Interim Results

Banco Bilbao Vizcaya Argentaria SA
26 July 2006



                              First half results 2006


     BBVA lifts net attributable profit 20.2% to €2,179m, without extraordinary
                                   capital gains


     The Group takes its strategy of profitable growth furtherwith the purchase
       of Texas Regional Banc and State National Banc, while transforming its
                        commercial banking networks in Spain


  • Net attributable profit rose 84% to €3,336m, including capital gains on
    the divestment of holdings in Repsol, BNL and Banc Internacional d'Andorra


  • The Group's return on equity (ROE) rose to 35.8% (45.2% including one-off
    operations)


  • Revenues grew faster and operating profit increased 24.8% (40.9% with the
    Repsol capital gain)

  • Cost/income ratio, including depreciation, continues to improve and now
    stands at 44.3% (41.4% with the Repsol capital gain) compared to 46.4% at
    June 2005


  • Non-performing loans fell further, to 0.82% (1.01% a year earlier) and
    coverage has increased to 275.1% (240.6% in June last year)


  • Following the BNL and Repsol divestments, core capital rose to 6.0%, Tier
    I capital was 7.6% and the BIS ratio came to 11.3%


  • In Retail Banking in Spain and Portugal, lending grow at 18.9% and
    customer funds at 8.6%. Operating profit rose 13.2% and net attributable
    profit increased 11% to €717m


  • Wholesale Businesses had another record quarter. First half operating
    profit increased 29.6% and net attributable profit jumped 47.9% to €623m


  • In Mexico & USA, lending (up 25.4%) and customer funds (up 15.5%)
    continued strong. Operating profit climbed 54.9% and net attributable profit
    was up 43.4% to €825m


  • South America's operating profit rose 51.1% and net attributable profit
    37.5% to €281m





    In the second quarter, BBVA maintained strong growth in revenues, business
    activity and recurrent earnings. Net attributable profit for the first half
    came to €2,179m, an increase of 20.2% compared to the same period last year.
    The Group concentrated on its profitable growth strategy, achieving
    important advances in all margins and lifting operating profit to 24.8%.
    Adding the capital gains on divestment of holdings in Repsol, BNL and Banc
    Internacional d'Andorra, net attributable profit shot up to €3,336m (an
    increase of 84%).


    BBVA once more strengthened fundamentals. Earnings per share grew 20.2%
    without one-off items) and return on equity came to 35.8% (45.2% including
    capital gains). The cost/income ratio improved from 46.4% to 44.3% (41.4%
    with Repsol) and the NPL ratio fell from 1.01% to 0.82%. Coverage is now
    275.1% (240.6% in June 2005). These results place the Group in the leading
    edge of large international banks in profitability, efficiency and risk
    profile. In June the Group announced the purchase of two US banks (Texas
    Regional and State National) and more recently it unveiled an extensive
    reform of its commercial banking networks in Spain.


    First-half results demonstrate BBVA's ability to generate recurrent revenues
    and profits that outpace the sector average. They also show it is constantly
    committed to improving efficiency and controlling risk and has a disciplined
    approach to solvency. Its ROE is second to none among European banks.


    The Group recently bought two new banking franchises in Texas, one of the
    fastest growing markets in the USA, demonstrating its successful acquisition
    strategy, adopted a few years earlier.


    In June it announced the purchase of Texas Regional and State National for
    $2.6 billion (€2,099m). It financed these operations from internal funds
    obtained on divestment of holdings in Repsol and BNL. The new additions,
    together with Laredo National Bank (acquired in 2005), make it one of the
    top banks in Texas.


    BBVA expects to conclude these operations at the end of this year or early
    next year. It thus completes its banking strategy in Texas and shares up the
    other businesses that make up its US franchise. The latter include Bancomer
    Transfer Services (BTS), BBVA Bancomer USA in California, BBVA Puerto Rico
    and BBVA Finanzia USA.


    BBVA recently revealed the first step in its transformation plan announced
    at the last AGM, launching a project to rebuild its commercial banking
    networks in Spain. The plan has three goals: to bring decisions closer to
    customers, to simplify the bank's intermediate and central organisation and
    to strengthen commercial banking management.


    In the second quarter of 2006, the BBVA Group generated record profits (even
    if extraordinary operations are excluded). Business activity continued at
    high levels in all areas, leading to elevated recurrent earnings and new
    improvements in efficiency, profitability and risk quality.


    The most relevant financial aspects of the Group's performance and strategy
    in the second quarter and first half of 2006 are summarised below:


  • In the second quarter of 2006, net attributable profit came to €2,316m. If
    the one-off capital gains associated with BNL, Repsol and Andorra, together
    with the extraordinary tax charge of €1,157m, are excluded, profit comes to
    €1,159m. This is 16.1% higher than the €998m obtained in the second quarter
    of 2005 and sets new quarterly records for profit and all other revenue
    lines on the income statement.


  • The total net attributable profit for the first half was €3,336m and,
    excluding one-offs in the second quarter, to €2,179m. The latter figure
    represents an increase of 20.2% over the €1,813m generated in the first half
    of 2005. Earnings per share came to €0.98 (€0.64 without one-offs), compared
    to €0.53 in the same period of 2005. ROE rose to 45.2% (35.8% without
    one-offs), against 36.0% in the first half of 2005.


  • Operating profit continued to rise in the first half to €4,575m. The
    year-on-year increase was 40.9% and if the capital gain from the sale of
    Repsol are excluded, the increase is 24.8% (21.9% at constant exchange
    rates).


  • Ordinary revenues grew 28.9% (20.4% without the Repsol capital gains) with
    rises in all revenues lines. Net interest income was up 19.7%, supported by
    higher volume and favourable spreads. Net fee income and insurance increased
    18.1%.


  • Operating costs grew at a slower pace (14.3% including depreciation and
    11.6% at constant exchange rates).


  • As a result, the cost/income ratio including depreciation improved to
    41.4% (44.3% without the Repsol capital gain), compared to 46.4% in the
    first half of 2005. Improvement occurred in all business areas.


  • The drop in non-performing loans (NPLs), combined with higher lending,
    meant a further improvement in the NPL ratio to 0.82% at 30-Jun-06 (1.01% a
    year earlier). This, together with the increase in generic provisioning due
    to higher lending, brought the coverage ratio to 275.1% (240.6% at
    30-Jun-05). Generic provisions now stand at €4,305m, compared to €3,445m at
    30-Jun-05.


  • The conclusion of the BNL and Repsol divestments lifted the Group's core
    capital at the end of June to 6.0% (5.6% at 31-Mar-06). Tier I was at 7.6%
    and the BIS ratio 11.3%.


  • On 10th July a first interim dividend of €0.132 per share was paid against
    2006 results. This is an increase of 15% over the first interim dividend
    paid in 2005.


  • Lending in Retail Banking in Spain and Portugal continued to grow (18.9%
    year-on-year) and customer funds were up 8.6%. Spreads continue to improve
    and net fee income and insurance revenues rose 12.8%. This led to a 9.6%
    rise in ordinary revenues and, following the moderate increase in costs,
    operating profit increased 13.2%. Net attributable profit grew 11.0% in the
    first half to €717m.


  • The strength of the Wholesale Businesses Area was demonstrated by record
    ordinary revenues, operating profit and by net attributable profit in the
    second quarter. In the first half ordinary revenues increased 25.6%,
    operating profit climbed 29.6% and net attributable profit rose 47.9% to
    €623m.


  • In the Mexico & USA area, business activity continued to grow strongly
    year-on-year (lending was up 25.4% and customer funds up 15.5% in local
    currency terms). This carried over to revenues. Net interest income rose
    29.6% at constant rates; net fee income and insurance grew 23.0% and
    ordinary revenues increased 30.2%. Revenues outgrew costs, so operating
    profit surged 45.8% (up 54.9% at current exchange rates) and net
    attributable profit climbed 35.0% to €825m (up 43.4% at current exchange
    rates).


  • Higher business volumes in South America, where lending grew 29.5% and
    customer funds were up 19.0% at constant exchange rates, resulted in higher
    revenues. Net interest income increased 25.9% and net fee income and
    insurance grew 15.2%. Higher net trading income, boosted operating profit
    45.1% (51.1% at current exchange rates) and net attributable profit rose
    33.4% to €281m (an increase of 37.5% in euros).



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