Operating income

Operating expenses amounted to €2,758m for the first quarter of 2013. Their trend was in line with previous quarters, with a year-on-year increase of 9.1% and a quarter-on-quarter decline of 3.4%. Execution of the investment plans in emerging economies continues, as do the technology and cost control plans in developed markets. It is worth highlighting the following examples: BBVA recently announced an investment plan in Mexico of around €2,700m for 2013 to 2016 with the aim of improving customer relations and experience, and thus continuing to offer a quality service, boosted by the range of innovative and specialized products offered. In South America, branches were opened in Chile, Colombia and Peru in the first quarter, and there has been a drive to boost alternative distribution channels, with progress continuing on the customer-centric approach. A cross-cutting development plan is also being undertaken in some businesses, such as payment channels, private banking, consumer finance and asset management.

Operating costs

(Millones de euors)

(1) At constant exchange rates: +10.2%.

Breakdown of operating costs and efficiency calculation

(Million euros)

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	1Q13	Δ %	1Q12	2012
Personnel expenses	1,458	8.2	1,347	5,662
Wages and salaries	1,100	6.2	1,035	4,348
Employee welfare expenses	234	13.0	207	819
Training expenses and other	124	18.0	105	495
General and administrative expenses	1,025	7.8	951	4,106
Premises	232	5.1	221	916
IT	187	13.8	164	745
Communications	81	(0.9)	81	330
Advertising and publicity	100	11.9	90	378
Corporate expenses	23	6.1	22	102
Other expenses	293	9.0	269	1,201
Levies and taxes	109	4.3	105	433
Administration costs	2,482	8.0	2,298	9,768
Depreciation and amortization	276	20.2	230	1,018
Operating costs	2,758	9.1	2,528	10,786
Gross income	5,471	3.9	5,265	22,441
Efficiency ratio (Operating costs/Gross income, in %)	50.4		48.0	48.1

Efficiency

The following are worth highlighting in terms of the number of employees, branches and ATMs:

The workforce fell over the quarter by over 1,600 people, basically due to the sale of the pension business in Mexico. The workforce in the rest of the geographical areas remains very stable. In all, the number of people working at BBVA as of 31-Mar-2013 totals 114,245.
The total number of the Group’s branches was also reduced totaling 7,895 units as of the close of March. By geographical areas, the number has increased in South America as a result of the expansion plans underway and fallen in Mexico due to the sale of the pension business.
The number of ATMs at the end of March stood at 20,219 units. Worth noting is their increase in South America, above all in Peru.

As a result of these revenue and expenses figures, the Group’s efficiency ratio in the first quarter of 2013 was 50.4% and operating income stood at €2,712m, barely 0.9% down on the figure 12 months earlier.