Luisa Gomez Bravo - Head of Investor Relations Ángel Cano Fernández - President, Chief Operating Officer and Executive Director Jaime Sáenz de Tejada - CFO

Good morning, ladies and gentlemen, and welcome to the Fourth Quarter Result Presentation of BBVA Group. I am Luisa Gomez Bravo, Head of Investor Relations. And together with me today are Ángel Cano, President and COO of the group; and Jaime Sáenz de Tejada, the CFO of the group. We will begin, as usual, with Ángel giving us a presentation of the results and then we will open for Q&A immediately afterwards. Please keep in mind that we are specially stretched for time today, so we’ll try and cover as many of the questions as possible. And in any event after the presentation, of course, the IR team will be fully available to answer any remaining questions or any other new ones that you may have. And without further ado, Ángel, up to you. Ángel Cano Fernández: Hello, thanks, Luisa. Good morning, everyone, and welcome to BBVA’s fourth quarter 2014 earnings audio webcast. First, I would like to review the key strategic themes for the group last year. More specifically, I would like to refer to regulation, capital allocation, and to BBVA’s digital transformation process. The completion of the comprehensive assessment has marked a milestone in the road to the European single banking supervision and signals an important change in the European financial services playing field. On November 4, the European single supervisor began to exercise of its new supervisory role. Progress has been made, in my opinion, successfully on getting acquainted with the new single supervisor who is closely focusing on banks, business models, and profitability analysis. I have no doubt it’s been very positive for this sector. During the year, BBVA held a constant and open dialogue with the ECB to facilitate this process as much as possible. With regard to our business portfolio management we continue to…

Thank you, Ángel. First of all I apologies, because I think there may have been some technical problems at the beginning of the call. So we’ll move on now to the question-and-answer that - from the presentation. First, we’ll start out with the P&L of the Group, Vitor Roma from Goldman Sachs and Johan De Mulder from Sanford Bernstein ask, could you please provide further detail on the provisions, net, and other gains losses composition booked in the fourth quarter 2014, Spain, Venezuela, and Chile? Jaime Sáenz de Tejada: Okay. Hi, all. I’m Jaime. I’ll answer the question. Three major impact, the first one is in Spain. As you mentioned, the restructuring cost that we announced when we published the [indiscernible] quarter result presentation, we said that restructuring costs were going to be increased from the recurrent impact in a range of around €300 million that was the case. We have €295 million hit in Spain, around €245 million in banking activities, and around €50 million at corporate center. In the case of Chile, we have €52 million hit due to the Inverlink Case. As you know, the Supreme Court forced us to pay that civil penalty. And then in the case of Venezuela, there - mainly composed of generic provisions in order to make sure that we reduce this year’s contribution to our Group P&L.

Thank you. Juan-Carlos Calvo from BES and Alfredo Alonso from Kepler Cheuvreux ask, digitalization and restructuring charges, can you identity the precise figure charged for this concept in the fourth quarter? What will be associated cost savings that you expect and when can we expect further charges to the P&L in this concept in 2015 and 2016? How are evolving synergies obtained and how much is expected to be obtained? Jaime Sáenz de Tejada: Okay, those are a lot of questions. I already comment on the impact on the first quarter €245 million and €50 in banking activities and corporate center respectively. Clearly, the impact that these charges are having on our recurring costs are significant. I think, one of the biggest surprises of this year’s results is the pretty significant reduction in expenses in Spain minus 6% above the guidance that we gave to - at the beginning of the year, and that’s also the case at corporate center, where expenses are down by 10%. Our expectations as we shared in the third quarter’s results presentations is for expenses to continue to go down in Spain and in the corporate center in the future.

So just maybe let me add, Jaime, a couple of pieces of data related to the detailed numbers, we are releasing every month and every quarter. First of all, one of the purposes of this transformation is to increase the number of our detailed active customers. We ended out the year 2014 with - at group level with 9.1 million customers. When we started this comparison with - December 2011, this compares with 5 million customers, so on average 22% increase every year. And the other important - the other important number is the number of mobile active customers, we’ve reached 4.3 million mobile active customers at the end of 2014. From the beginning of this four-year period is 140% increase on average year-by-year. So I think the result of this transformation is getting better and giving us the result we were expecting at beginning of this project.

Thank you. Juan-Carlos Calvo from BES asks how much is the FX effect in the fourth quarter? Jaime Sáenz de Tejada: The FX effect has been positive in range of about €50 million.

And also he asks operating costs guidance for 2015 for the group ahead for Spain? Ángel Cano Fernández: So, just looking forward in Spain what we are forecasting or we are expecting is to see a further reduction in expenses between 3%, 4% during the year both in Spain business, in the Spanish business and the corporate center. For the Group as a whole, the rest of the countries they are going to implement their investment projects throughout the year. So they - the target is to grow the expenses below the revenues, and widening the jaws over the year and of course implementing the investment they’ve released to the markets a couple of years ago.

Francisco Riquel from N+1 asks, assuming FX rates stay at current levels, what P&L impact do you expect in 2015? Can you update on your FX hedging policy and if this could mitigate the positive impact into 2015 P&L? Jaime Sáenz de Tejada: Okay. We don’t give guidance for FX impact one-year ahead. We have never done it and we won’t do it today. Let’s refresh everybody on our hedging policy. As you know, we hedge earnings in a range of between 30% and 50%, depending on our view or what that the FX is going to be, taking also into account of the cost of the hedging policy, and that remains the case. So for 2015, hedges are we think those ranges. As well we have a hedging policy regarding capital. As you know we want to minimize core capital impact as a result of FX movements. So, whatever is not covered by the actual ratio, as you know the numerator and the denominator core and risk-weighted assets move the same way, whatever is not cover by these natural hedge we cover at around 50% again. Okay, and as you know the FX impact for 2014, due to FX has been only 1 basis point, which is roughly the same impact that we had in 2013.

Moving onto liquidity and ALCO, Rohit Chandra-Rajan from Barclays and Francisco Riquel from N+1 asks about the ALCO composition. Please could you provide an update on the size, composition yield and duration of the ALCO portfolio? Jaime Sáenz de Tejada: .:

Okay. Moving on now to capital, Francisco Riquel from N+1 asks, if we can explain the decline in fully-loaded ratios during the fourth quarter and the positives and negatives in this fourth quarter? Jaime Sáenz de Tejada: Okay. So fourth quarter, right?

Right, fourth quarter, please. Jaime Sáenz de Tejada: Okay. On a fully-loaded basis, total capital increased by 30 basis points from €10.1 million to €10.4 million. The main positive impacts were the equity offering that we did in November that generated 58 basis points, and the results, net of dividends contributed to an additional 17 basis points, those were the main positives. On the negative side, we had a decreasing core capital of around 26 basis points, 9 basis points of those are explained by the deposit guarantee fund adjustment, that all the Spanish banking system had to do. And an additional 17 basis points is explained by prudent valuation adjustment in the value of our pension funds and increasing our treasury stock. And then on the risk-weighted assets side the denominator also had an impact of minus 20 basis points, impacted by mainly increasing in activity that as you’ve seen has been very positive in the fourth quarter. And then we have some small impacts on due to FX and the increase in value of our stake in CNCB.

Okay. Thank you. I think this also answers Stefan Nedialkov from Citi’s question basically asking the same thing. Alvaro Serrano from Morgan Stanley adding on capital accumulation, which was weak in the quarter, asks what kind of organic growth, do you expect in 2015? Jaime Sáenz de Tejada: I think clearly the bank businesses are going to grow significantly in the years ahead, that’s what we’re expecting in many of our geographies. So risk-weighted assets will increase with we’ve had increase in activity taken into account that it is our intention to move to a, to cash to script, dividend policy this year, of course, subject to board approval. Capital generation will be slower in 2015 from what we’ve seen in the past.

Okay. In Alvaro Serrano from Morgan Stanley, Juan-Carlos Calvo from BES and Francisco Riquel from N+1 ask about our pro forma number at the moment including the acquisitions and disposals announced. If the fully-loaded ratio is below the 10% target, how are you planning to come back to the 10% rate? Jaime Sáenz de Tejada: Okay. If we detect from the 10.4% the impacts that we’ve shared with the market during 2014, of the different transactions that we announced the pro forma ratio will be 9.7%. Our expectations for the fully-loaded ratio at year-end 2015 is to return to the 10% number, so complying with our intended guideline.

Okay. Thank you. Rohit Chandra-Rajan from Barclays asks as well, if BBVA has had any indication from the ECB on capital requirements, what is the right level of CT1 and when does this need to be reached by? Jaime Sáenz de Tejada: Okay. As you can imagine and as Ángel said during the course of his presentations. We have been having regular interactions with our supervisors, the old and new. And regarding capital, all that interaction remains confidential as many other Spanish players have already set with the market. But what we can share with you is that we have an ample capital base that has demonstrated being very strong and very resilience in the very recent stress test. And we do not have any indication otherwise.

Carlos Gartlia [ph] from Socgen[ph] and Francisco Riquel from N+1 ask, what amount of DTAs now detected from CT1 now, do we have? Jaime Sáenz de Tejada: Okay. We have €4.9 billion of DTAs guaranteed by the government. As we said during 2014, that’s around 70 basis points in core.

Okay. And Raoul Leonard from Deutsche Bank asks about the CRR article 114 regarding the equivalence, the new regulatory provision line with EU. The impact he says, if there are any RWA inflation impact from the fact that Turkey is not regarded as having banking regulatory supervision in line with the EU? Jaime Sáenz de Tejada: Yes. Not only Turkey, in our footprint also Colombia and Peru, have not received yet their regulatory equivalence by the European authorities, in this case by the European commission. We expect that to happen in the course of 2015, this is an open-ended least and these countries are not there yet, because they haven’t had enough time to go through all the process. As you know, Bank of Spain in a circular in 2008 did qualified each of these three jurisdictions as having the regulatory equivalence to Spain, meaning that they have the same regulation and the same standard of supervision. And so our expectations are for these three countries to join at least as I said in 2015. If that didn’t happen the impact will be very manageable for BBVA.

Okay. Now a couple of questions on dividends and dividend policy, Alvaro Serrano from Morgan Stanley and Juan-Carlos Calvo from BES ask about our guidance of 35% to 40% dividend payout. They say, it stands in light of the - how does it stand in light of the recent ECB recommendations? When do you think you will be paying it in full cash? And in this regard also on dividends, Raoul Leonard from Deutsche Bank asks about script versus cash. And specifically, if there are any significant one-offs to the P&L in this year from Garanti accounting changes, for example, how should we think about your cash and script mix dividend in 2015? Will you try to keep the overall headline dividend per share at the same level as 2014? Ángel Cano Fernández: Yes. First of all the payout ratio policy is going to be, when we release at the end of 2013 as Jaime said before. So we are - what we are foreseeing for this year is subject to the AGM approval is to have to cash and to script dividends. Our policy set as well to move from the script to cash over time and depending on the evolution of the result. So maybe, it’s going to be a process to be implemented over the next two years, maybe sometime from now till the end of 2017. And the other one is something related to the extraordinary charges on one-offs during 2015. So as we released during the Turkish operation presentation where we say, as we - we were going to have one-off adjustment to do the P&L - to the 2015 P&L of €1.5 billion plus negative what I remember. So once you look at the - our annual report that we are going to release over the next few days with the audit report as well, you’re are going to see one update for the end of the year of this number and the number you are going to see is €1.2 billion plus negative. So this is one negative one-off and the other positive one-off is going to be the capital gains from the Chinese transactions, both the Hong Kong one and the mainland one. So maybe at the end of the year we are going to have some negative number in net-net, but it’s going to be manageable for this point of view.

Okay. Moving on now to Spain banking business, first let’s start with Raoul Leonard’s question from Deutsche Bank regarding the deposit guarantee fund. Specifically he asks, if we can detail the impact of the IFRIC 21 this quarter. What charge did you take through P&L and what was the impact on capital? Jaime Sáenz de Tejada: Okay. I think that the rationale behind the numbers is already well known by the market. In our case the extraordinary contribution that we didn’t charge to the P&L in 2013 was €181 million. So this is what we had to account as a negative in the 2013 P&L numbers. On top of that, as you know, we have to account for the contribution that we’re going to pay in February 2015 in the results of 2014. That was an impact of €221 million. Also we had to readjust the 2013 ordinary contribution which was €200 million and that I had to go through the 2013 P&L to the exact number was €226 million. And the last adjustment is what the contribution for 2012, which was also around €200 million, who we have to deduct from the 2013 P&L numbers and deduct from reserves. Okay, it’s a little bit complicated but those are the numbers.

Okay. Now moving to the blog of net interest income, starting off with volumes Alfredo Alonso from Kepler Cheuvreux asks what are the reasons for positive quarter-on-quarter loan growth in Spain banking business? Jaime Sáenz de Tejada: As I think we share with markets during 2014. I think we were expecting that at the end of the year loan volumes will going to remain flat and that what happened in the fourth quarter. It shows a slight increase so that’s a very positive news. And as we’ve also shared with market, that was mainly driven by the corporate sector. Okay, so we have increases quarter-on-quarter on SMEs above - around 1.5%. We have increases in large corps around 6%, and we have increases in the CIB business of around 2.5%. So in general, corporations, large and small, is what has driven loan growth in the quarter.

Okay. Alvaro Serrano from Morgan Stanley, Vitor Roma from Goldman Sachs, Rohit Chandra-Rajan from Barclays, Alfredo Alonso from Kepler, Arturo de Frias from Santander, David Vaamonde from MainFirst, Damien Souchet from Autonomous, Sofie Peterzens from JPMorgan, Francisco Riquel from N+1, and Mario Ropero from Fidentiis ask all about deposit and loan pricing specifically, several questions. Please could you discuss recent trends and future expectations for deposit and loan pricing? Do you think the deposit costs could go down further the front book? Do you think it will be sufficient to offset asset spread compression? Could you please comment on your outlook for NII and volume growth for 2015? And funding costs will come down further, but to what extent lower loan loss spreads and lower contribution from ALCO portfolio could impair growth in NII in 2015? Ángel Cano Fernández: Quite a long question, Luisa. So first of all, talking about the deposits, the latest price we are - we have with pricing that were new entries and new production is a little bit under 30 basis points, in fact, 29 basis points for December. The average cost of the stock at the end of the year is €1.27. So in fact, what we are going to see during the year - during 2015 is a new decrease of the cost of the stock. So maybe we are going to see depending on the maturity of these time deposits. I referred that an additional 50 basis points reduction on this number. Regarding the loan or the lending prices we are going to see during the year is true. We are seeing quite important pressure on this yield. So what we think is we’re going to offset most of this negative impact from the lending side having a slight increase improvement on our customer spread. So in fact, once you take into account the evolution on the lending activity during the year, we are expecting a gain here, a positive - in the slight positive growth on the total stock, not very large, but maybe between 1%, 2% growth. So all-in-all from this side, we’re expecting positive growth on the NII line. So maybe talking about the ALCO, Jaime. Jaime Sáenz de Tejada: Yes. I think in 2014, ALCO contribution was pretty much in line with our expectations and with 2013 numbers, it is true that it’s contribution to the 2015 numbers will be lower and but a lot will depend on how do we manage wholesale funding, which we are still seeing its cost down. So that will be my answer here.

Okay. Francisco Riquel from N+1 asks what has been the evolution of your deposit base and deposit costs in Catalonia, since the campaign launched by Santander in this region? Jaime Sáenz de Tejada: Nothing significant and its trends are not - differ, do not - do not defer from what we’ve seen in other regions, so the impact has been minor.

Okay. Sofie Peterzens from JPMorgan asks fee income guidance for 2015. Jaime Sáenz de Tejada: Okay. Clearly, one of the best news of the quarter is increasing commissions in Spain. I think this is something that we’ve also been sharing with the market during 2014. The main reasons being the good performance of mutual and pension funds that have increased almost 30% during the year, and also the good behavior of investment banking fees. So we’ve seen an increase quarter-on-quarter of 4% in fee income for the year - for the quarter. Regarding guidance for 2015, it’s true that we have some headwinds, because certain commissions mainly interchange fees and commissions on pension plans have been regulated and reduced, but we expect to be able to compensate through growth in activity, these reductions and grow in the low-single digits.

Okay. A couple of questions regarding Catalunya Banc. Ruis Benya [ph] from Signidif [ph], asks any news regarding the tax assets plans for the entity upon the closing of the deal? Is the bank going to maintain Catalunya as a separate entity and Johan De Mulder from Sanford Bernstein asks if you can give update on the progress of the Catalunya acquisition and some color on deposit pricing trends there? Jaime Sáenz de Tejada: Okay. To update on the progress everything remains on track and we expect to close a transaction during the first month of - first four months of the year. So that will be around the month of April, different approvals are coming without any problems. Regarding the name, I think we haven’t - that’s something that we share in the past. We haven’t shared any - haven’t made any decision on that yet. And regarding deposit trends they are and they remain within what were our expectations, when we did the due diligence numbers. So the good news about CatalunyaCaixa transaction is that everything goes on track and that we were very happy with the results of the stress test, that clearly ratify that we were conservative in the due diligence process.

Okay. Regarding asset quality in Spain Juan-Carlos Calvo from BES asks about cost of risk guidance for 2015? Ángel Cano Fernández: So as you - as you’ve seen during the presentation we finally released 0.95% the cost of risk in Spain, which means 1.03% including real estate provisions. So for 2015 we are forecasting from this 1.03% to move down to 80 basis points, 85 basis points.

Okay. Going to BBVA real estate, Johan De Mulder from Sanford Bernstein asks if we can provide more color on the Spanish real estate portfolio. Losses are higher than expected in the fourth quarter on the real estate portfolio. And if we can provide more color there. And also Johan De Mulder from Sanford Bernstein and Raoul Leonard from Deutsche Bank ask what is the average gain loss on disposals and how do you see it evolving in 2015? Jaime Sáenz de Tejada: Okay. Again a lot of questions, if I don’t answer all please, Luisa, remind me. Yes, this is true the fourth - the fourth quarter provisions were a little bit higher than what we’ve seen in the previous quarter, especially because the third quarter was below the recurrent rate. It’s mainly due by the collateral update and certain foreclosed assets revaluation that we have to do periodically. Regarding the overall evolution of the portfolio, the portfolio was down by €700 million in the quarter, so very positive news. The total number for the year is minus €2 billion down to €12.6 billion our total net exposure, so clearly improving on the trends that we’ve seen at the beginning of the year. In terms of actual sales we increase then in value by 18% and we made actually €10 million in the second-half of the year on all those sales with an average discount of 50%. So it means that provisioning levels are good and these sales do not generate losses. Ángel Cano Fernández: So as I mentioned during the presentation very clearly talking about the real estate projection during 2015. So what is clear, we are going to see much less negative contribution from this unit in 2015, and as I said in the presentation, quite limited for 2016. So we are expecting to talk about Spain without any material negative contribution from this unit in just in couple of years.

Okay. Moving onto Mexico Arturo de Frias from Santander, David Vaamonde from MainFirst ask about the impact of oil in Mexican economy and specifically how does 2016 look like if the oil price does not pick up, and expectations in Mexico in terms of GDP growth for the year? Jaime Sáenz de Tejada: Okay. The year-end GDP growth rate was 2.1%. We expect 2015 to behave much better something in the range of between 3% and 3.5% is what we are expecting as of today. And if reforms are implemented correctly this could be the running rate for the next three to five years. Regarding the impact of the oil prices, if they follow the base line scenario that we have as of today, which means that oil prices will eventually go back to $80 per barrel in two years, the impact - the actual impact in Mexico is actually very minor, we are just talking 0.2% on GDP numbers. We’ve already shared with market the different hedges that they have. If prices remain at $50, maybe the impact could reach 0.4% per year. So the impact in that case will be a little bit higher.

Okay. Johan De Mulder from Sanford Bernstein, Vitor Roma from Goldman Sachs, Alvaro Serrano from Morgan Stanley, Rohit Chandra-Rajan from Barclays, Arturo de Frias from Santander, David Vaamonde from MainFirst, Francisco Riquel from N+1, Stefan Nedialkov from Citi, Ignacio Sanz from UBS and Benjie Creelan-Sandford from Macquarie ask about the NII performance. The NII performance excluding the contribution from the securities portfolio, specifically if we can explain the net interest margin, the NIM margin increase in the fourth quarter, which develop very well. How do you expect this trend going forward given the low interest rate environment? What drove the lending growth in fourth quarter, individuals, SMEs, sectors? And if we can give details on the expectation of loan growth for this year and 2016, in view of lower oil prices related pressure on public finances, et cetera? So basically NII performance, NIM increase, and lending growth, how it has behaved by sectors and outlook for this year. Jaime Sáenz de Tejada: I think Ángel has already answered 80% of the questions. Regarding, NII growth this quarter it has been 2.9% so that - 2.8% so definitely a very positive number. Taking into account that contribution from the ALCO portfolio has remained pretty much stable in every single quarter. It means that this increase is mainly driven by volumes and better behavior of the cost customer spread as Ángel has said. The good behavior of funding cost is also helping. That’s for euro. Okay, and regarding the future on guidance, I think we’ve answered every single question. Ángel Cano Fernández: But we were talking about Mexico. Jaime Sáenz de Tejada: We were talking about…

We were talking about Mexico, yes. I’m sorry, they confused. Jaime Sáenz de Tejada: I am very sorry. I didn’t hear the Mexico. Ángel Cano Fernández: No, no, but Jaime, the answer is very - is quite similar - the answer is quite similar. The lending activity in the fourth quarter of the year has been quite positive for Mexico. SMEs, the commercial activity has grown by close to 10% first of all and even we were been growing to consumer side and residential mortgages as well, but above all, commercial has had a really outstanding performance during this quarter. So this is one, the other one is the customer’s spread evolution as well has improved just a little bit during the quarter. So both items drives - drove the NII during this quarter to wherever you can see in the presentation in the Mexican P&L statement.

Okay. Alvaro Serrano from Morgan Stanley and Stefan Nedialkov from Citi ask what kind of costs growth should we expect to here in Mexico? Ángel Cano Fernández: The cost of risk in Mexico - cost, just cost. Jaime Sáenz de Tejada: What Ángel already said is that the investment plan continues in Mexico. We will continue to invest above inflation as we did this year. The investment plan would be - is half underway so that will remain so for 2015 and 2016. What Ángelhas also said is that gross income will grow higher, so we will not only maintain positive jaws but also increase the operating leverage.

Okay. Now, effectively David Vaamonde from MainFirst, Stefan Nedialkov from Citi and Ignacio Sanz from UBS has regarding our guidance on cost of risk for 2015 in Mexico? Jaime Sáenz de Tejada: In Mexico, okay, clearly one of the positives of 2014 has been the very good evolution of the cost of risk in Mexico. That has been particularly true also in the fourth quarter. It’s - the cost of risk during the year has behaved a little bit better than our guidance at 3.45%. Clearly thanks to the good measures that we have taken in 2013 that we have also shared with markets in terms of mortgages, credit cards and the real estate portfolio. Our numbers are much better than what other peers have been sharing with the market. That trend should remain for 2015, as you know our customer spread in Mexico is very rich. We’re talking over 12% and our cost of risk of around 3.5% is what we feel our business mix should have going forward.

Okay. Moving onto few questions on Venezuela. We start-off with Raoul Leonard from Deutsche Bank, and Mario Ropero from Fidentiis asking if we can please refresh us on the carrying value of your investment in Venezuela and if there is any goodwill? Jaime Sáenz de Tejada: The carrying value in Venezuela is €1.58 billion. Okay, and we don’t have any goodwill.

Okay. Sofie Peterzens from JPMorgan, Francisco Riquel from N+1, Raoul Leonard from Deutsche Bank and Mario Ropero from Fidentiis, Marta Sánchez Romero from KBW, Ignacio Cerezo from Credit Suisse and Johan De Mulder from Sanford Bernstein ask regarding FX in Venezuela. Specifically any plans of readjusting the FX for Venezuela. What will be the trigger of that and if not, why not? And what is our outlook for Venezuela what will be the impact of a potential move to SICAD-II on capital and earnings and how much is already provisioned? Jaime Sáenz de Tejada: Okay. As you know President Maduro has very recently announced his intention to change the different - the FX policy in the country. Although, we do not have some specifics, so we are waiting for those specifics to be announced in order to have a more clear view of what should be our exchange rate for 2015. As you know they will keep maintaining the CADIVI rate at 6.3% and what they said is that the current SICAD-I which is at 12% will merge will SICAD-II which is currently around 50-60, it changes quite often. Our expectation is that this convergence will be done within those ranges. They are also sharing their intentions to have a free exchange rate also, trying to move the parallel rate into the formal economy, until we know the answers I think it’s too early to go - to move to a specific. Regarding the contribution of Venezuela to the 2015 P&L, I think our intention remains the same of what we share with the market this year. This year’s contribution in current numbers is down by 50% from 2013, and our intention again is for that to also happen in 2015, so around €80 million is what our expectations are today.

Okay. I think that answers as well Rohit Chandra-Rajan from Barclays’s question regarding the outlook for the year and also Benjie Creelan-Sandford from Macquarie’s question regarding guidance on 2015 for the P&L. Specifically Francisco Riquel asks from N+1, if we would consider to inject capital in Venezuela subsidiaries in case of sovereign default in the country? Ángel Cano Fernández: So the answer is no, but this is not our centralized scenario. Jaime Sáenz de Tejada: The franchise is very well capitalized. Its total capital ratio is 17%, almost all Tier 1, well above the minimum requirement. So we don’t feel that is close to happen at all.

Okay. Sofie Peterzens from JPMorgan asks about hyperinflation, specifically, would you please give details on the hyperinflation charge in Venezuela? Jaime Sáenz de Tejada: Yes. The total hyper charge in 2014 has been €301 million that is almost double the actual impact that we saw in 2014, when it was around €140 million. So the actual increase is €160 million impact for the year, that’s taken into account the inflation that we’ve seen this year, which is around 70% and our expectations is for an increase in that rate in 2015.

Okay. And last question regarding Venezuela from Johan De Mulder from Sanford Bernstein is regarding our government bonds in Venezuela, specifically, how much exposure do you hold to Venezuelan government bonds? Jaime Sáenz de Tejada: Yes. Our total exposure in Venezuela is €3 billion. What is important to realize is that everything is denominated in bolivars, so our expectation is for them to be paid and it won’t have any impact whatsoever on whatever happen with Venezuela sovereign debt denominated in euros or dollars.

Okay. Moving onto the U.S., Robert Noble from RBC, and Andres Williams from Mediobanca asks about cost of risk. They specifically say that, cost of risk is very low in the U.S. business. Given its exposure to taxes, what do you expect to happen to cost of risk going forward in light of the oil price fall? Jaime Sáenz de Tejada: Yes. It’s true, cost of risk in general in the U.S., and in the different U.S. banks, and as well as in Compass is structurally very low right now or in the 0.23% range. Our expectation for that rate is to normalize going forward. But we don’t feel that we will face a significant impact from our oil and gas portfolio in the U.S. I think that you are aware that Standard & Poor’s hasn’t changed the outlook of Compass after reviewing the oil and gas exposure that different banks in the region had. That was not the case for many other institutions, where the outlook was lower. And that is because our exposure is focused on integrated companies, mainly on midstream less affected by the reduction in oil prices and very little exposure on the servicing industry, which is one that is being most affected, so a very conservative oil and gas energy exposure.

Okay. Moving onto South America ex-Venezuela, Robert Noble from RBC asks where do we see the Latin American tax rate going over the next two years, specifically the impact on our Colombian, Chilean and Peruvian businesses due to the tax reforms and what the impact will be for BBVA? Jaime Sáenz de Tejada: Yes. He is right. We’ve seen changes in corporate tax numbers in some countries. We’re seeing an increase in Chile and Colombia and a decrease in Peru. Also this year we’ve seen an increased tax rate in Colombia as the intangibles from the Ganadero transactions are done with it. So the total tax rate has increased a little bit. So yes, we expect an increase in Chile and Colombia and a reduction in Peru. The rates are public, so I don’t think it’s necessary to share with the market, so the actual rate.

Okay. What credit growth rate, sorry, a question from Robert Noble from RBC. What credit growth rate do you expect from Latin America in 2015, 2016 particularly in light of the impact of the oil prices in the - and lower commodity prices of the region? Jaime Sáenz de Tejada: Okay. We’ve seen a very strong growth rate in 2014. Volumes have increased by around 21%. Without taking into account Venezuela, actual growth has been 13%, and that’s with Peru and Chile actually not having the best year in the last three or four. Our expectations for GDP growth in both countries, in Chile and Peru is to increase significantly. Chile to 3% and Peru over 4% on more than doubling this year’s growth, and that will also continue to drive loan demand in both countries. It is true that Colombia is the most affected country by the lower price of oil. We expect that GDP growth could be affected by roughly minus 1%. So as Colombia was the fastest growing country in Latin America almost reaching 5% growth levels the minus 1% impact will only reduce growth to 4%, so still continue to drive loan demand going forward, so in general good news expected for 2015 and beyond.

Okay. And the next question, the last question in South America from Mario Ropero from Fidentiis asks about the NII in Chile, given that inflation is going to be lower this year, what can we expect in Chile in NII in that regard? Jaime Sáenz de Tejada: Yes. Low inflation numbers do affect NII in Chile, as we expect inflation to be around 2.3% in 2015 versus 4.6% in 2014, definitely that will have an impact on NII growth in 2015.

Okay. We just have a couple of two minutes left, but on the strategy quickly Raoul Leonard from Deutsche Bank asks, if giving your recent sell down of stacks in the Asia, are you now deemphasizing this region completely and should we expect further divestments? Ángel Cano Fernández: is:

Okay. Ángel Cano Fernández: Having as well, sorry, and we are going to - as well to focus on the consumer side trying to reach some additional joint ventures from this point of view to manage as well this consumer business.

Okay. Alyati [ph] from Citadel asks, what are the reasons behind BBVA wanting to sell its Portuguese business? Press reports suggest that BBVA expressed its interest in Novo Banco, how are you thinking about this opportunity? Jaime Sáenz de Tejada: As you know, we never comment on this press reports.

Okay. Andrea Filtri from Mediobanca asks, if we should rule out any further acquisitions in Spain external growth or what about elsewhere? Jaime Sáenz de Tejada: I think it is our responsibility to take a look at every single transaction that takes place in our footprint, and that’s what we’ll continue to do. We don’t have any expectation whatsoever that anything will be done in the next few years. But our obligation is to take a look at whatever comes across, no changes there either.

Okay. And I think the last question, the other ones, I think that we can’t answer. They are more detailed questions, but the Alex Koagne from Natixis asks, if we could share our view on the QE and the impacts on the banking sector. Jaime Sáenz de Tejada: Okay. I think, we believe that our QE has been a very positive news €16 billion per month is an open-ended program clearly has surprised markets. So it will increase significantly the ECB balance sheet. In the case of Spain and the periphery in general that will have a very positive impact. Taking into account Spain’s capital key in the ECB is that - these means that Spain will receive a €100 billion in bonds acquisitions by the ECB, which is a very, very significant number that should continue to drive spreads down going forward.

Okay. And just to finish off on the corporate center, Mario Ropero asks about the reason for the positive tax shield in the corporate center in the quarter, that is because we received Telefónica dividends, as you know, there are certain taxes. So I’m sorry I had to rush through the last part of the questions. And as I mentioned before, we will be available throughout the day to answer a couple of more detailed questions that came in and then the other questions that you may still have for us. Thank you very much all for attending the presentation. Ángel Cano Fernández: Thank you very much. Jaime Sáenz de Tejada: Thank you.