Merger Agreement

Banco Bilbao Vizcaya Argentaria SA
10 March 2000


                         BBVA TO LEAD THE FIRST MEXICAN
                                 FINANCIAL GROUP

BBVA  and  Grupo  Financiero Bancomer have reached an agreement to  merge  their
operations in Mexico. BBVA will reach up to a 40% participation in the new Group
and  will  become the main shareholder and manager of the top Mexican financial
group with a market share of more than 26%.

BBVA-Bancomer presents several great opportunities of value creation  which 
will be  derived  from the profitability of a clientele of over 5 million 
customers. This  process  implies  strong synergies in traditional business  and
 a  strong commitment toward e-business and a quantum leap in this field.

The  new  Group reasserts its solvency with a contribution of equity  surpassing
$1.2  Billion and substantially elevates its provisioning levels to  reach  a
100%  coverage ratio as well as the possible contingencies that are derived from
Fobaproa (loss-sharing).

After  this operation, BBVA, situates itself as the leader of the Latin American
banking  sector  with  a  market share in deposits of  more  than  9% (14% in
Spanish-speaking countries) and reinforces its position as the  absolute leader
in the Latin American private pension business with a third of the market.

The agreement is subject to the approval from the Mexican, Spanish,  and  other
authorities.

As  part  of  the  agreement reached between BBVA  and  Grupo  Financiero      
Bancomer  (GFB)  to merge their operations in Mexico, the Spanish  entity      
will  become  the  controlling  and managing  shareholder  of  a  Mexican      
Financial  Group  (called  BBVA-Bancomer)  with  total  assets  of  $36      
Billion,  loans  of $35 Billion and total deposits of  $26  Billion.  Net      
attributable  profit for 1999 totalled $421 million and operating  income      
of $1,1 Billion.
                                                                               
BBVA-Bancomer activities will be focused on banking, pensions,  insurance      
and e-business.
                                                                               
BBVA-Bancomer will become the leader in the Mexican banking  sector  with      
a  26%  deposit  market share and the first private  financial  group  in      
Latin America, based on deposits.
                                                                               
With  this  operation  BBVA  will  incorporate  into  its  Pension  Group      
division  Afore  Bancomer,  the prime pension  fund  management  firm  in      
Mexico  with  a market share surpassing 23% and 2.5 million  subscribers,      
the  leading  private  pension fund manager in Latin  America,  based  on      
number of subscribers.
                                                                               
Afore  Bancomer  will garner the new Group a privileged position  in  what     
has  been  described by members of the investment community as  the  most      
advanced  and dynamic pension system in the Latin American region.  Afore      
Bancomer  reached net attributable profit of $54 million and  an  ROE  of      
28%.
                                                                               
GFB  also controls Seguros Bancomer, the leading company in bancassurance in 
the Mexican market. Seguros Bancomer obtained net attributable profit of $31
million in 1999 and an ROE of 48%.
                                                                               
Following  this  operation  BBVA will have over  4  million  new  banking      
clients and 2.5 million additional pension fund subscribers, creating a client
base of more than 34 million on a global level.

THE NEW FINANCIAL GROUP PRESENTS
GREAT OPPORTUNITIES FOR VALUE CREATION
       
The experience of BBVA in Mexico, with the management of BBV Probursa since
1995, provides a deep knowledge of the Mexican banking market and its potential.
In this period BBV Probursa has successfully developed a model of retail banking
that has allowed it to increase its market share from 2.6% to 7.5% over the past
5 years.
     
The merger between BBV Probursa and GFB presents a magnificent opportunity to
generate value for the shareholders of both of these entities. The new Group has
the best and most recognized retail banking franchise in the country, with the
most extensive banking and pension fund client base, with a leading      
management team and a business model, that has proven to be successful, and has
been developed with one of the most advanced technological platforms.
       
The combination of both entities will allow significant cost savings (systems,
office models, free up space, alternative channels, advertising, etc) and
revenue synergies (cross-selling, reduction in financing costs, etc). As a
result of this, a strong improvement in efficiency can be expected in the new
Group and an important advance in its profitability.
       
Additionally, the merging entities set the development of e-business as a key
goal, both in e-banking and e-commerce. The new Group will develop a strategy in
order to position itself as the leader in these businesses in Mexico.
       
From a financial point of view, the deal entails an important capitalization of
the newly formed group and allows an accelerated  provisioning  reaching  a 
100%  coverage  level   for   non performing  loans  as  well as 100% coverage
in  Fobaproa  (loss-sharing). BBVA-Bancomer  will be the first major Mexican
banking  group  to  attain 100%  coverage of both items, which without a doubt
will be  welcomed  by the financial markets.

THE TRANSACTION

As  part  of  this operation, BBVA will make a capital increase  of  $600      
million  in  BBV-Probursa.  Following this, BBV-Probursa  will  merge  with   
GFB   and  so  BBVA  will  hold  approximately  23%  of  the  new   BBVA      
Group-Bancomer.  This  shareholding will allow  the  BBVA  Group  to  take     
management  control of the new entity based on the agreements established      
with  the  current  shareholders. The Board of  Directors  will  have  15      
members, 8 of them from BBVA.
                                                                               
Additionally,  BBVA  will  subscribe a  $600  million  subordinated  bond      
mandatorily,  convertible in 2002, 2003 and 2004. The  conversion,  which    
will  be done at market price at time of execution will raise BBVA's stake     
in the new Group within the 30% range.
                                                                               
BBVA's  stake in the new Group will reach approximately 40% in the medium      
term.

BBVA-LEADER IN THE LATIN AMERICAN
FINANCIAL SECTOR
 
BBVA  will  lead  the charge in the Latin American banking sector  with  a     
franchise  garnering  more than 9% market share (14% in  Spanish-speaking      
countries) and more than 10 million banking clients.
                                                                               
This  operation  confirms its leadership position  in  the  pension  fund      
management  business in Latin America with more than 12  million  clients      
and one-third of the market. BBVA manages the first Latin American pension fund
manager based on number of affiliates (Bancomer) and the largest pension fund
manager based on total funds managed (Provida). Additionally, BBVA will       
control the leading entities in the three most important private pension markets
in Latin America: Chile, Mexico, and Argentina.

MEXICO: ECONOMY AND FINANCIAL SECTOR
                                      
The  operation will place BBVA - Bancomer as the leader in the  financial      
sector of the vigorous Mexican market. This market is attractive for  its      
size,  its  population  of 100 million inhabitants, demographics  profile      
and  low  bancarization  rate.  Therefore, it  presents  enormous  growth      
potential.
                                                                               
Mexico  is  also considered one of the most promising countries  from  an      
economic  standpoint within the region. In 1999 the Mexican economy  grew      
3,7% in a generalized recessionary environment in Latin America.
                                                                               
The  political and economic reforms put forth during the last  years  and      
the  improving fundamental macroeconomic variables situate  Mexico  in  a      
favourable position. Its increasing ties with the U.S. through NAFTA,  is      
a determining factor in its future evolution.
                                                                               
Current  estimates for GDP growth in Mexico in the next  three  years  is      
estimated  to be 4% annually and a reduction in the inflation  rate  from      
12.3% in 1999 to the 8% range.
                                                                               
The  positive  evolution  of  the Mexican  economy  has  been  explicitly      
recognized  by  Moody's  in their upgrading Mexico  to  investment  grade      
status on March 7 of this year.
                                                                               
Within  this  context  of  strong growth, the  outlook  for  the  Mexican      
banking   sector   is   excellent.  After   suffering   the   long-winded      
restructuring  period  resulting  from  the  1994  banking  crisis,   the      
fundamental changes of the last months as well. as those forecasted  for the
near future support the expectations for  a  positive reversal of trends.
                                                      
By  the  first  semester  of 2000, the Mexican  banking  sector  will  be      
adequately  provisioned and recapitalized, it will have new and  rigorous      
guidelines for capital and loan loss provisioning, and new laws  expected      
to   be   enacted  will  speed  up  and  strengthen  enforceability   and      
collaterals  and allow for improved management of recoveries.  All  these      
changes  anticipate a boost for loan activity in the country and  a  very      
favourable impact on the banking sector.

                                                  (December 1999)

                         MEXICAN FINANCIAL GROUPS

Millions of US $               ASSETS         DEPOSITS     BRANCHES
GF BANCOMER-BBV PROBURSA       36,463          26,484       1,994
GF BANACCI                     32,600          21,968       1,279
GF SERFIN (1)                  19,242          14,389         572
GF BITAI                       13,400           9,379       1,526
GF NORTE                       12,147           8,947         469
GF SANTANDER MEXICANO           7,537           5,839         360

(1) Data as of September 1999

                                                  (January 2000)

         MEXICAN PENSION FUND MANAGEMENT COMPANIES (AFORES)

Millions of US $          TOTAL ASSETS            MARKET SHARE
                             MANAGED                  %
BANC0MER                     2,680                  23,1
BANAMEX - AEGON              1,873                  16,2
PROFUTURO GNP                1,110                   9,6
GARANTE                      1,038                   9,0
SANTANDER MEXICANO           1,001                   8,6
BITAL                          961                   8,3
                                                                         

Balance Sheet 1999

(Mill, US$)                     GF Bancomer    GF.BBV-Probursa   Proforma

Cash and Marketable Securities      5,731           1,848          7,579

Total Leading (Gross)              19,513           5,823         25,336
Total Lending (ex-Fobaproa)        14,637           3,299         17,936
Fobaproa Loans                      4,876           2,524          7,400
Total Lending (net)                17,912           5,729         23,641

Other assets                        4,064           1,187          5,251
Total assets                       27,706           8,765         36,471
Deposits                           19,571           6,911         26,482
Due to banks & others               3,917             919          4,836
Subordinated Debt,                    759              33            792
Other Liabilities                     538             220            758
Total Liabilities                  24,785           8,083         32,869
Net Worth                           2,921             681          3,602
TL + Net W                         27,706           8,765         36,471
                                                                         

Income Statement 1999


(Mill, US$)                     GF Bancomer    GF.BBV-Probursa   Proforma

Net Interest Income                 1,774            468           2,243

Commissions                           619            130             750
Trading Income                        153             33             186
                                                             
Ordinary Margin                     2,547            631           3,178

Operating Costs                     1,544            489           2,033

Operating Margin                    1,003            142           1,145

Loan loss provisions                  544             64             608
Other Income                          (68)           (20)            (89)
Pre-tax Earnings                      390             58             448
Taxes                                 (30)             2             (27)
Net Profit                            361             61             421



Income Statement GF Bancomer + GF.BBV Probursa

Mill (US $)                          1999            1998       % Change

NET INTEREST INCOME                 2,243           1,936         15,9
Fees                                  750             599         25,1
Trading Income                        186             (32)         N,S,
  
ORDINARY MARGIN                     3,178           2,503         27,0
OPERATING COSTS                     2,033           1,802         12,8
OPERATING PROFIT                    1,145             700         63,5
Loan Loss Provisions                  608             434         40,0
Other                                 (89)           (243)       (63,5)
PRETAX INCOME                         448              23          N,S,
INCOME TAX                            (27)            115       (123,6)
NET PROFIT                            421             138        205,0


          BBVA IS NOW THE LEADER IN LATIN AMERICAN BANKING
                              M.M. EUR.
COUNTRY       ENTITY       DEPOSITS   DEPOSITS   RANKING   BRAN    EMPLOYEES
                                      SHARE                CHES
ARGENTINA    B.FRANCES       5,87      8,1        2nd       329     4,876
BRASIL       BBV BRASIL      1,38      1,1       13th       226     4,958
CHILE        BANCO BHIF      2,21      5,0        7th        62     1,803
COLOMBIA     B.GANADER0      1,47      9,5        5th       308     5,832
MEXICO       BBVA-BANCOMER  26,50     26,1        1st     1,994    32,334
PERU         B,CONTINENTAL   1,97     16,6        3rd       180     2,832
PANAMA       BBVA PANAMA     0,44      9,0       10th         7       195
PARAGUAY     BEX PARAGUAY    0,05      6,0        3rd         8        75
P,RICO       BBV P, RICO     2,36      8,8        4th        65     1,230
URUGUAY      FRANCES Y BEX   0,39      4,3        6th        12       242
VENEZUELA    B, PROVINCIAL   2,83     19,7        1st       409    11,062
TOTAL                       45,46      9.1        1st     3,597    65,439


                BBVA IS THE PRIME LEADER IN PENSIONS
 
  NAME (Country)         %       TOTAL FUNDS    NO       %       RANKING
                       STAKE      MANAGED    SUBSCR,   MARKET     FUNDS
                                  (M EUR)     (000)    SHARE     MANAGED
PROVIDA (Chile)         50,7       10,902     2,427     32,2       1st
CONSOLIDAR (Argent.)   100,0        3,173     1,370     19,0       1st
BANCOMER (Mexico)       51,0        2,455     2,505     23,1       1st
PROFUTURO (Mexico)      44,6        1,070     2,024      9,6       3rd
PREVISION BBV (Boliv,)  90,0        1,058       299     56,1       1st
FUTURO (Bolivia)        70,0        1,058       253     43,9       2nd
PORVENIR (Colombia)     20,0          974       892     24,1       1st
HORIZONTE (Peru)        75,2          589       572     25,0       2nd
HORIZONTE (Colomb,)     69,8          577       538     13,8       3rd
COLFONDOS (Colomb.)     35,0          192       811     15,7       3rd
PORVENIR (El Salvad.)   35,0           42       168     21,8       2nd
PREVISION (El Salvad)   51,0           36       163     18,8       3rd
MAXIMA (El Salvador)    50,0           30       111     15,0       4th
    TOTAL                          22,162    12,303     32,4       1st