Corporate and investment banking

This unit coordinates the origination, distribution and management of a complete catalog of corporate and investment banking products (corporate finance, structured finance, structured trade finance, equity and debt capital markets), global trade finance and global transaction services. Coverage of large corporate customers is specialized by sector (industry bankers). This business model allows BBVA to consolidate the strong positioning of C&IB in Spain and Latin America; at the same time, a selective customers attraction approach is being developed in Europe and Asia.

Recurrent revenues have performed particularly well in a context of reduced investment. Net interest income grew by 12.1% in 2010 and as a percentage of average total assets it was 1.66% at the close of the year, compared with 1.27% at the end of 2009. Net fees increased by 15.7% to €351m in the same period. As a result, gross income grew by 14.2% in the area to €916m, and the operating income was up 15.0% to €765m. Net attributable profit increased by 20.4% to €506m from €421m in 2009.

The activity of the Structured Finance unit has consolidated BBVA as one of the top entities in the business across Europe, the Americas and Asia. Related to the Energy sector, BBVA has remained active in renewable energies in all the geographical areas in which it operates. It has structured and led operations in the solar thermal, wind power and gas sectors. In the gas sector it has participated in Nordstream I, the most extensive operation undertaken in Europe, which consisted in the construction of a gas pipeline between Russia and Germany. In transport infrastructure, BBVA once more had a leading position in the financing of major projects in Australia, Portugal, Spain and France. The Bank has also exported its experience in public-private partnership models to the field of social infrastructure. The Americas closed a very successful year, particularly with operations such as Long Beach Court House and Hydrochile. In the United States, BBVA is also leader in the number of wind-power operations, with a total of nine.

In Structured Trade Finance, the first deal with Sinosure coverage (the China Export and Credit Insurance Corporation) was signed with the participation of CNCB. BBVA has been the first Spanish bank to achieve this. The first transactions have also been concluded in the new Frankfurt office. Major operations in Mexico include the financing of capital goods to develop the electrical power plant in Manzanillo and to extend the Volkswagen plant in Puebla. Finally, for the second year in a row BBVA received the award for the best bank in Trade Finance in Latin America from the three most important publications in the sector: Trade Finance Magazine, Global Trade Review and Trade & Forfaiting Review. According to Dealogic, the Group once more ended the year in first place by number of deals at a global level.

Corporate Finance has participated in leading advisory operations. Among these was the sale of Endesa Cogeneración y Renovables to Enel Green Power, considered one of the most important deals in Spain in 2010, and the acquisition of Talecris by Grifols, the most important cross-border transaction this year with a Spanish buyer. The unit closed 2010 in a leading position in the Spanish ranking by number of deals announced (14), according to Thomson Reuters.

In Equity Capital Markets the reduced Spanish market activity in 2010 has been offset by participation in international operations. Outstanding operations have been the initial public offering of Enel Green Power, the biggest in EMEA (Europe, the Middle East and Asia) since 2008; and OHL Mexico, the biggest in the country for the last ten years. Following these and other operations, BBVA has won the first place in the Thomson Reuters Mexican equity capital markets ranking.

BBVA was very active in Debt Capital Markets in 2010, and closed the year in top positions in both Spain and in Latin America.

In bonds, BBVA consolidated its leading position in the Spanish market in 2010, and repeated its number one spot both in terms of volume and number of operations (according to Dealogic and Thomson Reuters). At the close of the year, the Group had a market share of 10.8% in volume placed, over €15,000m through 69 operations by financial, institutional and corporate issuers. Specifically, there were three syndicated transactions with the Kingdom of Spain, one of which received an award from Credit Magazine as Best Euro Sovereign Bond. There has also been excellent activity in Europe, the United States and Latin America. In Mexico, a new asset class has been established for placing dollar-denominated bonds with the first issue of Industrias Peñoles stock-market certificates. As a result of these operations and other transactions, BBVA has achieved a leading position in the Loan Pricing Corporation debt capital markets ranking for Mexico.

In syndicated loans, BBVA has led the financing of large Spanish and international groups. In Spain, they include the loan arranged for Telefónica to finance the acquisition of a stake in Vivo held by Portugal Telecom, the underwriting of a loan for Red Eléctrica to purchase the electricity networks of Endesa, FCC and Iberdrola, and the finance for Grifols to purchase Talecris. As a result, the Bank has ended the year in first place in the ranking of financial institutions active in the Spanish market (according to Dealogic and Thomson Reuters). In the international market, BBVA has been present at the highest level in the operations of groups such as GDF Suez, Anglo American and Vodafone. At the same time, it has increased its presence in Asia and led the syndicated financing of Hutchinson Wampoa, Huawei, Hong Kong Electricity and China Light Power. It has also closed the biggest syndicated loan deal in Mexico for Pemex, at US$ 3,250m. This puts BBVA at the top of the ranking in this product in the country (according to Loan Pricing Corporation).

Finally, within its strategic cross-country and customer focus approach, the Global Transaction Services unit has continued to develop products and solutions best suited to covering the transaction needs of customers other than individuals: liquidity management, payment and collection cash flows, working capital requirements, custody services, and securities clearing and settlement. It has also signed an agreement with CNCB for the provision of transactional services to companies and corporations in Spain.

Project Finance, Structured Trade Finance y Corporate Finance
Most significant transactions in 2010

Equity Capital Markets, Bonds and Syndicated Loans
Most significant transactions in 2010

C&IB. Ranking 2010

Product Location Ranking Role Source Criteria
Syndicated loans Spain 1st Bookrunner Dealogic/Thomson Reuters Volume and number of transactions

Latin America 1st Bookrunner Dealogic Volume

Mexico 1st Bookrunner Loan Pricing Corporation Volume
Fixed-income origination Spain 1st Bookrunner Dealogic/Thomson Reuters Volume and number of transactions

Mexico (1) 3rd Bookrunner Bloomberg Volume
Project Finance Spain 2nd/3rd Mandated lead manager Dealogic 2nd Number of transactions/ 3rd volume

Europe 2nd Mandated lead manager Dealogic Number of transactions

Latin America 3rd Mandated lead manager Dealogic Number of transactions

Mexico 3rd Mandated lead manager Dealogic Number of transactions

Global 3rd Mandated lead manager Dealogic Number of transactions

Global (PFI/PPP) (2) 4th Mandated lead manager Dealogic Number of transactions
Equity capital markets Spain 4th Bookrunner/Global coordinator Dealogic Volume

Mexico 1st Bookrunner/Global coordinator Thomson Reuters Volume
Corporate finance Spain 3rd Financial advisor Thomson Reuters Number of transactions
Trade finance Latin America 1st/2nd Mandated lead manager Dealogic 1st Number of transactions/ 2nd volume

Asia-Pacific (3) 1st Mandated lead manager Dealogic Volume and number of transactions

Western Europe 1st/3rd Mandated lead manager Dealogic 1st Number of transactions/ 3rd volume

BRIC 1st Mandated lead manager Dealogic Volume and number of transactions

Global 1st/3rd Mandated lead manager Dealogic 1st Number of transactions/ 3rd volume
(1) Domestic issues in local currency, including BBVA’s issues. (2) PFI = Public Finance Initiative, PPP = Public-Private Partnership. (3) Excluding Japan.

C&IB. Awards 2010

Product Award Category/Media Location
Fixed income origination Sovereign Bond category. Kingdom of Spain deal Credit Awards / Incisivemedia Europe
Syndicated loans Best Syndicated Loan. Grupo México Latin Finance Awards / Latin Finance Latin America

Latino America Loan. Americans Mining Corp. International Financial Review / Thomson Reuters Latin America
Equity capital markets Best Primary Equity Issue. Grupo Commercial Chadreaui Latin Finance Awards / Latin Finance The Americas
Structured trade finance Best Trade Finance Bank in Latin America 2010 Global Trade Review / Trade & Forfaiting Review / Trade Finance Magazine Latin America
Project finance 5 Deals of the Year 2010 (3 Europe, 2 America) Project Finance Magazine Awards / Euromoney Europe/ the Americas
Cash management Best provider of cash management enterprises services in Spain Cash Management Poll / Euromoney Europe
Institutional custody Top Rated in Spain Global Investor Magazine / Euromoney Spain
Project finance Transport/Road Deal of the year. Peninsula link Project Finance Magazine Awards Asia-Pacific