1st half 2005 results

Banco Bilbao Vizcaya Argentaria SA
26 July 2005

January-June 2005 Results



BBVA's net attributable profit rises 20.1% to €1.8 billion



•        Net attributable profit for the quarter was a record €998m, an
increase of 21.8%



•         Earnings per share (EPS) rose 18.7% in the first half, return on
equity (ROE) increased to 35.6% and the first interim dividend is 15% higher



•         Driven by higher revenues, operating profit grew faster, rising 17.7%
to €3.2 billion



•         All margins grew strongly, supported by a sharp increase in activity
and more favourable spreads. Net interest income grew 11.1%, core revenues grew
10.9% and ordinary revenues grew 11.8%



•         The cost/income ratio improved from 44.7% to 43.4%. Including
amortisation, it improves  2.1 percentage points to 46.7%.



•         In Retail Banking in Spain and Portugal, lending and customer funds
grew faster at 20.5% and 10.7%, respectively. Operating profit increased 13.1%
and net attributable profit was up 12.5%.



•         The Wholesale and Investment Banking Area increased operating profit
17% and net attributable profit by 29.1%



•         The Americas Area maintained its high rate of business growth.
Operating profit increased 27.7% and net attributable profit was 62.7% higher.



•         Mexico lifted operating profit 38.9% and its net profit rose 55.7%
with strong growth in the more profitable businesses



•         The non-performing loans ratio continued to fall. It now stands at
1.01% (1.32% a year earlier) and coverage rose from 206.5% to 240.5%



•         BBVA's capital base remains sound with a BIS ratio of 12.2% and core
capital at 5.8%





BBVA increased the rate of business and revenue growth and achieved net
attributable profit of €1.81 billion in the first half of 2005. This is 20.1%
higher than last year. At the end of the first half year BBVA's return on equity
(ROE) stands at 35.6%. Earnings per share (EPS) increased 18.7% and the first
interim dividend is up 15%. Net attributable profit in the second quarter was
€998m (up 21.8%). This is a new group record.



The income statement reflects the solid performance of recurrent margins on
positive development of revenues and operating profit. The latter grew faster,
at 17.7%, and is the key factor behind the first half results. BBVA once more
strengthened fundamentals. Non-performing loans fell to 1.01% (from 1.32% a year
earlier) and coverage rose to 240.5% (previously 206.5%). The cost/income ratio
improved from 44.7% to 43.4% (from 48.8% to 46.7% including amortisation) and
capital adequacy strengthened. The BIS ratio stands at 12.2% and core capital is
5.8%.



The level of activity and the group's results in the second quarter of 2005
confirm the positive trend noted in the first quarter. There was strong growth
in business activity in Spain and the Americas and revenue growth was higher. As
a result, there was a substantial improvement in all margins and in net
attributable profit. All indicators of group profitability, risk quality,
capital adequacy and efficiency were higher.



At the end of June, BBVA's total assets had grown 15.5%, lending to customers
was up 22.7% and total customer funds 18.6%. There were double-digit increases
in all recurrent margins.



Taken as a whole, the first-half figures show that BBVA is advancing in its
strategy of profitable growth based on dynamic commercial activity in its main
retail markets (Spain and the Americas). They also reveal the favourable
activity and results of its Wholesale Banking and Investment Area.



During the first half, the group concluded the acquisition of Laredo National
Bancshares, reinforcing BBVA's franchise in the USA.



In the Spanish market the group added 77 branches under its network expansion
plan, which has thus grown from 3,371 to 3,448 outlets.



Quarterly financial information complies with 'Circular 4/2004' of the Bank of
Spain and with the International Financial Reporting Standards (IFRS) and data
is reported on a uniform basis. The most relevant aspects of the group's
financial status in the first half are summarised below:



•          In the second quarter of 2005 the BBVA group obtained net
attributable profit of €998m. This is the highest amount ever achieved by the
group in a single quarter and is 21.8% more than the same period last year. As a
result, profit in the first half came to €1.81 billion (a year-on-year increase
of 20.1%), earnings per share increased 18.7% and ROE rose to 35.6%.



•          Driven by higher revenues, operating profit in the half-year grew
faster at 17.7% (15.0% in the first quarter) and came to €3.2 billion. This
positive performance was the determining factor behind the higher profit.



•          Net interest income rose 11.1% (6.8% in the first quarter) and 11.7%
if dividends are excluded. The upward trend is the result of notable increases
in business activity in Spain and the Americas, and interest spreads that were
more favourable than in previous periods.



•          Net fee income and insurance income rose 10.5% with increases that
were higher than the previous quarter in all business areas. Net trading income
grew 20.9%. As a result, ordinary revenues grew 11.8% in the first half,
compared to 8.4% in the first quarter. Net sales of non-financial activities
also performed well.



•          Operating costs including amortisation increased 7.2%. On a
comparable basis (ie, excluding Laredo National Bancshares, Hipotecaria Nacional
and Valley Bank) the increase was 5%.



•          The cost/income ratio improved to 43.4% in the first half compared to
44.7% in the same period last year. Including amortisation, the ratio is 46.7%
and the year-on-year improvement is 2.1 percentage points.



•          The sharp increase in customer lending and lower non-performing loans
(NPLs) resulted in a further improvement in the NPL ratio to 1.01% at the end of
June (1.32% at 30-Jun-04). At the same time coverage rose to 240.5% (206.5% a
year earlier).



•          At 30-Jun-05 the group's capital base remained sound with the BIS
ratio at 12.2% and core capital at 5.8%. Without the Laredo acquisition core
capital would be 6.1%.



•          On July 11th a first interim dividend of €0.115 per share was paid
against 2005 results. This is an increase of 15% over the first interim dividend
paid in 2004.



•          In the Retail Banking Area in Spain and Portugal, lending and
customer funds grew faster compared to March. Lending grew 20.5% (with a growing
percentage of SME finance) and customer funds increased 10.7%. This led to a
7.5% increase in ordinary revenues (6.1% in the first quarter). In year-on-year
terms, operating profit grew 13.1% and net attributable profit grew 12.5% to
€793m.



•          In the Wholesale and Investment Banking Area overall operating profit
grew 17% and 20.5% in wholesale banking alone (corporate and institutional
customers). As loan provisioning requirements were lower than last year, net
attributable profit increased 29.1% to €280m.



•          The Americas Area maintained the high rate of growth of recent
quarters and the main margins on the income statement grew faster year-on-year.
Net interest income rose 25%, operating profit increased 27.7% and net
attributable profit grew 62.7% to €823m. In a like-for-like comparison based on
the same units, operating profit grew 22.9% and attributable profit 56.3%.



•          Mexico recorded strong growth in the more profitable business lines
(consumer finance and credit cards in terms of lending, and transaction accounts
in terms of customer funds). Thus net interest income grew 34.4% in the first
half. Following the increase in net fee income and especially in net trading
income in the second quarter, cumulative operating profit to June grew 38.9%.
Net profit increased 55.7% (47.1% excluding Hipotecaria Nacional).






                      This information is provided by RNS
            The company news service from the London Stock Exchange