BBVAValuationandAnalysis

M&AProject
C.U.N.E.F/15thJanuary2013
CristinaMariJimenez,AlbaFernandezBarreirosy
JaimeSierraPuerta

1. ExecutiveSummary
2. BBVA
Introduction&origins
BBVAsprofile
DividendStrategy
SalesDistribution
3. EnvironmentAnalysis
MacroOutlookforSpanishFinancialSector
Businessevolutionin2011
CompetitivePerspective
4. FinancialAnalysis
DividendDiscountMethod
RatioAnalysis
5. BIBLIOGRAPHY
6. EXHIBITS

1.EXECUTIVESUMMARY

InthisprojectweanalyzedBBVA,oneofthemostimportantSpanishfinancialinstitutions,
byusingsomeoftheseveralvaluationmethodsthatareavailable:thediscounteddividend
method,basedonourassumptionsandapreviousstageofgatheringinformation,andthe
comparison of some financial ratios we considered important. Both analyses have been
made always by comparison with the situation of BBVAs direct competitors and the
Spanishfinancialsector.

BBVAoperatesinthefinancialsectorasacustomercentricmultinationalgroupproviding
financialandnon-financialproductsandservicesallovertheworld

BBVAs ongoing profitability in the last years compares favourably with the sectors
average. The Group maintains an outstanding position in terms of the main items on the
income statement over average total assets which have been increasing at 1-2% because
of several reasons: the incorporation of Garanti and UNNIM, the favourable business
activity in the emerging markets, especially Latin America, the higher cost of customer
fundsandofwholesalefundingamongothers.

On the other hand, even with the fall in net income for 2011 and 2012, BBVA, being a
relatively mature company, has reiterated that it will maintain the total dividend at 0,42
euros,atrendthatwillbeabletoaccomplishuntil2014inordertoattractnewinvestors
andmaintainthosealreadyinthecompany.Theyareevenwillingtopayadividendhigher
thantheirEPS,asweestimatewillhappenin2012(makingthepayoutratiotoincrease).
BBVA has demonstrated a good efficiency ratio of 48% with a solid return on assets and
more or less stable net interest marging (2,20-2,50% growth). Both, BBVA's solid
efficiency and earnings ratios are not, however, translating into a credible return on
equity,withBBVAhavinganexpectedreturnonequityof3,97%in2012.Thisispartofa
downwardtrendwhichcanbeattributedtothefundsdivertedtoloan-lossprovisionsthat
willnotcontinuein2013and2014.

We can say BBVA is, with Santander, one of the Spanish Banks most prepared to face the
restructuring of the domestic financial system and the new market requirements,
especially due to its foreign exposure, which really is a significant advantage relative to
otherSpanishbanks.AnyexposuretoSpainandincreasingriskcreatedbythedeepening
oftheSpanisheconomiccrisisisclearlymitigatedbyitsgeographicdiversityandthefact
thatitderives59%ofitsnetattributableprofitfrommarketsoutsideofSpain(especially
Mexico).

Still the future of BBVA will inevitably be associated with the macroeconomics variables
that may weigh negatively on some aspects such as the stocks performance in the near
term, profitability, or debt exposure, so it will have to continue to exhibit strong risk
management practices, through reducing loan exposure to troublesome markets, de-
leveragingitsbalancesheetandtakingmeasurestoincreaseliquidity.

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2.BBVA
2.1INTRODUCTIONS&HISTORICALBACKGROUND

Banco Bilbao Vizcaya Argentaria (BBVA) is a customer-centric multinational group that

providesfinancialandnon-financialproductsandservices,inover30countriesandto53
millioncustomersthroughouttheworld.

It has its origins in 1857 when the Spanish Board of Trade sponsored the creation of
Banco de Bilbao as a currency-issuing and discount bank, which until 1890s was
practicallytheonlybankinthatpartofSpain.Duetotheeconomicdevelopmentin1960,
Banco de Bilbao grew further, absorbing other banks and started to create a financial
group. At the same time Banco de Vizcaya, set up in 1901, also continued to develop as a
modernuniversalbankandbegantoemergeasanimportantfinancialgroup.Bothofthem
mergedin1988creatingBBV.

Parallel to this process, Corporacin Bancaria de Espaa was set up in 1991 as a

governmentcorporationandcreditentitywithbankstatus.Itstartedoutwithafederated
bankingmodel,howeverin1998CorporacinBancariadeEspaa(alreadyprivatizedvia
IPOs), BEX (which had merged with BCI), BHE and Caja Postal were merged into a single
bankcalledArgentaria.

BBVandArgentariaannouncedtheirplannedmergeron19thOctober1999thuscreating
BBVAandfinallybecomingasingleBBVAbrandinFebruary2001.

2.2BBVAsPROFILE

BBVAoperatesintwocross-sectionalbusinessunitssegmentedbycustomertype:
a. Corporate&InvestmentBankingwhichincludesBBVAGroupactivitywithlarge
companiesandcorporations.
b. GlobalRetail&BusinessBanking,mainlyaglobalunitjoiningRetailBanking,SME
& Commercial banking, Insurance and Pensions, Payment Systems, Consumer
Finance,PrivateBankingandAssetManagement.

BBVAs approach to banking is based on a business model focused on long-term and

lastingrelationshipswithitscustomer.Ithasthereforefranchiseswithasufficientcritical
customerbasethatallowtheholdingofleadingpositions:1st/2ndinSpain,marketleader
inMexico,1st/2ndinSouthAmerica,aleadershippositionintheUSSunbelt,andstrategic
alliancesinTurkeyandChina.
Furthermore management based on anticipation; a corporate governance framework
underpinned by principles of integrity, prudence and transparency; and finally, an
appropriate diversification strategy in terms of geographical areas, businesses and
customers,arealsofundamentalpartsofBBVAsbankingmethodology.
2.3DIVIDENDPOLICIY

BBVAs share is currently trading at 7,45 euros. During 2011 and historically, BBVA has
maintained one of the highest dividend payout ratios in its sector, with an established
dividendfloorof0.42pershare.Astheirearningshavebeenaround0,61thatsameyear,
we can say the company was paying out dividends lower than their earnings per share,
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which means that they have a dividend yield of 6.30%. But this ratio may not be
maintainedinthefollowingyears.
ThefactthatBBVAsChairman:FranciscoGonzlez,madethecommitmentofmaintaining
the same levels of dividend per share (despite the rising loan loss provisions and falling
profitabilitycausedbyongoingbanksolvencyandeconomiccrisis),makesusrealisethere
is no much room for BBVA to keep on increasing their dividends in the short term. This
will be something we estimate, might happen in 2014 as a direct result of their
recovery/growthoverthatyear.
2.4GEOGRAPHICALDISTRIBUTION

Asmentionedbefore,BBVA,fromageographicalpointofviewandtakingintoaccountits
corebusiness(depositsandloans);isawelldiversifiedbankwithimportantbusinessesin
Eurasia, Mexico, US and South America. It is particularly interesting to focus attention in
Spain,USAandMexico,countriesinwhichBBVAhasmostoftheinvestmentsortradesin
the stock market. (Bolsa de Madrid, NYSE and so on). This is explained in detail in
EXHIBIT1.

One can appreciate through the following figures the importance of diversification for
BBVAespeciallysincein2011almost55%ofthegrossincomewasoriginatedinemerging
countriesandthetrendin2012seemstobeincreasingtoa59%.Fromthisoverview,one
can even conclude that probably Mexico and the emerging countries will gain an
importantshareoftheloanbookofBBVAinthelongrunastheeconomicactivityinthese
countries is increasing and as BBVA, according to the financial reports, is increasingly
gainingmarketshareinLatamandMexico.
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3.ENVIRONMENTANALYSIS

3.1MACROOUTLOOKFORSPANISHFINANCIALSECTOR

In2011theglobaleconomysufferedavisibleslowdownduetotheuncertaintygenerated
by the financial markets, in particular the European sovereign debt markets.The Spanish
economy was, and still is, immersed in its own adjustments in order to overcome this
crisis, with a growth in 2011 that was a few decimal points below 1% and a trend for a
gradualslowdownthroughouttheyear.

With this panorama and the slow pace of recovery of the European debt crisis, we
estimate a downward trend for 2012, especially for the developed economies. We
thereforeassumetheeurozoneisexpectedtohaveanegativegrowthof0.5%asawhole,
whichwillbearound-1.3%inSpain.Forcontinuousyearsweestimateaslowrecoveryso
thatworldwidegrowthratewillatarateof3%and3.5%in2013and2014respectively.

SinceBBVAoperatesinthefinancialSectoritisalsoimportanttonotethatinSpainthere
hasbeenanimportantwaveofreformswithinthefiscalandthelaborframework,thatwill
inevitablyaffectBBVAsperformance.

TheRDL2/2012wasdevelopedsouncertaintyassociatedtotheSpanishBanking
System (and the toxic assets coming from the construction and real state sector)
could be eliminated. Thus, the total amount required as reserves for financial
entities and principals, amounts to 53,842,000 euros, which add to the efforts of
higher provisions made by banks since 2008, and have led some writedowns of
112,000millioneuros.

The EBA recapitalisation programme for major European banks involves raising
CoreTier1capitalto9%andthevaluationatmarketpricesofgeneralgovernment
debtinstruments.RequirementsofBASILIII.

On top of all the measures and developments mentioned, it is also important to

factor in the assessment of the Spanish banking sector the structural measures
adopted:
- Transformationofsavingsbanksintocommercialbanks
- Significant reduction in the number of former savings banks (from 45 before the
crisisto11institutionsandongoingevenfurther).
- Rapid crisis resolution scheme: the FROB has been able to initiate rapidly the
process of disposal of intervened institutions, and thus the creation of a big and
inefficientpublicbank/bankingsectorhasbeenavoided.

In terms of solvency, BBVA comfortably passed Oliver Wymans stress test and
continues to comply with the capital recommendations of the European Banking
Authority(EBA)andwithoutcapitalrequirements.

As a direct consequence and even with all the measurestakento restructure the balance,
themacroeconomicsituationforBBVAisstillconsideredanadversescenario.

3.2.BUSINESSEVOLUTIONON2011ANDFUTUREESTIMATIONS.

In 2011 BBVA was able to maintain their recurring earnings and an organic capital
generation,evenif,aspreviouslymentioned,therewasacrisiswithanegativeimpacton
theSpanishfinancialsector.InordertobeabletotalkaboutBBVAsevolutionduringthis
lastyearitisnecessarytoanalyzesomeofthemostsignificantBalanceSheetsandIncome
Statementaccounts.
AnalyzingthemostimportantISaccounts(seelightblueEXHIBIT2)wecanseethat:

- Netinterestincomein2011amountedto13,160m,whichdecreasedonlya1.2%
fromdataobtainedon2010.Inquarterlyterms,thenetinterestincomeincreased
throughouttheentireyear,whichmeansitwassomehowstablethankstovarious
factors: the increased volume of business in emerging countries, the contribution
from Garanti acquisition (Turkey) and the appropriate price management. These
elementswillstillguaranteesomehowagrowthin2012,2013and2014for15%,
3% and 6% respectively. In 2012 Garanti effect as well as a good price
management through the repricing of loans and greater contribution from
mortgage floors in Spain will lead to a much bigger increase than the following
years.

- Revenuefromdividends,whichbasicallyincludesBBVAsstakeinTelefonica(paid
once in May and another time in November), went up 6.3% to 562m, and to a
lesserextent,thedividendscollectedintheGlobalMarketsunit.

- The income from fees and commissions was very stable, with a visible rise of just
1% to 4,560m. This increase is relevant given the environment: regulatory
limitationsaspreviouslyexplained,activityslowedinSpainandthefactthatsome
feeswerereducedtoensurecustomerloyalty.Thissituationwillbeevenbiggerin
the future, especially in 2012 where strong activity in emerging markets and the
greatercontributionofGarantioffsetthenegativeimpactspreviouslymentioned.
We estimate that such a great growth is not possible to maintain and will slowly
stabilizeagaingraduallygrowingata5%and2%in2013and2014respectively.

- Gross income, including the net gains on financial assets and liabilities, the
exchange differences and the dividends (which all represents 90% of the Banks
total revenue), summed 20,566m in 2011, that represents a fall of 2% from the
previousyear,which,ontheotherhand,representsariseof0.3%ifweexcludethe
exchange-rate effect. This trend will not continue in the following years where
growthwillbeobserved,especiallyin2012(witha13%)

- Operatingexpensesin2011amountedto9,951m,withanincreaseof11.0%.The
rise is due to the change in the scope of consolidation especially with the
incorporation of Garanti. Also some of the investment made throughout the year,
to the personnel training efforts in place for promoting talent in the Bank. Since
thenumberofbranchesandemployeeswillstillbeincreasingduringthefollowing
years,sowillbetheseexpenses.

- Impairmentlossesonfinancialassetswere4,226min2011,afallof10.4%onthe
figureforthepreviousyear.Inthefourthquartertherewasanincreaseinthelevel
of the Groups loan-loss provisions, aimed at taking advantage of the higher
revenue over the last three months of the year. As a result, BBVAs coverage ratio
closedat61%asofDecember31,2011.
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- Ontheotherhandprovisionsamountedto510min2011,5.7%uponthefigure
for the previous year. They basically cover early retirement, other allocations to
pension funds and provisions for contingent liabilities. The strong generation of
operatingincomeenablestheGrouptoabsorbasignificantincreaseinitsloan-loss
provisions in Spain in order to cover the ongoing impairment of its real estate
portfoliosandassets,whichwillalsomaintainthegrowthratein2012ata23%.
However since the situation on 2013 and 2014 with the real state sector is
expected to improve the provisions this two accounts will decrease a 4 and 6%
respectively.

- To sum up, the changes mentioned above in revenue and expenses resulted in an
operating income of 5,879 in 2011 (6,742 in 2010). An operating income that
willcontinuetogrowinthefollowingyearsexceptin2013.

- Othergainsandlossesreportedanegative2,109min2011.Thiscanbeexplained
almost entirely by two concepts: a negative 665m corresponding to real estate
provisionsandassetsfromrecoverieswiththeaimofmaintainingcoverageabove
30%;andanegative1,444mforgoodwillimpairmentintheUnitedStates.

- In general, 2011 income taxes were reduced because of tax-exempt or low-tax

revenues (especially dividends and income accounted by the equity method) and
the growing weight of earnings from Mexico, South America and Turkey, where
effectivetaxratesarelow.
- Finally as a result there will be a Net income with a decreasing trend in the first
years2011and2012butthatwillreboundagainin2013and2014.
Furthermore analyzing the most important accounts on the Balance Sheet (see light blue
EXHIBIT 3) we can see BBVA closed 2011 with a balance sheet that reflects stability,
prudent risk management, high solidity, low leverage and reduced funding needs, things
thatwillbemaintainedinthecontinuousyears.

- In terms of stability, the Groups total assets as of 31-Dec-2011 were

597,688million, representing an increase of 8.1% from last years, mainly
explainedbytheincorporationofGaranti.Weexpectthistendencytocontinueata
1-2% in the following years (2012, 2013 and 2014) due to several factors, among
them,itisworthmentioningtheInclusionofUNNIM.Thisimpliedtheinclusionof
a network with 556 branches and 3,028 employees that manage 18 billion in
customer loans and 11 billion in customer deposits (data as of the close of
September2012).

- The Groups business volume that comes from the sum of gross customer lending
plustotalcustomerfunds,cameto788millionasofDecember31,2011,withan
increase of 2.3% compared to last year. Of this figure, 361million corresponded
togrosslendingand426milliontototalcustomerfunds,whichincorporateboth
on-balancesheetandmutualandpensionfunds,aswellascustomerportfolios.

- Loansandadvancestocustomersisthemainitemontheassetsideofthebalance
sheet, representing 58.9% of total assets as of December 31, 2011. On the
liabilities side, deposits from customers stood at 47.2% of the total balance sheet
at the end of 2011, and thus, theLoan-to-Depositratioclosedtheyearat101,7%,
whichreflectsstabilityandevenmoreimportant,liquidity.

These loans and advances to customer can be separated in performance by

geographical area and will be determinant in the trend for following years: which
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willconsistonareductioninthemostproblematicreal-estateportfolios(basically
in Spain and the United States) with a reduction in the Corporate & Investment
Banking (CIB) portfolios in all developed countries and growth in the emerging
markets.

More specifically in Spain, gross lending to customers will fell as a result of the
reduction in the countrys economy, even with an increase of the market share in
the residential mortgage portfolio. In Europe, on the other hand, lending will
probably remain stable and focused only on high added value customers, mainly
corporateclients.InGaranti(Turkey),weestimatelendingwillcontinuedtogrow,
aboveallinconsumerloans.
On the other hand, in United States there was a shift in its portfolio to increasing
the weight of target portfolios (in residential and commercial real estate). Finally,
inLatinAmerica,aregionwherelendingisclearlybuoyanttherewillbeanotable
increaseinpracticallyalltheportfoliosandcategories.

- The more stable customer funds on the balance sheet (current and savings
accountswithlowercosts)performedparticularlywell.Asaresult,theirweighton
the liabilities side of the balance sheet increased, thus allowing the Group to
continuetoimproveitsfundingstructurethrough2011,andfollowingyears.

3.3COMPETITIVEPOSITIONING

In order to be able to evaluate some of the financial information of BBVA it is vital to be

able to compare it to other similar institutions in the Spanish Financial sector such as:
Banco Santander, Bankia, Banesto and Banco Popular (even though BBVA and Santander
arealsoconsiderinternationalbankswithamuchbiggergeographicalscope).EXHIBIT4

These 5 banks have the highest number of total assets, being Santander the biggest one
with1,251,525m.followedbyBBVAwith597.688million,thenBankia,LaCaixa,Banco
Popular and Banesto, (even if the net income generated by each of them follows a
completelydifferentorderanddoesntdependssolelyinthenumberofassetstheyown).

AllthesebanksperformintheSpanishfinancialsectorthathasalwaysbeencharacterized
forhavingagreatamountofofficesandbranches(associatedwithconnectionandloyalty
to the customer). However within recent years there has been a process of reducing
branch numbers due to the financial crisis. Yet, at 31-Dec-2011, BBVAs branch network
numbered 7,457 units, having 96 more branches than at the close of 2010. Furthermore,
this is a number we expect to grow in 2012 and the coming years due to the opening of
branches in emerging countries, which are increasing as a result of the expansion
processes and growth opportunities offered by their markets. Again while this is a great
number that surpasses most of the Spanish Banks (Banesto, Popular, Bankia), Banco
Santanders number of branches is even bigger, as it is also a Bank with an important
internationalpresence.

It is also important to analyze the number of employees since they will be considered a
key source of productivity and will constitute an important operating cost. Both, Banco
Santander and BBVA have the highest number of employees, followed by Bankia and
LaCaixa.MorespecificallytheBanksemployeesnumbered110,645people,ayear-on-year
growth of 3.4% which, given the circumstances is considered really stable growth of
humancapitalresourceandmayexplaintheincreaseinpersonnelexpenses.

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Despite these increased investments (branches, personnel and administrative expenses),
theefficiencyratioclosedDecemberatalevelof48.4%,consideredlowincomparisonto
LaCaixa and a worldwide measure, yet not as low as the one from Banco Santander,
BanestoandBancoPopularwhichprovetobemuchmoreefficient.StillwecansayBBVA
is delivering an outstanding efficiency ratio, which is an extremely positive sign for
investors as it indicates that despite the extremely difficult operating conditions
managementhasmaintainedcontrolofcostsandthatthebankhascontinuedtogenerate
income.

Other important factor to consider is the gross customer lending. While BBVA closed
December 2011 at 361,310 million, which represents a rise over the year of 3.7% and
constitutes a very strong position among its direct competitors; Banco Santander had a
leadingpositionwithanamountalmostasdoubleastheoneBBVAhad:750,100million.

4.FINANCIALANALYSIS

4.1.RATIOSANALYSIS

Weanalyzedratiosandperformancemeasurements(EXHIBIT5)suchas:

(LTD)LoansToDeposits=(Loans/Deposits)
A commonly used statistic for assessing a bank's liquidity by dividing the banks
total loans by its total deposits. This number, also known as the LTD ratio, is
expressed as a percentage. If the ratio is too high, it means that banks might not
have enough liquidity to cover any unforeseen fund requirements; if the ratio is
toolow,banksmaynotbeearningasmuchastheycouldbe.Atitsmostbasiclevel
itrepresentstheratiooffundsloanedinproportiontofundstakenasdepositsand
therefore is indicative of how much of a bank's loan portfolio is funded through
wholesale or short-term loans, which leave a bank's costs base vulnerable to
movementsininterestrates.

Ahealthyloandepositratioisgenerallyconsideredtobe95%to105%andBBVA
is expected to have a loan deposit ratio of 101,7% in 2012 which is considered
amongtherange.Howeverthereisadecreasingtrendthroughthefollowingyears
duetothefactthatbanksmaynotbeearningasmuchastheycouldbe.Thesame
phenomenon taken place when comparing this same ratio with the remaining
financialinstitutionsthathavebeentakenintoconsiderationforthisproject,with
theexceptionofCaixaBankwhichmaintainsitsRatiostablethroughouttheyears.

(LTA)LoansToAssets=(Loans/TotalAssets)
The loans to assets ratio measures the total loans outstanding as a percentage of
total assets. The higher this ratio indicates a bank is loaned up and its liquidity is
low.Thehighertheratio,themoreriskyabankmaybetohigherdefaults.

From our ratio analysis we obtained an estimated Loans to Assets ratio for BBVA
in 2012 of 62.96%. This could be interpreted by saying that 62.96% of the
corporationsassetsarefinancedwithloansandfinancialobligationslastingmore
than one year. We can see that from 2011 to 2012, the Loans to Assets ratio for
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BBVA declined from 63.76% to 62.96%. The bank reduced its amount of loans
outstanding as a percentage of total assets. However from 2012 onwards, the
Loans to Assets Ratio for BBVA experiences an increase, that is, the amount of
corporations assets financed with loans and financial obligations increased in
numberonceagain.

As we can see in the ratio comparison, the same phenomenon happens with the
otherfinancialentities,astheirLoanstoAssetsRatioexperiencesanincreasefrom
theestimatedperiodof2013,totheestimatedperiodof2014.

LEVERAGERATIO=(Tier1/TotalAdjustedAssets)
Itindicateswhatproportionofequityanddebtthecompanyisusingtofinanceits
assets.TheleverageratioisgenerallyexpressedasTier1capitalasaproportionof
total adjusted assets. Tier 1 capital is broadly defined as the sum of capital and
reserves minus some intangible assets such as goodwill, software expenses, and
deferredtaxassets.3Incalculatingtheleverageratio,theseintangibleshavetobe
removedfromthetotalassetbaseaswell,tomakeitcomparabletoTier1capital.

FromthedatawecanseethattheLeverageRatioforBBVAfromyears2009-2014
experiences an increase, starting at a ratio of 5.5%, and ending at an estimated
ratioof6.3%.Thismeansanincreaseintheproportionofdebtandequitythatthe
companyisusingtofinanceitsassets.

(ROA)ReturnonAssets=(NetOperatingIncome/TotalAssets)
An indicator of how profitable a company is relative to its total assets.ROA gives
an ideaas to how efficientmanagement isat using its assets to generate
earnings.Calculated by dividing a company's annual earnings by its total assets,
ROA is displayed as a percentage. Sometimes this is referred to as "return on
investment" but it also means how many dollars of earnings result from each
dollarofassetsthecompanycontrols.

FromourratioanalysisweobtainedanestimatedROAforBBVAin2012of0.98%.
This could be interpreted by saying that, for every 100 million euros invested in
the company, 0.98 million euros in earnings would be the result of the use of the
assets.
For BBVA we can see an expected decrease on the ROA in the period 2012-2013
followed by an increase in the following period. The decrease on the first period
could be a consequence of the increase on total assets experimented by the firm,
whichincreasedby1%,aswellasadecreaseintheNetOperatingincomeof1%.

However, on the following period of 2013-2014, the ROA goes from 0.48 to 1.02,
thisisbecausetheNetOperatingIncomewillincreaseby18%andtheTotalassets
is expected to increase by 2%. Both of these positive expected increases are the
determinantsofthepositiveevolutionoftheROA.

(ROE)ReturnonEquity=(NetIncome/StockholderEquity)
Return on Equity is determined by dividing net income (minus preferred
dividends) by average common stockholders equity. It shows how many euros of
earningsresultfromeacheuroofequity.

FromourratioanalysisweobtainedanestimatedROEforBBVAin2012of3.97%.
This could be interpreted by saying, that for every 100 million euros invested in
the bank, 3.97 million euros will be obtained as profit. The bank will be earning
3,97%onitsequity.Thehigherthereturnonequitythebetter.
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This moderate return on equity is further concerning when it is considered that

BBVAhasadebttoequityratioof2.5anditisunabletotranslatethishighdegree
of leverage into a superior return on equity as would be expected. Again this can
be attributed to the increased loan loss provisions set aside due to the worsening
outlook of its Spanish loan portfolio and the difficulties of the current operating
andeconomicenvironment.Furthermore,BBVAisdeliveringasuperiorreturnon
equitywithalowerdegreeofleveragethanBancoSantander,whichhasadebtto
equityratioof3.7comparedtoBBVA's2.5.

(NIM)NetInterestMargin=(NetInterestincome/TotalAssets)
Net interest margin (NIM) is a measure of the difference between the interest
income generated by banks or other financial institutions and the amount of
interestpaidouttotheirlenders(forexample,deposits),relativetotheamountof
their (interest-earning) assets. It is similar to the gross margin of non-financial
companies.

It is usually expressed as a percentage of what the financial institution earns on

loansinatimeperiodandotherassetsminustheinterestpaidonborrowedfunds
dividedbytheaverageamountoftheassetsonwhichitearnedincomeinthattime
period(theaverageearningassets).InthecaseofBBVA,itsNIMratioexperiences
anincreaseformyear2011onwards.Thiscouldbeinterpretedbysayingthatthe
firms investment decisions are being more successful compared to its debt
situations. Increased positive values denote that the firm made optimal decisions,
asinterestexpensesturnedouttobelowerthantheamountofreturnsgenerated
byinvestments.

EPS(EarningsperShare)

Isameasureusedbyinvestorstoseehowmuchofthecompanysprofittheyown
becausepartwillstayinthefirm(plowbackratio)andtherestcanbeusedtopay
dividends (payout ratio) or repurchase shares. It is very useful therefore to
evaluate the growth evolution of a company, but cannot be used for a direct
comparison with competitors since the number of shares differs from one
companytoanother.

Analyzing the results from BBVAs Earnings per Share ratio we have obtained a
drastic decrease (11.307.40) from 2012-2013, this could reflect investors
opinion of a decrease in BBVAs profit, maybe as a consequence of the financial
crisisandtheSpanishfinancialsectorremodeling-Howevertheratioexperiences
a new increase in the next period 2013-2014 and reaches a figure of 10.9, which
could represent new confidence in the sector and more positive prospects for the
bank.

Payoutratio

Is a measure that will indicate the amount reinvested in the firm. The lower the
payoutratio,thehighertheamountreinvestedandthehighertheplowbackratio.
This also can be interpreted as more investment projects with expected returns
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above the markets return (if returns are not above the cost of capital it will not
plowback any amount). Companies with a low payout ratio are those companies
withhighgrowthexpectations,alsoknownasnonmaturedcompanies.

From our data we can conclude that the Net Income Attributable to Parent
Company experienced a decrease in 2012 of 46%. This could be explained by
sayingthatBBVAsearningspersharedecreased,andatthesametimethenumber
of shares outstanding increased, while maintaining the dividend per share
constant,sothisresultedinadecreasingdividendyield,andanincreasingpayout
ratio.

PER(PricetoEarningsratio)

Canbeinterpretedinnumerousways,buthavingtopickone,wewillconsiderthis
ratio as the price investors are prepared to pay for each dollar or earnings.
CompanieswithgrowthprospectswillhavehigherPERratiosthanthosewithout.

When these firms reinvest a big part of their earnings (at a ROE greater than the
cost of capital) the price per share will increase due to increasing growth
opportunities.ThecurrentEPSwillstaythesamebutsincethepricewillrise,the
PERwillincreaseaswell.

ThePriceEarningsRatioexperimentedadecreaseintheyears2012-2013,where
it decreased from 11.30 to 7.40, investor were willing to pay less per dollar of
earnings of the bank. This could be seen as a negative aspect as lower P/E are
sometimeslinkedtodeclineorecessiveprospectsforcompanies.However,inthe
period 2013-2014, the P/E ratio is estimated to go back to similar figures from
previousperiods,reaching10.9.Soinvestorsarepredictedtore-gainconfidencein
the financial entity and support future growth prospects. This is a very positive
changeoftrendsforthebank.

4.1DISCOUNTEDDIVIDENDVALUATIONMETHOD

The first method to value BBVA is the Dividend Discount Method, that will allow us to
evaluate in the present time the projected shareholder cash flow for the next 3 years,
starting in 2011 since this is the last year the company data was available. We have
decided to use this method because, while on other type of companies such as Telefonica
thevaluecanbeobtainedbydiscountingfuturecashflowsataWACCdiscountrate(DFCF
approach), for the financial sector and banks the core cashflows to analyze are dividends
anditismuchmorerepresentative.

Underthisvaluation(EXHIBIT6)themaintowtaskstoaccomplishare:
a) Estimate the future dividends of the company (as well as its perpetual growth
rate)
b) Discount them with the most accurate cost of equity, calculated with the CAPM
model.

Taking into account the previous macroeconomic and internal environment factors we
expect for the Dividend per Share to remain constant at 0,42 until 2014 where it will
14
increaseto0,5pershare.Weassumethisisso,basedonthefactthatBBVAhasmantained
thisratesince2008andduetothesignalingeffect.PrincipalAgentTheorysuggeststhat
companyannouncementsofanincreaseindividendpayoutsactasanindicatorofthefirm
possessingstrongfutureprospects.Wewouldconsiderthistheoryonlytosomeextent,so
that even if in Spain the profit has been decreasing, foreign profit will enable to maintain
thoselevelsandin2014thiswillincrease.OntheotherhandNumberofshareholdersas
well as Outstanding Shares may slightly increase from non-Spanish investors in future
years(between2%-5%and3%-7%respectively).

Thereforethedividendschemelooksasfollows:

DIVIDENDSCHEME 2009* 2010* 2011 2012E 2013E 2014E

Dividendpershare 0,42 0,42 0,42 0,42 0,42 0,5
Numberofshares 3.748 4.491 4.903 5.067 5.407 5.677
DiscountDividend: 1.574 1.886 2.059 2.128 2.271 2.839

From2014onwardsweestimateaconstantgrowthindividendsof3%.

Next, we calculated the cost of equity of BBVA through the CAPM model that creates a
regression of BBVA Spread versus the Market Spread, thus describing the relationship
between risk and expected return. Even though this model is based on unrealistic
assumptions such as the perfect market efficiency or homogeneous expectations among
investors, it is one of the simplest methods to expose reality. The CAPM model is
formulatedby:

[KeRf]=[RmRf]orKe=Rf+[RmRf]where:

Rm: Returnonthemarket.Wehavecalculatedthereturnonthemarketby
extractingthemarketvaluesofIbex35during2003and2012fromYahoo
Finance and calculating the yearly returns. Afterwards we have calculated
the average of these values in order to have a representative value of the
returnonSpanishmarketduringthelast10years.

Evenifreturnsonthemarkethavebeenincreasingduringthefirstyearsof
the decade and dropped due to the crisis during the last years, calculating
the ten year average provides a more representative view of the iBex
returninthemedium/longrun,resultingina7,10%

Rf: Risk free rate. If risk free interest rate increases, BBVA Ke will also
increase as investors expect more return for the extra risk assumed by
buyingBBVAsharesandnotgovernmentbonds.However,thisisthemain
doubt of the whole European Banking System: what will happen to the
EURO,totheweakcountries(PIIGS)andthereforehowwilltheirsovereign
risk be affected. For simplicity, we assume a 5,1% risk free rate which is
takenfromtheannualreturnofaSpanish10yearbond.

: Regression Coefficient. Once returns were calculated, we have obtained

from Bloomberg the Beta of BBVA that amounted to 2.24. The beta is the
regression coefficient that measures the percentage change in Ke (Cost of
15
Equity) of BBVA, for a 1% increase in the Spread (Market Risk Premium -
RiskFree).

Ke:Costofequity.AsaresultBBVAscostofequityis7,58%

Finallywediscounttheexpecteddividendswiththecostofcapitaland,usingtheGordon
GrowthModel,weaddtheResidualValue.

BBVA(NPV) =
Div1
(1+ ke)
+
Div2
(1+ ke)
2
+
Div3
(1+ ke)
3
+... +
Div
(ke g)

SothatBBVAvalueis73.636millfromwhichtheresidualvalueis63.891mill

5.REFERENCES:

FinancialReportBBVA2011and2012.

BBVAsAnnualAccounts2011.

InformedeEstabilidadFinanciera4/2012.BancodeEspaaEurosistema.
Madrid2012.

IBEX 35: 1991-2012, Rentabilidad y Creacin de Valor. IESE Business

School/CIIF.DocumentodeinvestigacinDI-890.Enero2011.

Bloomberg

YahooFinance

WorldBankStatistics(http://data.worldbank.org)

FinancialBankingRatios.EXANEReport7/01/2013

16
6.EXHIBITS

EXHIBITI:USA,SPAINANDMEXICO

To gain further understanding it is imperative to have a quick look at the Macro- picture of these
countries.

It is easily to perceive that the economic crisis in Spain is critical and most challenging for the
bankingsector:economyisalreadyinrecession,economicactivitywillbelowuntilitrecovers.This
together with the crisis of the European banking system and the low interest rates policy of the
EuropeanCentralBankalsoreinforcetheideathattheloanbookinEuropewontgrow.Iftheloan
bookdoesnotgrow,neitherdoesthenetinterestincome.

ThisviewalmostcontrastswiththesituationinMexicowhereevenifunemploymentisstillrising,
definitelyatmuchlowerlevelsandeconomyisgrowingandalargepotentialgrowthisinview.USA
presents a more stable view than Spain but also some doubts are in mind. The economy is still
recovering from the financial crisis, for 2013 the Fiscal Cliff was the main worry, still the high
publicdeficitcanaffecttheeconomyand,inturn,thebankingactivity.

ThelasttwographsshowthegrowingriskofdeflationinSpain:evenifalongwiththeOMTpolicy
oftheECBtoacquirehugeamountsofgovernmentbonds,moneygrowthfallsandinflationrates
are still low. Moreover it is also necessary to take into account in the analyses some financial
indicatorsofthebankingindustryineachcountry.

-20,00%
0,00%
20,00%
2
0
0
0

2
0
0
2

2
0
0
4

2
0
0
6

2
0
0
8

2
0
1
0

AnnualGDPGrowth(%)
MEX
ESP
USA
0,00%
5,00%
10,00%
15,00%
20,00%
200020022004200620082010
InaOon,GDPdearor(annual
%)
ESP
USA
MEX
-10
-5
0
5
10
15
20
25
30
35
200020022004200620082010
Moneyandquasimoneygrowth
ESP
USA
MEX
17

Thehigh(6%)NPLratiosthatMexicopresentedatthebeginningofthedecadearenowreachedinSpain.This
also supports the low expectation of Loan growth in Spain and a more attractive opportunity in Mexico. The
grosssavingindicatorsforeseeanincrementofMexicandepositsandsimilarfinancialproductsinthemedium
runwhileinUSAandSpainthesituationismorequestionable:

Spanish Banking Authority (BDE) is trying to penalize the deposit business as a

consequence of the war for deposits (or for liquidity) that took place last year. It is
important to make a point here: BBVA as one of the few diversified Spanish Banks is
perceived in Spain as a refuge which enabled the bank to attract flight deposits. This
togetherwiththecontractionoftheloanbookimprovestheLoan/Depositratio.Inthelong
runthesituationforBBVASpainremainshighlyuncertain.
In US the extremely strong competition is the main impediment for an important market
positioningofthecompany

0,00%
1,00%
2,00%
3,00%
4,00%
5,00%
6,00%
7,00%
2000 2002 2004 2006 2008 2010
BankNPLLoans
ESP
USA
MEX
0,00%
5,00%
10,00%
15,00%
20,00%
25,00%
30,00%
1
9
9
0

1
9
9
2

1
9
9
4

1
9
9
6

1
9
9
8

2
0
0
0

2
0
0
2

2
0
0
4

2
0
0
6

2
0
0
8

2
0
1
0

Grosssavings(%GDP)
ESP
US
A
ME
X
0,00%
50,00%
100,00%
150,00%
200,00%
250,00%
300,00%
1
9
9
0

1
9
9
3

1
9
9
6

1
9
9
9

2
0
0
2

2
0
0
5

2
0
0
8

2
0
1
1

DomesOccredit(%GDP)
ESP
USA
MEX
This graph shows Domestic credit
provided by the banking sector,
which includes all credit to various
sectors on a gross basis. In line
which was previously said, Mexico
represents the highest growth
potential of the business and
domesticcreditisexpectedtogrow
strongly.

18
EXHIBITII:INCOMESTATEMENT

EXHIBITIII:BALANCESHEET

EXHIBITIV:COMPETITIVEPOSITION

!"#$%&'(()'*+',-&'.()'*/!0!10!!
Bankia B. Santander BBVA Caixa Banesto B. Popular Banking Sector
!"#$%&'(()#( 298.367 1.251.525 597.688 282.406 108.848 130.926 23.684.590
*+(#",)-&.)/01/2&2-"(( ND 750.100 361.310 182.661 69.198 98.873 9.436.488
!"#$%&3+(#",)-&4+/0( ND 984.353 426.464 248.326 55.155 61.285 8.430.908
5#"367"%0)-8(&9+/0( 12.078 80.629 40.952 17.619 5.424 9.124 1.017.019
:)#&;/3",) -3.031 24.373 3.485 972 122.627 480 24.139
<=31)/3>&?@AB?C)-("//)%&)DC)/()(E"#7)-&$0,1/1(#-$FG)&)(C)/()(AHI-"((&;/3",) ND 45,00% 48,40% 50,50% 43,00% 42,15% 57,43%
:+,J)-&"4&K=3)(HL-$/37)( 4.101 14.756 7.457 5.196 1.714 2.203
:+,J)-&"4&),C%">))( 22.683 193.349 110.645 28.529 8.613 14.062
!"#"$%&'()&&*
"((&*( +,,- +,., +,.. +,.+& +,./& +,.0& 1 +,.,2+,,- 1 +,..2+,., 1 +,.+2+,.. & 1 +,./2+,.+ & 1 +,.02+,./ &
CASH AND BALANCES WITH CENTRAL BANKS 16.344 19.981 30.939 22% 55%
FINANCIAL ASSETS HELD FOR TRADING 69.733 63.283 70.602 69.190 66.422 65.094 -9% 12% -2% -4% -2%
!!!!!!!!!!!!!!!!"#$%& $%'!$'($%)*& +# ),&+#-*.& 0 0 0 0% 0%
!!!!!!!!!!!!!!!!/*0+!&*),.12*& 34.672 24.358 20.975 -30% -14%
!!!!!!!!!!!!!!!!34,1+5 1%&+.,-*%+& 5.783 5.260 2.198 -9% -58%
!!!!!!!!!!!!!!!!6.$'1%7 '*.1($2(*& 29.278 33.665 47.429 15% 41%
OTHER FINANCIAL ASSETS DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS 2.337 2.774 2.977 19% 7%
AVAILABLE-FOR-SALE FINANCIAL ASSETS 63.521 56.456 58.144 51.167 48.353 46.128 -11% 3% -12% -6% -5%
!!!!!!!!!!!!!!!!34,1+5 1%&+.,-*%+& 57.071 50.875 52.914 -11% 4%
!!!!!!!!!!!!!!!!6.$'1%7 '*.1($2(*& 6.450 5.581 5.230 -13% -6%
LOANS AND RECEIVABLES 346.117 364.707 381.076 381.495 392.177 407.080 5% 4% 0% 3% 4%
!!!!!!!!!!!!!!!!"#$%& $%'!$'($%)*& +# ).*'1+!1%&2+,2#%& 22.239 23.637 26.107 6% 10%
Loans and advances to customers 323.442 338.857 351.900 364.217 372.593 387.497 5% 4% 4% 2% 4%
!!!!!!!!!!!!!!!!/*0+!&*),.12*& 436 2.213 3.069 408% 39%
HELD-TO-MATURITY INVESTMENTS 5.437 9.946 10.955 11.337 11.564 12.027 83% 10% 3% 2% 4%
HEDGING DERIVATIVES 3.595 3.563 4.552 -1% 28%
NON-CURRENT ASSETS HELD FOR SALE 1.050 1.529 2.090 46% 37%
INVESTMENTS IN ENTITIES ACCOUNTED FOR USING THE EQUITY METHOD 2.922 4.547 5.843 56% 29%
TANGIBLE ASSETS 6.507 6.701 7.330 3% 9%
INTANGIBLE ASSETS 7.248 8.007 8.677 8.667 8.667 8.667 10% 8% 0% 0% 0%
!!!!!!!!!!!!!!!8##'91:: 6.396 6.949 6.798 9% -2%
!!!!!!!!!!!!!!!;+<*.& 852 1.058 1.879 24% 78%
TAX ASSETS 6.273 6.649 7.841 6% 18%
!!!!!!!!!!!!!!/*=*..*' 5.086 5.536 6.332 9% 14%
!!!!!!!!!!!!!!!>,..*%+ 1.187 1.113 1.509 -6% 36%
OTHER ASSETS 3.981 4.595 6.662 15% 45%
*3*"#'"((&*( 535.065 552.738 597.688 605.896 611.683 626.373 3% 8% 1% 1% 2%
#4"!4#4*4&( +,,- +,., +,.. +,.+& +,./& +,.0& 1 +,.,2+,,- 1 +,..2+,., 1 +,.+2+,.. & 1 +,./2+,.+ & 1 +,.02+,./ &
FINANCIAL LIABILITIES HELD FOR TRADING 32.830 37.212 51.303 55.317 57.605 59.089 13% 38% 8% 4% 3%
!!!!!!!!!!!!!6.$'1%7 /*.1($2(*& 29.000 33.166 46.692 14% 41%
!!!!!!!!!!!!!?<#.+!@#&12#%& 3.830 4.046 4.611 6% 14%
OTHER FINANCIAL LIABILITIES DESIGNATED AT FAIR VALUE THROUGH P&L 1.367 1.607 1.825 18% 14%
FINANCIAL LIABILITIES AT AMORTIZED COST 447.936 453.164 479.904 1% 6%
!!!!!!!!!!!!!/*A#&1+& =.#-)*%+.$:!0$%B& $%'!).*'1+!1%&2+,2#%& 70.312 68.180 92.503 92.503 98.978 103.927 -3% 36% 0% 7% 5%
!!!!!!!!!!!!!>,&+#-*. /*A#&1+& 254.183 275.789 282.173 316.034 338.156 354.895 9% 2% 12% 7% 5%
!!!!!!!!!!!!!/*0+!)*.2C)$+*& 99.939 85.179 81.930 -15% -4%
!!!!!!!!!!!!!?,0#.'1%$+*'!:1$01:12*& 17.878 17.420 15.419 -3% -11%
!!!!!!!!!!!!!;+<*. C%$%)1$:!:1$01:12*& 5.624 6.596 7.879 17% 19%
HEDGING DERIVATIVES 1.308 1.664 2.710 27% 63%
PROVISIONS 8.559 8.322 7.561 7.780 5.610 4.712 -3% -9% 3% -28% -16%
!!!!!!!!!!!!!@.#(1&1#%& =#. A*%&1#%& $%'!&1-1:$. #0:17$2#%& 6.246 5.980 5.577 -4% -7%
!!!!!!!!!!!!!@.#(1&1#%& =#. +$D*& $%'!#+<*. :*7$:!)#%2%7*%)1*& 299 304 350 2% 15%
!!!!!!!!!!!!!@.#(1&1#%& =#. )#%2%7*%+!.1&B& $%'!)#--1+-*%+& 243 264 291 9% 10%
!!!!!!!!!!!!!;+<*. A.#(1&1#%& 1.771 1.774 1.343 0% -24%
TAX LIABILITIES 2.208 2.195 2.330 -1% 6%
!!!!!!!!!!!!!>,..*%+ 539 604 772 12% 28%
!!!!!!!!!!!!!/*=*..*' 1.669 1.591 1.558 -5% -2%
OTHER LIABILITIES 10.094 11.099 11.997 10% 8%
*3*"#'#4"!4#4*4&( 504.302 515.263 557.630 565.370 567.818 578.488 2,2% 8,2% 1,4% 0,4% 1,9%
&564*7 +,,- +,., +,.. +,.+& +,./& +,.0& 1 +,.,2+,,- 1 +,..2+,., 1 +,.+2+,.. & 1 +,./2+,.+ & 1 +,.02+,./ &
STOCKHOLDER'S FUNDS 29.362 36.689 40.952 40.993 43.862 47.371 25% 12% 0% 7% 8%
!!!!!!!!!!!!3%'#9-*%+!E,%'F G*&*.(*& $%'!#+<*. 25.152 32.083 37.948 39.365 39.763 42.504 28% 18% 4% 1% 7%
!!!!!!!!!!!!!H%)#-*!$I.10,+*'!+# +<*!A$.*%+!)#-A$%5 4.210 4.606 3.004 1.628 4.099 4.867 9% -35% -46% 152% 19%
VALUATION ADJUSTMENTS -62 -770 -2.787 -2.787 -2.787 -2.787 1142% 262% 0% 0% 0%
NON-CONTROLLING INTEREST 1.463 1.556 1.893 2.320 2.790 3.301 6% 22% 23% 20% 18%
*3*"#''&564*7 30.763 37.475 40.058 40.526 43.865 47.885 22% 7% 1% 8% 9%
*3*"#'#4"!4#4*7 8'&564*7 535.065 552.738 597.688 605.896 611.683 626.373 3% 8% 1% 1% 2%
INCCML S1A1LMLN1 2009* 2010* 2011 2012L 2013L 2014L 2010]2009 2011]2010 2012]2011 L 2013]2012 L 2014]2013 L
!"#$%$&#& (")'&*+*,(% *"-.+$ 23.775 21.134 24.188 -11% 14%
!"#$%$&#& (")'&*+*,(% $/0$"&$& -9.893 -7.814 -11.028 -21% 41%
NET INTEREST INCOME 13.882 13.320 13.160 15.134 15.588 16.523 -4% -1% 15% 3% 6%
1*2*)$")'!"-.+$ 443 529 562 19% 6%
34(%$'.5'6%.7#'(")'8.&& .5'$"99$& (--.:"#$)'5.% :&*"; #4$'$<:*#= +$#4.) 120 335 600 179% 79%
>$$'(")'?.++*&&*."'"$#'*"-.+$ 4.430 4.537 4.560 5.062 5.315 5.421 2% 1% 11% 5% 2%
@$#';(*"& ."'7"("-*(,'(&&$#& (")',*(A*,*9$& B $/-4(";$')*C$%$"-$& D"$#E 1.544 1.894 1.479 23% -22%
F#4$% .0$%(9"; *"-.+$'D"$#E 247 295 205 19% -31%
GROSS INCOME 20.666 20.910 20.566 23.240 23.472 24.646 1% -2% 13% 1% 5%
6$%&.""$,'$/0$"&$& -4.651 -4.814 -5.311 4% 10%
G)+*"*&#%(9."'-.&#& -3.011 -3.393 -3.793 13% 12%
1$0%$-*(9."'(")'(+.%9H(9." -697 -761 -847 9% 11%
6%.2*&*."& D"$#E (")'!+0(*%+$"# -5.931 -5.200 -4.736 -5.825 -5.592 -5.257 -12% -9% 23% -4% -6%
NET OPERATING INCOME 6.376 6.742 5.879 6.232 6.176 7.284 6% -13% 6% -1% 18%
F#%.& %$&:,#().& "$#.& -739 -321 -2.109 -57% 557%
@$;(92$'I..)J*,, 99 1 0 -99% -100%
INCOME BEFORE TAX 5.736 6.422 3.770 2.187 5.991 7.070 12% -41% -42% 174% 18%
!"-.+$'#(/ -1.141 -1.427 -285 25% -80%
NET INCOME 4.595 4.995 3.485 2.241 4.773 5.584 9% -30% -36% 113% 17%
@$#'*"-.+$'(K%*A:#$)'#. "."-."#%.,,*"; *"#$%$&# 385 389 481 1% 24%
@$#'*"-.+$'(K%*A:#$)'#. 0(%$"#'-.+0("= 4.210 4.606 3.004 1.628 4.099 4.867 9% -35% -46% 152% 19%
Average 1ota| Assets S42.969 SS8.808 S71.311 464.S6S 469.002 480.266 3 2 -19 1 2
Average equ|ty 263.12S 291.S19 492.4S9 498.211 S39.266 S88.68S 11 69 1 8 8
19
EXHIBITV:RATIOS

!"#$%&'#()%*+,-,#%).#/012'13%)40#50%,610, !""#$ !"%"$ !"%% !"%!& !"%'& !"%(&

)*+,*-*./012345
Loans/1oLal AsseLs 64,69 63,98 63,76 62,96 64,11 64,99
L1u: Loans/ueposlLs 106,66 106,03 101,71 93,38 89,72 88,72
678-*.01239:012345
rovlslon/Loans 2,47 2,28 1,98 2,04 1,43 1,16
)8;872:8012345
Leverage: 1ler 1/(1oLal AsseLs- lnLanglble asseLs) 4,3 3,4 3,3 3,3 3,8 6,3
uebL/ LqulLy 1639,3
&279*9:012345
neL lnLeresL Marglng (nlM): neL lnLeresL lncome/1oLal AsseLs 2,39 2,41 2,20 2,30 2,33 2,64
8eLurn Cn AsseLs (8CA): neL Cperaung lncome/1oLal AsseLs 0,83 0,89 0,61 0,48 1,02 1,16
8eLurn Cn LqulLy (8CL): neL lncome/SLockholder LqulLy 14,34 12,33 7,34 3,97 9,33 10,27
Larnlng er Share (LS) 1,12 1,03 0,61 0,32 0,76 0,86
<.=87
rlce Larnlngs 8auo (L8) 11,30 7,40 10,90 20,01 8,34 7,57
ay ouL rauo 0,37 0,41 0,69 1,31 0,55 0,58
!"#$%&$'(")*++$, -./-0 -./10 -./20
3",4*"%5
Loans/1oLal AsseLs 39,96 39,43 39,69
L1u: Loans/ueposlLs 114,00 110,00 108,00
8CA -1,31 0,17 0,30
8CL -30,81 3,68 6,31
L8 -1,02 4,37 3,78
3",6+7$%5
Loans/1oLal AsseLs 64,36 64,07 64,27
L1u: Loans/ueposlLs 128,00 123,00 120,00
8CA -0,19 0,23 0,42
8CL -3,93 3,18 8,13
L8 -3,26 10,23 7,10
&"*8"%3",4%5
Loans/1oLal AsseLs 64,27 64,00 64,36
L1u: Loans/ueposlLs 144,00 144,00 144,00
8CA 0,02 0,08 0,31
8CL 0,37 1,24 7,21
L8 -343,33 13,89 8,49
3",9$%:$(;<")%5
Loans/1oLal AsseLs 72,93 72,78 72,94
L1u: Loans/ueposlLs 133,00 136,00 134,00
8CA -0,14 0,07 0,40
8CL -2,73 1,37 8,13
L8 -3,77 16,46 6,34
3",9$%=",7",>6)%5
Loans/1oLal AsseLs 36,06 36,06 36,97
L1u: Loans/ueposlLs 123,00 122,00 122,00
8CA 0,32 0,48 0,38
8CL 8,66 12,70 13,39
L8 14,31 10,09 8,33
33?@
Loans/1oLal AsseLs 62,96 64,11 64,99
L1u: Loans/ueposlLs 101,71 93,38 89,72
8CA 0,61 0,48 1,02
8CL 3,97 9,33 10,27
L8 11,30 7,40 10,90
=697$)%A*,",9*6)$%5
Loans/1oLal AsseLs 39,69 39,92 40,38
L1u: Loans/ueposlLs 107,74 106,64 106,24
8CA 0,26 0,36 0,42
8CL 7,30 9,71 10,70
L8 12,43 9,64 8,28
20

EXHIBITVI:DIVIDENDDISCOUNTMETHOD

!"#$%&'(%)*+,#-'(#./0
!"#$%%&' (%%)* +#,-%,.#-,/# -
0123%
%425 6**& -
0123
%425 6**7 -
0123%
%425 6**' -
0123
%425 6**8 -
0123%
%425 6**9 -
0123
%425 6**: -
0123%
%425 6**; -
0123
%425 6*)* -
0123%
%425 6*)) -
0123
%425 6*)6
7,10 33,33 16,32 20,39 31,06 -9,10 -36,12 29,33 -1,29 -20,23 -0,86
<=>? =@%#AB!?+
C2D-EF"G-H(-EI
8f 3,10
8eLa 1,24
8m 7,10
rlma de mercado=(8m-8l) 2,00
C2 9J':K
4!.!4#L4%><M#N# 6**;O 6*)*O 6*)) 6*)6# 6*)&# 6*)7# LPQH RQPSTU QVT2
ulvldend per Share 0,42 0,42 0,42 0,42 0,42 0,50 2.923,83 0,03
number of Shares 3.747,97 4.490,91 4.903,21 5.067,46 5.406,98 5.677,33
ulvldends: 1.574,15 1.886,18 2.059,35 2.128,34 2.270,93 2.838,67
LW.%=@%"".,
ulvldends ulscounL llow 9.744,29
8esldual value 63.891,81
LCCnCMlC vALuL 73.636,10
!"#"$%&$'(%)'*"+,-%. /0012 /0302 /033 /03/4 /0354 /0364
7 /0308/001 7 /0338/030 7 /03/8/033 4 7 /0358/03/ 4 7 /0368/035 4
!"#$ &'(%)*#$"%+$,-"%.&/01 12,73 7,56 6,68 6,43 6,32 6,49 -41% -12% -4% -2% 3%
2#$3"4%5#6,4#7,8#9:'%.;,77%&/01 47.712 33.951 32.753 32.584 34.172 36.846 -29% -4% -1% 5% 8%
<"4%=::3%>#7?"%6"$ @*#$"%.&/01 7,83 8,17 8,35
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