a number of committees constituting quality governance
assist in the adoption of improvement measures for the areas in which errors or poor practices were detected,
creating work groups to operate with the support of the Bank's senior management. In 2016, this Service
proposed 73 improvement plans, 58 of which have already been implemented.
Through periodic committee meetings, the Customer Care Service continues working on the uniformity of
criteria, harvesting the fruits of this labor in an internal tool for grouping procedures, management criteria, rules,
regulations and response models applicable to each type.
Additionally, and with a view to fulfilling the recommendations of regulators, an ambitious training plan has been
created for all the members who are part of this Service's team. The plan aims to broaden the legal
understanding of managers while deepening comprehension of the practical aspects of banking management:
operations, marketing and action protocols in the retail network.
In line with the demands of society, there is particular sensitivity concerning protection for mortgage debtors,
proposing solutions to enable debtors to pay their obligations with the entity and collaborating closely with the
Social Housing Policy department, which is in turn a party represented on the Central Mortgagor Debtor
Protection Committee.
The non-complex tasks of complaints admission and management that had been outsourced in 2015 were
consolidated in 2016, resulting in more agile and motivated responses and guaranteeing compliance with the
guidelines.
The complaints management tool launched at the beginning of 2015 is now fully operational and has become an
essential element for not only complaints and claims management but also analysis of root causes.
Moreover, the Network Quality and Internal Quality units were incorporated into Quality and Customer Care in
2016. The aim has been to generate a single quality model that would enable us to satisfy our strategic priority
of providing a new standard in customer experience by incorporating a unique vision and forestalling
inefficiencies and dispersions.
5
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain
Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 51). This English version is a translation of the original in
Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
7.2. Report on the activity of BBVA´s Customer Ombudsman
In accordance with article 17 of Order ECO / 734/2004, dated on March 11, of the Ministry of Economy,
departments and services of customer service and customer defender of financial institutions, is included a
summary of the activity in the year 2016 of the office of the BBVA´s Customer Ombudsman:
Statistical summary of grievances and complaints handled in 2016
Customer complaints submitted to the Customer Ombudsman for a decision in 2016 numbered 1,348 cases. Of
these cases, 85 were finally not admitted for processing because they failed to meet the requirements stipulated
in Ministerial Order ECO/734/2004. Of the total cases, 92.06%, a total of 1,241, were resolved and concluded
within the year, and a total of 22 were pending analysis.
The grievances and complaints handled are classified in the table below in line with the criteria established by the
Complaints Service of the Bank of Spain in its requests for information:
Type of Complaint to the Customer Ombudsman
Number of
Complaints
Assets operations
Investment services
Liabilities operations
Other banking products (cash, ATM, etc.)
Collection and payment services
Insurance and welfare products
Other
Total
462
298
137
175
86
62
128
1,348
The details of the complaints resolved in 2016, broken down according to their final resolution, are as follows:
Resolution for Complains of the Ombudsman
In favor of the person submitting the complaint
Partially in favor of the person submitting the complaint
In favor of the BBVA Group
Total
Number of
Complaints
0
784
457
1,241
Based on the above, it can be concluded that more than 59.20% of customers bringing a complaint before the
Customer Ombudsman were in some way satisfied, either as a consequence of Ombudsman’s formal resolution
or because of the outcome of its action as mediator between the customer and the Bank.
The Customer Ombudsman's decisions are based on current legislation, on the contractual relationships in place
between the parties, on current standards on transparency and customer protection, on best banking practices
and, especially, on the principle of equity.
Independence is an essential aspect of the Customer Ombudsman. Resolutions by the Ombudsman that are
favorable to the customer are binding on BBVA.
Recommendations or suggestions
Among the various initiatives implemented by the Bank at the behest of the Ombudsman in 2016, we would
highlight the following:
•
Suggestions have been made to relevant departments, for improving the Bank's claims system which can
contribute to a better and more satisfactory customer service.
• Recommendations for clarity, simplicity and transparency of the information provided to customers on
products and services offered by the Bank, as well as improving personal treatment quality with those.
• There have been recommendations on the suitability of matching product profile with customer profile,
advertising and marketing and to streamline and improve insurance claims management.
6
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain
Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 51). This English version is a translation of the original in
Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
•
In partnership with Quality, Legal Services in Spain and Portugal, and the Customer Care Service, a Quality
Committee has been set up, which meets on a monthly basis with the participation of various of the Group's
Units and Areas in Spain to discuss and share problems, ideas or suggestions related to the grievances and
complaints lodged by the customers, in order to improve the Group's complaints system and thus contribute
to providing better and more satisfactory care to the customers.
• Group representatives are in constant contact and meet regularly with the Complaints Service of the Bank of
Spain, the CNMV and the Spanish General Directorate of Insurance and Pension Funds, with the common
goal of harmonizing criteria and fostering more robust customer protection and security.
Customers not satisfied with the resolution of the Customer Ombudsman can appeal before the Bank of Spain,
the CNMV or the Spanish General Directorate of Insurance and Pension Funds. The Ombudsman always informs
the customers of this option.
In 2016, 104 complaints by BBVA, S.A. customers were filed before the various public supervisory institutions,
which were processed in the Office of the Ombudsman previously.
8. Innovation and Technology
BBVA is engaged in a process of digital transformation, the main aim of which is to achieve its aspiration of
strengthening relationships with its customers and being the best possible Bank for them. The Engineering
division's mission is therefore to enable a technology strategy that provides the foundation for this transformation,
thus becoming more customer-centric and establishing a more global strategy, fast to implement, digital, flexible,
and leveraged on the Group's data. This must be done while continuing to provide support to the Bank's core
business: a) catering to the demand for traditional business (multi-segment, multi-product, multi-channel, etc.);
and b) contributing reliability, with the necessary tools to ensure adequate internal controls, based on consistent
information and data. Likewise, another Engineering objective is to provide the Group with all the tools it needs to
drive profitability, new productivity paradigms and new business processes.
Customers are at the heart of digital transformation. To deliver on their requirements it is necessary to offer real-
time operation, making all the necessary information and procedures available anywhere, anytime, and any
channel. The area's responsibilities therefore need to be revised, particularly regarding rapid product
development, the open ecosystem concept and the critical role of data. Therefore, the main lines of work focus
on the following:
• A new technology stack to offer customers services that are more suited to their needs, in terms of speed
and content.
• Alliances with strategic partners to harness cutting-edge technology, and the necessary collaboration to
speed up the transformation process.
• Productivity and reliability, i.e. securing improved performance from technology, and doing so in a manner
that is fully reliable and guarantees the highest quality standards.
New technology stack: cloud paradigms
With customers increasingly making use of digital channels, and therefore driving an exponential increase in
transaction numbers, the Group has developed its IT model into a more uniform and scalable system, boosting
cloud technology.
In 2016 Engineering has worked on constructing the fundamental building blocks of the technology stack that
includes the entire BBVA Group and shares the cloud attributes such as flexibility and stability that are demanded
by the digital world, while strictly complying with regulatory requirements. This new stack will enable real-time
access, a new approach to data management and the optimization of processing costs, meaning customers
benefit from a service that caters directly to their needs.
Strategic alliances
Engineering has driven creation of a network of strategic alliances, giving traction to BBVA's digital transformation
and complementing its technology stack. Establishing an ecosystem of strategic alliances with some of the
leading businesses in the market ensures the adoption of innovative technologies, digitalization of the business
and speed in the global activation, deployment and operation of solutions. Furthermore, by building a network of
technological alliances with strategic partners, BBVA will work in close cooperation with some of the foremost
companies in their respective fields, such as Salesforce, Red Hat, Amazon Web Services or Cisco.
7
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain
Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 51). This English version is a translation of the original in
Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
Productivity and reliability
Productivity is one of the key aspects of the BBVA transformation process. Greater productivity is critical to
providing our customers with the best possible service while being profitable. Engineering is therefore working on
the following:
• Technology transformation at two levels:
- Hardware: creating the components of the new infrastructure, redirecting demand to new models based
on the cloud paradigm and progressive migration of traditional transactions.
- Software: reusing functionalities and automating as many processes as possible.
• Transformation of operations with a multi-local focus, representing a new organizational approach to
production and functions that optimizes processes.
It is critical to obtain the best possible performance from infrastructures, architectures, operations and internal
processes, and to do so in a way that is fully reliable. Reliability is another key factor for the Engineering function
and digital transformation. Reliability must be at the heart of businesses, guaranteeing utmost quality standards;
both internally, when providing service to other BBVA units, and from an external point of view, when providing a
service to customers.
Operational and technological risk management
One standout initiative for the future in terms of the security and protection of technology channels is the
complete account opening process via mobile devices, meaning customers do not have to go into a branch to
open an account. This service has been designed pursuant to the directives of the Commission on the Prevention
of Money Laundering and Monetary Offenses (SEPBLAC), and incorporates modern facial recognition technology,
with capabilities to identify forged national ID cards (DNI). These technologies will be gradually incorporated into
the most critical processes for customer relations via technological channels.
Work has been carried out in the field of business continuity, meaning contingency plans for low-probability but
extremely high-impact events. Business impact analysis has been updated and implemented, reviewing
technology dependency on critical processes to improve service recovery in the event of IT system malfunction.
Business continuity plans have also been activated in several incidents that have affected BBVA Group, such as
the flooding of the Mapocho River affecting the Bank's headquarters in Chile, social disturbances that affected the
headquarters in Mexico and Venezuela, and the impact of Hurricane Mathew in the south of the United States.
At the same time, digital transformation has established itself as a strategic priority for the financial sector in
general and for BBVA in particular. In this context, it is vital that we ensure effective protection for BBVA's brand
and assets, as well as our customers' data, from the threats present in the virtual environment. To achieve this,
BBVA has created a reliable and efficient center for cyber-attack prevention, alerts and response. This ensures
that the Group develops at the same pace as organized technological crime.
BBVA has also consolidated deployment of the cybersecurity standard designed by NIST (National Institute for
Standards and Technologies) as a benchmark framework for management and control.
Finally, it is important to note that BBVA is utterly committed to protecting its customers. It therefore works
closely with regulators and the rest of the industry across its global footprint.
9. Other information
9.1. Capital and treasury stock
Information about common stock and transactions with treasury stock is detailed in Notes 23 and 26 of the
accompanying Financial Statements.
9.2. Shareholder remuneration and allocation of earnings
Information about shareholder remuneration and application of earnings can be found in Note 3 of the
accompanying Financial Statements.
8
Translation of financial statements originally issued in Spanish and prepared in accordance with Spanish generally accounting principles (Bank of Spain
Circular 4/2004, and as amended thereafter, which adapts the EU-IFRES for banks. See Note 51). This English version is a translation of the original in
Spanish for information purposes only. In the event of a discrepancy, the original Spanish-language version prevails.
9.3. Average period for payment to suppliers
The average period payment to suppliers during the year 2016 is 33 days, below the maximum legal limit of 60
days established by Law 15/2010 of July 5, for which measures are put into place combating late payment
in commercial transactions. The calculation of the average period for payment was made as established in the
Act.
10. Subsequent events
The interim dividend approved on December 21, 2016 was paid out on January 12, 2017, as detailed in Note
3.
On February 1, 2017, BBVA´s shareholder remuneration policy for 2017 was announced (see Note 4).
From January 1, 2017 to the date of preparation of these consolidated financial statements, no other subsequent
events not mentioned above in these financial statements have taken place that could significantly affect the
Group’s earnings or its equity position.
11. Annual corporate governance report
In accordance with the provisions of Article 540 of the Spanish Corporate Act, the BBVA Group prepared the
Annual Corporate Governance Report for 2016 (which is an integral part of the Management Report for that
year) following the content guidelines set down in Order ECC/461/2013, dated March 20, and in CNMV Circular
5/2013, dated June 12 in the wording provided by CNMV Circular 7/2015, dated December 22, including a
section detailing the degree to which the Bank is compliant with existing corporate governance recommendations
in Spain. In addition, all the information required by Article 539 of the Spanish Corporations Act can be accessed
on BBVA’s website www.bbva.com
.
9
ANNUAL CORPORATE GOVERNANCE REPORT ON THE PUBLICLY TRADED
COMPANIES
ISSUER IDENTIFICATION
FINANCIAL YEAR-END
31/12/2016
TAX ID No.: A-
48265169
Registered name: BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Registered Address: Plaza de San Nicolás 4, 48005 Bilbao (Vizcaya)
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
10
ANNUAL CORPORATE GOVERNANCE REPORT
ON THE PUBLICLY TRADED COMPANIES
A. OWNERSHIP STRUCTURE
A.1 Fill in the following table on the company’s share capital:
Date of last modification
Share capital (EUR)
Number of shares
Number of voting rights
20/10/2016
3,217,641,468.58
6,566,615,242
6,566,615,242
Indicate if there are different classes of shares with different rights associated with them.
NO
Class
Number of shares
Nominal
amount
Number of voting
rights
Different rights
A.2 Detail the direct and indirect owners of significant holdings in your company at year-end, excluding directors:
Name of shareholder
(person or company)
Number of direct
voting rights
Direct owner of stake
Number of
voting rights
% of total voting
rights
Indirect voting rights
Indicate the most significant movements in the shareholder structure during the year.
Name of shareholder (person or
company)
Date of the transaction
Description of the transaction
A.3 Fill in the following tables with the members of the company’s Board of Directors with voting rights on company
shares:
Name of
director
Number of direct
voting rights
Direct owner of
stake
Number of voting
rights
% of total voting
rights
Indirect voting rights
FRANCISCO GONZÁLEZ
RODRÍGUEZ
CARLOS TORRES VILA
TOMÁS ALFARO DRAKE
JOSÉ MIGUEL ANDRÉS
TORRECILLAS
2,255,715
1,716,059
0.06%
173,974
17,425
10,632
0.00%
0.00%
0.00%
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
11
JOSÉ ANTONIO FERNÁNDEZ
RIVERO
BELÉN GARIJO LÓPEZ
JOSÉ MANUEL GONZÁLEZ-
PÁRAMO MARTÍNEZ-MURILLO
SUNIR KUMAR KAPOOR
CARLOS LORING MARTÍNEZ DE
IRUJO
LOURDES MÁIZ CARRO
JOSÉ MALDONADO RAMOS
JOSÉ LUIS PALAO GARCÍA-
SUELTO
JUAN PI LLORENS
74,467
0
51,983
0
58,311
0
38,761
10,928
0
0
0
0
0
SUSANA RODRÍGUEZ VIDARTE
26,390
JAMES ANDREW STOTT
103
1,008
10,000
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
% total voting rights held by the Board of Directors
0.06%
Fill in the following tables with the members of the company’s Board of Directors with share options:
Name of director (person or
company)
Number of
direct share
options
Direct owner
Number of
voting rights
Number of
equivalent
shares
% of total voting
rights
Indirect share options
FRANCISCO GONZÁLEZ
RODRÍGUEZ
239,636
CARLOS TORRES VILA
111,425
JOSÉ MANUEL GONZÁLEZ-
PÁRAMO MARTÍNEZ-
MURILLO
23,942
0
0
0
0
0
0
0
0
0
0.00%
0.00%
0.00%
A.4 Where applicable, indicate any family, commercial, contractual or corporate relationships between holders of
significant shareholdings, insofar as the company is aware of them, unless they are of little relevance or due to
ordinary trading or exchange activities:
Related name (person or
company)
Type of relationship
Brief description
A.5 Where applicable, indicate any commercial, contractual or corporate relationships between holders of significant
shareholdings, and the company and/or its group, unless they are of little relevance or due to ordinary trading or
exchange activities:
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
12
Related name (person or
company)
Type of relationship
Brief description
A.6 Indicate whether the company has been informed of any shareholder agreements that may affect it as set out
under articles 530 and 531 of the Corporate Enterprises Act. Where applicable, briefly describe them and list the
shareholders bound by such agreement:
Participants in shareholders
agreements
% of share capital affected
Brief description of agreement
NO
Indicate whether the company is aware of the existence of concerted actions amongst its shareholders. If so,
describe them briefly.
Participants in concerted action
% of share capital affected
Brief description of concerted
action
NO
If there has been any amendment or breaking-off of said pacts or agreements or concerted actions, indicate this
expressly:
A.7 Indicate whether any person or organization exercises or may exercise control over the company pursuant to
article 5 of the Securities Exchange Act. If so, identify names:
NO
Name (person or company)
Comments
A.8 Fill in the following tables regarding the company’s treasury stock:
At year end:
Number of direct shares
Number of indirect shares (*)
Total % of share capital
2,789,894
4,440,893
0.11%
(*) Through:
Name of direct owner of shareholding (person or company)
Number of direct shares
CORPORACIÓN GENERAL FINANCIERA, S.A.
Total:
4,440,893
4,440,893
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
13
Give details of any significant changes during the year, pursuant to Royal Decree 1362/2007.
Explain the significant changes
Seven treasury stock communications were made in 2016, of which two correspond to a change in the number of
voting rights in the “Dividend Option”, which let shareholders decide whether to receive shares or cash for their
dividend payment and the rest correspond to acquisitions passed the 1% threshold. These communications are
detailed below:
Communication date: 12 January 2016 with a total of 1,114,168 direct shares and 38,177,251 indirect shares
acquired for 0.617% of the total share capital. This communication was made after acquisitions passed the
1% threshold.
Communication date: 03 March 2016 with a total of 4,065,465 direct shares and 34,238,771 indirect shares
acquired for 0.602% of the total share capital. This communication was made after acquisitions passed the
1% threshold.
Communication date: 28 April 2016 with a total of 802,445 direct shares and 21,959,011 indirect shares
acquired for 0.351% on the total share capital. This communication was made on execution of the “Dividend
Option” program.
Communication date: 24 June 2016 with a total of 1,491,209 direct shares and 23,702,450 indirect shares
acquired for 0.389% of the total share capital. This communication was made after acquisitions passed the
1% threshold.
Communication date: 29 September 2016 with a total of 1,513,946 direct shares and 7,696,489 indirect
shares acquired for 0.142% on the total share capital. This communication was made after acquisitions
passed the 1% threshold.
Communication date: 25 October 2016 with a total of 7,932,973 direct shares and 10,159,764 indirect shares
acquired for 0.276% of the total share capital in the “Dividend Option” program.
Communication date: 13 December 2016 with a total of 896,297 direct shares and 7,267,288 indirect shares
acquired for 0.124% of the total share capital. This communication was made after acquisitions passed the
1% threshold.
A.9 Describe the conditions and term of the prevailing mandate from the general meeting to the Board of Directors to
issue, buy back and transfer treasury stock.
The Annual General Meeting of Shareholders of BBVA held on 16 March 2012, under item three of the agenda,
passed a resolution to delegate to the Board of Directors the power to increase the Bank's share capital, within
a maximum term of 5 years following the date of the resolution, up to a maximum amount corresponding to 50%
of BBVA's share capital on the date of such authorization, on one or several occasions, by issuing new ordinary
or privileged shares with or without voting rights, including redeemable shares or shares of any other kind, with
or without an issue premium, the countervalue of said shares comprising cash considerations. The authorization
includes the setting out of the terms and conditions of the common stock increase, the determination of the
nominal value of the shares to be issued, their characteristics and any privileges they may confer, the attribution
of the right of redemption and the conditions of redemption, and the exercise of that right by BBVA; and grants
the Board of Directors with the capacity to exclude the preemptive subscription right regarding shares issued by
virtue of said resolution, though this capacity is limited to 20% of the share capital of BBVA on the date of said
authorization.
In the meeting held on 19 November 2014, the BBVA Board of Directors, by virtue of the aforementioned
delegation, agreed to a common stock increase with exclusion to the preemptive subscription right through an
Accelerated Bookbuilding Offering (ABO). On 20 November 2014, the common stock increase was executed for
a nominal amount of €118,787,879.56 by issuing 242,424,244 ordinary shares of BBVA, each one at a nominal
value of €0.49, in the same class and series as the shares currently in circulation.
The fifth item on the agenda at BBVA's Annual General Meeting of Shareholders held on 16 March 2012 agreed
to power to the Board of Directors to issue securities convertible and/or exchangeable for BBVA shares on one
or multiple occasions within a maximum period of 5 years from the date of the adoption the agreement to do so,
for a maximum amount of €12,000,000,000 or its equivalent in any other currency, extending the delegation's
aspects and capacities to: establish the different aspects and conditions of each issue; increase the share
capital by the amount needed to address the requests for conversion or subscription; exclude the preemptive
subscription right to shareholders whenever necessary or required in the interest of the company; and
determine the rate of conversion and/or exchange and the date of conversion and/or exchange.
In exercising this delegation in 2016, 2015, 2014 and 2013, BBVA executed four issues of convertible perpetual
securities into new issues of ordinary BBVA shares (level 1 additional capital instruments) with exclusion of the
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
14
preemptive subscription right, amounting to €1 billion in 2016, €1.5 billion in 2015 and 2014 respectively and
USD $1.5 billion in 2013.
The Annual General Meeting of Shareholders of BBVA held on 14 March 2014, under agenda item three,
agreed to authorized BBVA, directly or via any of its subsidiaries, for a maximum term of five years from the
date of said resolution, for the derivative acquisition of BBVA shares at any time and on as many occasions as it
deems appropriate, by any means permitted by law, including charging the acquisition to the year's profits
and/or unrestricted reserves, and to subsequently dispose of the shares acquired, indicating that derivative
acquisition of shares will at all times be carried out in compliance with the conditions established under
applicable legislation and, in particular, the following conditions: (i) at no time will the nominal value of the
treasury stock acquired, directly or indirectly, under this authorization, added to the shares already owned by the
Company and its subsidiaries, exceed 10% of the subscribed share capital of BBVA or, as appropriate, the
maximum amount permitted by applicable legislation; (ii) the acquisition shall not result in the equity being less
than the share capital plus the legal reserves or the reserves that are restricted by the Company bylaws; (iii) a
restricted reserve, equivalent to the sum of treasury stock of the company recorded to assets, may be
established against the net equity; (iv) shares acquired must be fully paid up, unless the acquisition is without
consideration, and must not entail any obligation to provide ancillary benefits; and (v) the acquisition price per
share will not be below the nominal value of the share or more than 20% above the listed price or any other
price associated with the shares on the acquisition date. Moreover, said General Meeting expressly authorized
that the shares acquired by BBVA or its subsidiaries by exercising the aforementioned authorization may be
wholly or partially earmarked for delivery to workers or directors of BBVA or its subsidiaries.
The General Meeting of Shareholders of BBVA held on 11 March 2016 resolved, under item three, sections 3.3
and 3.4 of the agenda, to perform two common stock increases to be charged to voluntary reserves through the
issue of new ordinary shares each with a nominal value of €0.49, without issue premium, which as of 31
December 2016 had not been executed. The maximum term for the execution of said increases is one year
from the date of the adoption of said resolutions.
A.9 bis Estimated floating capital:
Estimated floating capital
%
100
A.10 Indicate whether there is any restriction on the transferability of securities and/or any restriction on voting rights.
In particular, report the existence of any restrictions that might hinder the take-over of control of the company by
purchasing its shares on the market.
NO
A.11 Indicate whether the General Meeting has agreed to adopt measures to neutralize a public takeover bid,
pursuant to Act 6/2007.
NO
If so, explain the measures approved and the terms and conditions under which the restrictions would become
inefficient:
A.12 Indicate whether the company has issued securities that are not traded on a regulated market in the EU.
YES
Where applicable, indicate the different classes of shares, and what rights and obligations each share class confers.
All the shares in BBVA's capital have the same class and series, and confer the same voting and economic rights.
There are no different voting rights for any shareholder. There are no shares that do not represent capital.
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
15
The Bank's shares are admitted for trading on the Securities Exchanges in Madrid, Barcelona, Bilbao and Valencia,
through the Spanish electronic trading platform (Continuous Market), and the stock markets in London and Mexico.
BBVA American Depositary Shares (ADS) are traded on the New York Stock Exchange and also on the Lima
Exchange (Peru) under an exchange agreement between both markets.
Additionally, as of 31 December 2016, shares of BBVA Banco Continental, S.A.; Banco Provincial S.A.; BBVA
Colombia, S.A.; BBVA Chile, S.A. and BBVA Banco Francés, S.A., were traded on their respective local securities
markets and, for the latter entity, on the New York Stock Exchange and in the Latin American securities exchange
(LATIBEX) on the Stock Market of Madrid.
B GENERAL MEETING
B.1 Indicate, and where applicable give details, whether there are any differences from the minimum standards
established under the Corporate Enterprises Act (CEA) with respect to the quorum and constitution of the General
Meeting.
YES
% quorum different from quorum set
% quorum different from quorum set out in
out in art. 193 of CEA for general
art. 194 of CEA for special circumstances
circumstances
in art.194 of CEA
Quorum required on first
summons
Quorum required on
second summons
0.00%
0.00%
66.66%
60.00%
Description of differences
Article 194 of the Corporate Enterprises Act establishes that, in public limited companies, in order for a General
Meeting (whether annual or extraordinary) to validly resolve to increase or reduce capital or make any other
amendment to the Company Bylaws, bond issuance, the cancellation or restriction of first refusal subscription
rights over new shares, or the conversion, merger or spin-off of the company or global assignment of assets and
liabilities or the transfer the registered office abroad, the shareholders present and represented on first summons
must own at least fifty percent of the subscribed capital with voting rights.
On second summons, twenty-five percent of said capital will be sufficient.
The above notwithstanding, article 25 of the BBVA Company Bylaws establishes that a reinforced quorum of two-
thirds of subscribed capital with voting rights must attend the General Meeting at first summons or 60% of that
capital at second summons, in order to adopt resolutions on replacing the corporate purpose, the transformation,
total spin off, winding-up of the Company and amending that article of Bylaws establishing this reinforced quorum.
B.2 Indicate, and where applicable give details, whether there are any differences from the minimum standards
established under the Corporate Enterprises Act (CEA) for the adoption of corporate resolutions:
NO
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
16
Describe any differences from the minimum standards established under the CEA.
B.3 Indicate the rules applicable to amendments to the company bylaws. In particular, report the majorities
established to amend the bylaws, and the rules, if any, to safeguard shareholders' rights when amending the bylaws.
Article 30 of the BBVA Company Bylaws establishes that the General Meeting is empowered to amend the Company
Bylaws and to confirm and/or rectify Board of Directors’ interpretation of them.
To such end, the rules established under articles 285 et seq. of the Corporate Enterprises Act shall apply.
The above paragraph notwithstanding, article 25 of the BBVA Company Bylaws establishes that in order to adopt
resolutions regarding any change to the corporate purpose, transformation, total spin-off or winding up the Company
and amendment of the second paragraph of said article 25, two-thirds of the subscribed voting capital must attend
the General Meeting on first summons or 60% of that capital on second summons.
As regards the procedure for amending the Company Bylaws, article 4.2 c) of Act 10/2014 dated 26th June, on the
regulation, supervision and solvency of credit institutions, establishes that the Bank of Spain shall be responsible for
authorizing amendments to the bylaws of credit institutions.
Moreover, article 10 of Royal Decree 84/2015 dated 13rd February, implementing Act 10/2014, stipulates that the
Bank of Spain shall have two months to decide following receipt of the request for the Company’s Bylaws
amendment, which must be accompanied by a certification of minutes recording the agreement, a report
substantiating the proposal drawn up by the board of directors and a project of new bylaws, identifying the cited
amendments.
Notwithstanding the foregoing, article 10 of Royal Decree 84/2015 also establishes that no previous authorization
from the Bank of Spain is required, though the latter must be notified, so that it may be entered into the Credit Entity
Register, of amendments with the following purposes:
- Change of the registered office within the national territory.
- Stock capital increase.
- Incorporating verbatim into the bylaws legal or regulatory precepts of a mandatory or prohibitive nature, or for the
purpose of complying with legal or administrative decisions.
- Those amendments for which the Bank of Spain, in response to a prior enquiry made by the affected bank, deems
that authorization is not required due to their little relevance.
This communication must be made within fifteen working days following the adoption of the Bylaws amendment
resolution.
Finally, to indicate that as a significant entity, BBVA is under the direct supervision of the European Central Bank
(ECB) in cooperation with the Bank of Spain under the Single Supervision Mechanism, so the authorization of the
Bank of Spain above mentioned shall be submitted to the ECB, prior to its resolution by the Bank of Spain.
B.4 Indicate the data on attendance at general meetings held during the year to which this report refers and the
previous year:
Attendance figures
% voting remotely
General Meeting date
% shareholders
% attending by
present
proxy
13/03/2015
11/03/2016
2.69%
1.83%
39.68%
38.34%
Electronic
vote
Other
Total
0.04%
19.64%
62.05%
0.26%
22.08%
62.51%
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
17
B.5 Indicate the number of shares, if any, that are required to be able to attend the General Meeting and whether
there are any restrictions on such attendance in the bylaws:
Number of shares required to attend the General Meetings
500
YES
B.6 Section repealed.
B.7 Indicate the address and means of access through the company website to the information on corporate
governance and other information on the general meetings that must be made available to shareholders on the
company's website.
The content on corporate governance and other information on the latest general meetings are directly accessible
through the Banco Bilbao Vizcaya Argentaria, S.A. corporate website, www.bbva.com, in the Shareholders and
Investors, Corporate Governance and Remunerations Policy section.
C CORPORATE GOVERNANCE STRUCTURE
C.1 Board of Directors
C.1.1 Maximum and minimum number of directors established in the bylaws:
Maximum number of Directors
Minimum number of Directors
C.1.2 Fill in the following table on the Board members:
15
5
Name of
director
(person or
company)
FRANCISCO
GONZÁLEZ
RODRÍGUEZ
CARLOS
TORRES VILA
TOMÁS
ALFARO
DRAKE
JOSÉ MIGUEL
ANDRÉS
TORRECILLAS
JOSÉ ANTONIO
FERNÁNDEZ
Representative
Type of
directorship
Position on the
Board
Date first
appointed
Date last
appointed
Election
procedure
-
-
-
-
-
EXECUTIVE
CHAIRMAN
28/01/2000
11/03/2016
EXECUTIVE
CHIEF
EXECUTIVE
OFFICER
04/05/2015
11/03/2016
INDEPENDENT
DIRECTOR
18/03/2006
14/03/2014
INDEPENDENT
LEAD DIRECTOR
13/03/2015
13/03/2015
OTHER
EXTERNAL
DIRECTOR
28/02/2004
13/03/2015
GENERAL
MEETING
RESOLUTION
GENERAL
MEETING
RESOLUTION
GENERAL
MEETING
RESOLUTION
GENERAL
MEETING
RESOLUTION
GENERAL
MEETING
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
18
RIVERO
BELÉN GARIJO
LÓPEZ
JOSÉ MANUEL
GONZÁLEZ-
PÁRAMO
MARTÍNEZ-
MURILLO
SUNIR KUMAR
KAPOOR
CARLOS
LORING
MARTÍNEZ DE
IRUJO
LOURDES
MÁIZ CARRO
JOSÉ
MALDONADO
RAMOS
JOSÉ LUIS
PALAO
GARCÍA-
SUELTO
JUAN PI
LLORENS
SUSANA
RODRÍGUEZ
VIDARTE
JAMES
ANDREW
STOTT
-
-
-
-
-
-
-
-
-
-
INDEPENDENT
DIRECTOR
16/03/2012
13/03/2015
EXECUTIVE
DIRECTOR
03/06/2013
14/03/2014
INDEPENDENT
DIRECTOR
11/03/2016
11/03/2016
OTHER
EXTERNAL
DIRECTOR
28/02/2004
14/03/2014
INDEPENDENT
DIRECTOR
14/03/2014
14/03/2014
OTHER
EXTERNAL
DIRECTOR
28/01/2000
13/03/2015
INDEPENDENT
DIRECTOR
01/02/2011
14/03/2014
INDEPENDENT
DIRECTOR
27/07/2011
13/03/2015
OTHER
EXTERNAL
DIRECTOR
28/05/2002
14/03/2014
INDEPENDENT
DIRECTOR
11/03/2016
11/03/2016
RESOLUTION
GENERAL
MEETING
RESOLUTION
GENERAL
MEETING
RESOLUTION
GENERAL
MEETING
RESOLUTION
GENERAL
MEETING
RESOLUTION
GENERAL
MEETING
RESOLUTION
GENERAL
MEETING
RESOLUTION
GENERAL
MEETING
RESOLUTION
GENERAL
MEETING
RESOLUTION
GENERAL
MEETING
RESOLUTION
GENERAL
MEETING
RESOLUTION
Total number of Directors
15
Indicate the severances that have occurred on the Board of Directors during the reporting period:
Name of director (person or company)
Status of the Director at the
time
Date of leaving
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
19
RAMÓN BUSTAMENTE Y DE LA MORA
IGNACIO FERRERO JORDI
OTHER EXTERNAL
OTHER EXTERNAL
11/03/2016
11/03/2016
C.1.3 Fill in the following tables on the Board members and their different kinds of directorship:
EXECUTIVE DIRECTORS
Name of director (person or company)
Position within company organization
FRANCISCO GONZÁLEZ RODRÍGUEZ
GROUP EXECUTIVE CHAIRMAN
CARLOS TORRES VILA
CHIEF EXECUTIVE OFFICER
JOSÉ MANUEL GONZÁLEZ-PÁRAMO MARTÍNEZ-
MURILLO
DIRECTOR OF GLOBAL ECONOMICS, REGULATION
& PUBLIC AFFAIRS
Total number of executive Directors
% of total directors
3
20%
EXTERNAL PROPRIETARY DIRECTORS
EXTERNAL INDEPENDENT DIRECTORS
Name of director (person or
company)
PROFILE
BELÉN GARIJO LÓPEZ
JOSÉ LUIS PALAO GARCÍA-
SUELTO
JUAN PI LLORENS
INTERNATIONAL EXECUTIVE COMMITTEE,
MEMBER OF THE EXECUTIVE BOARD OF MERCK GROUP AND CEO
OF MERCK HEALTH CARE., DIRECTOR OF L’OREAL AND CHAIR OF
ISEC
THE PHRMA
(PHARMACEUTICAL RESEARCH AND MANUFACTURERS OF
AMERICA).
OTHER RELEVANT POSITIONS: WAS PRESIDENT OF COMMERCIAL
OPERATIONS IN EUROPE AND CANADA AT SANOFI AVENTIS.
GRADUATED IN MEDICINE FROM UNIVERSIDAD DE ALCALÁ DE
HENARES, MADRID.
SPECIALIST IN CLINICAL PHARMACOLOGY AT HOSPITAL DE LA PAZ -
UNIVERSIDAD AUTÓNOMA DE MADRID.
HAS BEEN SENIOR PARTNER OF THE FINANCIAL DIVISION AT
ARTHUR ANDERSEN SPAIN.
OTHER RELEVANT POSITIONS: WAS HEAD OF THE AUDIT AND
INSPECTION SERVICES AT THE INSTITUTO DE CRÉDITO OFICIAL
(OFFICIAL CREDIT INSTITUTE) AND HAS ALSO BEEN A FREELANCE
CONSULTANT.
GRADUATED IN AGRICULTURAL ENGINEERING FROM THE MADRID
SCHOOL OF AGRICULTURAL ENGINEERS AND BUSINESS AND
MANAGEMENT STUDIES FROM UNIVERSIDAD COMPLUTENSE DE
MADRID.
CHAIR OF THE BOARD'S REMUNERATION COMMITTEE. HAD A
PROFESSIONAL CAREER AT
IBM HOLDING VARIOUS SENIOR
POSITIONS AT A NATIONAL AND INTERNATIONAL LEVEL INCLUDING
VICE PRESIDENT FOR SALES AT IBM EUROPE, VICE PRESIDENT OF
TECHNOLOGY & SYSTEMS AT IBM EUROPE AND VICE PRESIDENT OF
FINANCIAL SERVICES SECTOR, GMU (GROWTH MARKETS UNITS) IN
CHINA. HE WAS EXECUTIVE CHAIRMAN OF IBM SPAIN.
GRADUATED IN INDUSTRIAL ENGINEERING FROM UNIVERSIDAD
POLITECNICA DE BARCELONA AND TOOK A GENERAL MANAGEMENT
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
20
LOURDES MÁIZ CARRO
TOMÁS ALFARO DRAKE
JOSÉ MIGUEL ANDRÉS
TORRECILLAS
SUNIR KUMAR KAPOOR
JAMES ANDREW STOTT
PROGRAM AT IESE.
WAS SECRETARY OF THE BOARD OF DIRECTORS AND DIRECTOR OF
THE LEGAL DEPARTMENT OF IBERIA, LÍNEAS AÉREAS DE ESPAÑA
UNTIL APRIL 2016.
PHD IN PHILOSOPHY, WORKED IN RESEARCH AND GAVE CLASSES IN
METAPHYSICS AT THE COMPLUTENSE UNIVERSITY DURING FIVE
YEARS. GRADUATED IN LAW, JOINED THE STATE COUNSEL CORPS
AND HELD VARIOUS POSTS OF RESPONSIBILITY IN THE PUBLIC
ADMINISTRATIONS SUCH AS GENERAL ORGANIZATIONAL DIRECTOR,
WORK AND COMPUTING POSITIONS AT THE MINISTRY OF PUBLIC
ADMINISTRATIONS, GENERAL DIRECTOR OF THE SOCIEDAD
ESTATAL DE PARTICIPACIONES PATRIMONIALES (SEPPA) IN THE
MINISTRY OF ECONOMY AND FINANCES AND GENERAL TECHINCAL
SECRETARY AT THE MINISTRY OF AGRICULTURE. SHE HAS BEEN A
DIRECTOR IN NUMEROUS COMPANIES, INCLUDING RENFE, GIF
(NOW, ADIF), ICO (INSTITUTO DE CRÉDITO OFICIAL), ALDEASA AND
BANCO HIPOTECARIO.
CHAIR OF THE BOARD'S APPOINTMENTS COMMITTEE. DIRECTOR OF
INTERNAL DEVELOPMENT AND TEACHER IN THE FINANCE AREA AT
UNIVERSIDAD FRANCISCO DE VITORIA.
OTHER RELEVANT POSITIONS: WAS DIRECTOR OF THE FOLLOWING
BACHELOR'S DEGREES AT UNIVERSIDAD FRANCISCO DE VITORIA:
BUSINESS ADMINISTRATION AND MANAGEMENT; BUSINESS
STUDIES; MARKETING; BUSINESS ADMINISTRATION. GRADUATED IN
ENGINEERING AT ICAI AND BECAME MASTER IN ECONOMICS AND
BUSINESS ADMINISTRATION (MBA) AT IESE.
CHAIR OF THE BOARD'S AUDIT AND COMPLIANCE COMMITTEE AND
LEAD DIRECTOR.
HIS PROFESSIONAL CAREER BEGAN WITH ERNST & YOUNG AS
GENERAL MANAGING PARTNER FOR AUDIT AND ADVISORY
SERVICES AND CHAIRMAN OF ERNST & YOUNG SPAIN UNTIL 2014.
MEMBER OF SEVERAL ENTITIES SUCH AS THE OFFICIAL REGISTRY
(ROAC), REGISTRY OF ECONOMIST
OF ACCOUNT AUDITORS
CHARTERED
AUDITORS
ACCOUNTANTS AND THE ADVISORY BOARD OF THE INSTITUTE OF
INTERNAL AUDITORS. GRADUATED IN BUSINESS SCIENCES AND
ECONOMICS FROM THE COMPLUTENSE UNIVERSITY IN MADRID.
INDEPENDENT CONSULTANT
IN SEVERAL TECHNOLOGICAL
COMPANIES SUCH AS ATLANTIC BRIDGE VENTURES, PANDA
SECURITY, AVNI NETWORKS, GLOBALLOGIC AND AGNITY GLOBAL.
OTHER RELEVANT POSITIONS: RESPONSIBLE FOR EMEA
IN
MICROSOFT EUROPE AND WORLDWIDE DIRECTOR OF BUSINESS
STRATEGY IN MICROSOFT CORPORATION. FORMERLY EXECUTIVE
VICE PRESIDENT AND MARKETING DIRECTOR OF CASSATT
CORPORATION AND PRESIDENT AND CEO OF UBMATRIX
INCORPORATED. GRADUATED
IN PHYSICS STUDIES FROM
BIRMINGHAM UNIVERSITY AND MASTER IN COMPUTER SYSTEMS AT
CRANFIELD INSTITUTE OF TECHNOLOGY.
CHAIR OF THE BOARD’S RISK COMMITTEE.
OTHER RELEVANT POSITIONS: RESPONSIBLE FOR CORPORATE
DEVELOPMENT OF THE ASIA-PACIFIC REGION AND FOR FINANCIAL
SERVICES IN WESTERN EUROPE AND MEMBER OF THE OLIVER
WYMAN FINANCIAL SERVICES GLOBAL LEADERSHIP COMMITTEE.
FORMERLY INDEPENDENT DIRECTOR AND CHAIRMAN OF THE RISKS
AND AUDIT COMMITTEE OF BARCLAYS BANK SPAIN AND
INDEPENDENT DIRECTOR AND MEMBER OF THE AUDIT COMMITTEE
OF CATENON, S.A. GRADUATED IN ECONOMICS FROM CAMBRIDGE
UNIVERSITY.
INSTITUTE OF
SPANISH
(REA),
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
21
Total number of independent Directors
% of total directors
8
53.33%
Indicate whether any director considered an independent director is receiving from the company or from its group any
amount or benefit under any item that is not the remuneration for his/her directorship, or maintains or has maintained
over the last year a business relationship with the company or any company in its group, whether in his/her own
name or as a significant shareholder, director or senior manager of an entity that maintains or has maintained such a
relationship.
Where applicable, include a reasoned statement from the Board with the reasons why it deems that this director can
perform his/her duties as an independent director.
Name of director (person or company)
Description of the relationship
Reasoned statement
OTHER EXTERNAL DIRECTORS
Identify all other external Directors and explain why these cannot be considered proprietary or independent Directors
and detail their relationships with the company, its executives or shareholders.
Name of director (person or
company)
Reasons
Company, executive or
shareholder to which
related
JOSÉ MALDONADO RAMOS
José Maldonado Ramos has been a director for
a continuous period of more than 12 years.
Banco Bilbao Vizcaya
Argentaria, S.A.
JOSÉ ANTONIO FERNÁNDEZ
RIVERO
CARLOS LORING MARTÍNEZ
DE IRUJO
José Antonio Fernández Rivero has been a
director for a continuous period of more than 12
years.
Carlos Loring Martínez de Irujo has been a
director for a continuous period of more than 12
years.
Banco Bilbao Vizcaya
Argentaria, S.A.
Banco Bilbao Vizcaya
Argentaria, S.A.
SUSANA RODRÍGUEZ
VIDARTE
Susana Rodríguez Vidarte has been a director
for a continuous period of more than 12 years.
Banco Bilbao Vizcaya
Argentaria, S.A.
Total number of other external Directors
% of total directors
4
26.67%
Indicate any changes that may have occurred during the period in the type of directorship of each director:
Name of director (person or company)
Date of change Previous category
Current category
JOSÉ ANTONIO FERNÁNDEZ RIVERO
CARLOS LORING MARTÍNEZ DE IRUJO
01/03/2016
01/03/2016
INDEPENDENT
INDEPENDENT
OTHER EXTERNAL
OTHER EXTERNAL
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
22
C.1.4 Fill in the following table with information regarding the number of female directors over the last 4 years, and
the category of their directorships:
Number of female directors
% of total Directors of each category
Year
2016
0
0
2
1
3
Year
2015
0
Year
2014
0
Year
2013
0
0
2
1
3
0
2
1
3
0
2
0
2
Year
2016
Year
2015
Year
2014
Year
2013
0.00%
0.00%
25%
25%
20%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
25%
28.57%
20%
25%
25%
0.00%
20 %
21.43%
14.29%
Executive
Proprietary
Independent
Other external
Total:
C.1.5 Explain the measures, if any, that have been adopted to try to include a number of female directors on the
Board that would mean a balanced presence of men and women.
Explanation of measures
Article 3 of the Board of Directors Regulations establishes that the proposals submitted to the General Meeting by
the Board for appointment or reelection of directors and the appointments the Board makes directly to cover
vacancies, exercising its powers of co-option will be approved at the proposal of the Appointments Committee in
the case of independent directors, and following a report from said Committee in the case of all other directors. In
any case, the proposal must be accompanied by a report of the Board of Directors explaining the grounds on
which the Board of Directors has assessed the competence, experience and merits of the candidate proposed,
which will be attached to the minutes of the Annual General Meeting or of the Board of Directors. Also, in
accordance with article 529 decies of the Corporate Enterprises Act, the proposal for the appointment or re-
election of non-independent directors must be accompanied by a report from the Appointments Committee. When
there is a proposal to re-elect directors, the Board of Directors’ resolutions and deliberations will take place in the
absence of the directors whose re-election is proposed, who if present, must leave the meeting.
The Appointments Committee's mission is to assist the Board of Directors in matters concerning the selection and
appointment of directors and, in particular, to submit to the Board of Directors the proposals for the appointment,
re-election or removal of independent directors and to report on the proposals for the appointment, re-election or
removal of all other directors.
To such end, article 33 of the Board of Directors Regulations establishes that the Appointments Committee will
assess the balance of skills, knowledge and expertise that the Board of Directors requires, as well as the
conditions that candidates should display to fill the vacancies arising, assessing the dedication necessary to be
able to suitably perform their duties in view of the needs that the Company’s governing bodies may have at any
time. The Committee will ensure that, in line with the principles set out in the BBVA Board of Directors
Regulations, when filling new vacancies, the selection procedures are not marred by implicit biases that may
entail any discrimination and, in particular, discrimination that may hinder the selection of female directors, trying
to ensure that women who display the professional profile being sought are included as potential candidates.
Moreover, BBVA has established a director selection policy stating that the selection procedures cannot involve
discrimination in selecting female directors and that in 2020 the number of female board members will represent
at least 30% of the total number of members of the Board of Directors.
In the latest selection processes, the Appointments Committee has ensured that there are no implicit biases that
may hinder the access of women to the vacancies. It evaluated the skills, knowledge and expertise of all the
candidates according to the needs of the governing bodies at any given time, assessing the dedication necessary
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
23
to be able to suitably perform their duties in the light of the principles contained in the BBVA Board of Directors
Regulations. For these selection processes, the Committee counts on the support of prestigious consultants at
international level in the selection of directors, who carry out an independent search for potential candidates that
meet the profile defined in each case by the Appointments Committee.
During these processes, the external expert was expressly requested to include women with the suitable profile
among the candidates to be presented and the Committee analyzed the personal and professional profiles of all
the candidates presented on the basis of the information provided by the consultancy firm, according to the needs
of the Bank's governing bodies at any given time. The skills, knowledge and expertise necessary to be a Bank’s
director were assessed and the rules on incompatibilities and conflicts of interest as well as the dedication
deemed necessary to be able to comply with the duties were taken into account.
BBVA currently has three female directors on its governing body, i.e. 20% of its members, one of whom is a
member of the Group's Executive Committee.
C.1.6 Explain the measures, if any, agreed by the Appointments Committee to ensure that selection procedures do
not suffer from implicit biases that may hinder the selection of female directors, and that the company deliberately
seeks and includes potential female candidates that meet the professional profile sought:
Explanation of measures
See above section.
The Appointments Committee, in compliance with the principles established in the Board of Directors' Regulations
and Selection, Appointment, Renewal and Diversity Policy of the Board of Directors, in the selection processes of
the directors, ensures that among the potential candidates are women who meet the professional profile sought,
and also takes care that in the selection procedures there are no implicit biases that might hinder the selection of
female directors.
When, despite any measures that might have been adopted, the number of female directors is low or zero, explain
the reasons:
Explanation of reasons
C.1.6.bis Explain the conclusions of the Appointments Committee regarding verification of compliance with the board
member selection policy. And, in particular, explain how this policy is fostering the goal for 2020 to have the number
of female board members represent at least 30% of the total number of members of the board of directors.
The Board of Directors has established a director selection policy stating that the individuals proposed for
appointment as members of the Board of Directors must meet the requirements set out in current legislation, in the
specific regulations applicable to credit institutions, Company Bylaws and Board Regulations. In particular, the
directors must meet the suitability requirements needed to hold the position and display recognized commercial and
professional repute, possess adequate knowledge and experience to hold the position, and be committed to good
governance of the Company.
The selection policy states that the member selection, appointment and rotation procedures for the Board of Directors
shall be aimed at attaining a composition of the company's governing bodies that enable the adequate exercise of the
duties established by Law, Company Bylaws and its own Regulations in the company's best interest.
To this effect, the Board of Directors shall ensure that the appointment, selection and rotation procedures enable the
most suitable candidates to be identified at all times, based on the requirements of the corporate bodies and that they
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
24
favor diversity of experience, knowledge, skills and gender and, in general, do not suffer from implicit biases that may
involve any kind of discrimination.
In particular, the director selection policy establishes that the selection procedures cannot entail any discrimination for
the selection of female directors and that in 2020 the number of female board members will represent at least 30% of
the total number of members of the Board of Directors. In this regard, the number of women on the Board of Directors
has increased in recent years and women meeting the required professional profile have been expressly requested to
be nominated for director selection processes.
Additionally, it sets out that the composition of the Board of Directors shall attempt to have an appropriate balance
between the different types of board members and that non-executive members represent an ample majority over
executive directors, taking steps so that the number of independent directors accounts for at least 50% of the total
seats.
Thus, following the appointments proposals that were submitted to the Board of Directors by the Appointments
Committee and subsequently approved by the Annual General Meeting held on 11 March 2016, the Board of
Directors has deepened the diversity of knowledge and experience and has increased the international profile of the
members of the Board, by including people with ample experience in the financial and risk sector and extensive
knowledge and experience in the area of information technology, digital business and cyber-security; having
incorporated people with professional experience developed in positions of maximum responsibility in top level
multinational companies.
Consequently, the Board of Directors currently comprises fifteen members, namely three executive directors, four in
the "other external" category and eight are considered independent directors. BBVA's corporate bodies therefore
have a structure, size and composition according to their needs and, as in recent years, with a structure in which at
least half of its directors are independent directors, thus complying with that established in the Regulations of the
Board of Directors and in the Selection, Appointment, Renewal and Diversity Policy of the Board of Directors.
Lastly, the Appointments Committee has followed the Selection, Appointment, Renewal and Diversity Policy of the
Board of Directors when submitting candidates for re-election to the Board of Directors to be studied at the General
Shareholders Meeting in 2017. On approval of said proposal by the BBVA General Shareholders Meeting, the Board
composition shall continue to comprise 50% independent directors and a percentage of female directors on the Board
representing 27% of non-executive directors.
C.1.7 Explain the form of representation on the Board of shareholders with significant holdings.
C.1.8 Explain, where applicable, the reasons why proprietary directors have been appointed at the behest of a
shareholder whose holding is less than 3% of the capital:
Indicate whether formal petitions have been ignored for presence on the Board from shareholders whose holding is
equal to or higher than that of others at whose behest proprietary directors were appointed. Where applicable,
explain why these petitions have been ignored.
NO
C.1.9 Indicate whether any director has stood down before the end of his/her term of office, if the director has
explained his/her reasons to the Board and through which channels, and if reasons were given in writing to the entire
Board, explain below, at least the reasons that were given:
Name of director
Reason for leaving
C.1.10 Indicate any powers delegated to the managing directors(s):
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
25
Name of director (person or company)
Brief description
FRANCISCO GONZÁLEZ RODRÍGUEZ
Holds broad-ranging powers of representation and
administration in line with his duties as Group Executive
Chairman.
CARLOS TORRES VILA
Holds broad-ranging powers of representation and
administration in line with his duties as Chief Executive Officer.
JOSÉ MANUEL GONZÁLEZ-PÁRAMO
MARTÍNEZ-MURILLO
Holds powers of representation and administration in line with
his duties as Head of Global Economics, Regulation & Public
Affairs.
C.1.11 Identify any members of the Board holding positions as directors or managers in other companies belonging
to the listed company’s group:
Name of director (person or
company)
Name of the Group Company
Position
Does the
director hold
executive
functions?
FRANCISCO GONZÁLEZ
RODRÍGUEZ
BBVA BANCOMER, S.A. INSTITUCIÓN DE
BANCA MÚLTIPLE, GRUPO FINANCIERO
BBVA BANCOMER
DIRECTOR
NO
FRANCISCO GONZÁLEZ
RODRÍGUEZ
GRUPO FINANCIERO BBVA BANCOMER,
S.A. DE C.V.
DIRECTOR
NO
CARLOS TORRES VILA
BBVA BANCOMER, S.A. INSTITUCIÓN DE
BANCA MÚLTIPLE, GRUPO FINANCIERO
BBVA BANCOMER
DIRECTOR
NO
CARLOS TORRES VILA
GRUPO FINANCIERO BBVA BANCOMER,
S.A. DE C.V.
DIRECTOR
NO
C.1.12 Detail, where applicable, any company directors that sit on Boards of other companies publicly traded on
regulated securities markets outside the company's own group, of which the company has been informed:
Name of director (person or company)
Corporate name of the listed
company
Position
BELÉN GARIJO LÓPEZ
L’ORÉAL SOCIÉTÉ ANONYME
DIRECTOR
JUAN PI LLORENS
ECOLUMBER, S.A.
CHAIRMAN
JOSÉ MIGUEL ANDRÉS TORRECILLAS
ZARDOYA OTIS, S.A.
DIRECTOR
C.1.13 Indicate and, where applicable, if board regulations have established rules on the maximum number of
company boards on which its directors may sit:
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
26
YES
Explanation of rules
Article 11 of the Board of Directors Regulations establishes that in the performance of their duties, directors will be
subject to the rules on limitations and incompatibilities established under applicable regulations at any time and in
particular to the provisions of Spanish Act 10/2014 on the regulation, supervision and solvency of credit
institutions.
Article 26 of Act 10/2014 establishes that the directors of credit institutions may not hold at the same time more
positions than those set out in one of the following combinations: (i) an executive position together with two non-
executive positions; or (ii) four non-executive positions. Executive positions are defined as those performing
management duties irrespective of the legal bond attributed by those duties. The following will count as a single
position: 1) executive or non-executive positions held within the same group; 2) executive or non-executive
positions held within: (i) entities belonging to the same institutional protection scheme; or (ii) companies in which
the entity holds a significant stake. The positions held in non-profit organizations or entities pursuing non-
commercial purposes shall not count when determining the maximum number of positions. Nonetheless, the Bank
of Spain may authorize members of the Board of Directors to hold an additional non-executive post if it deems that
such a post would not interfere with the correct performance of the activities thereof in the credit institution.
The Committee's duties are also detailed in article 11 of the Board of Directors Regulations, BBVA directors may
not:
Provide professional services to companies competing with the Bank or with any of its Group companies, or
be an employee, manager or director of such companies unless they have received express prior
authorization from the Board of Directors or from the Annual General Meeting, as appropriate, unless these
activities had been provided or performed before they became a Bank director, do not involve no effective
competition and had been reported to the Bank at that time.
Take a direct or indirect stake in businesses or enterprises in which the Bank or its Group companies hold an
interest, unless such stake was held prior to joining the Board of Directors or to the time when the Group took
out its holding in such businesses or enterprise, or unless such companies are listed on domestic or
international securities exchanges, or unless authorized to do so by the Board of Directors.
Be a director in companies in which the Group or any of the Group companies hold a stake. As an exception
and when proposed by the Bank, executive directors are able to hold directorships in companies directly or
indirectly controlled by the Bank with the approval of the Executive Committee, and in other associate
companies with the approval of the Board of Directors. A person ceasing to be an executive director is
obliged to resign from any office in a subsidiary or associate company that is held by virtue of such
directorship.
Non-executive directors may hold a directorship in the Bank's associate companies or in any other Group
company provided the directorship is not related to the Group's holding in such companies. They must have
prior approval from the Bank’s Board of Directors. For these purposes, holdings of the Bank or its Group in
companies resulting from its ordinary business activities, asset management, treasury trading, derivative
hedging and/or other transactions will not be taken into account.
Hold political office or engage in other activities that might have a public significance or affect the image of
the Company in any manner, unless there is prior authorization from the Bank's Board of Directors.
C.1.14 Section repealed.
C.1.15 Indicate the overall remuneration for the Board of Directors:
Remuneration of the Board of Directors (thousands of euros)
15,718
Cumulative amount of rights of current Directors in pension scheme (thousands of euros)
16,660
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
27
Cumulative amount of rights of former Directors in pension scheme (thousands of euros)
89,059
C.1.16 Identify members of senior management that are not in turn executive directors, and indicate the total
remuneration accruing to them during the year:
Name (person or company)
Position(s)
JUAN ASÚA MADARIAGA
CORPORATE & INVESTMENT BANKING (CIB)
JORGE SÁENZ-AZCÚNAGA CARRRANZA
COUNTRY MONITORING
CRISTINA DE PARIAS HALCÓN
COUNTRY MANAGER SPAIN
EDUARDO OSUNA OSUNA
COUNTRY MANAGER MEXICO
DON DEREK JENSEN WHITE
CUSTOMER SOLUTIONS
RICARDO FORCANO GARCÍA
TALENT & CULTURE
RICARDO ENRIQUE MORENO GARCÍA
ENGINEERING
JAIME SÁENZ DE TEJADA PULIDO
FINANCE
RAFAEL SALINAS MARTÍNEZ DE LECEA
GLOBAL RISK MANAGEMENT
EDUARDO ARBIZU LOSTAO
LEGAL & COMPLIANCE
FRANCISCO JAVIER RODRÍGUEZ SOLER
STRATEGY & M&A
RICARDO GÓMEZ BARREDO
ACCOUNTING & SUPERVISORS
DOMINGO ARMENGOL CALVO
GENERAL SECRETARY
JOSÉ LUIS DE LOS SANTOS TEJERO
INTERNAL AUDIT
Total senior management remuneration
(thousands of euros)
18,442
C.1.17 Indicate the identity of the Board members, if any, who are in turn members of the Board of Directors in
companies of significant shareholders and/or in entities of their group:
Detail the relevant affiliations, other than those considered in the above paragraph, that link Board members to
significant shareholders and/or companies in their group:
C.1.18 Indicate whether there has been any change in the Board regulations during the year:
NO
Description of changes
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
28
C.1.19. Indicate procedures for selection, appointment, re-election, assessment and removal of directors. List the
competent bodies, the procedures to be followed and the criteria to be employed in each procedure.
Selection and appointment procedure:
BBVA has established a policy setting out the main general principles applicable in the selection and appointment of
directors. Additionally, articles 2 and 3 of the Board of Directors Regulations stipulate that the General Meeting is
responsible for the appointment of members of the Board. However, if a seat falls vacant, the Board has the authority
to co-opt members. In any event, persons proposed for appointment as directors must meet the requirements of
prevailing legislation, the specific regulations applicable to credit institutions and he provisions of the Company
Bylaws. In particular, directors should meet the necessary suitability requirements to exercise their directorship. Thus,
they must be considered to be of commercial and professional good repute, with adequate knowledge and expertise
to perform their duties and in situation in which they can exercise good governance of the entity.
The Board will ensure that the selection procedures for directors favour diversity in experience, knowledge, skills and
gender and, in general, do not suffer from implicit biases that may imply any discrimination. The Board will submit its
proposals to the General Meeting in such a way that there is an ample majority of non-executive directors over the
number of executive directors on the Board. The proposals submitted to the General Meeting for appointment or re-
election of directors and the appointments the Board makes directly to cover vacancies, exercising its powers of co-
option, will be approved at proposal of the Appointments Committee in the case of independent directors, and
following a report from said Committee for all other directors. In any case, the proposal must be accompanied by a
report of the Board explaining the grounds on which the Board of Directors has assessed the competence,
experience and merits of the proposed candidate, which will be attached to the minutes of the General Meeting or of
the Board of Directors. The Board’s resolutions and deliberations on these matters will take place in the absence of
the director whose re-election is proposed who, if present, must leave the meeting.
To such end, the Board of Directors Regulations establish that the Appointments Committee will evaluate the balance
of skills, knowledge and expertise on the Board of Directors, as well as the conditions that candidates should display
to fill the vacancies arising, assessing the dedication necessary to be able to suitably perform their duties in view of
the needs that the Company’s governing bodies may have at any time. The Committee will ensure that when filling
new vacancies, the selection procedures are not marred by implicit biases that may involve any discrimination and, in
particular, those that hinder the selection of female directors, trying to ensure that women who display the
professional profile being sought are included as potential candidates.
Directors will stay in office for the term established by the Company Bylaws or, if they have been co-opted, until the
first General Meeting is held.
Re-election: Please refer to the section above.
Assessment:
As indicated in article 17 w) of the Board's Regulations, the Board of Directors is responsible for assessing the quality
and efficiency of its operation and assessment of the performance of the duties of the Chairman of the Board. Such
assessment will always begin with the report submitted by the Appointments Committee. Likewise, evaluation of the
operation of its Committees, on the basis of the report that these submit to it. Moreover, article 5 of the Board's
Regulations establishes that the Chairman, who is responsible for efficiently running of the Board, will organize and
coordinate the regular assessment of the Board with the Chairs of the relevant Committees. Moreover, article 5 ter of
the Board's Regulations establishes that the Lead Director is especially empowered to conduct the regular
assessment of the Chairman of the Board.
Pursuant to the provisions of the Board Regulations, as in previous years, in 2016 the Board of Directors assessed
the quality and efficiency of its own running and that of its Committees, as well as the performance of the duties of
the Chairman, both as Chairman of the Board and as the first executive of the Bank, based on the report of the
Appointments Committee.
Severance:
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
29
Directors will stand down from office when the term for which they were appointed has expired, unless they are re-
elected.
Directors must apprise the Board of any circumstances affecting them that might harm the Company’s reputation and
credit and circumstances that may impact their suitability for the position. Directors must place their directorship at the
disposal of the Board and accept its decision regarding their continuity or non-continuity in office, under the
circumstances listed in section C.1.21 below. If its decision is negative, they are obliged to tender their resignation. In
any event, directors will resign their positions on reaching 75 years of age. They must present their resignation at the
first meeting of the Bank’s Board of Directors after the General Meeting of Shareholders that approves the accounts
for the year in which they reach this age.
C.1.20 Explain to what degree the self- assessment has led to significant changes in its internal organization and the
procedures applicable to its activities:
Description of changes
Article 17 of the Board of Directors Regulations establishes that the Board will assess the quality and efficiency of
the Board’s operation, based on the report submitted by the Appointments Committee, which it has done in 2016,
likewise producing certain changes (indicated below), similar to previous years, to continue the ongoing adaptation
process of corporate governance to the regulatory requirements and best practices.
Thus, the entity has been analyzing in 2016 its needs for improvement by introducing various measures to adapt
its Corporate Governance system and practices to the new environment in which the entity carries out its activity,
including, among other measures, the following: (i) the process of progressive renewal of the Board of Directors
has been continued, as established in the Board of Directors' selection, appointment, renewal and diversity policy,
proposing to the Annual General Shareholders' Meeting held on 11 March 2016 the appointment of two new
directors, on an independent basis, which has increased the international profile and the diversity of experience
and knowledge on the Board; (ii) in order to assist the Board of Directors in the better performance of its functions
related to technology strategy and the risks associated with technology and cyber-security, it was agreed the
creation of the Technology and Cyber-security Committee and it was developed its duties; (iii) the distribution of
functions between the Board and its Committees has been strengthened in order to improve the formalization of
the decision-making process by the corporate bodies, which strengthens its intervention in the Board Committees,
reinforcing the analysis and review of the relevant issues that are the subject of consideration by the corporate
bodies and critical review by the directors; (iv) the informational model has been strengthened, consisting in
making available to the directors in sufficient time the information related to the matters included in the agenda,
which allows the decisions of the corporate bodies to be adopted on the basis of more complete, consistent,
homogeneous and quality information for decision-making, as well as the better development by the directors of
their management and supervisory and control functions; (v) in order to strengthen the decision-making process of
the corporate bodies at BBVA and the improvement of the supervisory and control functions of the Board, the
content and frequency of meetings of certain corporate bodies have been adapted, as well as the reports to the
Board of Directors, especially those made by the Chairmen of the Committees and other Group officers, to enable
them to perform their duties better; and (vi) to facilitate the knowledge of those issues relevant to the proper
performance of their functions, the specific program of continuous training for non-executive directors continued to
be promoted, highlighting the improvements introduced especially in the areas of technology, cyber-security and
digital business, in line with the Group's digital transformation process and its environment.
C.1.20.bis Describe the assessment process and the assessed areas conducted by the board of directors assisted,
as the case may be, by an external consultant, regarding the diversity in its composition and capacities, duties and
composition of its committees, the performance of the chair of the board of directors and the chief executive officer of
the company, and the performance and contribution of each board member.
According to article 17 of the Board of Directors Regulations, the Board shall evaluate the quality and efficiency of its
running and the performance of the functions of the Chairman of the Board, based in each case on the report
submitted by the Appointments Committee. Likewise, the Board of Directors shall assess of the running of its
Committees, based on the report they submit. Also, in compliance with the Recommendation of the Code of Good
Governance, the Board of Directors has had an external consultant of recognized prestige at international level to
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
30
carry out the evaluation of the quality and efficiency of the functioning of the Board of Directors and the performance
of the functions of the Chairman for the year 2015.
In the most recent assessment process carried out for 2016, the Board of Directors has assessed: (i) the quality and
efficiency of the Board of Directors' operation, (ii) the performance of the Chairman of the Board of Directors; and (iii)
the running of the Committees of the Board of Directors. The procedure to conduct these assessments was:
Throughout the year, the Appointments Committee has been analyzing the structure, size and composition of
the Board of Directors during the selection processes of incorporating new members of the Board of Directors
and re-electing directors, as well as while conducting the yearly assessment on the running of the Board of
Directors. Thus the quality and efficiency of the running of the Board of Directors was examined based on the
prior report submitted by the Appointments Committee and raised to the Board of Directors where the
following matters were reviewed in detail: structure, size and composition of the Board of Directors;
organization, preparation and development of the meetings of the Board of Directors; ethics and principles;
training of members of the Board of Directors and activity of the Board of Directors. The Appointments
Committee, with a view to drawing up this report, mined detailed reports on the composition and operations
thereof, and on the main activities implemented by these bodies in the performance of the duties attributed
thereto by the Company Bylaws and the Board of Directors Regulations.
The performance of the duties of the Chairman of the Board of Directors, as Chairman and as first executive,
was carried out by the Board of Directors on the basis of a report on its activities during the year and taking
into account the previous report of the Appointments Committee, the Lead Director having conducted the
evaluation process in accordance with the provisions of Article 5 ter of the Board Regulations. The
Appointments Committee drew up its report with detailed information on the performance of the duties by the
Chairman.
The Board of Directors conducted the quality and efficiency assessment on the operations of the Audit and
Compliance, Risk, Appointment and Remuneration Committees based on the reports submitted by their
respective Chairs. Thus, the activity carried out by the Audit and Compliance Committee was the subject of a
corresponding presentation to the Board at its meeting held on 26 October 2016 by the Chairman of the
Committee, which explained the process of selecting the new external auditor of the Bank and its Group, the
supervision and control of the Group's financial and accounting information, as well as the main
communications and inspections carried out by supervisors, among other matters. Moreover, during its
meeting on 30 November 2016, the Board of Directors received the report of the Chairman of the Risk
Committee regarding the activities undertaken by the Committee during 2016, apprising of the tasks executed
by the Committee in the analysis and preparation of the proposals for resolution that, within the scope of risks,
were conveyed to the Executive Committee and the Board for consideration; and insofar as risk tracking and
control. The Board also received, at its meeting held on January 31, 2017, the report of the Chairman of the
Remuneration Committee on the activity carried out by the latter during 2016, which treated, among other
things, the work carried out in relation to the preparation and development of the proposals for resolutions
submitted to the Board on remuneration matters, in particular those relating to remuneration issues of the
executive directors and the Senior Management, as well as of the non-executive directors and on the other
work that had been carried out regarding to the review of the Remuneration Policy applicable in view of the
new regulation recently approved. Likewise, in its session on 31 January 2017, the Board received the report
of the Chairman of the Appointments Committee regarding the activities undertaken by the Committee during
2016 within the different scopes of duties. The operations of the Committees were also analyzed in the
Board's general assessment process described above.
C.1.20.ter Break down, where pertinent, the business relationship that the consultant or any company of its group
maintains with the company or any company of its group.
C.1.21 Indicate the circumstances under which directors are obliged to resign.
In addition to the circumstances set out in applicable legislation, as established in article 12 of the BBVA Board of
Directors Regulations, the directors shall resign from their office when the term for which they were appointed has
expired, unless they are re-elected. Directors must apprise the Board of Directors of any circumstances affecting
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
31
them that might harm the Company’s reputation and credit circumstances that may impact their suitability for the
position.
As set out in article 12 of the BBVA Board of Directors Regulations, directors must place their office at the disposal of
the Board of Directors and accept the Board’s decision regarding their continuity or non-continuity in office. Should
the Board resolve they not continue, they will be obliged to tender their resignation, in the following circumstances:
- When they are affected by circumstances of incompatibility or prohibition as defined under prevailing legislation, in
the Company Bylaws or in the Board of Directors Regulation;
- When significant changes occur in their personal or professional situation that may affect the condition by virtue of
which they were appointed to the Board;
- When they are in serious dereliction of their duties as directors;
- When for reasons attributable to the director in his or her condition as such, serious damage has been done to the
Company's net worth, credit or reputation; or
- When they lose their suitability to hold the position of director of the Bank.
C.1.22 Section repealed.
C.1.23 Are reinforced qualified majorities required, other than the legal majorities, for some type of resolution?
If applicable, describe the differences.
NO
C.1.24 Explain whether there are specific requirements, other than those regarding directors, to be appointed
Chairman of the Board of Directors.
C.1.25 Indicate whether the Chairman has a casting vote:
NO
NO
C.1.26 Indicate whether the bylaws or the Board Regulations establish an age limit for directors:
YES
Age limit for Chairman
Age limit for Chief Executive
Officer
Age limit for directors
0
0
75
C.1.27 Indicate whether the bylaws or the Board Regulations establish a limited term of office for independent
directors, other than that established by law:
NO
C.1.28 Indicate whether the bylaws or the Board Regulations establish specific rules for proxy voting in the Board of
Directors, the way this is done and, in particular, the maximum number of proxies a director may have, and whether it
has established any limit regarding the categories that may be delegated beyond the limits stipulated by legislation. If
so, briefly give details on such rules.
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
32
The BBVA Board of Directors Regulations establishes that directors are required to attend the meetings of corporate
bodies and the meetings of the Board Committees on which they sit, except for a justifiable reason. Directors shall
participate in the deliberations, discussions and debates on matters submitted for their consideration.
However, article 21 of the Board of Directors Regulations establishes that should it not be possible for directors to
attend any of the Board of Directors’ meetings, they may grant proxy to another director to represent and vote for
them. This may be done by a letter or e-mail sent to the Company with the information required for the proxy director
to be able to follow the absent director's instructions, in observance of the applicable legislation, though non-
executive directors may only grant their proxy to another director that is also non-executive.
C.1.29 Indicate the number of meetings the Board of Directors has held during the year. Where applicable, indicate
how many times the Board has met without the Chairman in attendance. In calculating this number, proxies given
with specific instructions will be counted as attendances.
Number of Board meetings
Number of Board meetings held without the Chairman’s attendance
12
0
If the Chairman is an executive Director, indicate the number of meetings held without an executive director present
or represented and chaired by the Lead Director
Number of meetings
0
Indicate the number of meetings of the Board’s different committees held during the year.
Number of Executive Committee meetings
Number of Audit and Compliance Committee meetings
Number of Appointments Committee meetings
Number of Remuneration Committee meetings
Number of Risk Committee meetings
Number of Technology and Cyber-security Committee meetings
17
12
8
6
38
3
C.1.30 Indicate the number of meetings held by the Board of Directors during the year attended by all its members. In
calculating this number, proxies given with specific instructions will be counted as attendances.
Number of meetings attended by all directors
% of attendances to total votes during the year
12
100%
C.1.31 Indicate whether the individual and consolidated financial statements presented for Board approval are
certified beforehand:
NO
Where applicable, identify the person(s) who has(have) certified the Company's individual and consolidated financial
statements to be filed by the Board:
C.1.32 Explain the mechanisms, if any, established by the Board of Directors to prevent the individual and
consolidated financial statements that it files from being presented to the General Meeting with a qualified auditors
report.
Article 29 of BBVA's Board of Directors Regulations establishes that the Audit and Compliance Committee will be
formed exclusively by independent directors and its main task is to assist the Board of Directors in supervising the
financial information and exercising oversight for the Group. In this regard, its functions are as follows: oversee the
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
33
efficacy of the Company's internal control, the internal audit and the risk management systems in the process of
drawing up and reporting the financial information, including tax-related risks, as well as to discuss with the external
auditor any significant weaknesses in the internal control system detected when the audit is conducted, without
undermining its independence and oversee the process of drawing up and reporting the financial information. For
such purposes, the Audit and Compliance Committee may submit recommendations or proposals to the Board of
Directors.
Moreover, article 3 of the Audit and Compliance Committee Regulations establishes that the Committee shall verify
that the external audit schedule is conducted under the agreed conditions at appropriate intervals, and that it meets
the requirements of the competent authorities and the Bank’s governing bodies. The Committee will also periodically
– at least once a year – request from the auditor its evaluation of the quality of the group’s internal control procedures
regarding the drafting and presentation the financial information of the Group.
The Committee shall also be apprised of any infringements, situations requiring adjustments, or anomalies that may
be detected during the course of the external audit and are of a material nature; materiality in this context signifies
those issues that, in isolation or as a whole, may give rise to a significant and substantive impact or harm to assets,
earnings or the reputation of the Group; discernment of such matters shall be at the discretion of the auditor who, if in
doubt, must opt to report on them.
In exercising these duties, the Audit and Compliance Committee holds monthly meetings with the external auditor's
representatives without the presence of executives, to monitor their work on an ongoing basis, in order to guarantee
that the activity is carried out under the best conditions and with no interference in management.
C.1.33 Is the company Secretary a director?
NO
Complete if the Secretary is not also a Director:
Name or corporate name of Secretary
DOMINGO ARMENGOL CALVO
C.1.34 Section repealed.
Representative
-
C.1.35 Indicate the specific mechanisms the company has established, if any, to preserve the independence of the
external auditors, the financial analysts, the investment banks and the rating agencies.
The BBVA Audit and Compliance Committee Regulations establish that this Committee’s duties, described in section
C.2.1, include ensuring the independence of the external audit in two ways:
- Avoiding any possibility of the warnings, opinions or recommendations of the external auditor being adversely
influenced. To this end, the Committee must ensure that compensation for the auditor's work does not compromise
either its quality or independence, in compliance with current legislation on auditing at all times.
- Stipulating as incompatible the provision of audit and consulting services unless they are work required by
supervisors or whose provision by the external auditor is allowed by applicable legislation, and there are not available
in the market alternatives as regards content, quality or efficiency of equal value to those which the auditor could
provide; in this case approval by the Committee will be required, but this decision may be delegated in advance to its
Chair. The external auditor shall be prohibited from providing prohibited services outside the audit, in compliance with
what is set out at all times by audit legislation.
This matter is the subject of special attention by the Audit and Compliance Committee, which holds monthly meetings
with the representatives of the external auditor, without the presence of Bank executives, to know the details of the
progress and quality of their work, as well as to confirm their independence of the performance of their work. It also
monitors the engagement of additional services to ensure compliance with the Committee’s Regulations and
applicable legislation in order to safeguard the independence of the external auditor.
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
34
Moreover, in accordance with the provisions of point f), section 4 of article 529 quaterdecies of the Corporate
Enterprises Act and article 30 of the BBVA Board of Directors Regulations, the Audit and Compliance Committee
each year before the external financial auditor issues their report on the financial statements, has to issue a report
expressing its opinion regarding the independence of the auditor.
This report must in any event contain the reasoned assessment of the provision of additional services of any kind by
the auditors to the Group's entities, considered individually and as a whole, other than the legal audit and in relation
to the regime of independence or the rules regulating the account audit activity. The external auditor must issue, also
on an annual basis, a report confirming its independence via-à-vis BBVA or entities linked to BBVA, either directly or
indirectly, with information on the additional services of any kind provided to these entities by the external auditor, or
by the individuals or entities linked to them, as set out in the redrafted text of the Audit Act.
In keeping with the legislation in force, the relevant reports confirming the auditor's independence were issued in
2016.
In addition, as BBVA's shares are listed on the New York Stock Exchange, it is subject to compliance with the
Sarbanes Oxley Act and its implementing regulations.
C.1.36 Indicate whether the company has changed its external auditor during the year. If so, identify the incoming
and outgoing auditors:
If there were disagreements with the outgoing auditor, explain their grounds.
Explanation of disagreements
NO
C.1.37 Indicate whether the audit firm does other work for the company and/or its group other than the audit. If so,
declare the amount of fees received for such work and the percentage of such fees on the total fees charged to the
company and/or its group:
YES
Company
Group
Total
Amount of non-audit work (thousands euros)
657
437
1.094
Amount of non-audit work/total amount billed by the
audit firm (%)
4.88%
2.46%
3.50%
C.1.38 Indicate whether the audit report on the annual financial statements for the previous year contained
reservations or qualifications. If so, indicate the reasons given by the chair of the audit committee to explain the
content and scope of such reservations or qualifications.
NO
C.1.39 Indicate the number of consecutive years during which the current audit firm has been auditing the financial
statements for the company and/or its group. Likewise, indicate the percentage of the number of years audited by the
current audit firm to the total number of years in which the annual financial statements have been audited:
Number of consecutive years
Company
14
Group
14
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
35
Number of years audited by current audit firm / number of
years the company has been audited (%)
87.50%
87.50%
C.1.40 Indicate and, where applicable, give details on the existence of a procedure for directors to engage external
advisory services:
YES
Details of the procedure
Article 6 of the BBVA Board of Directors Regulations expressly recognizes that directors may request any
additional information or advice they require to comply with their duties, and may request the Board of Directors for
assistance from external experts on matters subject to their consideration whose special complexity or importance
so requires.
The Audit and Compliance Committee, pursuant to article 31 of the Board of Directors Regulations, may engage
external advisory services for relevant issues when it considers that these cannot be properly provided by experts
or technical staff within the Group on grounds of specialization or independence.
Under articles 34, 37 and 40 of the Board of Directors Regulations and in accordance with the specific regulations
of the Technology and Cyber-security Committee, the rest of the Committees may obtain such advice as may be
necessary to establish an informed opinion on matters related to its business. This will be done through the
Secretariat of the Board.
C.1.41 Indicate and, where applicable, give details on the existence of a procedure for directors to obtain the
information they need to prepare the meetings of the governing bodies with sufficient time:
YES
Details of the procedure
Article 6 of the Board of Directors Regulations establishes that before meetings the directors will be apprised of the
necessary information to be able to form their own opinions regarding questions corresponding to the Bank’s
corporate bodies. They may request any additional information and advice they require to comply with their duties.
Exercise of these rights will be channeled through the Chairman and/or Secretary of the Board of Directors, who will
attend to requests by providing the information directly or by establishing suitable arrangements within the
organization for this purpose, unless a specific procedure has been established in the regulations governing the
Board of Directors Committees.
Thus, the Bank's corporate bodies have a procedure for verifying the information that is submitted for consideration
to them, coordinated by the Board Secretariat with the areas responsible for information, through the Information of
Governing Bodies' Department, in order to provide in due time sufficient, adequate and complete information for the
meetings of the Bank's various corporate bodies and to enable directors to best perform their duties.
C.1.42 Indicate and, where applicable give details, whether the company has established rules requiring directors to
inform and, where applicable, resign under circumstances that may undermine the company’s standing and
reputation:
YES
Explanation of rules
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
36
In accordance with article 12 of the Board of Directors Regulations, directors must apprise the Board of Directors of
any circumstances affecting them that might harm the Company’s reputation and credit and circumstances that may
impact their suitability for the position.
Directors must place their office at the disposal of the Board of Directors and accept its decision regarding their
continuity or non-continuity in office. Should the Board resolve they not continue, they will be obliged to tender their
resignation when for reasons attributable to the director in his or her condition as such, serious damage has been
done to the Company’s net worth, credit and/or reputation or when they lose their suitability to hold the position of
director of the Bank.
C.1.43 Indicate whether any member of the Board of Directors has informed the company of any legal suit or court
proceedings against him or her for any of the offences listed in article 213 of the Corporate Enterprises Act:
Indicate whether the Board of Directors has analyzed the case. If so, explain the grounds for the decision taken as to
whether or not the director should retain his/her directorship or, where applicable, describe the actions taken or
planned to be taken by the Board of Directors on the date of this report.
NO
Decision adopted/action
taken
Reasoned explanation
C.1.44 Detail significant agreements reached by the Company that come into force, are amended or concluded in the
event of a change in the control of the company stemming from a public takeover bid, and its effects.
C.1.45 Identify in aggregate terms and indicate in detail any agreements between the company and its directors,
managers or employees that have guarantee or ring-fencing severance clauses for when such persons resign or are
wrongfully dismissed or if the contractual relationship comes to an end due to a public takeover bid or other kinds of
transactions.
Number of beneficiaries
62
Type of beneficiary
1 executive director
14 members of Senior
Management (excluding
executive directors)
47 technical & specialist
professionals
Description of the agreement
The Bank as of 31 December 2016, is committed to pay severance indemnity to
the director José Manuel González-Páramo Martínez-Murillo, whose contract
recognizes his right to receive an indemnity in the event of severance on
grounds not due to his own will, death, retirement, invalidity or dereliction of
duties, equivalent to twice his fixed remuneration.
In addition, as of 31 December 2016, 14 members of Senior Management are
entitled to receive compensation payment in the event of severance on grounds
other than their own will, retirement, disability or dereliction of duties. Its amount
will be calculated by factoring in the fixed elements of the Bank employee's
remuneration and length of office and which under no circumstances are paid in
the event of lawful dismissal for misconduct by decision of the employer on
grounds of the worker's dereliction of duties.
The Bank has also agreed compensation clauses with some employees (47
technical and specialist professionals) in the event of unfair dismissal. The
amount of this compensation is calculated as a function of the wage and
professional conditions of each employee.
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
37
Indicate whether these contracts must be disclosed to and/or approved by the Company governance bodies:
Body authorizing the clauses
YES
NO
Board of Directors
General Meeting
Is the General Meeting informed of the clauses?
YES
x
NO
C.2 Board of Directors Committees
C.2.1 Detail all the Board Committees, their members and the proportion of executive, proprietary, independent and
other external directors sitting thereon:
EXECUTIVE OR DELEGATE COMMITTEE
Name
Position
Category
FRANCISCO GONZÁLEZ RODRÍGUEZ
CHAIRMAN
EXECUTIVE
CARLOS TORRES VILA
SUSANA RODRÍGUEZ VIDARTE
JOSÉ ANTONIO FERNÁNDEZ RIVERO
JOSÉ MALDONADO RAMOS
CARLOS LORING MARTÍNEZ DE IRUJO
MEMBER
MEMBER
MEMBER
MEMBER
MEMBER
EXECUTIVE
OTHER EXTERNAL
OTHER EXTERNAL
OTHER EXTERNAL
OTHER EXTERNAL
% of executive Directors
% of proprietary Directors
% of independent Directors
% of other external Directors
33.33%
0%
0%
66.66%
Explain the committee's duties, describe the procedure and organizational and operational rules and summarize the
main actions taken during the year.
In accordance with article 27 of BBVA's Board of Directors Regulations, the Executive Committee shall be
apprised of matters delegated by the Board of Directors, in accordance with the pertinent legislation currently in
force, the Company Bylaws or the Board Regulations. Among the functions of the Executive Committee is that of
assisting the Board of Directors in its general supervision role, and in particular in the supervision of the progress
of business and the monitoring of the risks to which the Bank is or may be exposed and in decision-making on
matters that fall within the scope of the powers of the Board of Directors, provided that they do not constitute non-
delegable powers under the Law, the Company Bylaws or the Board of Directors Regulations.
As regards its organizational and operating rules of this Committee, article 28 of the Board Regulations establishes
that the Executive Committee shall meet on the dates set out in the annual calendar of meetings and at the
request of the Chair or the Chair's delegate. All other aspects of its organization and operation will be subject to
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
38
the provisions established for the Board of Directors by the Board Regulations. Once the minutes of the meeting of
the Executive Committee are approved, they shall be signed by the meeting's Secretary and countersigned by
whoever has chaired the meeting.
Directors will be given access to the approved minutes of the Executive Committee at the beginning of Board
meetings, so that they can be apprised of the content of its meetings and the resolutions it has adopted.
With regard to its most important actions in 2016, the Executive Committee has analyzed the Bank's quarterly and
annual results and the monthly performance of the Group's activity and results throughout 2016. It has also studied
the Strategic Plan and the budget established for the exercise of the main resolutions of the Bank's Assets and
Liabilities Committee; has developed intense management, control and supervision of risks in the BBVA Group
throughout 2016; has analyzed the most relevant aspects related to the economic and market situation and the
evolution of the BBVA share price; has been informed of the most outstanding aspects of regulatory developments
affecting financial institutions; has analyzed and, if appropriate, approved different operations and projects arising
from the Group's activity and has been informed of the changes that have been made in the internal regulations of
the Bank, among other issues.
Indicate whether the composition of the Executive Committee reflects the distribution of different classes of
directorship on the Board.
YES
Otherwise, explain the composition of the Executive Committee.
AUDIT AND COMPLIANCE COMMITTEE
Name
Position
Category
JOSÉ MIGUEL ANDRÉS TORRECILLAS
CHAIRMAN
INDEPENDENT
BELÉN GARIJO LÓPEZ
JUAN PI LLORENS
TOMÁS ALFARO DRAKE
LOURDES MÁIZ CARRO
MEMBER
MEMBER
MEMBER
MEMBER
INDEPENDENT
INDEPENDENT
INDEPENDENT
INDEPENDENT
% of proprietary Directors
% of independent Directors
% of other external Directors
0%
100%
0%
Explain the committee's duties, describe the procedure and organizational and operational rules and summarize the
main actions taken during the year.
As established in article 30 of the Board of Directors Regulations, the duties of the Audit and Compliance
Committee include the following:
- Report to the General Meeting on questions raised in relation to issues within the Committee's competence.
- To supervise the effectiveness of the Company's internal control, the internal audit area and the risk management
systems in the process of drawing up and reporting the financial information, including tax-related risks, as well as
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
39
to discuss with the auditor any significant weaknesses in the internal control system detected during the audit,
without undermining its independence.
- To oversee the drafting and presentation of the financial information and submit recommendations or proposals
to the Board aimed at safeguarding its completeness.
- To submit to the Board of Directors the proposals for the selection, appointment, re-election and replacement of
the external auditor, taking responsibility for the selection process in accordance with applicable regulations, as
well as the conditions for its engagement, and periodically obtain from the external auditor information on the audit
plan and its execution, in addition to preserving its independence in the discharge of its duties.
- To establish appropriate relations with the external auditor in order to receive information on any matters that
may jeopardize its independence, for examination by the Committee, and any others that have to do with the
process of auditing the accounts, as well as those other communications provided for by law and in auditing
standards.
- Each year, before the audit report is issued, to submit a report expressing an opinion on whether the auditor's
independence has been compromised. This report must contain the reasoned assessment of the provision of each
of the additional services referred to in the preceding section, considered individually and as a whole, other than
the legal audit and in relation to the regime of independence or the rules regulating the audit activity.
- To report, prior to the decisions that the Board may adopt, on all those matters provided for by law, in the
Company Bylaws and in the Board Regulations, and in particular on: (i) the financial information that the Company
is required to disclose regularly; (ii) the creation or acquisition of shares in special-purpose entities or entities
domiciled in countries or territories considered tax havens; and (iii) the transactions carried out with related parties.
- To oversee compliance with applicable domestic and international regulations on matters related to money
laundering, conduct on the securities markets, data protection and the scope of Group activities with respect to
anti-trust regulations. Also to ensure that any requests for action or information made by official authorities on
these matters are dealt with in due time and in due form.
- To ensure that the internal codes of ethics and conduct and securities market trading, as they apply to Group
personnel, comply with legislation and are suitable.
- To especially enforce compliance with the provisions applicable to directors contained in these Regulations, and
ensure that directors comply with applicable regulations regarding their conduct on the securities markets.
In keeping with the organizational and operating rules, article 31 of the Board Regulations states that the Audit and
Compliance Committee shall meet as often as necessary to discharge its duties, though an annual calendar of
meetings will be drawn up in accordance with its tasks. The officers responsible for the areas within their remit, in
particular, Accounting, Internal Audit and Compliance, may be invited to attend Committee meetings. They may
request that other staff be invited from their areas that have particular knowledge or responsibility in the matters
contained on the agenda, when their presence at the meeting is deemed advisable. However, only the Committee
members and the Secretary shall be present when the results and conclusions of the meeting are assessed. The
Committee may hire external advisory services for matters of importance if, for reasons of specialization or
independence, it considers that such services cannot be rendered by Group experts or technical personnel. The
Committee may also call on the personal cooperation and reports of any employee when it considers that this is
necessary to fulfill its duties with regard to relevant issues. The usual channel for a request of this nature shall be
through the reporting lines of the Company. However, in exceptional cases the request may be notified directly to
the person in question. In addition, its convocation, quorum of constitution, adoption of agreements, minutes and
other ends of its operating regime shall be in accordance with the Board Regulations for the Board of Directors, as
applicable, and with that established in the specific regulations of this Committee
The most important activities carried out by the Audit and Compliance Committee in 2016 are detailed in section
C.2.5.
Identify the Director who has been appointed Chairman on the basis of knowledge and experience of accounting or
auditing, or both and state the number of years they have been Chairman.
Name of Director
Number of years as Chairman
JOSÉ MIGUEL ANDRÉS TORRECILLAS
1
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
40
APPOINTMENTS COMMITTEE
Name
Position
category
TOMÁS ALFARO DRAKE
CHAIRMAN
INDEPENDENT
JOSÉ MIGUEL ANDRÉS TORRECILLAS
JOSÉ MALDONADO RAMOS
LOURDES MÁIZ CARRO
SUSANA RODRÍGUEZ VIDARTE
MEMBER
MEMBER
MEMBER
MEMBER
INDEPENDENT
OTHER EXTERNAL
INDEPENDENT
OTHER EXTERNAL
% of proprietary Directors
% of independent Directors
% of other external Directors
0%
60%
40%
Explain the committee's duties, describe the procedure and organizational and operational rules and summarize the
main actions taken during the year.
The Appointments Committee is bound to assist the Board of Directors in matters relating to the selection and
appointment of Board members. Thus, as provided for under article 33 of the Board Regulations, the Appointments
Committee will discharge the following duties:
- Submit proposals to the Board of Directors on the appointment, re-election or removal of independent directors
and report on the proposals for the appointment, re-election or removal of the other directors.
To such end, the Committee will assess the balance of skills, knowledge and expertise on the Board of Directors,
as well as the conditions that candidates should display to fill the vacancies arising, assessing the time dedication
necessary to be able to suitably perform their duties in view of the needs that the Company’s governing bodies
may have at any time.
The Committee will ensure that when filling new vacancies, the selection procedures are not marred by implicit
biases that may entail any discrimination and, in particular, discrimination that may hinder the selection of female
directors, trying to ensure that women who display the professional profile being sought are included as potential
candidates.
Likewise, when drawing up proposals within its scope of competence for the appointment of directors, the
Committee will take into account, in case they may be considered suitable, any applications that may be made by
any Board of Directors’ member for potential candidates to fill the vacancies.
- Submit proposals to the Board of Directors for policies on the selection and diversity of members of the Board of
Directors.
- Establish a target for representation of the under-represented gender in the Board of Directors and draw up
guidelines on how to achieve that target.
- Analyze the structure, size and composition of the Board of Directors at least once a year when carrying out its
operational assessment.
- Analyze the suitability of the various members of the Board of Directors.
- Perform an annual review of the status of each director, so that this may be reflected in the annual corporate
governance report.
- Report the proposals for the appointment of the Chairman and the Secretary and, where applicable, of the
Deputy Chairman and the Deputy Secretary.
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
41
- Report on the performance of the duties of the Chairman of the Board, for the purposes of the periodic
assessment by the Board of Directors, under the terms established in the Board Regulations.
- Examine and organize the succession of the Chairman in conjunction with the Lead Director and, where
appropriate, submit proposals to the Board of Directors so that the succession takes place in an planned and
orderly manner.
- Review the Board of Directors policy on the selection and appointment of members of senior management, and
make recommendations to the Board when necessary.
- Report on proposals for appointment and removal of senior managers.
Moreover, article 34 of the Board Regulations regulates the organizational and operating rules of the Appointments
Committee, establishing that it will meet as often as necessary to fulfill its duties, convened by its Chair or by
whoever stands in for its Chair pursuant to the provisions of article 32 of the Board Regulations. The Committee
may request the attendance at its meetings of persons with tasks in the Group that are related to the Committee's
duties. It may also obtain advice as necessary to establish criteria related to its business. This will be done through
the Secretary of the Board. For all other matters, the system for convening meetings, quorums, passing
resolutions, drafting minutes and other details of its operation will be in accordance with the provisions of the
Board of Directors Regulations insofar as they are applicable.
Regarding the most important actions carried out by the Appointments Committee in 2016, the Committee
Chairman presented to the Board a report on the activities carried out during the 2016 financial year, which
included, among other things, the tasks carried out in relation to the appointment and re-election of directors over
the year, the assessment of the duties of the Chairman of the Board, analysis of the structure, size and
composition of the Board with a view to evaluating the quality and efficiency of its operations, a review of the
suitability of the directors and the condition of independent directors, and proposals for appointment and
severance of the members of Senior Management.
REMUNERATION COMMITTEE
Name
Position
Category
JUAN PI LLORENS
CHAIRMAN
INDEPENDENT
JOSÉ ANTONIO FERNÁNDEZ RIVERO
MEMBER
OTHER EXTERNAL
BELÉN GARIJO LÓPEZ
JOSÉ LUIS PALAO GARCÍA-SUELTO
MEMBER
MEMBER
INDEPENDENT
INDEPENDENT
JAMES ANDREW STOTT
MEMBER
INDEPENDENT
% of proprietary Directors
% of independent Directors
% of other external Directors
0%
80%
20%
Explain the committee's duties, describe the procedure and organizational and operational rules and summarize the
main actions taken during the year.
The Remuneration Committee's main task is to assist the Board of Directors in matters related to the remuneration
policy for directors, senior management and any employees, whose professional activities have a significant
impact on the Bank's risk profile, ensuring that the established remuneration policy is observed. Thus, as provided
for under article 36 of the Board of Directors Regulations, it will discharge the following duties:
- Propose to the Board of Directors, for its submission to the Annual General Meeting, the directors’ remuneration
policy, with respect to its items, amounts and parameters for its determination and its vesting. Also to submit the
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
42
corresponding report, in the terms established by applicable law at any time.
- Determine the extent and amount of the individual remunerations, entitlements and other economic
compensations and other contractual conditions for the executive directors, so that these can be reflected in their
contracts. The Committee’s proposals on such matters will be submitted to the Board of Directors.
- Propose the annual report on the remuneration of the Bank's directors to the Board of Directors each year, which
will then be submitted to the Annual General Shareholders Meeting in accordance with applicable law.
- Propose the remuneration policy to the Board of Directors for senior managers and employees whose
professional activities have a significant impact on the Company's risk profile.
- Propose the basic conditions of the senior management contracts to the Board, and directly supervise the
remuneration of senior managers responsible for risk management and compliance duties within the Company.
- Oversee observance of the remuneration policy established by the Company and periodically review the
remuneration policy applied to directors, senior managers and employees whose professional activities have a
significant impact on the Company's risk profile.
- Verify the information on directors and senior managers’ remunerations contained in the different corporate
documents, including the annual report on directors’ remuneration.
Moreover, article 37 of the Board of Directors Regulations states that the Remuneration Committee will meet as
often as necessary to fulfill its duties, convened by its Chair or by whoever stands in for its Chair pursuant to the
provisions of article 35 of the Board Regulations. The Committee may request the attendance at its meetings of
persons with tasks in the Group that are related to the Committee's duties. It may also obtain advice as necessary
to establish criteria related to its business. This will be done through the Secretary of the Board. For all other
matters, the system for convening meetings, quorums, passing resolutions, drafting minutes and other details of its
operation will be in accordance with the provisions of the Board of Directors Regulations for the Board insofar as
they are applicable.
The most important activities carried out by the Remuneration Committee in 2016 are detailed in section C.2.5.
RISK COMMITTEE
Name
Position
Category
JAMES ANDREW STOTT
CHAIRMAN
INDEPENDENT
JOSÉ LUIS PALAO GARCÍA-SUELTO
CARLOS LORING MARTÍNEZ DE IRUJO
SUSANA RODRÍGUEZ VIDARTE
JOSÉ MIGUEL ANDRÉS TORRECILLAS
MEMBER
MEMBER
MEMBER
MEMBER
INDEPENDENT
OTHER EXTERNAL
OTHER EXTERNAL
INDEPENDENT
% of proprietary Directors
% of independent Directors
% of other external Directors
0%
60%
40%
Explain the committee's duties, describe the procedure and organizational and operational rules and summarize the
main actions taken during the year.
The Risk Committee will be tasked with assisting the Board of Directors in determining and monitoring the Group's
risk control and management policy and its strategy in this area. Thus, as provided for under article 39 of the
Board of Directors Regulations, it will discharge the following duties:
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
43
- Analyze and assess the proposals on the Group's risk management, control and strategy. In particular, these will
identify:
i. The Group's risk appetite; and
ii. The setting of the level of risk considered acceptable according to the risk profile and capital at risk, broken
down by the Group’s businesses and areas of activity.
- Analyze and assess the control and management policies for the Group's different risks and the information and
internal control systems.
- The measures established to mitigate the impact of risk identified, should they materialise.
- Monitor the performance of the Group's risks and their fit with the strategies and policies and the Group’s risk
appetite.
- Analyze, prior to submitting them to the Board of Directors or the Executive Committee, those risk operations that
must be put to its consideration.
- Examine whether the prices of the assets and liabilities offered to customers fully take into account the Bank's
business model and risk strategy and, if not, present a remedy plan to the Board of Directors.
- Participate in the process for establishing the remuneration policy, ensuring that it is consistent with adequate
and effective risk management and does not offer incentives for assuming risks that may exceed the level
tolerated by the Company.
- Ensure that the Company and its Group are provided with means, systems, structures and resources in line with
best practices to enable it to implement its risk management strategy, ensuring that the entity's risk management
mechanisms are appropriate in relation to the strategy.
Moreover, article 40 of the Board Regulations regulates the organizational and operating rules of the Risk
Committee, establishing that it will meet as often as necessary to fulfill its duties, convened by its Chair or by
whoever stands in for its Chair pursuant to the provisions of article 38 of the Board Regulations, though an annual
calendar of meetings will be drawn up in accordance with its tasks. The Committee may request the attendance at
its meetings of the Group's Chief Risk Officer, as well as the executives to whom the various risk areas report or
the persons with tasks in the Group that are related to the Committee's duties. It may also obtain advice as
necessary to establish criteria related to its business. This will be done through the Secretary of the Board. The
system for convening meetings, quorums, adopting resolutions, drafting minutes and other details of its procedures
will be governed by the provisions defined in the Board Regulations for the Board of Directors insofar as they are
applicable to the Committee and by any specific Regulations that might be established.
The Chairman of the Risk Committee presented to the Board a report on the most significant aspects of the activity
carried out by the Committee since taking office in April 2016. This emphasized the Committee's follow-up on the
evolution of Group risks and its degree of compliance with the defined strategies and policies and the Risk
Appetite Framework (RAF) established by the Board of Directors. Among the components of this Framework are
the key metrics in solvency, liquidity and recurrence of income, and the limits established for each type of risk. The
Committee analyzed the situation of the different geographical areas where the Group operates, with special
attention to current issues that could directly affect Group entities, throughout the year. In carrying out its duties,
the Committee reviewed different corporate risk policies during the year, prior to their approval by the Executive
Committee, and monitored the evolution of different projects developed by the Risk Area. In relation to the ICAAP
and ILAAP reports, as well as the Group Recovery Plan, the report commented on the review carried out by the
Committee prior to its approval by the Board of Directors, to verify its adequacy, integrity and alignment from the
perspective of the Group's risk profile. The report also referred to other projects of relevance to the Group, such as
RDA (Risk Data Aggregation), and to the actions carried out by the Committee in monitoring and supervising the
development of the project. He also reported on the Committee's follow-up on the Group's risk profile and its
various indicators and on the Committee's reviews of the preliminary proposals for the Risk Area for the
establishment of the Group's Risk Appetite Framework for 2017.
TECHNOLOGY AND CYBER-SECURITY COMMITTEE
Position
Position
category
CARLOS TORRES VILA
CHAIRMAN
EXECUTIVE
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
44
TOMÁS ALFARO DRAKE
SUNIR KUMAR KAPOOR
JUAN PI LLORENS
JAMES ANDREW STOTT
MEMBER
MEMBER
MEMBER
MEMBER
INDEPENDENT
INDEPENDENT
INDEPENDENT
INDEPENDENT
% of executive Directors
% of proprietary Directors
% of independent Directors
% of other external Directors
20%
0%
80%
0%
Explain the committee's duties, describe the procedure and organizational and operational rules and summarize the
main actions taken during the year.
According to its specific regulations, the purpose of the Technology and Cyber-security Committee is to assist
the Board in the following areas: (i) the understanding and acknowledgement of the risks associated to
technology and information systems related to the Group's activity and the oversight of its management and
control, particularly with regard to the cyber-security strategy; (ii) the acknowledgment and supervision of the
infrastructure and technology strategy of the Group and how this is integrated into the development of its overall
strategy; and (iii) ensuring that the Bank has determined plans and policies, and has the appropriate means, for
managing the abovementioned matters.
It will also perform the following functions:
- Oversight of technological risk and cyber-security management:
Review the major technology risks exposures of the Bank, including information security and cyber-
security risks and the steps management has taken to monitor and control such exposures.
Review the policies and systems for the assessment, control and management of the Group’s technology
risks and infrastructures, including the cyber-attack incident response and recovery plans.
Receive reports from management regarding the business continuity planning in technology and
technology infrastructure matters.
Receive reports from management, as and when appropriate, on: (i) IT-related compliance risks; and (ii)
the steps taken to identify, assess, monitor, manage and mitigate those risks.
Additionally, the Technology and Cyber-security Committee will be informed of any relevant event that
may occur regarding cyber-security issues. These are deemed to be those which, individually or as a
whole, may have a material impact or damage in the Group’s equity, results or reputation. In any case,
such events will be informed to the Chair of the Committee as soon as possible.
- Stay informed of the Technology Strategy:
Receive reports from management, as and when appropriate, on technology strategy and trends that may
affect the Company’s strategic plans, including the monitoring of overall industry trends.
Receive reports from management, as and when appropriate, on the metrics established by the Group for
the management and control of IT-related matters, including the progress of the developments and
investments carried out by the Group in this field.
Receive reports from management, as and when appropriate, on matters related to new technologies,
applications, information systems and best practices that affect the Group’s IT strategy or plans.
Receive reports from management on the core policies, strategic projects and plans defined by the
Engineering area.
Inform the Board of Directors and, if applicable, the Executive Committee, on any IT-related matters
falling within the scope of their functions.
For a better performance of its functions, channels for an appropriate coordination between the Technology and
Cyber-security Committee and the Audit and Compliance Committee will be established to ensure: (i) that the
Technology and Cyber-security Committee can have access to the conclusions of the work performed by the
Internal Audit Department in technology and cyber-security matters; (ii) and that the Audit and Compliance
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
45
Committee is informed on IT-related systems and processes that are related to or affect the Bank’s internal
control systems and other matters falling within the scope of its functions. Additionally, channels for an
appropriate coordination between the Technology and Cyber-security Committee and the Risk Committee will
be established to ensure that the Risk Committee monitors the impact of technological risks within the scope of
Operational Risk and other matters falling within the scope of its functions.
With regard to its functioning and organization, will meet as often as necessary to perform its duties, convened
by its Chair or by whoever stands in for its Chair pursuant to its Regulations. The Committee may request the
attendance at its meetings of persons with tasks within the Group that are related to the Committee's duties.
In particular, the Committee will maintain a direct and recurring contact with the executives responsible for the
areas of Engineering and Cyber-security in the Group, for the purpose of receiving the necessary information
for a better performance of the Committee’s duties. This information will be discussed in the meetings held.
The Committee may also engage external advisory services as may be necessary to establish an informed
opinion on matters related to its duties. This will be done through the Secretariat of the Board. For all other
matters, the system for convening meetings, quorums, passing resolutions, drafting minutes and other details of
its operation will be in accordance with the provisions of the Board of Directors Regulations for the Board
insofar as they are applicable.
The most important activities carried out by the Technology and Cyber-security Committee in 2016 are detailed
in section C.2.5.
C.2.2 Fill in the following table with information on the number of female directors sitting on Board Committees over
the last four years:
Number of female directors
Year 2016
Year 2015
Year 2014
Year 2013
Number
%
Number
%
Number
%
Number
%
1
2
2
1
1
-
16.66%
40%
40%
20%
20%
-
1
2
1
-
1
-
20%
40%
20%
-
16.66%
-
1
1
1
-
1
-
20%
25%
20%
-
20%
-
1
1
1
1
-
-
16.66%
20%
20%
20%
-
-
Executive
Committee
Audit and
Compliance
Committee
Appointments
Committee
Remuneration
Committee
Risk Committee
Technology and
Cyber-security
Committee
C.2.3 Section repealed.
C.2.4 Section repealed.
C.2.5 Indicate, where applicable, the existence of regulations for the Board Committees, where they can be consulted
and any amendments made to them during the year. Indicate whether an annual report on the activities of each
committee has been prepared voluntarily.
The Board of Directors Regulations, available on the Company's website, regulate the composition, functions and
operating rules of the Board Committees, except for the Technology & Cyber-security Committee, which has its own
Regulations.
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
46
APPOINTMENTS COMMITTEE: The Chairman of the Appointments Committee presented to the Board of Directors
a report on the activities of the Committee throughout 2016, which is explained in more detail in the section on the
Appointments Committee in section C.2.1 above.
AUDIT AND COMPLIANCE COMMITTEE: The Audit and Compliance Committee has specific Regulations approved
by the Board and available on the company's website, which govern its operation and powers, among other matters.
The Chairman of the Audit and Compliance Committee presented to the Board a report on its activities in 2016, in
which it reported on the tasks carried out by the Committee in relation to the functions assigned to it by the Board
Regulations, indicating that the Committee had carried out its activity without incident and fulfilled the functions
assigned to it in relation to the monitoring and supervision of financial information; the system of internal control of
financial-accounting information; internal and external audits; matters related to compliance and those related to the
regulatory environment. He reported on the Supervisory Review and Evaluation Process (SREP) carried out by the
European Central Bank; on the annual plan for the Compliance Area and its regular monitoring and the
communications with both national and international supervisory and regulatory authorities. He also informed the
Board regarding the evolution of the Group's corporate structure during the 2016 financial year, the Group's fiscal
management and the impact of the forthcoming entry into force of national and international accounting standards.
With regard to the external audit, he highlighted the work plans, schedules and communications maintained with the
external auditors for the 2016 financial year, having observed its independence by the Committee in compliance with
the applicable regulations and it's plan with regard to the selection process for the new BBVA Group external auditor
for 2017, 2018 and 2019.
RISK COMMITTEE: The Risk Committee has specific Regulations approved by the Board and available on the
Company's website, which govern matters including its duties and procedural standards, among other matters.
Likewise, the Chairman of the Risk Committee presented to the Board of Directors a report on the activities of the
Committee in 2016, which is explained in more detail in the section on the Risk Committee in section C.2.1 above.
TECHNOLOGY AND CYBER-SECURITY COMMITTEE: The Risk Committee has specific Regulations approved by
the Board and available on the Company's website, which govern matters including its duties and procedural
standards, among other matters. As this Committee was constituted by the Board of Directors in 2016, no specific
Committee activity report has been made for this financial year.
C.2.6 Section repealed.
D RELATED-PARTY TRANSACTIONS AND INTRA-GROUP TRANSACTIONS
D.1 Explain the procedure, if any, for approving related-party and intra-group transactions.
Procedures for approving related party transactions
Article 17 v) of the Board of Directors Regulations establishes that the Board is responsible for approving, where
applicable, the transactions that the Company or its Group companies may make with directors or with shareholders
that individually or in concert hold a significant stake. This includes shareholders represented in the Board of
Directors of the Company or of other Group companies or with parties related to them, with the exceptions provided
for by law.
Moreover, article 8 of the Board of Directors Regulations establishes that approval of the transactions of the
Company or its Group companies with directors needing to be approved by the Board of Directors will be granted
after receiving a report from the Audit and Compliance Committee. The only exceptions to this approval will be
transactions that simultaneously fulfill the following three characteristics: (i) they are carried out under contracts with
standard terms and are applied en masse to a large number of customers; (ii) they go through at market rates or
prices set in general by the party acting as supplier of the goods or services; and (iii) they are worth less than 1% of
the Company's annual revenues.
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
47
D.2 Detail any significant transactions, entailing a transfer of a significant amount or obligations between the
company or its group companies, and the company’s significant shareholders:
Name of significant
Name of the
shareholder (person or
company or group
company)
entity
Nature of the
relationship
Type of
transaction
Amount
(thousands of euros)
D.3 Detail any significant transactions entailing a transfer of a significant amount or obligations between the company
or its group companies, and the directors and/or senior managers:
Name of the directors
Name of the related
and/or senior managers
party (person or
Relationship
(person or company)
company)
Nature of
transaction
Amount
(thousands of euros)
D.4 Detail the significant transactions in which the company has engaged with other companies belonging to the
same group, except those that are eliminated in the process of drawing up the consolidated financial statements and
that do not form part of the company’s usual trade with respect to its object and conditions.
In any event, provide information on any intragroup transactions with companies established in countries or territories
considered tax havens.
Name of the Group Company
Brief description of the transaction
BBVA GLOBAL FINANCE LTD.
BBVA GLOBAL FINANCE LTD.
BBVA GLOBAL FINANCE LTD.
BBVA GLOBAL FINANCE LTD.
Holding of securities representing
debt
Current account deposits
Term account deposits
Issue-linked subordinated liabilities
185,839
Amount
(€k)
1,197
1,663
6,462
D.5 State the amount of the transactions carried out with other related parties.
D.6 Detail the mechanisms established to detect, determine and resolve possible conflicts of interest between the
company and/or its group, and its directors, managers and/or significant shareholders.
Articles 7 and 8 of the Board Regulations regulate issues relating to possible conflicts of interest as follows:
Article 7
Directors must adopt necessary measures to avoid finding themselves in situations where their interests, whether for
their own account or for that of others, may enter into conflict with the corporate interest and with their duties with
respect to the Company, unless the Company has granted its consent under the terms established in applicable
legislation and in the Board of Directors Regulations.
Likewise, they must refrain from participating in deliberations and votes on resolutions or decisions in which they or a
related party may have a direct or indirect conflict of interest, unless these are decisions relating to appointment to or
severance from positions on the governing body.
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
48
Directors must notify the Board of Directors of any situation of direct or indirect conflict that they or parties related to
them may have with respect to the Company's interest.
Article 8
The duty of avoiding situations of conflict of interest referred to in the previous article obliges the directors to refrain
from, in particular:
- Carrying out transactions with the Company, unless these are ordinary business, performed under standard
conditions for the customers and of insignificant quantity. Such transactions are deemed to be those whose
information is not necessary to provide a true picture of the net worth, financial situation and performance of the
Company.
- Using the Company's name or invoking their position as director to unduly influence the performance of private
transactions.
- Making use of the corporate assets, including the Company's confidential information, for private ends.
- Taking advantage of the Company’s business opportunities.
- Obtaining advantages or remuneration from third parties other than the Company and its Group, associated to the
performance of their position, unless they are mere tokens of courtesy.
- Engaging in activities for their own account or on behalf of third parties that involve effective actual or potential
competition with the Company or that, in any other way, bring them into permanent conflict with the Company's
interests.
The above provisions will also apply should the beneficiary of the prohibited acts or activities described in the
previous subsections be a related party related to the director. However, the Company may dispense with the
aforementioned prohibitions in specific cases, authorising a director or a related party to carry out a certain
transaction with the Company, to use certain corporate assets, to take advantage of a specific business opportunity
or to obtain an advantage or remuneration from a third party.
When the authorization is intended to dispense with the prohibition against obtaining an advantage or remuneration
from third parties, or affects a transaction whose value is over 10% of the corporate assets, it must necessarily be
agreed by a General Meeting resolution.
The obligation not to compete with the Company may only be dispensed with them no damage is expected to the
Company or when any damage that is expected is compensated by benefits that are foreseen from the dispensation.
The dispensation will be conferred under an express and separate resolution of the General Meeting.
In other cases, the authorization may also be resolved by the Board of Directors, provided the independence of the
members conferring it is guaranteed with respect to the director receiving the dispensation. Moreover, it will be
necessary to ensure that the authorized transaction will not do harm to the corporate net worth or, where applicable,
that it is carried out under market conditions and that the process is transparent.
Approval of the transactions of the Company or its Group companies with directors needing to be approved by the
Board will be granted after receiving a report from the Audit and Compliance Committee. The only exceptions to this
approval will be transactions that simultaneously meet the following 3 specifications: 1) they are carried out under
contracts with standard terms and are applied en masse to a large number of customers; 2) they go through at
market rates or prices set in general by the party acting as supplier of the goods or services; and 3) they are worth
less than one per cent of the Company’s annual revenues.
Since BBVA is a credit institution, it is subject to the provisions of Act 10/2014, dated 26th June, on the regulation,
supervision and solvency of credit institutions, whereby the directors and general managers or similar may not obtain
credits, bonds or guarantees from the Bank on whose board or management they work, above the limit and under the
terms established in article 35 of Royal Decree 84/2015, which implemented Law 10/2014, unless expressly
authorized by the Bank of Spain.
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
49
All the members of the Board of Directors and the senior management are subject to the Company’s Internal
Regulations on the Securities Markets. These Regulations are intended to control possible conflicts of interest. They
establish that everyone subject to it must notify the head of their area or the Compliance Unit of situations that could
potentially and under specific circumstances may entail conflicts of interest that could compromise their impartiality,
before they engage in any transaction or conclude any business in which they could arise.
D.7 Are more than one of the Group’s companies listed in Spain as publicly traded companies?
Identify the listed subsidiaries in Spain
NO
Listed subsidiaries
Indicate whether the respective areas of business and any potential relations between them and any potential
business relations between the holding company and the listed subsidiary and other group companies have been
publicly defined;
Define any potential business relations between the holding company and the listed subsidiary
company and between the listed subsidiaries and other group companies
Identify the mechanisms established to resolve any potential conflicts of interest between the listed subsidiary and
other companies of the group:
Mechanisms to resolve possible conflicts of interest
E RISK CONTROL AND MANAGEMENT SYSTEMS
E.1 Explain the scope of the company’s Risk Management System, including risks of a tax-related nature.
The BBVA Group has a General Risk Control and Management Model (hereinafter, "the Model") adapted to its
business model, organization and the geographical areas in which it operates. It allows it to operate within the
framework of the control and risk management strategy defined by the Bank's company bodies and adapt to an
economic and regulatory environment, addressing management globally and monitoring to the circumstances at
any particular time.
The risk management function at BBVA (Global Risk Management) is organized and developed by establishing
procedures and specific rules for each type of risk, bringing the Model's elements closer to the day-to-day
management of risks in the Group.
The elements comprising the model are:
1. A system of governance and organization of the risk management function that has an adequate definition of
roles and responsibilities in all areas, a series of committees and delegation structures, and an internal control
system which is consistent with the nature and scale of the risks.
2. A Group Risk Appetite Framework approved by the Board that determines the risks and the risk level that the
Group is willing to assume to achieve its business objectives.
3. A system of decision-making and processes to allow the ordinary management of risks, which is based on
three basic elements: the existence of a homogeneous normative body; a risk planning that ensures its
integration into the management of the Risk Appetite Framework and the comprehensive management of risks
throughout their life cycle.
4. A framework of risk identification, evaluation, monitoring and reporting that provides the Model with a dynamic
and proactive vision to enable compliance with the Risk Appetite Framework, even in unfavorable scenarios.
5. An adequate infrastructure that ensures that the Group has the human and technological resources needed
for effective management and supervision of risks in order to achieve its objectives.
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
50
Some notes on the Group management of different risks are given below:
• Credit risk: is the most relevant for the Group and includes management of counterparty, issuer, settlement and
country-specific risks. Management of this risk is based on the following principles: A) availability of basic
information for assessing risks, proposing risks and having supporting documentation for approval purposes; B)
sufficient customer fund generation and solvency to assume the repayments of principal and interest on loans
owed; C) establishment of adequate and sufficient guarantees to allow effective recovery of the operation,
considered a secondary and exceptional method of recovery for when the first fails. Management of this risk is
based on a comprehensive structure covering for objective and independent decision-making.
• Structural interest-rate risk: This includes the potential impact that changes in market interest rates have on the
net interest income and book value of entities. Its management model in the Group is decentralized, thus the
Balance-Sheet Management unit, pertaining to Finance, designs and executes the strategies to implement via
ALCO in accordance with the tolerances set out in the Risk Appetite Framework.
• Structural exchange-rate risk: Managed centrally focusing on the risk that arises when consolidating holdings in
subsidiaries with functional currencies other than the euro. The corporate Balance-Sheet Management unit,
through ALCO, designs and executes the hedging policies with the main purpose of controlling the potential
negative effect of exchange-rate fluctuations on capital ratios and on the equivalent value in euros of the foreign-
currency earnings of the different subsidiaries, considering the transactions according to market expectations
and their cost.
• Structural equity risk: Exposure to this risk mainly stems from holdings in non-strategic industrial and financial
companies with medium- and long-term investment horizons. It is managed in accordance with the corporate risk
management policies for equity positions in the equity portfolio, in order to ensure their adaptation to BBVA's
business model and its risk tolerance level according to the Risk Appetite Framework.
• Market risk (trading portfolio): This arises from the probability that there may be losses in the value of the
positions held as a result of changes in the market prices of financial instruments. The Value at Risk (VaR)
model is used to measure this.
• Liquidity and funding risk: Its control, monitoring and management, intends in the short term, to meet the
payment commitments envisaged in a timely manner without resorting to obtaining funds in difficult conditions or
that might deteriorate the reputation of the entity. In the medium and long term, the aim is to ensure that the
Group’s funding structure is appropriate and that its evolution is suitable according to the economic situation, the
markets and the regulatory changes, in accordance with the established Risk Appetite.
• Operational risk: Its management is based on the value provided by the Advanced Measurement Approach
model (AMA): knowledge, identification, prioritization and management of potential and actual risks, supported
by a governance model to drive management across all the Group's units. The aim is to reduce operating losses
by managing an adequate control environment.
Regarding taxation, BBVA has defined a tax-related risk management policy based on a suitable control
environment, a system for identifying risks and a monitoring process including continuous improvement of the
effectiveness of the established controls. In 2016 this management model was evaluated by an independent third
party.
E.2 Identify the corporate bodies responsible for drawing up and enforcing the Risk Management System, including
tax-related risks.
BBVA Group's risk governance model is characterized by a special involvement of its governing bodies, both in
setting the risk strategy and in monitoring and supervising its implementation on an ongoing basis.
The Board of Directors approves the risk strategy and supervises the internal control and management systems.
Specifically, the strategy approved by the Board includes, at least, the Group's Risk Appetite statement, the
fundamental metrics and the basic structure of limits by areas, types of risk and asset classes, as well as the
bases of the risk management and control model. The Board of Directors is also responsible for approving and
monitoring the strategic and business plan, the annual budgets and management goals, as well as the
investment and funding policy, in a consistent way and in line with the approved Risk Appetite Framework.
On the basis established by the Board of Directors, the Executive Committee approves specific corporate
policies for each type of risk; the metrics by type of risk related to concentration, profitability and reputation and
the basic structure of the Group's risk limits. By following up on them, with information on any possible excesses
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
51
of the limits that may occur and on the corrective measures to be taken in such cases in order to reestablish the
situation.
Lastly, the Board of Directors includes a committee specializing in risks, the Risk Committee. This committee
conducts an ongoing analysis and monitoring of risks within the remit of the governing bodies, assisting the
Board of Directors and the Executive Committee in the determination and monitoring of the risk strategy and the
corporate policies, respectively. Another task of special relevance it carries out is detailed control and monitoring
of the risks that affect the Group as a whole, which enables it to supervise the effective integration of the risk
strategy into management and the application of the corporate policies approved by the governing bodies.
The head of GRM is the Group's Chief Risk Officer (CRO), whose main responsibility is to ensure that the
Group's risks are managed in accordance with the Model. The Chief Risk Officer is supported by a structure
consisting of cross-cutting risk units in the corporate area and specific risk units in the Group's geographical
areas and/or business areas. Each of these units is headed by a Risk Officer who, within his/her field of
competence, carries out risk management and control functions and is responsible for applying the corporate
policies and rules approved at the Group level in a consistent manner, adapting them if necessary to the local
requirements and reporting to the local governing bodies.
The Risk Officers of the geographical and/or business areas report both to the Group's Chief Risk Officer and to
the head of their geographical and/or business area. This dual reporting system aims to ensure the
independence of the local risk management function from the operating functions and enable its alignment with
the Group's corporate policies and goals related to risks.
The risks function has a decision-making process supported by a structure of committees. The Global Risk
Management Committee (GRMC) is the highest executive body in the risk area and proposes, examines and,
where applicable, approves, among others, the internal risk regulatory framework and the procedures and
infrastructures needed to identify, assess, measure and manage the risks facing the Group in its businesses, as
well as the admission of operations involving more relevant risks.
Regarding the tax-related risk, the Tax Department establishes the control mechanisms and internal rules
necessary to ensure compliance with the tax laws in force and the tax strategy approved by the Board of
Directors.
This function is subject to supervision by the Audit and Compliance Committee of the BBVA Group, and is
evidenced by the appearances made before the same by the Head of the Fiscal Function of the BBVA Group.
E.3 Indicate the primary risks, including tax-related risks that could prevent business targets from being met.
BBVA has risk identification and scenario analysis processes in place that enables the Group to conduct a
dynamic and proactive risk management.
The risk identification processes are forward-looking to ensure the identification of emerging risks, and take into
account the concerns of both the business areas, which are closer to the reality of the different geographical
areas, and the corporate areas and Senior Management.
Risks are captured and measured in a consistent way using the most appropriate methodologies in each case.
Their measurement includes the design and application of scenario analyses and stress testing, and considers
the controls the risks are subjected to.
As part of this process, a forward projection is performed of the Risk Appetite Framework variables in stress
scenarios, with the aim of identifying possible deviations from the established thresholds; if such deviations are
detected, the appropriate measures are adopted to keep those variables within the target risk profile.
In this context, there are a series of emerging risks that could affect the Group's business performance. These
risks are organized into the following large blocks:
• Macroeconomic and geopolitical risks
According to the latest available information, global growth remains stabilized slightly above 3% in year-on-year
terms.
Recently, the uncertainty of the global panorama has increased with the victory of the exit option from the
European Union in the referendum held in the United Kingdom.
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
52
In general, the gradual recovery of growth in the developed economies does not suffice to offset the slowdown in
emerging economies. Developments in the Chinese economy, with vulnerabilities due to its high level of debt,
will continue to determine the global growth outlook and, in particular, in emerging economies.
Other events complete the outlook for global uncertainties for 2016 and 2017, and could affect the valuation of
the Group's holdings in certain countries:
o Geopolitical tensions in some areas. In connection with this issue, it is worth noting the uncertainty over
the political and economic situation following the events in Turkey since 15 July.
o The risk of an adjustment scenario in the United States, which might be caused by the Federal
Reserve's decision to postpone the rise in interest rates and a lower growth forecast than the previous.
These uncertainties have led to a significant increase in financial market volatility, asset price decline and
significant devaluations in emerging countries.
The Group's geographical diversification is the key to achieving a high level of recurring revenue, despite the
conditions of the environment and the economic cycles of the economies in which it operates.
• Regulatory and reputational risks
o Financial institutions are exposed to a complex and changing regulatory and legal environment that can
impact their growth capacity and the development of certain businesses, with higher liquidity and capital
requirements and lower profitability ratios. The Group monitors changes in the regulatory framework on
an ongoing basis to enable it to anticipate and adapt to those changes sufficiently in advance, adopt the
best practices and the most efficient and rigorous criteria for their implementation.
o The financial sector is coming under intense scrutiny by regulators, governments and society itself.
Negative news or inappropriate conduct can seriously damage an institution's reputation and affect its
ability to conduct a sustainable business. The attitudes and conduct of the Group and of its members
are governed by the principles of integrity, honesty, long-term vision and best practices, thanks to the
internal control Model, the Code of Conduct, tax strategy and the Group's Responsible Business
strategy, among others.
• Business, legal and operational risks
o New technologies and forms of customer relations: The development of the digital world and the
information technologies poses major challenges for financial institutions that represent threats (new
competitors, disintermediation…) and also opportunities (new customer relations framework, greater
ability to adapt to their needs, new products and distribution channels...). In this regard, digital
transformation is one of the priorities for the Group, which aims to lead the digital banking of the future.
o Technological risks and security breaches: Financial institutions are exposed to new threats such as
cyber-attacks, internal and customer database theft, payment system fraud… that require major
investments in security from the technological and human point of view. The Group attaches a great
deal of importance to active management and control of operational and technological risk. One
example is the early adoption of advanced models for managing these risks (AMA - Advanced
Measurement Approach).
The financial sector is exposed to growing litigation rates in that financial entities are facing an elevated number
of lawsuits whose economic consequences cannot be easily foreseen. The Group carries out a constant
management and tracking of such lawsuits in defense of its own interests, and allocates, when considered
necessary, the corresponding provisions for coverage thereof, following the criteria of internal lawyers and
external legal experts and based on the applicable laws and regulations.
E.4 Identify whether the entity has a risk tolerance level, including tax-related risks.
The Group's Risk Appetite Framework approved by the governing bodies determines the risks and the risk level
that the Group is willing to assume to achieve its business objectives taking into account the organic evolution of
the business. These are expressed in terms of solvency, liquidity and funding, profitability, or other metrics,
which are reviewed periodically or if there are any substantial changes in the entity's business or relevant
corporate operations.
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
53
The risk appetite is expressed through the following elements:
Risk Appetite Statement: sets out the general principles of the Group's risk strategy and the target risk
profile.
Statements and core metrics: based on the appetite statement, statements are established that specify the
general principles of risk management in terms of solvency, profitability, liquidity and funding. Moreover,
the core metrics reflect, in quantitative terms, the principles and the target risk profile set out in the Risk
Appetite statement.
Statements and metrics by type of risk: based on the core metrics and their thresholds for each type of risk,
statements are established that set out the general management principles for the risk and a number of
metrics are determined, whose observance enables compliance with the core metrics and the Group's Risk
Appetite statement. These metrics have a maximum risk appetite.
The basic structure of limits: they shape the Risk Appetite Framework at geographical area, risk type, asset
type and portfolio level, ensuring that management is within the metrics by type of risk.
In addition to this Framework, there is a level of management limits that is defined and managed by the risks
function when developing the basic structure of limits, with the aim of ensuring that proactive management of
risks by risk subcategory within each type or by subportfolio is in line with that basic structure of limits and in
general with the established Risk Appetite Framework.
Each geographical and/or business area has its own Risk Appetite Framework, consisting of its local Risk
Appetite statement, core metrics, and metrics by type of risk and limits, which must be consistent with those set
at the Group level, but adapted to their own reality. These are approved by the corresponding governing bodies
of each entity.
The corporate risks area works with the various geographical and/or business areas to define their Risk Appetite
Framework, so that it is coordinated with, and integrated into the Group's Risk Appetite Framework, making sure
that its profile is in line with the one defined.
The BBVA Group assumes a certain degree of risk to be able to provide financial services and products to its
customers and obtain attractive returns for its shareholders. The organization must understand, manage and
control the risks it assumes.
The aim of the Group is not to eliminate all risks, but to assume a prudent level of risks that allows it to generate
returns while maintaining acceptable capital and fund levels and generating recurrent earnings.
E.5 State what risks, including tax-related risks, have occurred during the year.
Risk is inherent to financial business, so the occurrence of risk to a greater or lesser extent is absolutely implicit
in the Group’s activities. BBVA thus provides detailed information on its annual financial statements (note 7 in the
Report and note 19 in the consolidated accounts covering tax-related risks) regarding the developments of such
risks, since their very nature can permanently affect the Group in undertaking its activities.
Likewise, as described in note 24 of the Report, BBVA has provided, as a result of the judgement issued by the
European Union Court of Justice regarding the interest rate clauses in consumer mortgage loans (known as
"floor clauses"), a provision to cover future claims that may arise.
E.6 Explain the response and supervision plans for the principal risks faced by the company, including tax-related
risks
The BBVA Group's internal control system takes its inspiration from the best practices developed both in the
COSO (Treadway Commission Committee of Sponsoring organizations) “Enterprise Risk Management -
Integrated Framework” and in the “Framework for Internal Control Systems in Banking Organizations”, drawn up
by the Basel Bank of International Settlements (BIS).
The control model has a system comprising three lines of defense:
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
54
The Group's business units constitute the first line of defense. They are responsible for managing current
and emerging risks and implementing control procedures. It is also responsible for reporting to its
business/support unit.
The second line is constituted by the specialist control units (Compliance, Accounting & Supervisors
(specifically, Internal Financial Control), Global Risk Management (within it, Internal Risk Control) and
Engineering (specifically, Internal Operations Control and Internal IT Control)). This line collaborates in
identifying current and emerging risks, defines the control policies within the scope of its cross-sector
specialty, ensures that they are implemented correctly, and provides training and advice to the first line. In
addition, one of its main functions is to monitor and question the control activity carried out by the first line
of defense.
The control activity of the first and second line of defense will be coordinated by the Internal Risk Control
Unit, which will also be responsible for providing these units with a common internal control methodology.
The third line of defense is made up of the Internal Audit unit, for which the Group assumes the guidelines
of the Basel Committee on Banking Supervision and of the Institute of Internal Auditors. Its function is that
of providing independent and objective assurance and consulting activity designed to add value and
improve the Organization's operations.
In addition, within the risk area, the Group has units for Internal Risk Control and Internal Validation that are
independent of the units that develop the models, manage the processes and execute the controls.
Its scope of action is global, both from the geographical point of view and in terms of the types of risks. It
encompasses all the areas of the organization and is designed to identify and manage the risks faced by the
Group entities, in order to guarantee the established corporate objectives.
The main function of Internal Risk Control is to ensure the existence of a sufficient internal regulatory framework,
a process and measures defined for each type of risks identified in the Group, and for those other types of risk
that may potentially affect the Group, control their application and operation, and ensure that the risk strategy is
integrated into the Group's management.
The Group's Internal Risk Control Director is responsible for the function and reports its activities and informs on
its work plans to CRO and to the Board's Risk Committee, assisting it in any matters where requested.
To perform its duties, the unit has a structure of teams at a corporate level and also in the most important
geographical areas in which the Group operates. As in the corporate area, the local units remain independent
from the business areas that implement the processes, and from the units that carry out the controls, reporting
functionally to the Internal Risk Control unit. The unit’s lines of action are established at Group level and it is then
responsible for their local-level adaptation and implementation, and for reporting on the most relevant aspects.
Among other functions, Internal Validation is responsible for the independent review and validation, at internal
level, of the models used to measure and assume the risks and for determining the Group's capital requirements.
With regard to tax risks, the Board of Directors approved the Tax Strategy for the BBVA Group. This strategy
reflects the tax-related postures of the Group. In this regard, the Tax Department establishes the policies and
control processes for guaranteeing compliance with the tax laws currently in force and the tax strategy.
F SYSTEMS OF INTERNAL RISK MANAGEMENT AND INTERNAL CONTROL OVER FINANCIAL REPORTING
(ICFR)
Describe the mechanisms comprising the risk management and control systems for financial reporting (ICFR) in the
entity.
F.1 The entity’s control environment
Give information, describing the key features of at least:
F.1.1. Which bodies and/or functions are responsible for: (i) the existence and maintenance of an adequate and
effective ICFR; (ii) its implementation; and (iii) its supervision.
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
55
Pursuant to article 17 of the Board Regulations, the Board of Directors approves the financial information that BBVA
is required to publish periodically as a publicly traded company. The Board of Directors has an Audit and Compliance
Committee, whose mission is to assist the Board supervise financial information and exercise control over the BBVA
Group.
In this respect, the BBVA Audit and Compliance Committee Regulations establish that the Committee's duties include
the supervision of the sufficiency, adequacy and effective operation of the internal control systems in the process of
drawing up and preparing financial information, so as to rest assured of the correctness, accuracy, sufficiency and
clarity of the financial information of the Entity and its consolidated Group.
The BBVA Group complies with the requirements imposed by the Sarbanes Oxley Act ("SOX") for each year's
consolidated annual accounts due to its status as a publicly traded company listed to the U.S. Securities Exchange
Commission ("SEC"). The main Group executives are involved in the design, compliance and maintenance of an
effective internal control model that guarantees the quality and veracity of the financial information. The Accounting &
Supervisors Department (“A&S”) is responsible for the operation and maintenance of the internal financial control
model.
In addition, and with the aim of reinforcing internal control environment, the Group has the Corporate Assurance
model (which includes the ICFR) where is established a framework for the supervision of the internal control model.
The Corporate Assurance model (in which the business areas, support areas and the areas specializing in internal
control participate) is organized into a system of committees that analyze the most relevant issues related to internal
control in each geographical area, with the participation of the country's top managers. These committees report to
the Group's Global Committee, chaired by the CEO with the assistance of the main executives responsible for the
business and control areas.
The different internal control units at holding and local level, coordinated by the Internal Control Area located in
Global Risk Management, are responsible for implementing and applying the internal control and operational risk
methodology defined in the Group. These internal control units are responsible, together with the business areas, for
identifying, prioritizing and assessing the risks, helping the units to implement a control model, documenting it and
supervising it periodically as well as defining risk mitigating measures and promoting their proper implementation.
The effectiveness of this internal control system is assessed on an annual basis for those risks that may have an
impact on the proper drawing up of the Group's financial statements. The Internal Financial Control area, the control
specialists of the business and support areas and the Group's Internal Audit department collaborate in this
assessment. In addition, the external auditor of the BBVA Group issues an opinion every year on the effectiveness of
internal control over financial reporting based on criteria established by COSO (Committee of Sponsoring
Organizations of the Treadway Commission) and in accordance with the standards of the U.S. Public Company
Accounting Oversight Board (PCAOB). This opinion appears in the Form 20-F that is filed every year with the SEC.
The result of the annual assessment of the System of Internal Control over Financial Reporting is reported to the
Group's Audit and Compliance Committee by the heads of Internal Audit and Internal Financial Control.
F.1.2. Whether, especially in the process of drawing up the financial information, the following elements exist:
• Departments and/or mechanisms responsible for: (i) the design and review of the organisational structure; (ii) the
clear definition of lines of responsibility and authority, with an adequate distribution of tasks and functions; and (iii)
ensuring that sufficient procedures exist for their correct dissemination within the entity.
The drafting of the financial information is carried out by the local Financial Management units of the countries and in
a centralized manner by the A&S Division, which is overall responsible for the drafting and reporting of accounting
and regulatory information.
The BBVA Group has organizational structure design and review mechanisms that clearly define action and
responsibility lines in the areas involved in drawing up of financial information of each entity and consolidated group,
and also has the channels and circuits necessary for their communication and distribution. The units responsible for
drawing up these financial statements have a distribution of tasks and segregation of functions necessary to draw up
these statements in an appropriate operational and control framework.
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
56
Additionally, there is an accountability model aimed at extending the culture of, and commitment to internal control.
Those in charge of the design and operation of the processes that have an impact on financial reporting certify that all
the controls associated with its operation under their responsibility are sufficient and have worked correctly.
• Code of conduct, approval body, degree of dissemination and instruction, principles and values included (indicating
whether specific mention is made of recording the transactions and drawing up of the financial information), body in
charge of analysing non-compliance and proposing corrective measures and sanctions.
BBVA has a Code of Conduct, approved by the Board of Directors that sets out BBVA's specific commitments in
developing one of the principles of its Corporate Culture: Integrity as a way of understanding and carrying out its
businesses. This Code likewise establishes the corresponding channel for whistleblowers regarding possible
infringements of the Code. It is the subject of ongoing training and refresher programs including key personnel in the
financial function.
During 2016, and after the Code was updated in 2015, campaigns have been developed to communicate and
disseminate its new contents, taking advantage of new formats and digital channels. In addition, an ambitious training
plan has been developed at a global level, reaching the entire workforce of the Group.
The Code of Conduct is published on the Bank's website (www.bbva.com) and on the employees’ website (intranet).
Additionally, Group’s integrant undertake personally and individually to observe its principles and rules in an express
declaration of awareness and adhesion.
The duties of the Audit and Compliance Committee include ensuring that the internal codes of ethics and conduct
and on securities market, applicable to all group personnel, comply with legal requirements and are adequate for the
Bank.
Additionally, BBVA has adopted a structure of Corporate Integrity Management Committees (with individual powers at
jurisdiction or Group entity levels, as applicable). Their joint scope of action covers all the Group businesses and
activities and their main duty is to ensure effective application of the Code of Conduct. There is also a Corporate
Integrity Management Committee, whose scope of responsibility extends throughout BBVA. The fundamental mission
of this committee entails ensuring uniform application of the Code in BBVA.
The Compliance Unit in turn independently and objectively promotes and supervises to ensure that BBVA acts with
integrity, particularly in areas such as money-laundering prevention, conduct with clients, security market conduct,
corruption prevention, data protection and other areas that could entail a reputational risk for BBVA. The unit's duties
include fostering the knowledge and application of the Code of Conduct, promoting the drafting and distribution of its
implementing standards, assisting in the resolution of any concern insofar as interpretation of the Code that may
arise, and managing the Whistle-Blowing Channel.
• Whistle-blowing channel, to allow financial and accounting irregularities to be communicated to the Audit
Committee, as well as possible non-compliance with the code of conduct and irregular activities in the organization,
reporting where applicable if this is confidential in nature.
Preservation of the Corporate Integrity of BBVA transcends the merely personal accountability for individual actions, it
calls for all employees to have zero tolerance for activities outside the Code of Conduct or that could harm the
reputation or good name of BBVA, an attitude that is reflected in everyone's commitment to whistle-blowing, by timely
communication, of situations that, even when unrelated to their activity or area of responsibility, could be illegal or
infringe upon the values and guidelines of the Code.
The Code of Conduct itself establishes the communication guidelines to follow and contemplates a Whistle-Blowing
Channel, likewise guaranteeing the duty to reserve of the reporting parties, confidentiality of the investigations and
the prohibition of retaliation or adverse consequences in light of communications made in good faith.
Telephone lines and email boxes have been set up for these communications in each jurisdiction. A list of these
appears on the Group’s Intranet.
As described in the previous section, BBVA has adopted a structure of Corporate Integrity Management Committees
(with individual powers at jurisdiction or Group entity levels, as applicable), whose joint scope of action covers all the
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
57
Group businesses and activities and whose functions and responsibilities (explained in greater detail in their
corresponding regulations) include:
• Drive and monitor global initiatives to foster and promote a culture of ethics and integrity among members of the
Group.
• Ensure an uniform application of the Code.
• Promote and monitor the functioning and effectiveness of the Whistle-blowing Channel.
• In exceptional cases where they are not already included among the members of the Committee, inform Senior
Management and/or the person responsible for the preparation of the financial statements of those events and
circumstances from which significant risks might arise for BBVA.
In addition, periodic reports are made to the Audit and Compliance Committee that supervises and controls their
proper functioning (independently managed by the Compliance area).
• Periodic training and refresher courses for employees involved in preparing and revising the financial information,
and in ICFR assessment, covering at least accounting standards, audit, internal control and risk management.
Specific training and periodic refresher courses are given on accounting and tax-related standards, internal control
and risk management in units involved in preparing and reviewing the financial and tax-related information and in
evaluating the internal control system, to help them perform their functions correctly.
Within the A&S area, there is an annual training program for all members of the area on aspects related to the
preparation of financial information and new regulations applicable in accounting, financial and fiscal matters, as well
as other courses adapted to the needs of the area. These courses are taught by professionals from the area and
renowned external providers.
This specific training program is in addition to the general Group training, which includes courses on finance and
technology among other subjects.
Additionally, the BBVA Group has a personal development plan for all employees, which forms the basis of a
personalized training program to deal with the areas of knowledge necessary to perform their functions.
F.2 Financial reporting risk assessment
Give information on at least:
F.2.1. The key features of the risk identification process, including error and fraud risks, with respect to:
• Whether the process exists and is documented.
The ICFR was developed by the Group Management in accordance with international standards set forth by the
Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) establishing five components on
which the effectiveness and efficiency of internal control systems must be based:
Establishing an adequate control environment for monitoring all these activities.
Evaluating the risks that may be incurred by an entity in drawing up its financial information.
Designing the necessary controls to mitigate the most critical risks.
Establishing the adequate information circuits to detect and communicate the system's weaknesses or
inefficiencies.
Monitoring such controls to ensure they are operational and the validity of their effectiveness over time.
In order to identify the risks with a greater potential impact on the generation of financial information, the processes
from which such information is derived are identified and documented, and an analysis of the risks that may arise in
each is conducted.
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
58
Based on the corporate internal control and operational risk methodology, the risks are included in a range of
categories by type, which include the error and fraud (internal/external), and their probability of occurrence and
possible impact is analyzed.
The process of identifying risks of error, falsehood or omission in the drawing up of the Financial Statements is
carried out by the Financial Reporting Internal Control unit, which manages their correction and in turn reports to the
Audit and Compliance Committee. The scope of the annual/quarterly or monthly assessment of their controls is
determined based on the materiality of the risks, thus ensuring coverage of the critical risks for the financial
statements.
The assessment of the aforementioned risks and of the effectiveness of their controls begins with the management's
understanding of and insight into the business and the analyzed operating process, considering criteria of quantitative
materiality, likelihood of occurrence and economic impact, in addition to qualitative criteria associated with the type,
complexity and nature of the risks or of the business structure itself.
The system for identifying and assessing the risks of internal control over financial reporting is dynamic. It evolves
continuously, always reflecting the reality of the Group's business, changes in operating processes, the risks affecting
them and the controls that mitigate them.
All this is documented in a corporate management tool developed and managed by Operational Risk (Storm) where
are documented all the processes, risks and controls managed by the different control specialists, including the
Financial Reporting Internal Control unit.
• Whether the process covers all the objectives of financial reporting (existence and occurrence; completeness;
valuation; presentation, breakdown and comparability; and rights and obligations), whether the information is updated
and with what frequency.
All the processes developed in the BBVA Group for drawing up financial information aim to record all financial
transactions, value the assets and liabilities in accordance with applicable accounting regulations and provide a
breakdown of the information in accordance with regulatory requirements and market needs.
The model of control over financial information analyses each of the aforementioned processes in order to ensure
that error or fraud risks are properly covered with controls that work efficiently, and is updated when there are
changes in the relevant processes for drawing up the financial information.
• The existence of a process for identifying the consolidation perimeter, taking into account aspects including the
possible existence of complex corporate structures, instrumental or special purpose vehicles.
The A&S (Accounting & Supervisors) organization includes a Consolidation department that carries out a monthly
process of identification, analysis and updating of the Group's consolidation perimeter.
In addition, the information from the consolidation department on new companies set up by the Group's different units
and the changes made to existing companies is compared with the issues analyzed by two specific committees
whose function is to analyze and document the changes in the composition of the corporate group (Holding Structure
Committee and Investments in Non-Banking Companies Committee, both corporate).
In addition, with regard to special-purpose entities control, the Internal Audit and Compliance areas of the Bank make
a periodic report of the Group's structure to the Board of Directors and to the Audit and Compliance Committee.
• Whether the process takes into account the effects of other types of risks (operational, technological, financial,
legal, tax-related, reputational, environmental, etc.) insofar as they impact the financial statements.
The model of internal control over financial reporting applies to processes for drawing up such financial information
and all operational or technical processes that could have a relevant impact on the financial, accounting, tax-related
or management information.
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
59
As explained above, all the specialist control areas apply a standard methodology and use a common tool (Storm) to
document the identification of the risks, of the controls that mitigate those risks and of the assessment of their
effectiveness.
There are control specialists in all the operational or support areas, and therefore any type of risk that may affect the
Group's operations is analyzed under that methodology (market, credit, operational, technological, financial, legal,
tax-related, reputational or any other type of risk) and is included in the ICFR insofar as it may have an impact on the
financial information.
• Which of the entity's governing bodies supervises the process.
The process for identifying risks and assessing the effectiveness and suitability of the controls is documented at least
once a year, supervised by the Internal Audit area and reported to the Global Corporate Assurance Committee of the
Group.
Moreover, the Internal Audit Director and head of the Group's Internal Financial Control report each year to the Audit
and Compliance Committee on the analysis and certification work carried out pursuant to SOX methodology, to
comply with the legal requirements imposed by the Sarbanes Oxley Act related to internal control systems for the
financial reporting and is included in Form 20-F, which is filed every year with the SEC (as explained in point one
regarding the control environment).
F.3 Control activities
Give information on the main features, if at least the following exist:
F.3.1. Procedures for review and authorization of the financial information and the description of the ICFR, to be
published on the securities markets, indicating who is responsible for it, and the documentation describing the activity
flows and controls (including those concerning risk of fraud) for the different types of transactions that may materially
impact the financial statements, including the procedure for closing the accounts and the specific review of the
relevant judgements, estimates, valuations and projections.
All the processes related to the drawing up of the financial information are documented, together with their control
model: potential risks linked to each process and controls established for their mitigation. As explained in point F.2.1,
the aforementioned risks and controls are recorded in the corporate tool Storm, which also includes the result of the
assessment of the operability of the controls and the degree of risk mitigation.
In particular, the main processes related to the generation of financial information are: accounting, consolidation,
financial reporting, financial planning and monitoring, financial and tax-related management. The analysis of these
processes, their risks and their controls is also supplemented by all other critical risks that may have a financial
impact from business areas or other support areas.
Likewise, there are procedures for review by the areas responsible for generating the financial and tax-related
information disseminated to the securities markets, including the specific review of the relevant judgements,
estimates and projections.
As mentioned in the annual financial statements, it is occasionally necessary to make estimates to determine the
amount at which some assets, liabilities, income and expenses and commitments should be recorded. These
estimates are mainly related to:
Impairment losses on certain financial assets.
The assumptions used to quantify certain provisions and in the actuarial calculation of liabilities and
commitments for post-employment remunerations and other obligations.
The useful life and impairment losses of tangible and intangible assets.
The appraisal of goodwill and price assignments in business combinations.
The fair value of certain unlisted assets and liabilities.
The recoverability of deferred tax assets.
The exchange rate and inflation index in Venezuela.
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
60
These estimates are made based on the best information available on the financial statement closing date and,
together with the other relevant issues for the closing of the annual and six-monthly financial statements, are
analyzed and authorized by a Technical Committee of A&S (A&S Executive Steering Committee) and submitted to
the Audit and Compliance Committee before their formulation by the Board of Directors.
F.3.2. Internal control procedures and policies for information systems (among others, access security, change
control, their operation, operational continuity and segregation of functions) that support the relevant processes in the
entity with respect to the drawing up and publication of the financial information.
The internal control models include procedures and controls regarding the operability of information systems and
access security, functional segregation, development and modification of computer applications used to generate
financial information.
The current methodology for internal control and operational risk establishes a list of controls by category whose
breakdown includes (among others) two categories: access control and functional segregation. Both categories are
identified in the model of internal control of financial information and their risks and controls are analyzed and
assessed on a regular basis, so the integrity and reliability of the information drawn up can be guaranteed.
Additionally, there is a corporate level procedure for managing system access profiles. It is developed, implemented
and updated by the Group's internal control unit of Engineering. This unit is also in charge of providing support for
control processes in change management (development in test environments and putting changes into production),
incident management, management of transactions, media and backup copy management, and management of
business continuity, among other things.
With all these mechanisms, the BBVA Group ensures the maintenance of adequate management of access control,
the establishment of the correct and necessary steps to put applications into production and their subsequent
support, the creation of backup copies, and assurance of continuity in the processing and recording of transactions.
In summary, the entire process of preparing and publishing financial information has established and documented the
procedures and control models necessary to provide reasonable assurance about the correctness of BBVA Group's
public financial information.
F.3.3. Internal control procedures and policies designed to supervise the management of activities subcontracted to
third parties, and those aspects of the evaluation, calculation and assessment outsourced to independent experts,
which may materially impact the financial statements.
The internal control policies establish controls and procedures for the management of subcontracted activities or
those aspects of evaluation, calculation and assessment outsourced to independent experts.
There is a set of standards and an Outsourcing Committee that establishes and supervises the requirements that
must be met at group level for the activities to be subcontracted. Regarding the financial processes, there are
procedural manuals contemplating the outsourced activity that identify the processes to be executed and the controls
to be applied by the service provider units and units entrusted with the outsourcing thereof. The controls established
in the outsourced processes concerning the generation of financial information are also tested by the Internal
Financial Control area.
The valuations from independent experts used for matters relevant for generating financial information are included
within the standard circuit of review procedures executed by internal control, internal audit and external audit.
F.4 Information and communication
Give information on the main features, if at least the following exist:
F.4.1. A specific function in charge of defining and keeping the accounting policies updated (accounting policy
department or area) and dealing with queries or conflicts stemming from their interpretation, ensuring fluent
communication with those in charge of operations in the organization, and an up-to-date manual of accounting
policies, communicated to the units through which the entity operates.
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
61
The organization has two areas within A&S (Group Financial Accounting and Global Supervisory Relations) in charge
of the Accounting Technical Committees (Accounting Working Group) and Solvency. Their purpose is to analyze,
study and issue standards that may impact the drawing up of the Group's financial and regulatory information,
determining the accounting and solvency criteria required to ensure correct recording of transactions to the accounts
and calculation of capital requirements within the framework of standards issued by the Bank of Spain, the European
Union (IASB, directives on equity) and the Basel Committee.
There is an updated accounting policies Manual, disseminated over the Company’s intranet to all the units in the
Group. This manual is the tool that guarantees that all the decisions related to accounting policies or specific
accounting criteria to be applied in the Group are supported and are standardized. The Accounting Policies Manual is
approved in the Accounting Working Group and is documented and updated for its use and analysis by all the
Group's entities.
F.4.2. Mechanisms to capture and prepare the financial reporting in standardised formats, for application and use by
all the units of the entity or the group, that support the main financial statements and the notes, and the information
detailed on ICFR.
The Group's A&S area and the financial directorates of the countries are responsible for the preparation of the
financial statements in accordance with the current accounting and consolidation manuals. There is also a
consolidation computer application that includes the information on the accounting of the various Group companies
and performs the consolidation processes, including the standardization of accounting criteria, aggregation of
balances and consolidation adjustments.
Control measures have also been implemented in each of the said processes in order to guarantee that all the data
underpinning the financial information are collected in a comprehensive, exact and timely manner. There is also a
single and standardized format for the financial reporting system. It is applicable to and used by all the Group units
and supports the main financial statements and the explanatory notes. There are also control measures and
procedures to ensure that the information disclosed to the markets includes a sufficient level of detail to enable
investors and other users of the financial information to understand and interpret it.
F.5 Supervision of the system's operation
Give information, describing the key features of at least:
F.5.1. The ICFR supervision activities carried out by the Audit Committee and whether the entity has an internal audit
function whose powers include providing support to the Audit Committee in its task of supervising the internal control
system, including the ICFR. Likewise, give information on the scope of the ICFR assessment carried out during the
year and of the procedure by which the person in charge of performing the assessment communicates its results,
whether the entity has an action plan listing the possible corrective measures, and whether its impact on the financial
reporting has been considered.
The internal control units of the business areas and of the support areas conduct a preliminary assessment of the
internal control model, assess the risks of the processes and the degree of mitigation of the controls, identify
weaknesses, design, implement and monitor the mitigation measures and action plans.
BBVA also has an Internal Audit unit that provides support to the Audit and Compliance Committee on the
independent supervision of the internal control system of financial information. The Internal Audit function is entirely
independent of the units that draw up the financial information.
All the control weaknesses, mitigation measures and specific action plans are documented in the corporate tool
Storm and submitted to the internal control and operational risk committees of the areas, as well as to the local or
global Corporate Assurance Committees, based on the relevance of the detected issues.
To sum up: both the weaknesses identified by the internal control units and those detected by the internal or external
auditor have an action plan in place to correct or mitigate the risks.
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
62
During 2016, internal control areas have conducted a full assessment of the internal control system of financial
information, and, to date, no material or significant weakness have been revealed therein. These were reported to the
Audit and Compliance Committee, and the Global Corporate Assurance Committee.
Additionally, in compliance with SOX, the Group annually assesses the effectiveness of the internal control model for
financial reporting on group of risks (within the perimeter of SOX companies and critical risks) that could impact the
drawing up of Financial Statements at local and consolidated levels. This perimeter considers risks and controls of
other specialties that are not directly financial (regulatory compliance, technology, risks, operational, human
resources, procurement, legal, etc.).
F.5.2. Whether there is a discussion procedure by which the auditor (in line with the technical auditing notes), the
internal audit function and other experts can inform senior management and the audit committee or the directors of
the entity of significant weaknesses in the internal control encountered during the review processes for the annual
accounts or any others within their remit. Likewise, give information on whether there is an action plan to try to correct
or mitigate the weaknesses observed.
As mentioned in the preceding section (F.5.1) of this Annual Corporate Governance Report, the Group has a
procedure in place whereby the internal auditor, the external auditor and the heads of Internal Financial Control can
report to the Audit and Compliance Committee, where appropriate, any significant internal control weaknesses
detected in the course of their work. Thus, a plan of action is prepared for all detected weaknesses, including those
that are not significant, which is presented to the Audit and Compliance Committee.
Since BBVA is a company listed with the SEC, the BBVA Group's auditor issues on an annual basis its opinion on the
effectiveness of the internal control over the financial information contained in the Group's annual consolidated
statements as of 31 December each year under PCAOB standards (“Public Company Accounting Oversight Board”),
with a view to filing the financial information under Form 20-F with the SEC. The latest report issued on the financial
information for 2015 is available on www.sec.gov. As of the date of this report, the auditor of the annual consolidated
statements corresponding to 2016 reported no significant or material weakness to the Audit and Compliance
Committee, the Board of Directors or executive management bodies of the Group.
The supervision activities of the internal control system carried out by the Audit and Compliance Committee,
described in the Audit and Compliance Committee Regulations published on the Group website, includes the
following:
Analyze the financial statements of the Bank and of its consolidated Group contained in the annual, six-
monthly and quarterly reports prior to their submission to the Board of Directors, as well as all other required
financial information, with the necessary detail deemed appropriate. For this purpose, the Committee shall be
provided with the necessary support by the Group's Senior Management, especially that of the Accounting
Department and the external auditor of the Company and its Group.
Review the necessary scope of consolidation, the correct application of accounting criteria, and all the relevant
changes relating to the accounting principles used and the presentation of the financial statements.
Oversee the effectiveness of the company's internal control, internal audit and risk management systems in
the process of drawing up and reporting the mandatory financial information, including tax-related risks, as
well as discuss with the external auditor any significant weaknesses in the internal control systems detected
during the audit, without undermining its independence. For such purposes, and where appropriate, they may
submit recommendations or proposals to the Board of Directors, along with the period for their follow-up.
Analyze, and approve as the case may be, the Annual Internal Audit Plan, monitoring it and being apprised of
the degree to which the audited units are complying with the corrective measures recommended by Internal
Audit.
Examine the draft codes of ethic and conduct, and respective amendments thereto drawn up by the
corresponding areas of the Group, and express an opinion before the proposals being put to the Bank’s
governing bodies.
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
63
The external auditor and the head of Internal Audit attend all meetings of the Audit and Compliance Committee, as
well as the Internal Control officer attend every six months, and are duly informed of the matters discussed.
F.6 Other relevant information
F.7 External auditor report
Report on:
F.7.1. Whether the ICFR information disclosed to the markets has been submitted by the external auditor, in which
case the entity must attach the corresponding report as an annex. Otherwise, explain the reasons why it was not.
The information related to internal control over the financial information of the BBVA Group described in this report is
reviewed by the external auditor, which issues its opinion on the control system and on its effectiveness in relation to
the statements published at the close of each financial year.
On 6 April 2016, the BBVA Group, as a private foreign issuer in the United States, filed the Annual Report (Form 20-
F) which was published on the SEC website on that same date.
In accordance with the requirements set out in Section 404 of the Sarbanes-Oxley Act of 2002 by the Securities and
Exchange Commission (SEC), the annual report Form 20-F included the certification of the main Group executives on
the establishment, maintenance and assessment of the Group's internal control system of financial reporting. Form
20-F report also included the opinion of the external auditor regarding the effectiveness of the entity's internal control
system of financial reporting at year-end 2015.
G DEGREE OF COMPLIANCE WITH CORPORATE GOVERNANCE RECOMMENDATIONS
Indicate the extent to which the company follows the recommendations of the Good Governance Code of listed
companies.
Should any recommendation not be followed or be only partially followed, a detailed explanation should be given of
the reasons so that the shareholders, investors and the market in general have sufficient information to assess the
way the company works. General explanations will not be acceptable.
1. The bylaws of listed companies should not place an upper limit on the votes that can be cast by a single
shareholder, or impose other obstacles to the takeover of the company by means of share purchases on the market.
COMPLIANT
2. When a dominant and subsidiary company are both listed, they should provide detailed disclosure on:
a) The activity they engage in and any business dealings between them, as well as between the listed
subsidiary and other group companies.
b) The mechanisms in place to resolve possible conflicts of interest.
NOT APPLICABLE
3. During the annual general meeting the chairman of the board should verbally inform shareholders in sufficient
detail of the most relevant aspects of the company’s corporate governance, supplementing the written information
circulated in the annual corporate governance report. In particular:
a) Changes taking place since the previous annual general meeting.
b) The specific reasons for the company not following a given Good Governance Code recommendation, and
any alternative procedures followed in its stead.
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
64
COMPLIANT
4. The company should draw up and implement a policy of communication and contacts with shareholders,
institutional investors and proxy advisors that complies in full with market abuse regulations and accords equitable
treatment to shareholders in the same position.
This policy should be disclosed on the company’s website, complete with details of how it has been put into practice
and the identities of the relevant interlocutors or those charged with its implementation.
COMPLIANT
5. The board of directors should not make a proposal to the general meeting for the delegation of powers to issue
shares or convertible securities without pre-emptive subscription rights for an amount exceeding 20% of capital at the
time of such delegation.
When a board approves the issuance of shares or convertible securities without pre-emptive subscription rights, the
company should immediately post a report on its website explaining the exclusion as envisaged in company
legislation.
PARTIALLY COMPLIANT
The Company has proposed to the General Shareholders' Meeting to delegate to the Board of Directors the power to
increase the share capital and issue convertible securities, while delegating the power to exclude, wholly or in part,
the preemptive right in capital increases and convertible securities issued, although this power to exclude the pre-
emptive right will be jointly limited to 20% of the share capital at the time of the delegation, this limitation not being
applicable to the issue of convertible securities which foresee their eventual conversion to the effects of their
computability as capital instruments, in accordance with the applicable solvency regulations, for being dilutive to
shareholders.
6. Listed companies drawing up the following reports on a voluntary or compulsory basis should publish them on their
website well in advance of the annual general meeting, even if their distribution is not obligatory:
a) Report on auditor independence.
b) Reviews of the operation of the audit committee and the nomination and remuneration committee.
c) Audit committee report on third-party transactions.
d) Report on corporate social responsibility policy.
7. The company should broadcast its general meetings live on the corporate website.
COMPLIANT
COMPLIANT
8. The audit committee should strive to ensure that the board of directors can present the company’s accounts to the
general meeting without limitations or qualifications in the auditor’s report. In the exceptional case that qualifications
exist, both the chairman of the audit committee and the auditors should give a clear account to shareholders of their
scope and content.
COMPLIANT
9. The company should disclose its conditions and procedures for admitting share ownership, the right to attend
general meetings and the exercise or delegation of voting rights, and display them permanently on its website.
Such conditions and procedures should encourage shareholders to attend and exercise their rights and be applied in
a non-discriminatory manner.
COMPLIANT
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
65
10. When an accredited shareholder exercises the right to supplement the agenda or submit new proposals prior to
the general meeting, the company should:
Immediately circulate the supplementary items and new proposals.
a)
b) Disclose the model of attendance card or proxy appointment or remote voting form duly modified so that
new agenda items and alternative proposals can be voted on in the same terms as those submitted by the
board of directors.
c) Put all these items or alternative proposals to the vote applying the same voting rules as for those submitted
by the board of directors, with particular regard to presumptions or deductions about the direction of votes.
d) After the general meeting, disclose the breakdown of votes on such supplementary items or alternative
proposals.
NOT APPLICABLE
11. In the event that a company plans to pay for attendance at the general meeting, it should first establish a general,
long-term policy in this respect.
NOT APPLICABLE
12. The Board of Directors should perform its duties with unity of purpose and independent judgement, according the
same treatment to all shareholders in the same position. It should be guided at all times by the company’s best
interest, understood as the creation of a profitable business that promotes its sustainable success over time, while
maximizing its economic value.
In pursuing the corporate interest, it should not only abide by laws and regulations and conduct itself according to
principles of good faith, ethics and respect for commonly accepted customs and good practices, but also strive to
reconcile its own interests with the legitimate interests of its employees, suppliers, clients and other stakeholders, as
well as with the impact of its activities on the broader community and the natural environment.
COMPLIANT
13. The board of directors should have an optimal size to promote its efficient functioning and maximize participation.
The recommended range is accordingly between five and fifteen members.
14. The board of directors should approve a director selection policy that:
COMPLIANT
Is concrete and verifiable;
a)
b) Ensures that appointment or re-election proposals are based on a prior analysis of the board’s needs; and
c) Favours a diversity of knowledge, experience and gender.
The results of the prior analysis of board needs should be written up in the nomination committee’s explanatory
report, to be published when the general meeting is convened that will ratify the appointment and re-election of each
director.
The director selection policy should pursue the goal of having at least 30% of total board places occupied by women
directors before the year 2020.
The nomination committee should run an annual check on compliance with the director selection policy and set out its
findings in the annual corporate governance report.
COMPLIANT
15. Proprietary and independent directors should constitute an ample majority on the board of directors, while the
number of executive directors should be the minimum practical bearing in mind the complexity of the corporate group
and the ownership interests they control.
COMPLIANT
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
66
16. The percentage of proprietary directors out of all non-executive directors should be no greater than the proportion
between the ownership stake of the shareholders they represent and the remainder of the company’s capital.
This criterion can be relaxed:
a)
b)
In large cap companies where few or no equity stakes attain the legal threshold for significant shareholdings.
In companies with a plurality of shareholders represented on the board but not otherwise related.
17. Independent directors should be at least half of all board members.
COMPLIANT
However, when the company does not have a large market capitalization, or when a large cap company has
shareholders individually or concertedly controlling over 30 percent of capital, independent directors should occupy,
at least, a third of board places.
COMPLIANT
18. Companies should disclose the following director particulars on their websites and keep them regularly updated:
a) Background and professional experience.
b) Directorships held in other companies, listed or otherwise, and other paid activities they engage in, of
whatever nature.
c) Statement of the director class to which they belong, in the case of proprietary directors indicating the
shareholder they represent or have links with.
d) Dates of their first appointment as a board member and subsequent re-elections.
e) Shares held in the company, and any options on the same.
COMPLIANT
19. Following verification by the nomination committee, the annual corporate governance report should disclose the
reasons for the appointment of proprietary directors at the urging of shareholders controlling less than 3 percent of
capital; and explain any rejection of a formal request for a board place from shareholders whose equity stake is equal
to or greater than that of others applying successfully for a proprietary directorship.
NOT APPLICABLE
20. Proprietary directors should resign when the shareholders they represent dispose of their ownership interest in its
entirety. If such shareholders reduce their stakes, thereby losing some of their entitlement to proprietary directors, the
latters’ number should be reduced accordingly.
COMPLIANT
21. The board of directors should not propose the removal of independent directors before the expiry of their tenure
as mandated by the bylaws, except where they find just cause, based on a proposal from the nomination committee.
In particular, just cause will be presumed when directors take up new posts or responsibilities that prevent them
allocating sufficient time to the work of a board member, or are in breach of their fiduciary duties or come under one
of the disqualifying grounds for classification as independent enumerated in the applicable legislation.
The removal of independent directors may also be proposed when a takeover bid, merger or similar corporate
transaction alters the company’s capital structure, provided the changes in board membership ensue from the
proportionality criterion set out in recommendation 16.
22. Companies should establish rules obliging directors to disclose any circumstance that might harm the
organization’s name or reputation, tendering their resignation as the case may be, and, in particular, to inform the
board of any criminal charges brought against them and the progress of any subsequent trial.
COMPLIANT
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
67
The moment a director is indicted or tried for any of the offences stated in company legislation, the board of directors
should open an investigation and, in light of the particular circumstances, decides whether or not he or she should be
called on to resign. The board should give a reasoned account of all such determinations in the annual corporate
governance report.
COMPLIANT
23. Directors should express their clear opposition when they feel a proposal submitted for the board’s approval
might damage the corporate interest. In particular, independents and other directors not subject to potential conflicts
of interest should strenuously challenge any decision that could harm the interests of shareholders lacking board
representation.
When the board makes material or reiterated decisions about which a director has expressed serious reservations,
then he or she must draw the pertinent conclusions. Directors resigning for such causes should set out their reasons
in the letter referred to in the next recommendation.
The terms of this recommendation also apply to the secretary of the board, even if he or she is not a director.
COMPLIANT
24. Directors who give up their place before their tenure expires, through resignation or otherwise, should state their
reasons in a letter to be sent to all members of the board. Whether or not such resignation is disclosed as a material
event, the motivating factors should be explained in the annual corporate governance report.
COMPLIANT
25. The nomination committee should ensure that non-executive directors have sufficient time available to discharge
their responsibilities effectively.
The board of director’s regulations should lay down the maximum number of company boards on which directors can
serve.
COMPLIANT
26. The board should meet with the necessary frequency to properly perform its functions, eight times a year at least,
in accordance with a calendar and agendas set at the start of the year, to which each director may propose the
addition of initially unscheduled items.
27. Director absences should be kept to a strict minimum and quantified in the annual corporate governance report.
In the event of absence, directors should delegate their powers of representation with the appropriate instructions.
COMPLIANT
COMPLIANT
28. When directors or the secretary express concerns about some proposal or, in the case of directors, about the
company’s performance, and such concerns are not resolved at the meeting, they should be recorded in the minute
book if the person expressing them so requests.
COMPLIANT
29. The company should provide suitable channels for directors to obtain the advice they need to carry out their
duties, extending if necessary to external assistance at the company’s expense.
COMPLIANT
30. Regardless of the knowledge directors must possess to carry out their duties, they should also be offered
refresher programmes when circumstances so advise.
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
68
COMPLIANT
31. The agendas of board meetings should clearly indicate on which points directors must arrive at a decision, so
they can study the matter beforehand or gather together the material they need.
For reasons of urgency, the chairman may wish to present decisions or resolutions for board approval that were not
on the meeting agenda. In such exceptional circumstances, their inclusion will require the express prior consent, duly
minuted, of the majority of directors present.
32. Directors should be regularly informed of movements in share ownership and of the views of major shareholders,
investors and rating agencies on the company and its group.
COMPLIANT
COMPLIANT
33. The chairman, as the person charged with the efficient functioning of the board of directors, in addition to the
functions assigned by law and the company’s bylaws, should prepare and submit to the board a schedule of meeting
dates and agendas; organize and coordinate regular evaluations of the board and, where appropriate, the company’s
chief executive officer; exercise leadership of the board and be accountable for its proper functioning; ensure that
sufficient time is given to the discussion of strategic issues, and approve and review refresher courses for each
director, when circumstances so advise.
COMPLIANT
34. When a lead independent director has been appointed, the bylaws or board of directors regulations should grant
him or her the following powers over and above those conferred by law: chair the board of directors in the absence of
the chairman or vice chairmen give voice to the concerns of non-executive directors; maintain contacts with investors
and shareholders to hear their views and develop a balanced understanding of their concerns, especially those to do
with the company’s corporate governance; and coordinate the chairman’s succession plan.
35. The board secretary should strive to ensure that the board’s actions and decisions are informed by the
governance recommendations of the Good Governance Code of relevance to the company.
COMPLIANT
COMPLIANT
36. The board in full should conduct an annual evaluation, adopting, where necessary, an action plan to correct
weakness detected in:
a) The quality and efficiency of the board’s operation.
b) The performance and membership of its committees.
c) The diversity of board membership and competences.
d) The performance of the chairman of the board of directors and the company’s chief executive.
e) The performance and contribution of individual directors, with particular attention to the chairmen of board
committees.
The evaluation of board committees should start from the reports they send the board of directors, while that of the
board itself should start from the report of the nomination committee.
Every three years, the board of directors should engage an external facilitator to aid in the evaluation process. This
facilitator’s independence should be verified by the nomination committee.
Any business dealings that the facilitator or members of its corporate group maintain with the company or members
of its corporate group should be detailed in the annual corporate governance report.
The process followed and areas evaluated should be detailed in the annual corporate governance report.
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
69
COMPLIANT
37. When an executive committee exists, its membership mix by director class should resemble that of the board.
The secretary of the board should also act as secretary to the executive committee.
PARTIALLY COMPLIANT
The current composition of the Executive Committee of BBVA was agreed by the Board of Directors at its meeting on
31 March 2016, and it was considered that it had the most adequate composition for the performance of its functions.
Thus, in accordance with article 26 of the Board of Directors Regulations of BBVA, which establishes that in its
composition non-executive directors have to be a majority over executive directors, as of 31 December 2016, the
Executive Committee of the Board of Directors partially reflects the participation on the Board of Directors since its
Chairman and Secretary are those of the Board of Directors and is composed of two executive directors and four
non-executive directors with the status of other external directors, which represents a majority of non-executive
directors in accordance with the provisions of the Regulations of the Board of Directors.
38. The board should be kept fully informed of the business transacted and decisions made by the executive
committee. To this end, all board members should receive a copy of the committee’s minutes.
COMPLIANT
39. All members of the audit committee, particularly its chairman, should be appointed with regard to their knowledge
and experience in accounting, auditing and risk management matters. A majority of committee places should be held
by independent directors.
COMPLIANT
40. Listed companies should have a unit in charge of the internal audit function, under the supervision of the audit
committee, to monitor the effectiveness of reporting and control systems. This unit should report functionally to the
board’s non-executive chairman or the chairman of the audit committee.
COMPLIANT
41. The head of the unit handling the internal audit function should present an annual work programme to the audit
committee, inform it directly of any incidents arising during its implementation and submit an activities report at the
end of each year.
42. The audit committee should have the following functions over and above those legally assigned:
1. With respect to internal control and reporting systems:
COMPLIANT
a) Monitor the preparation and the integrity of the financial information prepared on the company and, where
appropriate, the group, checking for compliance with legal provisions, the accurate demarcation of the
consolidation perimeter, and the correct application of accounting principles.
b) Monitor the independence of the unit handling the internal audit function; propose the selection,
appointment, re-election and removal of the head of the internal audit service; propose the service’s budget;
approve its priorities and work programmes, ensuring that it focuses primarily on the main risks the company
is exposed to; receive regular report-backs on its activities; and verify that senior management are acting on
the findings and recommendations of its reports.
c) Establish and supervise a mechanism whereby staff can report, confidentially and, if appropriate and
feasible, anonymously, any significant irregularities that they detect in the course of their duties, in particular
financial or accounting irregularities.
2. With regard to the external auditor:
a)
Investigate the issues giving rise to the resignation of the external auditor, should this come about.
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
70
b) Ensure that the remuneration of the external auditor does not compromise its quality or independence.
c) Ensure that the company notifies any change of external auditor to the CNMV as a material event,
accompanied by a statement of any disagreements arising with the outgoing auditor and the reasons for the
same.
d) Ensure that the external auditor has a yearly meeting with the board in full to inform it of the work
undertaken and developments in the company’s risk and accounting positions.
e) Ensure that the company and the external auditor adhere to current regulations on the provision of non-audit
services, limits on the concentration of the auditor’s business and other requirements concerning auditor
independence.
COMPLIANT
43. The audit committee should be empowered to meet with any company employee or manager, even ordering their
appearance without the presence of another senior officer.
44. The audit committee should be informed of any fundamental changes or corporate transactions the company is
planning, so the committee can analyze the operation and report to the board beforehand on its economic conditions
and accounting impact and, when applicable, the exchange ratio proposed.
COMPLIANT
45. Risk control and management policy should identify at least:
COMPLIANT
a) The different types of financial and non-financial risk the company is exposed to (including operational,
technological, financial, legal, social, environmental, political and reputational risks), with the inclusion under
financial or economic risks of contingent liabilities and other off-balance sheet risks.
b) The determination of the risk level the company sees as acceptable.
c) The measures in place to mitigate the impact of identified risk events should they occur.
d) The internal control and reporting systems to be used to control and manage the above risks, including
contingent liabilities and off-balance sheet risks.
COMPLIANT
46. Companies should establish a risk control and management function in the charge of one of the company’s
internal department or units and under the direct supervision of the audit committee or some other dedicated board
committee. This function should be expressly charged with the following responsibilities:
a) Ensure that risk control and management systems are functioning correctly and, specifically, that major risks
the company is exposed to are correctly identified, managed and quantified.
b) Participate actively in the preparation of risk strategies and in key decisions about their management.
c) Ensure that risk control and management systems are mitigating risks effectively in the frame of the policy
drawn up by the board of directors.
COMPLIANT
47. Appointees to the nomination and remuneration committee – or of the nomination committee and remuneration
committee, if separately constituted – should have the right balance of knowledge, skills and experience for the
functions they are called on to discharge. The majority of their members should be independent directors.
48. Large-cap companies should operate separately constituted nomination and remuneration committees.
COMPLIANT
COMPLIANT
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
71
49. The nomination committee should consult with the company’s chairman and chief executive, especially on
matters relating to executive directors.
When there are vacancies on the board, any director may approach the nomination committee to propose candidates
that it might consider suitable.
COMPLIANT
50. The remuneration committee should operate independently and have the following functions in addition to those
assigned by law:
a) Propose to the board the standard conditions for senior officer contracts.
b) Monitor compliance with the remuneration policy set by the company.
c) Periodically review the remuneration policy for directors and senior officers, including share-based
remuneration systems and their application, and ensure that their individual compensation is proportionate
to the amounts paid to other directors and senior officers in the company.
d) Ensure that conflicts of interest do not undermine the independence of any external advice the committee
engages.
e) Verify the information on director and senior officers’ pay contained in corporate documents, including the
annual directors’ remuneration statement.
COMPLIANT
51. The remuneration committee should consult with the company’s chairman and chief executive, especially on
matters relating to executive directors and senior officers.
COMPLIANT
52. The terms of reference of supervision and control committees should be set out in the board of directors
regulations and aligned with those governing legally mandatory board committees as specified in the preceding sets
of recommendations.
They should include at least the following terms:
a) Committees should be formed exclusively by non-executive directors, with a majority of independents.
b) They should be chaired by independent directors.
c) The board should appoint the members of such committees with regard to the knowledge, skills and
experience of its directors and each committee’s terms of reference; discuss their proposals and reports;
and provide report-backs on their activities and work at the first board plenary following each committee
meeting.
d) They may engage external advice, when they feel it necessary for the discharge of their functions.
e) Meeting proceedings should be minuted and a copy made available to all board members.
COMPLIANT
53. The task of supervising compliance with corporate governance rules, internal codes of conduct and corporate
social responsibility policy should be assigned to one board committee or split between several, which could be the
audit committee, the nomination committee, the corporate social responsibility committee, where one exists, or a
dedicated committee established ad hoc by the board under its powers of self-organization, with at the least the
following functions:
a) Monitor compliance with the company’s internal codes of conduct and corporate governance rules.
b) Oversee the communication and relations strategy with shareholders and investors, including small and
medium-sized shareholders.
c) Periodically evaluate the effectiveness of the company’s corporate governance system, to confirm that it is
fulfilling its mission to promote the corporate interest and catering, as appropriate, to the legitimate interests
of remaining stakeholders.
d) Review the company’s corporate social responsibility policy, ensuring that it is geared to value creation.
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
72
e) Monitor corporate social responsibility strategy and practices and assess compliance in their respect.
f) Monitor and evaluate the company’s interaction with its stakeholder groups.
g) Evaluate all aspects of the non-financial risks the company is exposed to, including operational,
technological, legal, social, environmental, political and reputational risks.
h) Coordinate non-financial and diversity reporting processes in accordance with applicable legislation and
international benchmarks.
COMPLIANT
54. The corporate social responsibility policy should state the principles or commitments the company will voluntarily
adhere to in its dealings with stakeholder groups, specifying at least:
a) The goals of its corporate social responsibility policy and the support instruments to be deployed.
b) The corporate strategy with regard to sustainability, the environment and social issues.
c) Concrete practices in matters relative to: shareholders, employees, clients, suppliers, social welfare issues,
the environment, diversity, fiscal responsibility, respect for human rights and the prevention of illegal
conducts.
d) The methods or systems for monitoring the results of the practices referred to above and identifying and
managing related risks.
e) The mechanisms for supervising non-financial risk, ethics and business conduct.
f) Channels for stakeholder communication, participation and dialogue.
g) Responsible communication practices that prevent the manipulation of information and protect the
company’s honor and integrity.
55. The company should report on corporate social responsibility developments in its directors’ report or in a separate
document, using an internationally accepted methodology.
COMPLIANT
56. Director remuneration should be sufficient to attract individuals with the desired profile and compensate the
commitment, abilities and responsibility that the post demands, but not so high as to compromise the independent
judgement of non-executive directors.
COMPLIANT
COMPLIANT
57. Variable remuneration linked to the company and the director’s performance, the award of shares, options or any
other right to acquire shares or to be remunerated on the basis of share price movements, and membership of long-
term savings schemes such as pension plans should be confined to executive directors.
The company may consider the share-based remuneration of non-executive directors provided they retain such
shares until the end of their mandate. This condition, however, will not apply to shares that the director must dispose
of to defray costs related to their acquisition.
COMPLIANT
58. In the case of variable awards, remuneration policies should include limits and technical safeguards to ensure
they reflect the professional performance of the beneficiaries and not simply the general progress of the markets or
the company’s sector, or circumstances of that kind.
In particular, variable remuneration items should meet the following conditions:
a) Be subject to predetermined and measurable performance criteria that factor the risk assumed to obtain a
given outcome.
b) Promote the long-term sustainability of the company and include non-financial criteria that are relevant for
the company’s long-term value, such as compliance with its internal rules and procedures and its risk control
and management policies.
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
73
c) Be focused on achieving a balance between the delivery of short, medium and long-term objectives, such
that performance-related pay rewards ongoing achievement, maintained over sufficient time to appreciate its
contribution to long-term value creation. This will ensure that performance measurement is not based solely
on one-off, occasional or extraordinary events.
COMPLIANT
59. A major part of variable remuneration components should be deferred for a long enough period to ensure that
predetermined performance criteria have effectively been met.
COMPLIANT
60. Remuneration linked to company earnings should bear in mind any qualifications stated in the external auditor’s
report that reduce their amount.
COMPLIANT
61. A major part of executive directors’ variable remuneration should be linked to the award of shares or financial
instruments whose value is linked to the share price.
COMPLIANT
62. Following the award of shares, share options or other rights on shares derived from the remuneration system,
directors should not be allowed to transfer a number of shares equivalent to twice their annual fixed remuneration, or
to exercise the share options or other rights on shares for at least three years after their award.
The above condition will not apply to any shares that the director must dispose of to defray costs related to their
acquisition.
PARTIALLY COMPLIANT
As a credit entity and thus bound to requirements insofar as remunerations, BBVA establishes its specific rules and
regulations by furnishing its remuneration policy with a variable remuneration system that includes deferral
conditions, payment in shares, unavailability and clauses for the ex-post adjustment of the remuneration depending
on the risk.
In this regard, the BBVA remuneration policy establishes that executive directors will receive 50% of the Annual
Variable Remuneration in equal parts in cash and in shares, in the first quarter of the financial year following the year
to which the remuneration corresponds, and the remaining 50% (in cash and in shares) deferred as a whole for a
period of three years, whereby its accrual and vesting shall be subject to compliance with a series of multi-year
indicators, which may reduce the deferred amount even to zero. Moreover, all shares paid for the settlement of
Annual Variable Remuneration, both the initial percentage and deferred amounts subject to multi-year indicators shall
be unavailable during a certain period, which shall be established on an annual basis by the Board of Directors,
applying such a withholding on the resulting number of shares after discounting the part required to honor the tax
payments.
In addition, the variable remuneration as a whole will be subject to the reduction and recovery clauses established in
the remuneration policy of BBVA’s directors, which approval is subject to the coming General Shareholders’ Meeting
of the Bank, which will be applicable to the annual variable remuneration accrued since 2016, inclusive.
This policy already includes for years 2017, 2018 and 2019 the executive directors’ commitment not to transfer the
shares that they receive from the remuneration systems, in the terms established in this Recommendation, thus
fulfilling it.
On a separate note, the executive directors have not transferred during 2016 the shares derived from remuneration
systems, except those transfers made to fulfill tax obligations deriving from their delivery.
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
74
63. Contractual arrangements should include provisions that permit the company to reclaim variable components of
remuneration when payment was out of step with the director’s actual performance or based on data subsequently
found to be misstated.
COMPLIANT
64. Termination payments should not exceed a fixed amount equivalent to two years of the director’s total annual
remuneration and should not be paid until the company confirms that he or she has met the predetermined
performance criteria.
COMPLIANT
H OTHER INFORMATION OF INTEREST
1. If there is any other aspect relevant to the corporate government in the company or in the group entities that has
not been reflected in the rest of the sections of this report, but is necessary to include to provide more comprehensive
and well-grounded information on the corporate governance structure and practices in your entity or its group, detail
them briefly.
2. This section may also include any other relevant information, clarification or detail related to previous sections of
the report insofar as they are relevant and not reiterative.
Specifically indicate whether the company is subject to corporate governance legislation from a country other than
Spain and, if so, include the mandatory information to be provided when different from that required by this report.
3. The company may also indicate if it has voluntarily signed up to other international, industry-wide or any other
codes of ethical principles or best practices. Where applicable, the code in question will be identified along with the
date of signing. In particular, mention will be made as to whether it has adhered to the Code of Best Tax Practices
(Código de Buenas Prácticas Tributarias) of 20 July 2010.
The data in this report refer to the year ending 31 December 2016, except in those cases when another date of
reference is specifically stated.
Further to Section A.2, State Street Bank and Trust Co., The Bank of New York Mellon S.A.N.V. and Chase
Nominees Ltd., as international custodian/depositary banks, held 11.74%, 5.18% and 7.04% of BBVA's share capital,
respectively, as of December 31 2016. Of said positions held by the custodian banks, BBVA is not aware of any
individual shareholders with direct or indirect holdings greater than or equal to 3% of the BBVA common stock.
Filings of significant holdings to CNMV: On 6 October 2016, Blackrock Inc. filed a report with the CNMV (securities
exchange authority) stating that it now had an indirect holding of 5.000% of the BBVA share capital, through the
company Blackrock Investment Management. Likewise, on 9 January 2017, Blackrock Inc. filed a report with the
CNMV (securities exchange authority) stating that it now had an indirect holding of 4.886% of the BBVA share
capital. Likewise, on 13 January 2017, Blackrock Inc. filed a report with the CNMV (securities exchange authority)
stating that it now had an indirect holding of 5.253% of the BBVA share capital.
The director holdings indicated in section A.3 are those reported as of 31 December 2016 and therefore may have
subsequently changed. Moreover, following the instructions to complete the Corporate Governance Report, the
owners of indirect holdings are not identified in this section; as none of them holds as much as 3% of share capital
and none of them reside in tax havens.
Moreover, as an explanation to the second table of section A.3., the number of direct rights on shares in the
Company corresponds with the shares from the Annual Variable Remuneration (AVR) from previous years that was
deferred and pending payment on the date of this Report, subject to the conditions for this. Thus, is included the total
number of “rights to shares” of BBVA executive directors corresponding to the third and second third deferred of
years 2013 and 2014 that they will perceive in 2017; to the third third deferred of the year 2014 that they will perceive
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
75
in 2018; and the 50% deferred of the AVR 2015 that they will perceive in 2019, subject in this case to the multiannual
indicators that could reduce the amount deferred, even become zero.
These amounts are disclosed in an individual manner for each executive director in the following way:
-
-
-
In the case of the Chairman: 29,555 shares corresponding to the third third deferred of AVR 2013; 37,392
shares and 37,390 shares corresponding to the second and third third deferred of AVR 2014; and 135,299
shares corresponding to the 50% of AVR 2015.
In the case of the CEO, who was appointed to that position on 4 May 2015: 7,937 shares corresponding to
the third third deferred of AVR 2013; 11,766 shares and 11,766 shares corresponding to the second and
third third deferred of AVR 2014, all of this in his previous condition of Director of Digital Banking; and
79,956 shares corresponding to the 50% of AVR 2015, being his AVR 2015 proportional to the months
elapsed in the performance of both positions.
In the case of the executive director Head of GERPA: 1,768 shares corresponding to the third third deferred
of AVR 2013; 3,681 shares and 3,678 shares corresponding to the second and third third deferred of AVR
2014; and 14,815 shares corresponding to the 50% of AVR 2015.
The payment of these deferred shares is subject to the non-occurrence of any of the situations established by the
Remuneration Policy applicable in each year that could impede payment thereof (malus clauses/clawback) in addition
the remaining conditions of the liquidation and payment system.
Further to the information in section A.8, regarding earnings from treasury-stock trading, rule 21 of Circular 4/2004
and IAS 32, paragraph 33, expressly prohibit the recognition in the income statement of profits or losses made on
transactions carried out with treasury stock, including their issue and redemption. Said profits and losses are directly
booked against the company’s net assets. In the table of significant variations, the date of entry of CNMV Model IV in
the registries of that body is included. Such model corresponds to the communications with own shares and the
reason for such communication.
In addition to what is indicated in section A.9, in relation to the agreement adopted by the BBVA Ordinary General
Shareholders Meeting held on 16 March 2012, item three of the Agenda, regarding delegation to the Board of
Directors of the power to increase the share capital, one or more times, within a maximum period of five years from
the date of adoption of said agreement, up to 50% of the share capital of BBVA at the time of said authorization, the
countervalue of said shares comprising cash considerations, given that the term of the aforementioned delegation
expires in 2017, the adoption of a new delegation in terms similar to those currently in force will be proposed at the
next Ordinary General Shareholders' Meeting.
Also, in relation to the agreement adopted by the BBVA Ordinary General Shareholders' Meeting held on March 16,
2012, in the fifth item on the Agenda, delegating to the Board of Directors the power to issue convertible securities
and/or securities exchangeable for BBVA shares, one or more times, within a maximum period of five years from the
date of adoption of said agreement, to a maximum total amount of €12,000,000,000 or the equivalent in any other
currency , given that the term of the aforementioned delegation expires in 2017, a new delegation agreement will be
proposed at the next Ordinary General Shareholders' Meeting in terms similar to those currently in force.
Regarding section A.9 bis, the resulting estimated floating capital of BBVA less the capital held by the members of
the Board of Directors and as treasury stock, both as of 31 December 2016, following the instructions to complete the
Corporate Governance Report is 99.87%.
Further to the information in section A.10, there are no legal or bylaws restrictions on the exercise of voting rights and
there are no legal or bylaws restrictions on the free acquisition or transfer of shares in the company’s share capital.
As for the legal restrictions on the free acquisition or transfer of shares in the company’s share capital, Spanish Act
10/2014, dated 26th June, on the regulation, supervision and solvency of credit institutions establishes that the direct
or indirect acquisition of a significant holding (as defined in section 16 of that Act) is subject to assessment by the
Bank of Spain as set out in sections 16 et seq. of that Act. Additionally, article 25 of Royal Decree 84/2015,
implementing Act 10/2014, establishes that the Bank of Spain shall evaluate proposals for acquisitions of significant
shares and submit a proposal to the European Central Bank regarding whether to oppose this acquisition or not. This
same article establishes the criteria that should be considered during said evaluation and the applicable timelines.
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
76
Further to the information included in section C.1.15:
The amount indicated as "Remuneration of the Board of Directors" includes remuneration stemming from the
remuneration systems established for non-executive and executive directors as provided for in the Remuneration
Policy for BBVA directors and pursuant to article 33 bis and 50 bis of the Company Bylaws, respectively, and
includes:
a) The fixed remuneration (for pertaining to the Board and Committees) and remuneration in kind corresponding to
2016 of non-executive board members.
b) The fixed remuneration and in kind for executive directors (3) corresponding to 2016.
c) The Annual Variable Remuneration 2016 equally distributed in cash and in shares for executive directors. It
should nonetheless be noted that this remuneration, has not accrued to the executive directors in its entirety on the
date of this Report, since, according to the BBVA director Remuneration Policy applicable to them, they will only
receive 50% of this amount in 2017, while the remaining amount will be deferred for a period of three years, and its
accrual and payment is subject to the concurrence of the multi-year assessment indicators. Furthermore, the deferred
Annual Variable Remuneration will be subject to the non-occurrence of any of the situations established by the
Remuneration Policy applicable in each year, that could reduce or impede payment thereof (malus clauses/clawback)
in addition the remaining conditions of the liquidation and payment system of the Annual Variable Remuneration.
d) The remuneration paid for all concepts to two independent directors who ceased in their position in March 2016
and who, consequently, did not remain in office as of 31 December 2016.
The total amount indicated, pursuant to the instructions in this Report, corresponds to the amount declared as total
remuneration accrued according to chart c) "Summary of Remuneration", section D.1 in the Annual Report on
Directors' Remuneration of BBVA.
All these items are included for each individual director in Note 54 of the Annual Report.
For calculating the cash value of the shares corresponding to the Annual Variable Remuneration for 2016, and in
accordance with the Remuneration Policy, the reference used was the average BBVA share closing price
corresponding to the trading days between 15 December 2016 and 15 January 2017, namely €6.43 per share.
The provisions recorded as of 31 December 2016 to cover commitments undertaken for the Chief Executive Officer
amounted to €16,051 thousand, of which, during 2016 and according to applicable accounting regulations, €2,342
thousand have been provisioned against earnings of the year and €836 thousand against equity, in order to adapt the
interest rate assumption used for the valuation of pension commitments in Spain. In the case of the executive director
Head of GERPA, the provisions recorded as of 31 December 2016 amounted to €609 thousand, of which €310 have
been provisioned against earnings of the year. In both cases, these amounts include the provisions covering
retirement, as well as death and disability.
There are no other pension obligations in favour of other executive directors.
As a result of the entry into force of Circular 2/2016, of the Bank of Spain to the credit institutions, on supervision and
solvency, 15% of the annual contributions agreed to pension systems determined on the basis of the benefit accrued
for the financial year corresponding to executive directors and BBVA’s senior managers, will be based on variable
components and will be considered as discretionary pension benefits, and in consequence will be deemed as
deferred variable remuneration, subject to the payment and withholding conditions provided in the applicable
regulations, as well as reduction arrangements and other applicable conditions established to the variable
remuneration in the Remuneration Policy for BBVA’s Directors.
The balance of the item "Provisions - Funds for pensions and similar liabilities" on the Group's consolidated balance
sheet as of 31 December 2016 includes €89 million under the item for post-employment benefit commitments
maintained with former members of the Board of Directors.
Further to the information included in section C.1.16:
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
77
The heading “Total senior management remuneration” includes the remuneration of members of Senior Management
listed as such as of 31 December 2016 (14 members), comprising:
a) The fixed remuneration and the remuneration in kind during 2016;
b) The Annual Variable Remuneration received during the first quarter of 2016 corresponding to 2015, both in cash
and in shares;
c) The deferred part of the variable remuneration received during the first quarter of 2016, corresponding to previous
years (2014, 2013 and 2012), both in cash and in shares, plus the amount of the corresponding updates.
For calculating the cash value of the shares corresponding to said remuneration, the payment price has been €5.44.
Moreover, members of Senior Management of the BBVA Group, excluding executive directors, who had ceased in
that condition during 2016 have received an overall total amount during this period of: €2,232 thousand as fixed
remuneration; €1,076 thousand and 162,266 BBVA shares corresponding to 50% of the Annual Variable
Remuneration for 2015; and €462 thousand and 53,246 BBVA shares as liquidation of the parts deferred from the
Annual Variable Remuneration from 2014, 2013 and 2012 whose corresponding payment was settled during the first
quarter of 2016, including the corresponding update; and as remuneration in kin and others amounting to €511
thousand.
Moreover, in 2016 following the disengagement of some members of Senior Management from the Group,
compensations were settled for a total amount of €1,788 thousand, which is recorded in note 44 to the Annual Report
under Other Personnel Expenses.
Lastly, the provisions recorded as of 31 December 2016 for pension commitments for members of the Senior
Management, excluding executive directors, amounted to €46,299 thousand, of which, during 2016 and according to
applicable accounting regulations, €4,895 thousand have been provisioned against earnings of the year and €2,226
thousand against equity, in order to adapt the interest rate assumption used for the valuation of pension
commitments in Spain. These amounts include the provisions covering retirement, as well as death and disability.
As a result of the entry into force of Circular 2/2016, of the Bank of Spain to the credit institutions, on supervision and
solvency, 15% of the annual contributions agreed to pension systems determined on the basis of the benefit accrued
for the financial year corresponding to executive directors and BBVA’s senior managers, will be based on variable
components and will be considered as discretionary pension benefits, and in consequence will be deemed as
deferred variable remuneration, subject to the payment and withholding conditions provided in the applicable
regulations, as well as reduction arrangements and other applicable conditions established to the variable
remuneration in the Remuneration Policy for BBVA’s Directors.
The balance of the item "Provisions - Funds for pensions and similar liabilities" on the Group's consolidated balance
sheet as of 31 December 2016 includes €265 million under the item for post-employment benefit commitments
maintained with former members of the Bank's Senior Management.
In reference to section C.1.29, the Board of Directors always meets with the attendance of its chair and therefore the
Lead Director has never chaired a meeting of the Board of Directors. The Lead Director, in the scope of his entrusted
duties, maintains fluid contact with the independent directors to simplify the discharge of his duties.
With regard to section C.1.31, as BBVA shares are listed on the New York Stock Exchange, it is subject to the
supervision of the Securities & Exchange Commission (SEC) and, thus, to compliance with the Sarbanes Oxley Act
and its implementing regulations, and for this reason each year the Group Executive Chairman, the CEO and the
executive tasked with preparing the Accounts sign and submit the certifications described in sections 302 and 906 of
this Act, related to the content of the Annual Financial Statements. These certificates are contained in the annual
registration statement (Form 20-F) which the Company files with this authority for the official record.
As reference to section C.1.45, the contractual terms and conditions insofar as provisions of the Chief Executive
Officer, shall determine that when no longer holding said position for any reason other than his own will, retirement,
disability or serious breaches of duty, he would be given early retirement with a pension payable, as he chooses,
through a lifelong annuity pension or capital, whose annual amount will be calculated on the basis of the provisions
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
78
that, according to current actuarial criteria applicable at that moment, the Bank might have made to said date in
fulfillment of the pension commitments for retirement as established in his contract, though in no case whatsoever
shall this commitment bind the Bank to any additional provisions. This pension may not exceed 75% on the
pensionable base if the event occurs before turning 55 or 85% on the pensionable base if the event occurs after
turning said age.
Likewise, the Board of Directors only approves the contract conditions related to executive directors and Senior
Management members as set out in article 17 of the Board Regulations, which are reported to the General Meeting
through this Report and the Annual Report on Directors' Remuneration of BBVA, but does not authorize those of
other technical and specialist professionals.
Further to section C.2.1, on 31 December 2016, the BBVA Executive Committee partially reflected participation in the
Board of Directors, since its Chair and Secretary sit on the Board of Directors whose composition, according to article
26 of the Regulations of the Board of Directors, has more non-executive directors than executive directors.
Moreover, and further to section C.2.1, we provide brief indications regarding what the regulations establish about the
composition and functions of each board committee:
• Audit and Compliance Committee: Article 29 of the Board Regulations establishes that the Audit and Compliance
Committee will exclusively comprise independent directors tasked with assisting the Board of Directors in supervising
the financial information and exercising oversight for the Group. The members of the Audit and Compliance
Committee, and particularly its Chair, shall be appointed with regard to their knowledge and background in
accounting, auditing and risk management. It will be made up of four members appointed by the Board, one of whom
will be appointed taking into account his/her knowledge of accounting, auditing or both. The Board will also appoint
the Chair of this Committee, who must be replaced every four years and may be re-elected one year after the end of
his/her term of office. When the Chair cannot be present, his/her duties will be performed by the most senior
independent director on the Committee, and, where more than one person of equal seniority are present, by the
eldest. The Committee will appoint a Secretary who may or may not be a member of the Committee.
Turning to the duties of the Audit and Compliance Committee mentioned in section C.2.1, in addition to the duties
cited in said section, the Audit and Compliance Committee has its own operating regulations available on the BBVA
website (www.bbva.com) and includes a full breakdown of the duties of this Committee.
• Appointments Committee: Article 32 of the Board Regulations establishes that the Appointments Committee will
comprise a minimum of three members who will be appointed by the Board of Directors, which will also appoint its
Chair. All the members of this Committee must be non-executive directors, and a majority of them independent
directors, as its Chair. When the Chair cannot be present, the meetings will be chaired by the most senior
independent director on the Committee, and, where more than one person of equal seniority are present, by the
eldest.
• Remuneration Committee: Article 35 of the Board Regulations establishes that the Remuneration Committee will
comprise a minimum of three members who will be appointed by the Board of Directors, which will also appoint its
Chair. All the members of this Committee must be non-executive directors, and a majority of them independent
directors, as its Chair. When the Chair cannot be present, the meetings will be chaired by the most senior
independent director on the Committee, and, where more than one person of equal seniority are present, by the
eldest.
• Executive Committee: Article 26 of the Board Regulations establishes the following: In accordance with the
Company Bylaws, the Board of Directors may, with the favorable vote of two-thirds of its members, appoint an
Executive Committee, ensuring that there is a majority of non-executive directors over executive directors. The
Executive committee will be chaired by the Chairman of the Board of Directors, or when this is not possible, by
whomever the Company Bylaws determines. The secretary of the Committee will be the Secretary of the Board. If
absent, the person the meeting’s members appoint for this purpose will stand in for the secretary.
• Risk Committee: Article 38 of the Company Board Regulations establishes that the Risk Committee will comprise a
minimum of three members who will be appointed by the Board of Directors, which will also appoint its Chair. All the
members of this Committee must be non-executive directors of whom at least one third, and in any event the Chair,
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
79
must be independent. When the Chair cannot be present, the meetings will be chaired by the most senior
independent director on the Committee, and, where more than one person of equal seniority are present, by the
eldest.
• Technology and Cyber-security Committee: The Technology and Cyber-security Committee Regulations establish
that it will comprise a minimum of three members appointed by the Board of Directors, which will also appoint its
Chairman. For these purposes, the Board of Directors will consider the knowledge and experience in technology,
information systems and cyber-security. When the Chairman cannot be present, the Committee meetings will be
chaired by the most senior member of the Committee and, where more than one person of equal seniority are
present, by the eldest.
Regarding section C.2.5, on the most important actions of the Remuneration Committee during 2016, the Chairman
of the Remuneration Committee submitted a report to the Board on its activities during 2016 including, among others,
the following aspects: in relation to non-executive directors, the need to extend the remuneration system with
deferred payment for an additional period of 5 years and submitted that decision to the General Meeting as governing
body responsible for approving it; likewise, the remuneration corresponding to the Technology and Cyber-security
members’ was determined for its proposal to the Board. Regarding the remuneration issues of executive directors,
the Committee proposed for approval by the Board the settlement of the Annual Variable Remuneration 2015, the
updating of the deferred parts of the variable remuneration of previous years, the review of the update of the fixed
and variable remuneration of reference for 2016, the determination of the annual and multiannual indicators for the
calculation of the Annual Variable Remuneration 2016, as well as their weightings, target and scales, and annual
determination rules for the settlement and payment system of the variable remuneration applicable to the categories
of personal whose professional activities significantly influence the risk profile of the Group, including executive
directors and BBVA Senior Management (Identified Group). In addition, regarding the remuneration issues of Senior
Management, the Committee proposed for approval by the Board the settlement of the variable remuneration for
2015 and the basic contractual conditions for 2016. This also included, among other matters, the tasks carried out by
the Committee in relation to the Annual Report on Directors’ Remuneration, proposed to the Board for a consultative
vote by the General Meeting, review of the application of the Remuneration Policy in the previous year and
verification of information on the remuneration of directors and senior executives contained in corporate documents.
In addition, the Committee has carried out in 2016 an intense work to review the Remuneration Policy applicable in
view of the new regulation that has recently been approved on remuneration, by submitting the corresponding
proposals to the Board for the amendment of the Remuneration Policy for directors and Identified Group.
With respect to section D (Related-party and Intragroup Transactions), see Note 53 of the BBVA Annual
Consolidated Accounts for 2016. With respect to section D.4, it details the transactions conducted by Banco Bilbao
Vizcaya Argentaria, S.A. at the close of the year, with companies issuing securities on international markets, carried
out as part of ordinary trading related to the management of outstanding issuances. Moreover, with respect to section
D.4, please refer to the section entitled “Offshore financial centers” in the BBVA Consolidated Management Report
for 2016.
During 2011, the BBVA Board of Directors approved the Bank's adhesion to the Code of Best Tax Practices (Código
de Buenas Prácticas Tributarias) approved by Foro de Grandes Empresas according to the wording proposed by the
State Tax Administration Agency (AEAT). During this year, it has been compliant with the contents of this Code.
Moreover, BBVA is committed to applying the provisions of the Universal Declaration of Human Rights, Principles of
United Nations Global Compact (which BBVA has formally signed), Equator Principles (to which BBVA has been
formally adhered since 2004) and other conventions and treaties involving international organizations such as the
Organization for Economic Cooperation and Development and the International Labor Organization.
This annual report on corporate governance has been approved by the company’s board of directors on 9 February
2017.
List whether any Directors voted against or abstained from voting on the approval of this Report.
NO
This English version is a translation of the original in Spanish for information purposes only. In case of a
discrepancy, the Spanish original will prevail.
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