Banco Bilbao Vizcaya - Final Results

RNS Number:5911E
Banco Bilbao Vizcaya S.A.
25 January 2000


                           BBVA: 1999 RESULTS

                        ATTRIBUTED PROFIT UP 22.6%,
                        TO 290,481 MILLION PESETAS

Highlights of the Balance Sheet and Profit and Loss Account

>   Sharp increase in activity in Spain, with gains of market share in all      
   businesses and a 25.3% increase in the operating margin

>   Return on equity (ROE) grew 3.8 points from 18.1% to 21.9%, with increases  
   in all margins

>   The efficiency ratio continues to improve, to 54.6% and 48.2% in Spain

>   A gigantic step forward has been taken in the introduction of the business  
   model in Latin America, where margins have moved upwards in the second half  
  year

>   Net write-downs amount to 245,000 million pesetas, compared to the 163,000
    million of capital gains generated in the financial year

Development of the BBV-Argentaria merger process

*   In only 100 days the whole or the executive structure has been completed    
   and policies on brands and technological platforms have been defined

*   In 15 months integration of the minority banks will be complete

*   The targets for profitability (R0E of 24%) and efficiency (50%) are         
   confirmed for the year 2002, when profit will double

BBVA ended the 1999 financial year with attributed profit of 290,481 million
pesetas (1,746 million euros), representing a 22.6% increase over the  previous
year. This was possible thanks to the improvement in all margins, in particular
the operating margin in Spain, which grew by 25.3%.  A total of 245,000 million
pesetas was applied to write-downs, compared with capital gains generated in the
financial year of 163,000 million.

The excellent Profit and Loss Account was supported by a sharp increase in
retail business, where market share has been gained in all segments, and in the
introduction of the new model of bank in Latin America, which has made it
possible to reap the first fruits after the upturn in business in this area. 
The results improve the ratios of profitability (ROE of 21.9% and ROA of 0.98%)
and efficiency (54.6%) and put the Group in an excellent position to face the
first year of the new bank created after the merger of BBV and Argentaria,
announced on 19 October last.

The process of integration is advancing at a quicker pace than planned, and it
has enabled the whole of the executive structure to be completed and to define
the policies on brands and technological platforms in under 100 days.  In 15 
months integration of the Argentaria and BBV networks will  be complete.

Technological development presents itself as a priority strategy. In addition to
the launch of uno-e, the first Internet-only bank, and the agreement with Terra,
BBVA is advancing in the consolidation of a multi-channel bank, on the basis of
the technologies of the two, merged institutions, which place it as the leader
in the sector.


Development of the Business

The 1999 financial year has allowed BBVA to increase its share of business in
all the segments of retail activity, which have more than compensated for the 
poor economic situation in Latin America (one of the worst in the last 50
years).

The Group's total assets have grown by over 17% to 39.7 billion pesetas, while
lending increased by 14% to 18.9 billion and managed resources were up  25% and
stood at 40.3 billion. In the last section there were notable increases in
customers' funds on the balance sheet (+17%), investment funds (+10%) and
pension funds (+130%).

In Latin America BBVA faced the year with determined support for the 
introduction of the business model, progress on the unified computing platform,
expansion of the distribution network, better risk management and a considerable
reduction in costs.  This has made it possible to obtain the first fruits in the
months of the year, after the upturn in activity in the second
half.  Accordingly the annual Basic Margin in Latin America grew by 7.5%.

Throughout 1999 BBVA's assets in America grew by 22% to 7.3 billion pesetas, 
accounting for 18.5% of the Group's total assets.  Lending policy has been
adjusted to the difficult situation in the area, with an increase of 13% to 3.2
billion pesetas (17% of the total for the Group), whereas managed resources
underwent sharp growth of 64% to 9.9 billion pesetas (24.4% of BBVA's total
resources).
                                 
These results have been achieved with a significant improvement of the quality
of risk.  The default rate in Latin America has fallen to 4.4% and the level of
cover has increased to 150%.

Not counting Latin America, BBVA consolidated its leading position in retail
business in 1999, with strong growth in all segments of business and in market
share, especially in investment funds (share of 20.9%) and pensions 24.4%).

Activity  performed through complementary and more efficient channels (telephone
and Internet banking) has gone from accounting for 16% to over 23% of the funds
managed by the Group.  The technological development of the new institution
ensures the best management tools in the service customers.

With regard to lending in retail business, investment has grown in a balanced 
way, with a total increase of 13.6% in the year, taking the total portfolio to
15.7 billion pesetas. BBVA's consumer credit in Spain increased by 18.3%,
mortgage lending by 16.8% and lending to businesses by 17%. The default rate has
fallen to 1.2% and the rate of cover has also increased to 123%.


Profit and Loss Account

BBVA closed the 1999 financial year with significant increases in all margins,
which have made it possible to make a large volume of write-downs and increase 
the profit attributed to the Group by 22.6%, to 290,481 million pesetas (1,746
million euros).  All this is despite the adverse situation in Latin America.

The intermediation margin grew by 4.4% (+10% not counting Latin America), to 
958,378 million pesetas, and net commission increased by 15.7% and stood at
450,389 million.  This places the basic margin at 1.4 billion pesetas, with
growth of 7.8% over 1998 (+10.6% not counting Latin America).

The ordinary margin underwent an increase of 8.8% to 1.5 billion pesetas. 
Discounting overhead expenses of administration, which grew by 7.3% and stand at
827,970 million (not counting Latin America, operating expenses only grew by
0.4%), amortisation and other charges, the operating margin stands at 575,161
million pesetas, with an increase of 10.8%.  Not counting business in Latin
America, the operating margin grew by 25.3% in the year.

The active management or industrial holdings has continued to Produce
significant results in the financial year.  The results according to the equity
method, including dividends, continue to show a recurring profit of around
90,000 million pesetas.

Additionally, considerable capital gains have been made in the industrial
portfolio in the amount of 163,000 million pesetas, which has not prevented 
non-realised capital gains from continuing to increase to cover one billion 
pesetas (seven times the capital gain realised in the year). Total net
write-downs were in excess of 215,000 million pesetas.

Pre-tax profit stood at 482,802 million pesetas (2,902 million euros), 
representing an increase of 22.2% in the year.  Consolidated profit amounts to 
360,787 million (+21.5%), which, after deducting the result attributed to  a
minority shareholders, takes the profit attributed to the Group to the 290,481
million mentioned.

These results have made it possible to increase considerably the profitability
and efficiency ratios.  The return on equity (ROE) went from 18.1% in 1998 to
21.9% in the last financial year and the return on assets (ROA) increased 0.89%
to 0.98%. The efficiency ratio continued to improve to 54.6%, compared with the
55.4% in 1998. Not counting Latin America, efficiency stood at 48.2%.


Rapid process of integration

The process of integration is advancing at a very rapid rate, even faster than
forecast at the time when the merger was announced.

In the first hundred days following the announcement of the merger, strategic
decisions have been taken which allow BBVA to come up to speed in the strategic
areas of business.

These decisions include:

* In only 100 days the whole executive structure, consisting of 1,700           
 executives, has been completed.
* Policies relating to brands have been defined.
* The new bank has decided on the configuration of the technological platform,  
 combining the advantages of the BBV network platform with Argentaria's         
innovative strategy in alternative channels.
* In 15 months, the integration of the minority banks will be complete, after   
 the decision adopted to merge Banco de Alicante and Banca Catalana with        
BBVA.
* The targets of profitability (ROE of 24%) and efficiency (50%) are confirmed  
 for the year 2002, when profit will double compared to the close of 1999.


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