BBVA in 2016
Index
About this report P. 1
1. Letter from the Group Executive Chairman P. 2
2. Performance P.4
2. 1. BBVA in gures P.5
2. 1. 1. Results P. 5
2. 1. 2. Balance sheet and activity P.8
2. 1. 3. Solvency P. 10
2. 1. 4. Global Risk Management P.12
2. 1. 5. Impact on people through the business P. 13
2. 2. Business areas P.15
2. 2. 1. Banking activity in Spain P.15
2. 2. 2. Real-estate activity in Spain P.1 9
2. 2. 3. The United States P.20
2. 2. 4. Turkey P.2 3
2. 2. 5. Mexico P.26
2. 2. 6. South America P.30
2. 2. 7. Rest of Eurasia P.32
2. 2. 8. Corporate Center P.33
2. 2. 9. Other information: Corporate & Investment Banking P.34
3. Strategy P.36
3. 1. Our vision: a new nancial environment for the nancial industry P.38
3. 1. 1. Macroeconomic environment P.38
3. 1. 2. The regulatory environment in the nancial industry P.4 0
3. 1. 3. Digitalization P.4 2
3. 1. 4. Shift in consumer behavior P.4 3
3. 1. 5. Reputation and materiality analysis P.4 4
3. 2. Our aspiration P.4 6
3. 3. Transformation of the BBVA Group: the Transformation Journey P.47
3. 4. Bringing the BBVA Purpose to life P.52
3. 5. Responsible banking model P.53
3. 6. Business organizational chart and structure P.55
4. Corporate governance P.5 7
4. 1. Corporate governance system P.58
4. 2. Compliance system P.6 2
4. 3. Internal control model P.6 6
5. Primary stakeholders P.6 8
5. 1. Materiality analysis P.69
5. 2. The customer P.7 1
5. 2. 1. Customer experience P.7 1
5. 2. 2. Customer protection P.76
5. 2. 3. TCR Communication P.7 7
5. 2. 4. People-centric solutions P.80
5. 3. The team P.8 7
5. 3. 1. Professional development P.89
5. 3. 2. Workplace P.91
5. 3. 3. Remuneration P.9 3
5. 3. 4. Volunteer work P.94
5. 4. Shareholders P.95
5. 5. Society P.99
5. 5. 1. Social, environmental and reputational risks P.99
5. 5. 2. Investment in social programs P.102
5. 5. 3. Financial education P. 10 3
5. 5. 4. Entrepreneurship P.106
5. 5. 5. Knowledge, education and culture P.109
5. 5. 6. Fiscal transparency P.113
5. 5. 7. The environment P.114
5. 6. Suppliers P.115
5. 6. 1. Supply chain P.116
5. 6. 2. Supplier management P.117
5. 7. Supervisors and regulators P.119
6. Report preparation guidelines P.121
6. 1. Criteria and standards P.122
6. 1. 1. Principles to guarantee information quality P.123
6. 2. GRI indicators P.124
6. 2. 1. General standard disclosures GRI G4 P.124
6. 2. 2. Specic standard GRI G4 disclosures P.129
6. 3. Independent assurance report P.139
Annex P.141
BBVA IN 2016
P. 1
BBVA in 2016 is a report published every year that presents the most relevant nancial and non-nancial information about
BBVA Group in 2016, supplemented with other documents and reports published by the Bank. The aim is to provide information
on the Group’s strategy and performance during the year, with a focus on events that are relevant for our stakeholders. For this
purpose, BBVA in 2016 is a report which is interconnected with the rest of the annual information through links and references.
Consolidated
financial
statements,
management
report and
auditors' report
BBVA in 2016
Information of
Prudential
Relevance.
Basel Accords,
Pilar III
Prepared jointly by the Financial Communication & External Reporting and Responsible Business departments, and with the
collaboration of dierent areas and departments in the whole Bank, BBVA in 2016 follows the latest international reporting
trends, such as the IIRC Conceptual Framework, the Global Reporting Initiative Sustainability Reporting Guidelines (GRI G4) and
the Institute for Social and Ethical Accountability AA1000 standard.
About this report
BBVA IN 2016
1. LETTER FROM THE GROUP EXECUTIVE CHAIRMAN
P. 2
1. Letter from the Group
Executive Chairman
Dear Shareholder,
In 2016, the global economy grew by 3.0%, somewhat below
the 2015 gure. The macroeconomic environment was
aected by high levels of volatility in the nancial markets,
mainly in the rst quarter of the year, with major falls in
commodity prices and uncertainty regarding the U.S. and
Chinese economies. Recovery was slow over the year and
shaped by unexpected political events, depreciation in some
emerging countries and geopolitical tension in the Middle
East.
Overall, the emerging economies recorded growth of 4.0%,
compared with 4.1% in 2015. Growth in developed economies
declined to 1.6% from 2.2% in 2015, due largely to the
slowdown in the United States.
Against this backdrop, BBVA’s net attributable prot
amounted to €3,475m, the highest gure since 2010, a year-
on-year increase of nearly 32% in current euros and 61% in
constant euros (i.e. not including exchange-rate variations).
BBVA achieved these results thanks to improved revenues,
cost control and lower loan-loss provisions.
The Group’s main risk indicators also improved in 2016. The
NPL coverage ratio remained high, the NPL ratio fell to 4.9%
and the cost of risk declined by 22 basis points to 0.84%.
BBVA closed the year with a very sound capital position, with
a fully-loaded CET1 capital ratio of 10.9%, far higher than the
levels required by the regulator, and an increase of 58 basis
points on the gure at the close of 2015.
In 2016, we continued to make progress in our transformation
process. We began this process some years ago and are
ahead of the rest of the industry, with a multi-dimensional
vision that includes new platforms and processes, new
capacities and talent, a new corporate culture, new work
spaces and ways of working, a new organizational structure,
new products and businesses and active participation in the
digital ecosystem.
Over these years we have managed short-term diculties
without losing sight of the medium and long term. We have
dealt with all the challenges that have arisen along the way,
without wavering from our main project: the transformation
of BBVA.
Our transformation process is now gathering pace. In 2016,
we entered fully in the execution phase, creating the new
capacities needed for banking in the 21st century and dening
a new relationship standard with our customers. They are the
great beneciaries of the BBVA project, and the results are
very tangible.
In Spain, according to a survey by Accenture among retail
customers, our Bank has the highest proportion of customers
with a digital prole among our peers, at 41%, and the gure
is growing fast. BBVA also has the highest rating for online
banking, branches, ATMs and mobile banking apps in Spain.
The survey shows that retail banking customers value BBVA
very positively compared with its peers in products such as
current accounts, deposits, securities, cards and insurance,
and give us the top score when assessing the banking sector’s
digital transformation.
In other countries, BBVA is ranked high in the surveys and
we continue working very hard to be in the top spot in all the
markets where we operate.
In 2016, BBVA established its responsible banking priorities
for the coming years within the framework of a new
Strategic Plan. This includes creating transparent, clear
BBVA’s net attributable prot amounted to
€3,475m, the highest gure since 2010, a
year-on-year increase of nearly 32% in current
euros and 61% in constant euros
Over the years we have managed short-term
diculties without losing sight of the medium
and long term. We have dealt with all the
challenges that have arisen along the way,
without wavering from our main project: the
transformation of BBVA
BBVA IN 2016
1. LETTER FROM THE GROUP EXECUTIVE CHAIRMAN
P. 3
and responsible relations with our customers, integrating
nancial literacy in the solutions we oer, promoting
responsible and sustainable growth and investment in
the community, with nancial literacy initiatives for the
community, entrepreneurship and knowledge.
The BBVA Foundation also continued to develop economic,
cultural and scientic programs. The BBVA Micronance
Foundation, which in 2017 will celebrate its 10th anniversary,
was recognized by the United Nations for its contribution to
the Sustainable Development Goals. BBVA also rearmed
its commitment to the United Nations Global Compact’s
principles.
2016 was a good year for BBVA. We increased our earnings
and made major progress in our Strategic Priorities: we have
taken a quantitative leap forward in customer experience,
grown digital sales, developed new business models,
strengthened our capital position, improved our eciency
and enhanced the workforce, combining the best banking
talent with new digital proles.
I would like to congratulate the more than 134,000 men and
women who work at BBVA Group around the world and who
make us a better bank. I encourage them to continue working
with the same enthusiasm and dedication.
And thank you, our shareholders, for the support you have
shown us. Your trust motivates us to continue working with
greater enthusiasm and drive, constructing a new banking
standard of service and creating opportunities for all.
In 2016, BBVA established its responsible
banking priorities for the coming years within
the framework of a new Strategic Plan and
continued to develop educational, economic,
cultural and scientic programs around the
world
2016 was a good year for BBVA. We increased
our earnings and made major progress in our
Strategic Priorities
March 1, 2017
Francisco González Rodríguez
BBVA IN 2016
2.PERFORMANCE
P. 4
2. Performance
2. 1. BBVA in gures P. 5
2. 1. 1. Results P.5
2. 1. 2. Balance sheet and activity P.8
2. 1. 3. Solvency P.10
2. 1. 4. Global Risk Management P.12
2. 1. 5. Impact on people through the business P.13
2. 2. Business areas P.15
2. 2. 1. Banking activity in Spain P.15
2. 2. 2. Real-estate activity in Spain P. 19
2. 2. 3. The United States P. 20
2. 2. 4. Turkey P. 23
2. 2. 5. Mexico P.2 6
2. 2. 6. South America P.30
2. 2. 7. Rest of Eurasia P.32
2. 2. 8. Corporate Center P.33
2. 2. 9. Other information: Corporate & Investment Banking P.34
BBVA IN 2016
2.PERFORMANCE
P. 5
2. 1. BBVA in gures
2. 1. 1. Results
In 2016, BBVA Group generated a net attributable prot
of €3,475m, with a positive trend despite the dicult
macroeconomic environment during the year and the need
for a provision related to the so called “mortgage oor
clauses”. This positive trend is supported by good geographic
diversication and a well dened and executed strategy.
Net attributable prot (Million euros)
2,642
3,475
2015 2016
+31.5%
+61.2%
at constant
exchange rates
Net attributable prot breakdown
(1)
(Percentage)
7.4
10.7
14.0
46.3
18.0
3.5
Turk ey
The Uni ted States
Spai n
Rest of Eurasia
Mexico
South America
(1)
Excludes the Corporate Center.
Highlights:
1. Positive performance of revenues.
Net interest income (Million euros)
16,426
17,059
2015 2016
+14.9%
at constant
exchange rates
+3.9%
Gross income (Million euros)
23,680
24,653
2015 2016
+4.1%
+14.2%
at constant
exchange rates
2. Limited growth of operating expenses, which have grown
below the rate of increase in gross income; thus improving
the eciency ratio.
Operating expenses (Million euros)
52,0
51,9
2015 2016
-13
Basis
12,317
12,791
2015 2016
+3.9%
+11.9%
at constant
exchange rates
+11,9%
at constant
exchange rates
BBVA IN 2016
2.PERFORMANCE
P. 6
Eciency ratio (Percentage)
52.0
51.9
2015 2016
3. Reduction in impairment losses on nancial assets.
Impairment losses on nancial assets (Million euros)
4,339
3,801
2015 2016
-12.4%
-4.6%
at constant
exchange rates
4. Increase in allocation to provisions, strongly aected by
the booking of the provisions covering the contingency
of possible future claims by customers as a result of the
judgment by the Court of Justice of the European Union
(CJEU) on “mortgage oor clauses” in loans with consumers.
5. Reduction in other gains (losses), mainly as a result of
increased provisioning requirements for properties.
Consolidated income statement
(1)
(Million euros)
2016 %
% at constant
exchange rates 2015
Net interest income 17,0 59 3.9 14.9 16,426
Net fees and commissions 4,718 0.3 8.5 4,705
Net trading income 2,132 6.1 16.2 2,009
Dividend income 467 12.4 13.5 415
Share of prot loss of entities accounted for using the equity method 25 n.m. n.m. 8
Other operating income and expenses 252 114.5 86.5 117
Gross income 24,653 4.1 14.2 23,680
Operating expenses (12,791) 3.9 11.9 (12,317)
Personnel expenses (6,722) 5.4 12.6 (6,377)
Other administrative expenses (4,644) (0.1) 9.5 (4,650)
Depreciation (1,426) 10.5 16.6 (1,290)
Operating income 11,862 4.4 16.9 11,363
Impairment on nancial assets (net) (3,801) (12.4) (4.6) (4,339)
Provisions (net) (1,186) 61.9 73.5 (733)
Other gains (losses) (482) 17.0 16.6 (412)
Income before tax 6,392 8.7 26.2 5,879
Income tax (1,699) 17. 9 43.1 (1,441)
Net income from ongoing operations 4,693 5.7 21.0 4,438
Results from corporate operations
(2)
- - - (1,109)
Net income 4,693 41.0 69.5 3,328
Non-controlling interests (1,218) 7 7.5 98.4 (686)
Net attributable prot 3,475 31.5 61.2 2,642
Attributable prot without corporate transactions 3,475 (7.4 ) 6.4 3,752
Earning per share (euros)
(3)
0.50 0.37
Earning per share (excluding corporate operations; euros)
(3)
0.50 0.54
(1)
From the third quarter of 2015, BBVA’s total stake in Garanti is consolidated by the full integration method. For previous periods, Garanti’s revenues and costs are integrated
in the proportion corresponding to the percentage of the Group’s stake then (25.01%).
(2)
2015 includes the capital gains from the various sale operations equivalent to 6.34% of BBVA Group’s stake in CNCB, the badwill from the CX operation, the eect of the
valuation at fair value of the 25.01% initial stake held by BBVA in Garanti and the impact of the sale of BBVA’s 29.68% stake in CIFH.
(3)
Adjusted by additional Tier I instrument remuneration.
BBVA IN 2016
2.PERFORMANCE
P. 7
To ensure comparable gures, the Group’s income statement
with year-on-year rates of change and Turkey in comparable
terms is presented below (to isolate the eects of the
purchase of an additional 14.89% stake in Garanti).
Evolution of the consolidated income statement with Turkey in comparable terms
(1)
(Million euros)
2016 %
% at constant
exchange rates
Net interest income 17,0 59 (3.6) 7.0
Net fees and commissions 4,718 (5.6) 2.5
Net trading income 2,132 9.7 19.8
Other income/expenses 744 31.1 31.1
Gross income 24,653 (2.2) 7.7
Operating expenses (12,791) (1.4) 6.6
Operating income 11,862 (3.1) 8.9
Impairment on nancial assets (net) (3,801) (16.5) (8.8)
Provisions (net) and other gains (losses) (1,669) 46.0 52.3
Income before tax 6,392 (2.3) 13.5
Income tax (1,699) 7.8 30.5
Net income from ongoing operations 4,693 (5.5) 8.4
Results from corporate operations
(2)
- - -
Net income 4,693 21.7 45.7
Non-controlling interests (1,218) 9.9 24.9
Net attributable prot 3,475 26.5 54.7
Attributable prot without corporate transactions 3,475 (9.9) 3.6
(1)
Variations taking into account the nancial statements of Garanti Group calculated by the full integration method since January 1, 2015, without involving a change of the
data already published.
(2)
2015 includes the capital gains from the various sale operations equivalent to 6.34% of BBVA Group’s stake in CNCB, the badwill from the CX operation, the eect of the
valuation at fair value of the 25.01% initial stake held by BBVA in Garanti and the impact of the sale of BBVA’s 29.68% stake in CIFH.
A detailed explanation about the Group’s results can be found
in the Consolidated Annual Accounts, the Management
Report and the Auditors’ Report.
BBVA IN 2016
2.PERFORMANCE
P. 8
2. 1. 2. Balance sheet and activity
BBVA Group managed €731,856m of assets as of
31-Dec-2016. The most notable aspects of this activity are:
1. Slight slowdown in lending due to its performance in
the domestic sector, though the non-domestic sector
remains robust. Despite the good performance from new
production in the domestic sector, its balance declined
due to weaker activity with institutions and higher
repayments on mortgage loans.
Loans and advances to customers (gross) (Billion euros)
367
433
430
Dec-2014 Dec-2015 Dec-2016
-0.6%
(
1)
(1)
At constant exchange rates +2.1%.
2. Downward trend in non-performing loans, particularly in
Spain, Turkey and Mexico.
3. Slight downturn in deposits, strongly aected by a
signicant fall in balances from the public sector. In
contrast, favorable performance of the most liquid and
lower-cost items.
4. O-balance sheet funds were at, with the most
outstanding features being a positive performance in
Spain and the adverse exchange-rate eect.
Customer funds (Billion euros)
331
403
401
121
132
132
452
535
533
Dec-2014 Dec-2015 Dec- 2016
Deposits from customers Other customer funds
0.3%
(1)
(1)
At constant exchange rates +1.5%.
BBVA IN 2016
2.PERFORMANCE
P. 9
Consolidated balance sheet (Million euros)
31-12-16 % 31-12-15
Cash, cash balances at central banks and other demand deposits 40,039 36.7 29,282
Financial assets held for trading 74,950 (4.3) 78,326
Other nancial assets designated at fair value through prot or loss 2,062 (10.8) 2,311
Available-for-sale nancial assets 79,221 (30.2) 113,426
Loans and receivables 465,977 (1.2) 471,828
Loans and advances to central banks and credit institutions 40,268 (14.6) 47,147
Loans and advances to customers 414,500 0.1 414,165
Debt securities 11,209 6.6 10,516
Held-to-maturity investments 17,69 6 n.m. -
Investments in subsidiaries, joint ventures and associates 765 (13.0) 879
Tangible assets 8,941 (10.1) 9,944
Intangible assets 9,786 (2.7) 10,052
Other assets 32,418 (4.1) 33,807
Total assets 731,856 (2.4) 749,855
Financial liabilities held for trading 54,675 (1.0) 55,202
Other nancial liabilities designated at fair value through prot or loss 2,338 (11.7) 2,649
Financial liabilities at amortized cost 589,210 (2.8) 606,113
Deposits from central banks and credit institutions 98,241 (9.6) 108,630
Deposits from customers 401,465 (0.5) 403,362
Debt certicates 76,375 (6.8) 81,980
Other nancial liabilities 13,129 8.1 12,141
Memorandum item: subordinated liabilities 17,230 7.0 16,109
Liabilities under insurance contracts 9,139 (2.8) 9,407
Other liabilities 21,066 (0.6) 21,202
Total liabilities 676,428 (2.6) 694,573
Non-controlling interests 8,064 0.9 7,992
Accumulated other comprehensive income (5,458) 63.0 (3,349)
Shareholders’ funds 52,821 4.3 50,639
Total equity 55,428 0.3 55,282
Total equity and liabilities 731,856 (2.4) 749,855
Memorandum item:
Collateral given 50,540 1.3 49,876
A detailed explanation about the Group’s balance sheet and
activity can be found in the Consolidated Annual Accounts,
the Management Report and the Auditors’ Report.
BBVA IN 2016
2.PERFORMANCE
P. 10
2. 1. 3. Solvency
BBVA Group closed 2016 with a capital adequacy position
above regulatory requirements. Of note in this regard are:
1. The fully-loaded CET1 ratio was 10.9%, with the phased-in
ratio standing at 12.2%.
CET1 Fully-Loaded (Year-on-year trend in basis points)
+89
-32
+1
Net
attributable
profit
Dividends
+58
10.3%
10.9%
CET1
(Dec-2015)
CET1
(Dec-2016)
Other
We maintain our 11% CET1 fully-loaded target for 2017.
2. The total fully-loaded capital ratio closed at 14.7%, and the
phased-in ratio at 15.1%
Capital ratios (Percentage. 31-12-2016)
10.9
12.2
1.6
0.7
2.2
2.3
14.7
15.1
Tier 2
Additional Tier 1
CET1
Fully-loaded Phased-in
3. High capital quality, with leverage levels that continue to
compare very favorably with the rest of its peer group.
RWAs/ Total assets
Leverage ratio
53%
31%
1º
6.5%
4.7%
European
peer group average
BBVA
1º
European peer group: BARC, BNPP, CASA, CS, CMZ, DB, HSBC, ISP, LBG, RBS, SAN, SG, UBS, UCG. European peer group gures as of September. BBVA gures as of
December 2016.
RWAs/ Total assets Leverage ratio
BBVA IN 2016
2.PERFORMANCE
P. 11
Capital base
(1)
(Million euros)
CRD IV phased-in
31-12-2016 30-09-2016 30-06-16 31-03-16 31-12-15
Common Equity Tier 1 (CET 1) 47,370 47,801 47,559 46,471 48,554
Tier 1 50,083 50,545 50,364 48,272 48,554
Tier 2 8,810 11,635 11,742 11,566 11,646
Total Capital (Tier 1 + Tier 2) 58,893 62,180 62,106 59,838 60,200
Risk-weighted assets 388,951 389,814 395,085 399,270 401,277
CET1 (%) 12.2 12.3 12.0 11.6 12.1
Tier 1 (%) 12.9 13.0 12.7 12.1 12.1
Tier 2 (%) 2.3 3.0 3.0 2.9 2.9
Total capital ratio (%) 15.1 15.9 15.7 15.0 15.0
(1)
The capital ratios are calculated under CRD IV from Basel III regulation, applying a 60% phase-in for 2016 and a 40% for 2015.
A detailed explanation about the Group’s solvency can
be found in the Consolidated Annual Accounts, the
Management Report and the Auditors’ Report and in the
Pillar III report.
BBVA IN 2016
2.PERFORMANCE
P. 12
2. 1. 4. Global Risk Management
BBVA Group has closed 2016 with a very positive trend in the
main asset quality indicators.
1. Slight reduction in credit risk during the year due to the
adverse exchange-rate eect, and favorable performance
of non-performing loans, which declined 9.2% in year-
on-year terms.
Non-performing loans (Million euros)
25.996
23.595
Dec-2015 Dec-2016
9.2%
2. Improvement in the main risk indicators.
Risk indicators (Percentage)
74
70
NPL coverage ratio
5.4
4.9
NPL ratio
1.06
0.84
Cost of risk
Dec-2015
Dec-2016
Credit risks
(1)
(Million euros)
31-12-16 31-12-15
Non-performing loans and contingent
liabilities
23,595 25,996
Credit risks 480,720 482,518
Provisions 16,573 19,405
NPL ratio (%) 4.9 5.4
NPL coverage ratio (%) 70 74
(1)
Include gross customer lending plus contingent exposures.
Non-performing loans evolution (Million euros)
2016 2015
Beginning balance 25,996 23,590
Entries 10,957 9,510
Recoveries (7,633) (7,040)
Net variation 3,324 2,470
Write-os (5,592) (5,027)
Exchange rate dierences and other (134) 4,964
Period-end balance 23,595 25,996
Memorandum item:
Non-performing loans 22,915 25,333
Non-performing contingent liabilities 680 664
A detailed explanation about the Group’s risk management
can be found in the Note 7 of Consolidated Annual Accounts,
the Management Report and the Auditors’ Report.
BBVA IN 2016
2.PERFORMANCE
P. 13
2. 1. 5. Impact on people through the business
Banks have a simple role in society: to attract the savings
of families, companies and other agents with the aim of
preserving them and making them grow; and to lend them,
with rigor and prudence, to third parties. These loans can
drive the development of personal, business and public-
sector projects that make the improvement of our present
and future possible. As a bank, BBVA helps people and
companies make the best nancial decisions by providing
guidance and clear, transparent and responsible information.
In addition to its role as a bank, BBVA strives to achieve its
Purpose of bringing the age of opportunity to everyone and
its aspiration to strengthen relations with its customers.
We do all this because we believe that we are more than
just a bank: we are creators of opportunities. In this way,
our Purpose and our aspiration have a positive impact on
people’s lives and on the societies in which we operate. BBVA,
Creating Opportunities.
Wealth creation
The income generated from our nancial activity goes back
into society in the form of salaries and wages for employees,
payments to suppliers, taxes and distribution of dividends to
shareholders, generating wealth for our stakeholders.
935,284 shareholders received €1,043m of remuneration
in cash.
134,792 employees earned €5,267m in salaries and
wages.
39 hours of training per year per employee, with an
investment of €45.5m.
4,240 suppliers were paid €7,751m
1
.
€9,440m in taxes accrued and collected from BBVA’s
business activity
€24,692m of economic value generated, which accounts
for 0.5% of the GDP of the economies in which BBVA
operates.
Contribution to growth and welfare
We have a positive impact on the lives of our customers
through our products and services, which create the
opportunities they need to carry out their projects and
manage their savings.
1
It excludes Turkey
70 million customers in 35 countries; 18 million digital
customers.
We nance homes for a total amount of €122,758m.
We manage pension plans for a total value of €33,418m.
2,555,542 SMEs, micro-enterprises and self-employed
workers supported or nanced by BBVA.
9,799,905 customers included in the nancial inclusion
segment.
1.8 million micro-entrepreneurs supported or nanced
with €1,009m from the BBVA Micronance Foundation.
Direct contribution to society
In addition to the impact we generate through the business,
we develop social programs via our own initiatives in nancial
literacy, education in values and entrepreneurship; or through
our foundations, which run programs that generate a positive
impact on society and benet a variety of groups.
More than €93m allocated to social programs, 2.7% of the
Group’s net attributable prot.
150,165 participants have beneted from our programs
providing education in values, with an investment of
€23.7m.
€10m invested in nancial education programs, in which
2.5m people have participated.
€6.9m allocated to social entrepreneurship, which have
beneted more than 1.8 million entrepreneurs.
€25m allocated to knowledge, education and culture
programs by the BBVA Foundation.
Contribution to sustainable development
We try to minimize the negative impact of our activity, as
well as taking advantage of opportunities arising from new
sustainable nancial models.
€4.444m allocated for nancing renewable energy
operations.
5.02% reduction in water consumption per person.
5,79% reduction in C02 emission per person.
BBVA IN 2016
2.PERFORMANCE
P. 15
2. 2. Business areas
2. 2. 1. Banking activity in Spain
Decline in lending, but good performance of the more
liquid deposits and o-balance sheet funds.
Weaker revenues due to environment.
Good evolution in costs and impairments.
Impact of mortgage oor clauses.
Risk indicators continue to improve.
Denition of the area
This business area includes the Commercial Banking,
Consumer Finance, Corporate and Business Banking (CBB),
Corporate & Investment Banking (CIB), BBVA Seguros and
Asset Management units. It also includes the portfolios,
nance and structural interest-rate positions of the euro
balance sheet. In addition, in September 2016 the merger of
Catalunya Bank (CX) was successfully completed with the
integration of the CX business in the BBVA systems.
Management priorities
Development of the strategic roadmap for the area
In line with the six Strategic Priorities dened by the Group,
this area established a Growth Plan a year ago, whose priority
objectives are to improve customer experience, boost digital
sales, optimize capital consumption and increase eciency
continuously as key levers to drive business protability.
In line with this Plan, the area has advanced along its strategic
roadmap based on four core elements: transformation and
development of the distribution model, development of a new
value proposition for customers, adaptation of the ways of
acting and working to the new environment, and leadership in
customer experience.
A. Transformation and development of the distribution
model
For individual customers, the new distribution model is
focused on Retail Banking Hubs (CBC); in other words,
centers oering specialized advice, with the capacity for
remote management (the
BBVA Contigo
manager) as a
core element of the model. These centers have managers
specializing in segmented customer service and advice,
boosting customer relations with the Bank through the
channel that is most suitable and convenient for them. In
this model, the CBC manager is responsible for the overall
management of the customers in the Bank, regardless of
the relationship channel.
Active remote clients
(1)
(Banking activity in Spain. Thousands)
262
309
504
Dec-2014 Dec-2015 Dec-2016
+92.4%
Retail Banking
Experts in managing customers across all
channels: face-to-face, remote and digital
Boosting each sale through the most suitable
channel for the customer
Digital ambassador specializing
in digital culture
1
Attended through remote advisors.
BBVA IN 2016
2.PERFORMANCE
P. 16
In the world of small companies work is being done
on the development of a distribution model based on
high-value advice and extreme specialization, which
is levered on the new “1+9” model: a relationship
manager, responsible for the overall customer relations
with the Bank, supported by a team of nine product
specialists (insurance, renting, foreign trade -Comex-,
payment channels, investment banking, etc.) based
on improvements in customer service. It is particularly
focused on the exibility and speed of response, thanks to
the new tools boosting manager mobility, the redesign of
processes and improvement of response times by support
areas.
B. New value proposition for customers
Digital disruption and easy access to information
has generated changes in our customers’ needs and
behavior. Customers’ demands for more immediacy and
customization have led us to drive digital sales through a
new value oering with three key lines:
New value proposition
Advice
Convenience
Mobile as the key relationship device
Simplicity
Transparent and reliable
Simple products
Very simple buying processes
Advice supported by the innovative tools
(Commerce 360. BBVA Valora…)
a. A more comfortable and appropriate, in other words,
convenient channel, through the development of
multiple new mobile applications already in the
hands of our customers, under the umbrella of the
well-known “Revolution of small things” campaign.
By way of example: Immediate registration (allows
people to open an account and become customers
100% online by mobile phone), remote signature, my
conversations, push notications, ability to request
appointments by mobile phone, reservation of turn at
teller and consultation of waiting times in branches,
etc.
Convenience: the revolution of small things
Website and smart phone
registration “Alta inmediata”
Advanced digital servicing
(Bizum, on-off, notifications)
Call logged and
contextualized
My conversations
Prior appointment
Turn at teller and query:
saturation of branch teller
Prioritization
Become a
customer is very
simple
All servicing in my
app
My remote
manager on my
smartphone
No waiting in the
branch
Customers through mobile (Banking activity in Spain. Thousands)
1,451
2,084
2,642
Dec-2014 Dec-2015 Dec-2016
+82.1%
Digital customers (Banking activity in Spain. Thousands)
2,637
3,306
3,857
Dec-2014 Dec-2015 Dec-2016
+46.3%
BBVA IN 2016
2.PERFORMANCE
P. 17
Digital sales (Banking activity in Spain. Percentage of total sales YTD,
number of transactions)
8.4
17.1
December 2015 December 2016
b. Simple, transparent and straightforward oering; in
other words, make simple and transparent products
and services available for customers in person, online
and via mobile devices and simplifying the digital
application process and timing as much as possible.
Simple & transparent
Transparent, Clear &
Responsable communication
Things to stop doing (10 out
12 measures implemented)
73% of products contracted
via web and 53% of products
via smartphone (October)
Transparent
Very simple
paperwork
c. Advice, a key that clearly dierentiates BBVA in quality
and immediacy in comparison with its peers. By way
of example:
Mi día a día
is an application to control
the household economy that categorizes and predicts
income and expenses, creates budgets or helps users
save, by setting “savings targets” with notications and
intermediate objectives; and
BBVA Valora
, a website
and pioneering application in the sector, which in six
months has achieved a million searches and that
advises on the buying and selling of properties, gives
information and allows exploration of the chosen
neighborhood, values the home and oers advice and
a prior simulation of nance.
2
Santander, Caixabank, Bankia, Sabadell and Popular.
Advisory
Personal Financial
Management
Budgets
Accounts goals (October)
BBVA Valora
360 Commerce
Control my
day-to-day- life
Helps me to
save
Helps me with
important
decisions
a tipos de cambios constantes
C. Adaptation of the ways of acting and working to the
new environment
The process of digital transformation underway in the
area involves undertaking changes in our productive
model, processes and ways of acting to achieve progress
in eciency and productivity that are compatible with
operational excellence and improvement of customer
experience.
a. Ways of working: the teams that head up digital
transformation work with the agile methodology, by
which multidisciplinary teams are organized in scrums
to achieve a clear objective that in turn is divided into
quarterly deliverables.
At the same time the area has a new organizational
model, with atter and more exible structures.
b. The Process Plan and new IT model represents the
redesign of the main operations and processes with
the aim of optimizing response times and reducing the
number of incidents to zero.
D. Leadership in customer experience
In 2016 the area has consolidated its leading position
among traditional banking institutions
2
in terms of
recommendations by individual customers (Net
Promoter Score index). This leading position is based
on the strategy developed over recent years, which puts
the customer at the heart of the business and which
is focused on minimizing the aspects that generate
customer complaints and on improving on-site and
remote attention and the quality of service oered. All
this has also allowed a very signicant reduction in the
customer attrition rate.
BBVA IN 2016
2.PERFORMANCE
P. 18
Net Promoter Score (NPS)
(1)
(Banking activity in Spain. Percentage)
-6
3
13
2014 2015 2016
+19
basis points
1
st
(1)
Entities: Santander, Caixabank, Bankia, Sabadell and Popular.
Attrition Rate (Retail customers) (Spain. Percentage)
9.34
8.88
December 2015 December 2016
-46 basis
points
Digital customer rating (Play Store Android) (Spain)
4.2/5 1
st
4.2/5 1
st
In the coming years, as part of the area’s Transformation
Plan, the aim will be to achieve a new standard of
customer experience for both individuals and companies.
Overall, Banking Activity in Spain, through its strategic
roadmap and the four core elements that sustain it,
represents a rm commitment to the construction of
a long-term competitive advantage: a new standard of
customer experience as a lever for growth, retention and
the increased loyalty of our customer base on which
to create lasting relations of trust with them, which is a
fundamental pillar of the future protability of our business.
The Management Report provides more details on the
macro and industry trends, activity and earnings of this
business area.
BBVA IN 2016
2.PERFORMANCE
P. 19
2. 2. 2. Real-estate activity in Spain
Better market dynamics.
Further reduction in net exposure and NPLs.
Increased coverage for real-estate assets.
Denition of the area
This area provides specialized management of the Group’s
real-estate assets, including foreclosed real-estate assets
from both residential and developer mortgages, the developer
loan business and other related assets. Management of
properties for BBVA’s own use is excluded from its scope.
Management priorities
Real-estate activity in Spain has as its main objective to steer
and accelerate the reduction of the BBVA Group’s real-estate
exposure, preserving the economic value of its assets. To that
end, its management aims to:
a. Boost the sale of retail and wholesale assets.
b. Make progress in management based on economic
rather than accounting values or criteria.
c. Continuously adapt the structures, procedures
and management schemes to achieve set targets,
paying particular attention to setting up controls and
maintaining high internal governance standards.
In 2016 various initiatives were launched aimed at expediting
this process, most notably the Metrovacesa restructuring
plan, which included splitting o the real-estate promotion
business as the company Metrovacesa Suelo y Promoción,
while keeping equity-related assets within Metrovacesa (with
additional asset contributions from partners). In October
2016, the tertiary equity business was merged with Merlin
Properties, SOCIMI, S.A. Land development agreements
were also reached with signicant developers through their
allocation to joint ventures and other partnership formulas for
short and medium-term land sale.
The Management Report provides more details on the macro
and industry trends, activity and earnings of this business
area.
BBVA IN 2016
2.PERFORMANCE
P. 20
2. 2. 3. The United States
Focus on protable and selective growth.
Good performance of deposits.
Improved tendency throughout the year.
Improved risk indicators throughout the year.
Denition of the area
This area incorporates business conducted by the Group in
the United States through BBVA Compass Group and the
BBVA New York branch.
BBVA Compass is a bank with 672 branches throughout the
United States. It is the 22
nd
largest bank in the United States in
terms of deposit market share.
BBVA Compass footprint
Denver
New York
Alburquerque
Las Cruces
El Paso
Lubbock
Ft. Worth
Houston
Beaumont
Jacksonville
Gainesville
Mobile
Montgomery
Birmingham
Huntsville
Dallas
San Antonio
Laredo
McAllen
Austin
Phoenix
Tucson
Los Angeles
San Diego
La Jolla
Atlanta
Chicago
Irvine
San Francisco
Walnut Creek
Sacramento
Branches Commercial oce
Commercial/Private client oce
Orlando
Tampa
Miami
Washinton. DC
Raleigh
Charlotte
Cleveland
BRANCHES BY STATE
Alabama 89
Arizona 75
California 62
Colorado 38
Florida 45
New Mexico 19
Texas 344
Management priorities
Development of the strategic roadmap for the area
In 2016, BBVA Compass continued making headway on
its strategic roadmap, enhancing a differentiated value
proposition aligned with the six Strategic Priorities defined
by the Group and focused on profitable growth. In this
sense, the area has a different approach model for each
segment and product / service offered, as well as handling
BBVA IN 2016
2.PERFORMANCE
P. 21
the business mix appropriately to achieve profitable
growth.
In particular, the BBVA Group subsidiary in the United States
has continued to work according to the following Strategic
Priorities:
A. To provide a new standard in customer experience,
BBVA Compass has focused its eorts on improving
processes and creating do-it-yourself solutions. The main
initiatives carried out in 2016 were therefore primarily
aimed at improving end-to-end processes related to:
Opening accounts and incorporating new customers
to the entity.
Contact center.
Credit and debit card application and maintenance.
Granting mortgage loans.
Other services / complaints.
Treasury management.
As a result of these initiatives and many others, the results
of BBVA Compass in terms of customer satisfaction, as
measured by Net Promoter Score (NPS), have improved.
Net Promoter Score (NPS). (BBVA Compass. Percentage)
31
36
2015 2016
The area’s objectives set for 2017 focus on increasing
retention, and growing the target customer base,
particularly in private and retail banking.
B. To drive digital sales, the area has been working on a
number of key initiatives throughout 2016 to foster the
transition of customers toward digital channels through
“do-it-yourself” solutions, the development of new,
cutting-edge functionalities and projects in partnership
with the branches; all without losing sight of the initiatives
for preventing fraud and improving cybersecurity. One
example of success is the online release in October
2016 of Signature Express Loan, a consumer loan that is
arranged entirely online.
Digital sales (Percentage of total sales YTD, number of transactions)
9.3
19.9
December 2015 December 2016
In 2017, BBVA Compass will continue to drive digital
sales through a proper pricing strategy, an attractive
value proposition driven by digital marketing and by
leveraging technology and big data. BBVA Compass will
also continue to make progress in online launching new
products, such as the signing up for credit cards, etc.
C. Turning to developments in new business models, BBVA
Compass has opted to open its technology platform
to third parties so that others can create business on
these supports. This is known as the Open APIs (open
application program interface). In this area, the startup
Dwolla, connected to the BBVA Compass API, is making its
real-time payment systems available to bank customers.
Customers using Simple can also enjoy the benets of
being connected to the BBVA Compass platform, as their
accounts have been migrated to that platform.
The platform will represent a competitive advantage
capable of achieving outstanding earnings and positioning
for the bank.
Looking forward to 2017, work will continue to develop the
following products and services on the open platform:
Corporate accounts.
Issue of debit cards.
Know your customer (KYC), i.e. processes for
identifying and checking customer identity.
Payment means.
Loans.
Operational processes.
BBVA IN 2016
2.PERFORMANCE
P. 22
D. To optimize capital allocation, the area is focusing its
efforts on generating growth organically by diversifying
the loan portfolio, with a particular focus on the most
profitable segments and an appropriate risk-adjusted
return. In addition, there is the challenge of generating
new sources of income from fees and commissions
while containing expenses in an environment where
interest rates are still low and with the income
statement for 2016 affected by the impairment in the oil
& gas sector, particularly during the first quarter of the
year.
E. In order to achieve an unrivaled eciency, BBVA
Compass is carrying out strict cost control and working on
a continuous review of its operating methods, to adapt to
a sector that is in constant change. This entails adapting:
The model, dening new branch prototypes leveraged
on new technologies.
The processes, with new management practices for
daily branch operations.
The structures, i.e. adjusting the size of the network
to the new customer behavior in order to optimize
protability.
F. Lastly, to attract, develop, motivate and retain a rst-
class workforce, the area is implementing a variety of
initiatives, focused on:
Establishing a sense among the workforce of
belonging to a “team of teams”.
A new mindset.
Eective employee communications.
Boosting the diversity and inclusion.
Creation of online communities that foster best
practices.
Establishing a new leadership and development model.
The Management Report provides more details on the
macro and industry trends, activity and earnings of this
business area.
BBVA IN 2016
2.PERFORMANCE
P. 23
2. 2. 4. Turkey
Focus on protable growth, driven mainly by business
banking loans.
Net interest income growth driven by price management
and activity.
2016 costs evolution in line with ination.
Risk metrics reect good management in a complex
environment.
Denition of the area
This area includes BBVA’s stake in Garanti, which has been
39.9% since the third quarter of 2015, when Garanti was
incorporated into the Group’s nancial statements by the full
integration method. Consequently, the year-on-year rates
of change of the earnings in the area have been aected by
the change in the scope of consolidation. In order to make
the comparison against 2015 easier, some rates of change
are shown considering the stake in Garanti in comparable
terms, i.e., including the stake in Garanti as if it had been
incorporated by the full integration method since January 1,
2015 (Turkey in comparable terms).
Garanti is a banking group with 23,678 employees that
provides a wide range of nancial products and services to
its 14.6 million customers through an extensive distribution
network, with 959 branches in Turkey, 7 in Cyprus, 1 in
Luxembourg and 1 in Malta. It has 3 representative oces in
London, Dusseldorf and Shanghai, in addition to a presence
in other countries, with 85 oces in Romania, 1 in Holland
and 74 oces in Turkey dedicated to other activities such as
leasing, factoring, and securities trading.
Garanti Bank footprint in Turkey
Number of
branches
tripled
since 2002
100%
geographical coverage
in 2016 vs. 49% in 2002
Management priorities
Garanti has continued to work on a series of initiatives in line
with the Group’s six Strategic Priorities. The following is a
summary of the most relevant initiatives undertaken in 2016.
A. Improving customer experience is a key aspect for
Garanti. The goal is always to provide a service above and
beyond the customer’s expectations, seeking to oer an
excellent customer experience through all the channels.
To do so, Garanti is putting special emphasis on being a
more transparent bank with clearer processes, and one
that behaves responsibly to its customers.
To this end, Garanti has launched the CX platform (Garanti
Empati). In addition to ensuring that all employees are
better informed regarding all the work and projects
underway, it allows them to:
Share best practices in customer experience.
Work on building a relationship of trust with
customers, in which better communication is crucial.
In addition, there is a mobile platform designed to
empower sales force, “STEP”, designed as a seamless
workspace with the slogan of “a bank in a tablet”.
Employees can keep up with all customer information,
transactions, product usage and customer requests
from a single, easy to use interface. It also enables video
communication with product / subject matter experts;
that is to say, it provides expert level information to our
customers from rst hand.
As a result, Garanti is ahead of its competitors in the NPS
index.
BBVA IN 2016
2.PERFORMANCE
P. 24
Net Promoter Score (NPS) (Turkey. Percentage)
47
64
Peer group average
Garanti
Peer group average: Akbank, Isbank, YKB, Deniz and Finanz.
Eorts to improve customer experience will continue
throughout 2017 with a view to making further
improvements in areas considered to be critical for the
entity, as well as in the complaint-handling processes.
Garanti has also worked in 2016 to expand the customer
base eectively, and will continue to do so in 2017 through:
Continuous eorts on new customer acquisition and
retention.
An increase in cross sales.
Use of big data as an eective way to identify customers.
B. To drive digital sales, Garanti has positioned mobile
banking at the center of its omni-channel strategy,
investing in digital channels with a view to achieving
sustained and protable growth. It is worth mentioning
that the vast majority of non-cash nancial transactions
are conducted through digital channels, which are thus
assuming a very prominent role in terms of what they
represent for the bank’s total sales.
92%
Of all non-cash financial trasactions
go through digital channels:
41%
Online
41%
Mobile
10%
ATM
0.2%
Call center
With increasing weight in mobile
Mobile transactions:
70 million in 2015
>111 million as of December 2016
The bank is convinced of the possibility of value
creation through digitalization and is pursuing a more
productive use of digital channels, improving existing
services, incorporating new features and developing new
applications and products for the digital environment.
Investments in digital channels. Feeding the sustainable and protable growth model
Higher cross-sell
Product penetration of digital customers
is 60% higher than average customers
Value creation
through
digitalization
Growing fee base
Service fees drives by online & mobile
banking make up 39% of bank´s total
service fees
Lower transaction costs
Transaction costs at online banking is 30 times
and mobile banking is 55 times lower than
branch banking
Increasing customer
satisfaction & loyalty:
Branches with >65% digital penetration
have 40% higher operational service
quality & efficiency
Sustained Growth
Branches increased focus on:
Builing relationship
Providing Advisory
Generating sales
Acquiring new customers
Higher Profitability
Profitability per digital customer
is 30% higher than traditional branch
customers
Some examples of the new mobile apps and
functionalities that have been launched include:
Bonus Flaş (BBVA Wallet), which has already reached
a broad user base with 2.8 million downloads in 2016.
The launch of “mobile appointment”, by which
customers can get prioritized queue numbers and
are allocated to less busy branches. This has allowed
customers to be served quicker and easier, thus
improving the customer experience.
BBVA IN 2016
2.PERFORMANCE
P. 25
Individual meetings with consultants via video calls.
In addition to providing customers with innovative
solutions that best meet their needs, Garanti has
redesigned its digital platforms to oer an incident-free
experience. These initiatives have resulted in a signicant
increase in online sales.
Digital sales (Percentage of total sales YTD, number of transactions)
23.4
26.1
December 2015 December 2016
C. Optimization of capital allocation is yet another
strategic priority for Garanti to ensure sustainable
growth and achieve optimal protability. This requires
alignment of decision-making with capital consumption
and business return, as well as a precise calculation
of the risks assumed. In this regard, tracking capital
consumption for the historical portfolio and new
customers alike is an essential part of the decision-
making process. To achieve sustained protability, the
focus will continue to be on diversifying the sources of
income from fees and commissions. Eective spread
management, prudent risk management and policies
designed to improve eciency are further key factors
for maintaining and improving the protability of the
business.
D. Human capital, in other words employees, represents
Garanti’s most valuable asset. This is demonstrated by
the investment gures in training and the recognition
obtained, which proves the bank’s standing among
the leaders in terms of quality standards in personnel
management.
The most valuable asset: human capital
Training hours per employee:
36 hours/year
1st company from Turkey to earn “Gold Certificate”
from Inverstors in People for the second time
542 thousand hours of in
class training
113 thousand hours of
digital training
Garanti Leadership A c a demy
85% of ourBank´s directors
graduated from these
programs
Ambassadors of our
common culture of
management
Best Talent Management in
Turkey
IIIP Gold cer ti fi cate in 2015:
Received first Gold in
Turkey in 2012
The Management Report provides more details on the
macro and industry trends, activity and earnings of this
business area.
BBVA IN 2016
2.PERFORMANCE
P. 26
2. 2. 5. Mexico
Activity continues strong
Operating expenses still growing below gross income
Double-digit year-on-year growth in net attributable prot
Sound risk quality
Denition of the area
This area comprises the banking, real-estate and insurance
businesses conducted by BBVA Group in Mexico (hereinafter,
BBVA Bancomer or BBVA Mexico).
The largest banking infrastructure:
Banches:
ATMs:
Correspondents
(1)
:
TPVs:
1,836
11,434
31,670
171,702
233 branches
1
st
position
Bajio
223 branches
1
st
position
West
315 branches
1
st
position
Metro
470 branches
1
st
position
North-EastNorth-West
205 branches
2
nd
position
South
221 branches
2
nd
position
South-East
168 branches
2
nd
position
branches
1
st
position
Total
1,836
(1)
It includes banking and exchange correspondents.
Management priorities
The Investment Plan implemented in 2013 for this area
concluded in 2016, entailing a total investment of US$3.5
billion. The plan included remodeling 1,831 branches (over
99% of the network), the installation of the most modern
ATMs available on the market (the number increased during
the year by 661 units), the launch of new applications, and
the development of a robust operational and informational
platform. In addition, the new head oces have obtained the
LEED certicate as sustainable buildings (Torre and Parques
BBVA Bancomer). This has resulted in BBVA Bancomer
achieving the top ranking on the Net Promoter Score (NPS),
with improved customer service excellence and a franchise
model implemented in branches, with specialized executives
by product and segment.
BBVA IN 2016
2.PERFORMANCE
P. 27
Additionally, in 2016, BBVA Bancomer continued working
on the Strategic Priorities that the Group launched in
2015, within an ongoing transformation process to continue
improving customer experience and the eciency of
processes as the key drivers of business protability.
Investment plan 2013-2016: 3,500 million dolars
Branches
Technology
Head ofces
1,831 branches (over 99% of the
netwok), the installation of the most
modern ATMs available on the market
Digital channels
New applications robust
operational plataform
LEED certicate as sustainable building
* Customer service excellence
* Franchise model implemented in branches
* Specialized excutives
NPS index
Net Promoter Score (NPS)
1
st
A. Provide a new standard in customer experience
Goal: to provide the best customer experience through a
new customer service standard and model, boosting the
relationship between customers and the bank through
the most suitable and convenient channel for them, while
oering the products and services that they need.
In 2015, BBVA Mexico launched a series of initiatives
to enhance customer loyalty and retention. The most
signicant was the
Experiencia Única
(Unique Experience)
model, now implemented in all the branches, which
standardizes customer service and generates an internal
certication model that allows an ongoing improvement in
the service.
BBVA Mexico has continued making further progress in
this regard in 2016. As a result, it has been recognized by
its customers as one of the banks oering the best service
in Mexico, as reected in the rise in the Net Promoter
Score over the year. Compared with its peers on the open
market, BBVA Bancomer closed the year ranked rst in
the country.
Net Promoter Score (NPS) (Mexico. Percentage)
40
44
Peer group average
BBVA Bancomer
Peer group average: Banamex, Santander, Banorte, HSBC.
Additionally, the mobile apps launched to simplify use
of nancial services have undergone a continuous
improvement process in terms of user experience
(UX) and transparency. Data from December 31, 2016
show that the BMovil, Send and Wallet apps have had
over four million downloads, payroll portability reached
79%, the customer contact center was redened, 82%
of transactions were migrated to ATMs or self-service
machines, the rst cross-border accounts (from Mexico
to the United States) were opened for non-resident
customers in the SME and retailer segments, and the
credit limit on cards for customers with a good nancial
history was raised.
Payroll attraction doubled
from 11 to 22 thousand per month
79% of total payroll portability, meaning
that 8 out of 10 employees choose
Nómina
Bancomer
(BBVA Bancomer payroll)
Several initiatives in individual customer segments
are being developed in 2017 to consolidate the bank’s
positioning, improve customer service, create better
value-added oerings and increase the customer base
loyalty. The initiatives expected to be implemented
include, among others: customer sub-segmentation,
a new incentive model and expansion of the product
oering.
B. Drive digital sales
Goal: support and boost sales through digital channels
and after-sales service, with swift, simple and secure
access to nancial services. There was only a limited
BBVA IN 2016
2.PERFORMANCE
P. 28
capability to track the performance of digital campaigns
in 2015. A new CRM (client relationship management)
model was implemented in 2016 for digital marketing
campaigns.
In 2015 an initial model had been implemented to provide
incentives for attracting and converting traditional
customers into digital customers, various products and
services were designed for digital consumption (One-
click) and certain solutions were developed for the digital
ecosystem. The Bancomer Trader app for trading shares
online was launched in 2016. BBVA Send received an award
at the 2016 Bit Prizes as the most innovative app in the
nancial sector for boosting digitalization in Mexico. This
app lets users withdraw cash without a card (20% of the
app users are not customers of the Bank). Additionally,
“One-click” is one of the best examples of the boost to
digital sales, since it provides the segments of private
individuals and small businesses with access to consumer
loans through digital and remote channels such as
Bancomer.com,
Bancomer Móvil
and ATMs. The number of
consumer loans granted through this medium represents
over 40% of total loans. This gure for 2015 was 11%.
Consumer loans granted through digital channels (Mexico. Thousands.
Percentage)
141
529
Digital loans (thousands)
15.1
39.9
Digital loans/Total (%)
Dec-2015 Dec-2016
Since2014whenweonlyhadsixdigitalproductswe
haveincreased our range substantially to 31. For instance,
in 2016 BBVA Bancomer launched Mexico’s rst fully
digital bank account as a result of a continuous process of
renewal to adapt to the needs of new customer segments.
As a result of all these eorts, BBVA in Mexico has reached
a gure of 3.9 million active digital customers and
granted over 500,000 loans through digital channels at
the close of 2016. This means a year-on-year growth of 4.5
times.
Digital sales
(1)
(Mexico. Percentage of total sales YTD, number of transactions)
6.2
11.9
December 2015 December 2016
(1)
Figures have been restated due to changes in the inclusion of some products.
A key focus will be maintained in 2017 on the ongoing
technology development and innovation for supporting
the sales process with tools that simplify the management
and procedure of lending. At the same time, the aim is also
to provide nancial users with incentives to save, and the
launch of several simple savings products is being pursued.
C. Optimize capital allocation
Goal: To optimize capital allocation by boosting
and improving protability to ensure the successful
sustainability of the business.
To achieve this goal, signicant progress has been made
in improving and generating more ecient processes
and tools to enable an integral management of BBVA
Bancomer’s capital and that of its subsidiaries, while
complying with the requirements of local and global
authorities. The initiatives currently underway in this
regard aim to guarantee that the business has the
essential nancial information available as the primary
management tool. Additionally, more importance is being
given to a cross-cutting vision of business protability
(customer, segment, product, region, unit and business
area). Likewise, substantial initiatives are being identied
for improving cost eciency.
D. Unrivaled eciency
Goal: To provide greater added value at a reasonable price,
achieving high levels of productivity across the whole value
chain with a clear focus on commercial activity.
A number of action plans are being developed and
implemented to generate more ecient processes that
will increase network productivity. Improvements are also
being made in fraud prevention services and eciency of
information analysis.
E. A rst-class workforce
Goal: To attract, develop, motivate and retain a rst-
class workforce, provide the best employee experience,
BBVA IN 2016
2.PERFORMANCE
P. 29
and bring corporate culture into line with the Group’s
transformation process:
The area seeks the continuous improvement and
development of the team. To do so, a leadership model
has been incorporated by relaunching the communication
strategy for the corporate culture and values. Constant
eorts are also being made to increase the levels of
transparency and employee satisfaction. Among the
initiatives are: the substantial simplication of pay scales
and salaries; incorporation of an oce for retaining, taking
care of and developing talent in the entity; creation of
a new hiring process for reducing hiring times by half;
a change in the design of the training program; and
development of a new selection strategy with a view to
attracting the best young talent available in the market.
F. Social responsibility
An additional strategic priority was dened in 2015 for
Mexico due to the importance of the BBVA Bancomer
Foundation for the country.
Its goal is to enhance our commitment to social
development and welfare, foster education in the country
and support the communities within the institution’s
sphere of action.
Among the initiatives implemented to foster this strategic
priority, every year some of the bank’s earnings are
allocated to support education for children with limited
resources and scarce opportunities for development
through a scholarship program. Financial literacy
programs are likewise carried out to raise awareness
of the practical advantages and positive impact of a
responsible use of nancial services and products. Over
2.5 million people beneted from these nancial literacy
programs in 2016. Additionally, the
Por los que se quedan
(For those left behind) and “Young Knowledge Olympics”
programs beneted over 84,000 students in the country.
Last but not least, BBVA Bancomer also fosters corporate
volunteering. A total of 2,235 employees have been
involved in over seven initiatives that beneted over
15,600 citizens, 3,500 students, 9 public schools and a
public park.
The Management Report provides more details on the
macro and industry trends, activity and earnings of this
business area.
BBVA IN 2016
2.PERFORMANCE
P. 30
2. 2. 6. South America
Activity decelerating on the back of a slower macro
growth.
Positive trend in revenues.
Costs inuenced by high ination in some countries and
the adverse eect of exchange rates.
Credit risk metrics behavior as expected: slight
deterioration due to macro environment.
Denition of the area
South America manages the BBVA Group’s businesses in the
region. The area is notably diversied and has units operating
in practically the entire zone.
BBVA’s footprint in South America
Banks AFPs
Insurance
company
Argentina x x
Bolivia x
Chile x x
Colombia x x
Paraguay x
Peru x
Uruguay x
Venezuela x x
Management priorities
In 2016, the area has focused on the six Strategic Priorities
dened by the Group, whose main objective is to strengthen
BBVA’s leading position in the region and become a
benchmark for service quality and capacity to build digital
relationships with customers.
Work has been undertaken to further the execution of
various transformation and technological development
programs, as well as to expand the oer of the dierent
distribution channels which reinforces value creation for our
customers.
Signicant progress has been made on the objectives set,
such as positioning BBVA as the bank most recommended by
its customers and increasing the digital oering in the region.
The most important developments are described in more
detail below.
A. To provide a new standard in customer experience,
in 2016 BBVA has worked to sustain and strengthen
its leadership in service quality. Specically, a number
of initiatives have been reinforced to ensure ongoing
contact with customers and to discover the reasons for
satisfaction or displeasure. This is crucial in enabling
BBVA to embrace a process of ongoing improvement
in real time and to share best practices among dierent
geographic areas. Particularly noteworthy is the launch
of the
Experiencia Única
(One Experience) program,
successfully implemented in Mexico, which guarantees
customers a high quality in all their interactions with the
Bank. This focus on quality has enabled BBVA to lead its
peers in many of the South American countries in which it
operates: Argentina, Paraguay, Uruguay and Venezuela.
Net Promoter Score (NPS)
(1)
(By geography. Percentage)
26
28
45
17
51
54
19
26
25
42
21
68
86
31
Argentina Chile Colomb ia
Peru
Venezuela Paraguay Uruguay
Peer group avergae BBVA Group
1
st
3
rd
2
nd
2
nd
1
st
1
st
1
st
(1)
Peer group average: Argentina: Banco Galicia, HSBC and Santander Rio / Chile:
BCI, Banco de Chile and Santander / Colombia: Bancolombia, Davivienda and
Banco de Bogotá / Peru: BCP, Interbank and Scotiabank / Venezuela: Banesco,
Mercantil and Banco de Venezuela / Paraguay: Continental, ITAU and Regional /
Uruguay: ITAU, Santander and Scotiabank.
South America will continue working on this line in 2017,
boosting the evolution toward a digital ecosystem. The
focus will continue to be on customer experience. In this
regard, the region expects to nalize adoption of the new
quality model launched in 2016
(Experiencia Única)
, which
provides customer feedback in real time, enabling teams
to identify and implement improvement opportunities
faster.
B. To drive digital sales, progress has been made
throughout 2016 in implementing the digital strategy
aimed at increasing the functionalities of the dierent
BBVA IN 2016
2.PERFORMANCE
P. 31
websites as well as creating and improving specic
mobile banking applications. Among these initiatives
BBVA Wallet stands out. It was initially launched in Chile
and has been expanded to Colombia as part of the
implementation process in the rest of the franchises
in the region. These initiatives have led to a doubling of
sales through digital channels to 1.4 million products sold
through the websites and mobile devices. In addition,
the region has seen a 60% increase in the volume of
customers interacting with BBVA through mobile phone
in 2016.
In 2017, work will also take place to further the
transformation of distribution models, paying particular
attention to productivity through digital sales and
increasing the eciency of physical networks. The key
issue in digital sales will be to transform risk processes
and models to adapt them to the new reality of banks
in South America. In the physical network, work will
done on the deployment of new management models
and customer service protocols, while identifying
opportunities for automation and migration to digital
channels.
Digital sales (South America. Percentage of total sales YTD, number of
transactions)
9.0
15.2
December 2015 December 2016
C. To create / associate with / acquire new business
models, the Group has been analyzing the innovation
ecosystem. It has identied more than 300 FinTech
companies in the region and has connected with the most
relevant startups.
In 2017 these interactions will continue with the goal
of ensuring BBVA is closely positioned alongside the
entrepreneur and developer communities.
D. To optimize capital allocation, in 2016 the area has
furthered the development of monitoring tools and
indicators for this purpose and, consequently, its
optimization.
In 2017, the banks in South America will begin to
transform their balance sheets, implementing the
monitoring tools based on capital consumption that were
developed in 2016. Particularly noteworthy are the pricing
models based on capital consumption and the monitoring
of specic metrics.
E. To adapt the cost structure and achieve an unrivalled
eciency, and as a result of the greater transformation of
the Bank towards a digital model, progress has been made
in 2016 to identify cross-cutting initiatives in the region
that help to achieve this priority.
The adaptation of the Group’s cost structure to the new
reality in each of the franchises in the region requires a
multi-year perspective, but the projects are expected to
yield results starting in 2017.
F. Finally, to develop, attract, motivate and retain a rst-
class workforce, work has continued on transforming the
way of working through initiatives such as:
The agile format, which facilitates the rapid and
ecient development of solutions and products
through the creation of multi-disciplinary teams
focused on a common goal. This has enabled
transformation initiatives to be implemented in
record time, oering customers new capabilities and
products. To this regard, a large number of Business
Development & Engineering teams in South American
countries are already working with this methodology.
A total of 215 people have been actively working in 31
scrums.
Work has also been carried out to transform work
spaces in corporate headquarters to make interaction
faster and simpler. This transformation, which already
began in Chile in 2015, continued to advance in 2016:
Argentina was the latest country to join in, with the
opening of its new headquarters in Buenos Aires.
Finally, cultural transformation will play a key role in
2017 as we continue to work on our goal to attract and
retain top talent. We will therefore continue boosting
the agile methodology, which means implementing a
project-based organization.
As result of all the above, in 2017 South America will
continue its transformation so that it can fulll its Purpose:
to bring the age of opportunity to everyone.
The Management Report provides more details on the macro
and industry trends, activity and earnings of this business
area.
BBVA IN 2016
2.PERFORMANCE
P. 32
2. 2. 7. Rest of Eurasia
The loan book recovered its upward path in the fourth
quarter of the year.
Reduction in the balance of deposits, strongly impacted by
the branches in Europe.
Signicant progress in earnings, supported by good
revenues and reduction in costs.
Denition of the area
This business area includes business activity in the rest
of Europe and Asia, i.e. the Group’s retail and wholesale
businesses in the area.
The Management Report provides more details on the macro
and industry trends, activity and earnings of this business
area.
BBVA IN 2016
2.PERFORMANCE
P. 33
2. 2. 8. Corporate Center
The Corporate Center is an aggregate that contains the rest of
the items that have not been allocated to the business areas,
as it basically corresponds to the Group’s holding function. It
includes: the costs of the head oces that have a corporate
function; management of structural exchange-rate positions;
specic issues of capital instruments to ensure adequate
management of the Group’s global solvency; portfolios and
their corresponding results, whose management is not linked
to customer relations, such as industrial holdings; certain
tax assets and liabilities; funds due to commitments with
employees; goodwill and other intangibles. It also comprises
the result from certain corporate operations carried out by
the Group in 2015.
The Management Report provides more details on the macro
and industry trends, activity and earnings of this business area.
BBVA IN 2016
2.PERFORMANCE
P. 34
2. 2. 9. Other information: Corporate &
Investment Banking
The environment of pressure on margins and excess
liquidity remains unchanged
Slight slowdown in lending, but a slowdown in the rate of
decline in customer deposits
Further improvement of results in the fourth-quarter,
thanks to good management of market volatility
Denition of the area
Corporate & Investment Banking (CIB or BBVA CIB)
includes the Group’s wholesale businesses, i.e. investment
banking, global markets, global loans and transactional
services for international corporate customers and
institutional investors across its global footprint.
BBVA CIB is a provider of high added-value services. Thanks
to a model with global coverage, it improves the product
oering and promotes a strategic dialog with customers,
supported by good geographical diversication.
CIB: a global business unit with a diversied business
employees
3,623
with a presence
in
25 countries
Europe
employees
Asia
153
employees
1,950
employees
1,520
America
Local banks with BBVA CIB presence
BBVA CIB´s branches
BBVA CIB´s representative oces
Management priorities
Progress in digital transformation and customer experience
Customers remain the main pillar of BBVA CIB’s strategy.
In 2016 work has therefore continued on reinforcing
this strategy, with particular focus on progress in digital
transformation and customer experience, through the
development of a less capital-intensive model that is more
ecient in terms of costs.
BBVA CIB aims to oer a dierential growth and higher
protability than the industry average, based on a recurring
and stable business model, aligned with the Group’s main
nancial objectives and Strategic Priorities, as described
below.
A. Provide new standard in customer experience
In 2016 major progress has been made on the goal of
achieving the best possible experience for our customers
across all the business areas, products, channels and
geographic areas.
By way of an example, the creation of the Client
Excellence Team in CIB has boosted this strategy,
achieving signicant results, such as the implementation
of Fenergo in Europe, an internal tool for managing the
contracting process; and the launch of Net Promoter
Score as a key indicator for discovering the level
of satisfaction of customers who operate with CIB.
Signicant improvements have also been recorded in the
BBVA IN 2016
2.PERFORMANCE
P. 35
automation of some of the post-contracting processes.
There have also been signicant achievements in cross-
cutting synergies, thanks to the marketing initiatives
implemented, which have had a positive impact on
revenues from customers.
Among the main objectives for the future of customer
experience in the unit are to extend the internal Fenergo
tool to other geographies and customer segments and
implement a project for improving customer claims
management. With respect to the cross-cutting approach,
the aim is to extend the diversication acid test to more
customers in order to identify their geographical and
product diversication and thus be able to improve cross-
selling.
B. Drive digital sales and new business models
The CIB digital transformation continues. In this regard,
signicant progress has been made in driving digital sales in
2016, as the launch of the Net Cash app in Spain. This is an
online banking platform for corporates and institutions that
has achieved very good results since its implementation, with
over 264,000 downloads and 1.8 million connections in the
month (December 2016 data), with planned implementation
over the coming months in Chile, Peru and Argentina.
This is a clear example of the continued development
of new channels, leading to greater interaction with
customers, making available a wider range of products and
improving processes through a higher level of automation,
transparency and speed of execution.
The objectives for the coming years are: continue to
make improvements to the global payments platform and
infrastructure and to the e-Banking tool in each country,
and enhance the digitalization of products and services,
developing the Net Cash architecture and developing the
user experience (UX); in other words, everything involving
the interface design, information architecture, usability and
web product design.
C. New business models
The unit has some initiatives underway that will be
maturing in the coming years; among them, the
identication of non-bank competitors, the development
of alliances with players positioned along the dierent
links of the value chain within the nancial industry, and
the review of potential new technical developments
(Blockchain).
D. Optimize capital allocation
BBVA CIB continues to optimize its capital model by
developing new processes and tools that can increase the
contribution to the Group’s capital ratio (CET1), as well as
adapt them to the new regulatory requirements.
E. Adapt the model, the processes and the structures to
achieve an unrivaled eciency
The unit has a permanent focus on cost eciency, with
particular emphasis on the management of discretionary
expenses. Development also continues on the investment
plan in information technology.
F. Attract, develop, motivate and retain a rst-class
workforce
Lastly, BBVA CIB is developing initiatives to boost the
talent of its team and facilitate the cultural change that is
being developed and implemented across the Group by
Talent & Culture.
The Management Report provides more details on the macro
and industry trends, activity and earnings of BBVA Group’s
wholesale businesses
BBVA IN 2016
3. STRATEGY
P. 36
3. Strategy
3. 1. Our vision: a new nancial environment for the nancial industry P.38
3. 1. 1. Macroeconomic environment P.38
3. 1. 2. The regulatory environment in the nancial industry P.4 0
3. 1. 3. Digitalization P.4 2
3. 1. 4. Shift in consumer behavior P.4 3
3. 1. 5. Reputation and materiality analysis P.4 4
3. 2. Our aspiration P.4 6
3. 3. Transformation of the BBVA Group: the Transformation Journey P.47
3. 4. Bringing the BBVA Purpose to life P.52
3. 5. Responsible banking model P.53
3. 6. Business organizational chart and structure P.55
BBVA IN 2016
3. STRATEGY
P. 37
During 2016, the BBVA Group made great progress in its
Transformation Journey, strongly supported by the Group’s
Purpose and six Strategic Priorities. The Entity’s new strategy
has been bolstered with particular focus on digitalization and
customer experience, simplifying the organizational structure
and in 2017 redening the Bank’s new tagline: “Creating
Opportunities”.
The BBVA Group is immersed in a transformation process
necessary to adapt to the new environment of the nancial
industry and preserve its leadership. This environment is
characterized by:
Economic downturn, increased regulatory pressure,
negative impact on the protability of the industry, low
interest rates and increased competition.
Changes in the expectations of customers, who demand
services of greater added value to help them achieve their
goals. Customers want advice, transparency and a digital
relationship model.
Entry of new players and large digital companies with
highly attractive value propositions and the resulting
risk for traditional banks of a gradual erosion of the
relationship with their customers.
Success in this new environment requires a more selective
approach, involving a redenition of the value proposition and
the adaptation of the universal banking business model.
In this context, the goal of BBVA Group’s transformation
strategy is to strengthen its relationship with its customers.
This strategy is structured around a Purpose and six
Strategic Priorities, which are the pillars buttressing not only
the strategic plans across all the Group’s regions and areas
but also the culture of the Organization as a whole.
Finally, in 2016 we strengthened our responsible banking
model with the approval of a new strategic plan for 2016-
2018.
BBVA IN 2016
3. STRATEGY
P. 38
3. 1. Our vision: a new nancial environment for the nancial
industry
3. 1. 1. Macroeconomic environment
Weak global economic growth, vulnerable to risks
Global growth improved in the second half of 2016
(estimated at 0.8% for the third quarter and 0.9% for the
fourth). Developed countries are speeding up their growth
thanks to improved condence and a stronger industrial
sector, which is also having an eect on the Chinese economy.
The performance of the rest of the emerging economies
is uneven, but in general the trend is for recovery. The
improvement in global trade also appears to be conrmed,
after a weak rst half of the year. Global growth is therefore
expected to be slightly higher than 3% in 2017, sustained by
support from central banks, relative calm on the nancial
markets and the recovery of emerging economies.
Global GDP growth and ination in 2016 (Real percentage growth)
GDP Ination
Global 3.0 4.8
Eurozone 1.7 0.2
Spain 3.2 -0.2
The United States 1.6 1.3
Mexico 2.0 2.8
South America
(1)
-2.8 43.4
Turkey 2.3 7.8
China 6.7 2.0
Source: BBVA Research estimates.
(1)
It includes Brazil, Argentina, Venezuela, Colombia, Peru and Chile.
Keys to growth in 2017
The key in this scenario of weak economic growth within a
context of reduced global trade and a greater aversion to
the spread of globalization lies in addressing the economic
consequences of some of the risks linked to economic policies.
First, there is the uncertainty in connection with the economic
policy of the new administration in the United States, particularly
regarding protectionism and its potential global eects. Second,
while the impact of Brexit (the referendum at the end of June
resulting in a victory for those wanting the United Kingdom to
leave the European Union) has not had a systemic impact, there
is nevertheless lingering uncertainty regarding the negotiations
related to it, which could weigh heavily on economic condence
in 2017. An additional factor is concern with respect to the results
of a very busy electoral calendar throughout Europe.
The 2017 outlook for Spain is one of moderate growth of up to
2.7%, in light of the weakening of some support factors such
as scal policy and an increase in oil prices.
The recovery in the rest of Europe faces the risk of a
slowdown associated with political uncertainty or the reversal
of the reforms implemented in some countries. In this
context, we expect a GDP growth of 1.7% in 2016 and 1.6% in
20 17.
In the United States, there are still major doubts
regarding economic policy, particularly with respect to
trade agreements, as well as the rate of interest rate
hikes by the Federal Reserve (FED) and their resulting
impact on emerging economies. In light of the foregoing,
the average growth in 2016 will slow to 1.6% and then
increase until 2.3% in 2017. In this scenario, the FED is
expected to conduct a gradual normalization process in
a context characterized by the uncertainty of the external
environment together with the FED’s own concerns
regarding the trending growth in productivity and the
economy’s potential GDP growth.
The key for emerging economies is management of their
vulnerability to sudden movements of capital. There has
been increased inationary pressure in Turkey, which could
lead to a tougher monetary policy in an environment of
moderate growth of 2.3% in 2016 and 2.5% in 2017. The pace
of economic growth in Mexico could have tapered o to 2%
in 2016 and this slowdown may become more pronounced,
down to 1% in 2017, given the uncertainty associated with
the trade measures adopted by the United States. The GDP
of South America as a whole could contract by 2.8% in 2016,
though it should recover and post growth of slightly over 1%
in 2017 thanks to the increased contribution from the foreign
sector, the end of the downturn in Brazil, private investment
in Argentina and the plans for public-sector investment in
countries such as Peru and Colombia.
However, in the more medium and longer term, the greatest
risk for the global economy remains linked to the imbalances
in China’s economy. In this regard, concerns regarding a
substantial slowdown in 2016 were allayed after reports of
6.7% growth (6.9% in 2015). However, the outlook continues
to be for a gradual slowdown to around 6% in 2017. In the long
term, doubts regarding the prospects of growth remain, given
the slow progress of structural reforms in some key areas,
particularly in state-owned companies.
BBVA IN 2016
3. STRATEGY
P. 39
Economic growth in 2017 (Percentage of GDP growth)
1.0%
Mexico
1.0%
Latin America
2.7%
Spain
6.0%
China
1.6%
Eurozone
2.5%
Turkey
Global
3.2%
2.3%
The United States
Source: BBVA Research
Latin America: Argentina, Brasil, Chile, Colombia, Mexico, Peru and Venezuela
BBVA IN 2016
3. STRATEGY
P. 40
3. 1. 2. The regulatory environment in the
nancial industry
The Single Resolution Mechanism: an assessment of
the rst year
The Single Resolution Mechanism (SRM) became fully
operational on 1 January 2016, passing the responsibility
for resolution from the Member States in the banking union
to the Single Resolution Board (SRB). The SRM is highly
signicant, as it is one of the three essential pillars of a true
European banking union. Since the beginning of the year, a
total of 144 Eurozone banks have been working under the
auspices of the SRB, 129 of which are supervised directly by
the European Central Bank (ECB) and another 15 are large
cross-border groups.
The SRM comprises two elements: the SRB and the
Single Resolution Fund (SRF). It applies to banks covered
by the Single Supervisory Mechanism (SSM). The SRM
complements the SSM and attempts to secure an orderly
resolution of banks in distress at a minimum cost for
taxpayers and the European economy.
The SRB is the main decision-making body of the SRM and
decides on the resolution mechanisms for distressed banks
that are within the scope of the SSM. As the highest authority
for banks in the banking union, it has the power to exercise its
powers at its own discretion with respect to any of the banks in
the Member States forming part of the banking union. In general,
as the banking supervisor the ECB informs the SRB of problems
faced by any of the banks in the union. The SRB then decides the
best strategy for resolution on a case-by-case basis.
The second element of the SRM is the SRF, which is essential
for nancing the resolution of banks in distress when a bail-
in of shareholders and creditors is insucient. The fund’s
resources come from the banks in the 19 Member States that
form the SSM. The target of the SRF is to accumulate at least
the equivalent of 1% of the deposits covered during the next
eight years (2016 2023). It is essential to note that the funds
accumulated in the SRF are only used as a last resort. At no
time may the funds be used to absorb the losses of an entity
or for its recapitalization. However, in some exceptional cases,
SRF funds can be used whenever the following conditions
are fullled: the existence of a bail-in of at least 8% of total
liabilities (including own funds) and the SRF contribution does
not exceed 5% of total liabilities (including own funds). The
SRF does not yet have all the estimated funds needed. The
contributions of the banks will gradually increase over the
coming years. To make up for this shortfall, bridge nancing
has been set up through intergovernmental agreements
(IGAs), which can be executed in case of need. Currently 14 of
the 19 Member States of the banking union have established
a Loan Facility Agreement (LFA).
The SRM becoming fully operational is a positive step, even
though the SRF is still in the accumulation phase. The SRF
is one of the essential elements for mitigating risks in the
European banking system and enables genuine banking
union.
The regulatory reform driven by the G-20 is almost
complete and the aim is for its implementation to be
more uniform
Completion of the regulatory reform driven by the G-20
following the outbreak of the nancial crisis continued
into 2016. A vital step was taken at the close of 2015 for
completing the resolution framework for global systemically
important banks (G-SIBs) with the approval in November
of the minimum total loss-absorbing capacity (TLAC)
requirements. Implementation continued throughout 2016
in most of the Member States of the Financial Stability Board
(FSB). Additionally, the FSB published a Key Attributes
Assessment Methodology in October with a view to aording
an eective and uniform implementation of the resolution
systems. Progress has also been made in the review of the
global capital framework (Basel III), particularly as regards
the methods for calculating the minimum requirements. In
addition, the implementation of the agreed reforms, which
involve greater capital and liquidity requirements and boost
the transparency and governance of banking institutions,
has made signicant progress in most jurisdictions and
strengthened the banking system. The impact of this global
reform on economic activity is drawing increasing interest,
since it could restrict economic growth.
Europe continues to take steps forward in its process of
strengthening and completing banking union
The progress made in European banking union has been
signicant, in keeping with last year (2015).
An initial milestone was the full roll-out of the SRM and
the start of the timeline for accumulating the resources
necessary in the SRF over the next eight years. This element
is essential for reducing risks in the banking system and thus
enables more eective banking union.
The European Commission reached a second milestone on
November 23, when presenting a particularly wide-ranging
legislative proposal with a view to including the most recent
international regulatory agreements in European regulations,
though adapting them to what is still a fragile economic
recovery. The legislative proposal revises Europe’s prudential
rules, particularly the CRR, CRD and BRRD, and includes
various elements for shoring up the banking system against
adverse shocks and thus reducing possible risks. Among
the elements included are: details for the compliance with a
leverage ratio, long-term liquidity ratio, implementation of a
BBVA IN 2016
3. STRATEGY
P. 41
more risk-sensitive methodology for calculating the market
risk of the nancial instruments held for trading by banks,
introduction of interest-rate risks in the banking portfolio, and
a review of the maximum exposure per counterparty. Turning
to bank resolution, the requirement for total loss absorbing
capacity (TLAC) was introduced for systemically important
banks and the nal design of this instrument was claried
for the other European entities (MREL). All these elements
mitigate the risk faced by entities and reduce the likelihood
that taxpayers will have to bail out banks, though at a possible
additional cost. The Commission hopes that the measures
specied will be eective enough to minimize undesired
eects and their negative impact on growth will be limited, so
that the benets of greater nancial stability will more than
oset the additional costs.
The step yet to be taken for achieving an eective banking
union entails moving toward a European Deposit Insurance
Scheme (EDIS). Last year the Commission introduced a
legislative proposal for a timeline for making steady progress
toward combining the dierent national deposit guarantee
funds into a single European one. The process will conclude
in 2024 with a common fund managed centrally, though the
legislative process has progressed much slower and faces
complications, which means its approval is less certain.
The EBA’s transparency exercise demonstrates greater
resistance by European banks to unexpected shocks
On July 29, the European Banking Authority (EBA) published
the results of its most recent EU-wide stress tests on banks.
The results were highly positive. The simulation revealed that
only two banks of the fty analyzed would need extra capital
if faced with an unexpected and substantial shock. This is a
signicant improvement compared with previous exercises
and demonstrates the increased resilience of European
banks. In turn, the good performance of the entities in Spain
is the result of the restructuring of the system and an eective
cleaning of their balance sheets. Lastly, if progress is to be
made toward an eective banking union it is essential to
resolve some issues inherited from the nancial crisis in other
areas of Europe as soon as possible.
BBVA IN 2016
3. STRATEGY
P. 42
3. 1. 3. Digitalization
Digitalization is making an impact on the nancial industry,
since it can satisfy the new demands of customers in various
ways.
Firstly, the entry of mobile devices has led to changes in
the distribution model. Society as a whole is permanently
connected, regardless of location. Mobile devices have
become the main channel of contact. The number of mobile
banking users worldwide has grown exponentially and
customers are increasingly interacting through their mobile
devices.
Moreover, new developments in technology (big data,
articial intelligence, Blockchain, the cloud, data processing,
biometry, etc.) represent a major advance in customer
experience. These technologies allow us to analyze
automatically data and algorithms (risk prole, habits and
preferences, nancial needs and expectations, etc.), together
with simple interactions and a uid transition across channels
and vendors. Likewise, they provide easy access to the
best solutions available on the marketplace with the most
benecial conditions by default. Technological innovations
reduce unit costs thanks to process automation and
scalability.
Big Data
Blockchain Cloud
Articial
intelligence
Data
processing
Biometrics
Better experience
More eciency
The customer will be the main beneciary
in this new environment as nancial services
become democratized
New technologies foster the democratization of nancial
services: the entire world will be able to gain access to better
and more sophisticated services that were up to now only
available for high-value segments. In this context, having
access to a customer’s relevant information with his/her
consent has proven to be critical in providing automated and
personalized advice. And to achieve this, it is essential to earn
the customer’s trust.
Additionally, new, specialized players are entering the
nancial industry and successfully tackling parts of the value
chain (payments, nancing, asset management, insurance,
etc.). Their disruptive proposals are primarily based on
improving customer experience and enhancing specialization
in certain products. These players include FinTech companies
and large digital corporations (Google, Amazon, etc.), which
are now competing with banks in the new environment.
In conclusion, traditional banking should respond by
becoming more competitive and providing value-added
solutions, with greater focus on customer experience and the
development of their digital oering.
BBVA IN 2016
3. STRATEGY
P. 43
3. 1. 4. Shift in consumer behavior
Customers are asking for a new type of banking
relationship and have begun demanding new services based
on new needs. We are currently in an environment where
consumers are permanently connected (they want to operate
at any time from any place). They are already accustomed to
digital experiences (they expect proactive and personalized
assistance for managing their money) and the use of multiple
devices and applications (they want to be able to operate
via what is the most convenient channel for them). They
are also calling for greater transparency and trust in their
banking relationship, in addition to enhanced customization,
accessibility and convenience in nancial services in order to
achieve their own goals in life.
Furthermore, a socio-demographic shift is underway
that should also be considered. The Millennial Generation
has a clearly digital prole and is becoming a new group of
consumers requiring services. Digitalization is reaching the
adult population (a greater number and with more purchasing
power in developed markets), while the middle class in
emerging countries is also increasing their digital potential.
In light of the foregoing, the nancial industry has to
transform and oer a more extensive service and advice
to customers, in addition to a new value proposition based
on a digital relationship model focused on an omnichannel
approach, personalization and convenience.
BBVA IN 2016
3. STRATEGY
P. 44
3. 1. 5. Reputation and materiality analysis
Reputation and trust have begun to recover in 2016, but
they remain at low levels
The nancial sector has experienced a profound crisis in
reputation and trust since 2007, particularly in the case of
developed economies. Recovery is not yet complete. The
reputation of banks in developed economies, according to
the Reputation Institute (RepTrak Pulse), fell from 61 to 53
points from 2007 to 2013. The decline is even greater in the
case of Spain, where the gure fell from 60 to 40 in the same
period. Since then there has been a recovery, with the gure
rising in 2016 to 53.5 points, still below pre-crisis levels.
Another key indicator is the Edelman Trust Barometer,
which measures trust in industry. The trend here has been
similar. In this case, the percentage of people around the
world who trust banks a great deal or quite a lot bottomed
out in 2012 at 43% (16% in Spain). Since then, the gures
have improved to 51% (35% in Spain), above all in 2016.
However, it is important to note that the nancial sector is
still the worst rated. According to the report, in 2016 the gap
in trust between the informed public and general public has
continued to grow (60 versus 48).
Materiality analysis
At BBVA, we have a broad range of tools for consultation and
dialog with all our stakeholders in each country and business
area in which we operate. These tools guarantee two things: that
stakeholders have the proper service channels available and
BBVA has sucient sources of information to know what their
priorities and expectations are with respect to the Entity, and can
thus oer them the appropriate response to their needs.
Identication and prioritization of material issues in 2016 are
summed up in the following materiality matrix, where they
are classied according to two variables: the importance for
stakeholders and importance for the BBVA business. The
matrix has been prepared following the recommendations on
disclosure in the GRI G4 sustainability reporting guidelines.
Materiality matrix
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
0.90
0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80 0.90 0.10
IMPORTANCE FOR BBVA'S STRATEGY AND BUSINESS
Responsible procurement/outsourcing
Community involvement
Contribution to the development
of local societies
Financial education
Talent attraction,
development and retention
Transparency and
selling practices
Solvency and nancial management
Ethical conduct
Customer service quality
Quality and fair products that
respond to customer needs
Digital
transformation
Security, privacy and customer protection
Good corporate governance
Diversity and work life balance
Social & environmental
responsible funding
Human rights, employee rights
and employment quality
Eco-eciency, environment,
climate change
Financial inclusion
IMPORTANCE OF THESE ISSUES FOR STAKEHOLDERS
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
0.90
0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80 0.90 0.10
IMPORTANCIA PARA LA ESTRATEGIA Y EL NEGOCIO DE BBVA
Compras Responsables
Acción social
Contribución al desarrollo
de las sociedades locales
Educación Financiera
Atracción, desarrollo y
retención del talento
Transparencia y prácticas
de comercialización
Solvencia y gestión nanciera
Conducta ética
Servicio al cliente de calidad
Productos de calidad y
con condiciones justas que
responden a las necesidades
de los clientes
Transformación digital
Protección y privacidad del cliente
Buen Gobierno Corporativo
Diversidad y conciliación
Financiación social y
medioambientalmente responsable
Derechos Humanos
y calidad del empleo
Cambio climático y ecoeciencia
Iclusión nanciera
IMPORTANCIA PARA LOS GRUPOS DE INTERÉS
The material issues with the highest priority are:
Ethics and good corporate governance.
Quality products and services for customers
Transparency and selling practices
Digital transformation
Financial solvency
BBVA IN 2016
3. STRATEGY
P. 45
Talent attraction, development and retaining
The second-level issues are:
Financial education.
Climate change and eco-eciency.
Financial inclusion.
Human rights and quality employment.
BBVA addresses these issues through its six Strategic
Priorities.
BBVA IN 2016
3. STRATEGY
P. 46
3. 2. Our aspiration
In this context, the main objective of the BBVA Group’s
transformation strategy, i.e. our aspiration, is to strengthen
the relationship with our customers.
Customers should be the main beneciaries of this new
environment, in which nancial services are becoming
more democratic. To do so, we are redening our value
proposition, based on the fundamental pillars of customer
experience and trust.
We want to help our customer take nancial decisions
through a clear, simple and transparent oering of products
and services, based on fair conditions and concepts of
prudence and integrity to gain their trust.
Our value proposition must also be easy and convenient; in
other words, a proposition that oers the chance of accessing
our services at any time, from any place and by the means
chosen by each individual customer, allowing the choice
of using either do-it-yourself (DIY) options through digital
channels or human interaction.
We also have to provide the relevant assistance and
advice. We have to help our customers take the best
decisions (banking and non-banking), support them in the
management of their day-to-day nance, provide products
and services that are proactive, innovative and personalized,
together with the best recommendations from all the possible
nancial alternatives.
Finally, to attain our aspiration, we are leveraging technology
and data. Since we began our transformation process
in 2007, we have been striving to improve our platforms
(multi-channel architecture, core banking system, etc.) while
adapting to the new development paradigms (platform as a
service), to make technology work for our customers.
BBVA IN 2016
3. STRATEGY
P. 47
3. 3. Transformation of the BBVA Group: the Transformation
Journey
We have taken great strides in 2016 to fulll our Purpose: “To
bring the age of opportunity to everyone”. Aligned with our
vision of the future, our Purpose is our reason for being and
guides our strategy and decision-making. We want to help our
customers achieve their goals in life. We want to go beyond
being a bank and become a vehicle of opportunities with a
positive impact on the lives of people and on the business of
companies.
In line with our Purpose, signicant steps have also been
taken in the development of the Group’s six Strategic
Priorities to make headway in our transformation process.
Strategic Priorities
New standard in
customer experience
Drive digital sales New business
models
Optimize capital
allocation
Unrivaled eciency A rst-class workforce
1
4
5 6
2 3
A new standard in customer experience
The focus of BBVA Group is on providing the best customer
experience that stands out for its simplicity, transparency and
swiftness, further empowering our customers while bringing
them personalized advice.
We have a customer-oriented business model that oers a
dierential service with a very ambitious goal: to be leaders
in customer satisfaction across our global footprint.
Number of customers (BBVA Group. Millions)
Dec-2015 De c-2016
66
70
+6%
BBVA IN 2016
3. STRATEGY
P. 48
Net Promoter Score (NPS) (By geography. Percentage)
13
36
64
44
26
25
42
21
68
86
31
-2
42
47
40
26
28
45
17
51
54
19
Spain
The United
States
Turkey
Mexico
Argentina
Chile
Colombia
Peru
Venezuela
Paraguay
Uruguay
BBVA Peer group average
1º
9º
1º
1º
1º
3º
2º
2º
1º
1º
1º
Peer Group: Spain: Santander, CaixaBank, Bankia, Sabadell, Popular / The United States: Bank of America, Bank of the West, Comerica, Frost, Chase, Regions, US Bank,
Wells Fargo/ Mexico: Banamex, Santander, Banorte , HSBC /Peru: BCP, Interbank, Scotiabank / Argentina: Banco Galicia, HSBC, Santander Rio/ Colombia: Bancolombia,
Davivienda, Banco de Bogotá/ Chile: BCI, Banco de Chile, Santander / Venezuela: Banesco, Mercantil, Banco de Venezuela / Paraguay: Continental, ITAU, Regional /
Uruguay: ITAU, Santander, Scotiabank.
Our relationship model is evolving to adapt to our customers’
multi-channel prole. The amount of digital and mobile
customers in BBVA Group grew considerably in 2016, while
branch activity has declined in recent years.
Branch activity (BBVA Spain. Millions of transactions)
51
46
42
38
2013 2 014 2015 2016
-25%
Digital customers (BBVA Group. Millions)
15.4
18.4
Dec-2015 Dec-2016
+20%
Mobile customers (BBVA Group. Millions)
9.0
12.4
Dec-2015 Dec-2016
+38%
There was also signicant progress made in improving the
customer experience in terms of the distribution model,
products and functionalities.
Various projects were launched in the distribution model:
“Mis conversaciones” (My conversations) and “Alta Digital
(Digital Onboarding) in Spain, a new customer welcome
program in the United States, expansion of the remote
manager model in Mexico, Argentina, Turkey and Peru,
“Step” (a relationship model based on the use of tablets and
arrangement of appointments by mobile in Turkey, “Feedback
online - Opinator” in Argentina and the launch of “Experiencia
única” (Unique experience) in Peru.
Some of the more prominent new products and functional
features developed in 2016 include: mobile-to-mobile
transfer, “BBVA Valora” and “Commerce 360” in Spain; salary
advances, cross-sales of digital insurance, simple credit
renewals for SMEs and digital auto and mortgage credits in
Mexico; swift signature on loans and aggregation of external
BBVA IN 2016
3. STRATEGY
P. 49
accounts in the United States; online banking notication via
mobile devices and smart car insurance in Turkey; a personal
nancial and expense manager in Spain and Mexico; and the
“Precios - Cotiza” model in Peru.
Finally, with a view to prioritizing global and local projects,
BBVA has implemented a “Single Development Agenda
(SDA)”, which develops solutions that have a clear impact
on customer experience. The aim is also to provide strategic
consistency with signicant impact at Group level in the
development of customer solutions, prioritize and coordinate
the allocation of resources, minimize expenses, streamline
time to market (or launch times) and develop infrastructure
and capabilities adequately.
Driving digital sales
At BBVA, it is essential to drive digitalization for our
transformation while boosting business on digital channels.
In this regard, we are developing a range of digital products
and services that enable customers to use the channel most
convenient for them.
The Product Digitalization Plan includes the digitalization
of traditional products (mortgages, car insurance, receipt
nancing, one-click loans, etc.) and the launch of native
products, i.e. ones that were digital from the start (Wallet,
Link, Wibe, etc.)
Moreover, signicant work is being carried out on sales
through digital channels, which have been developing very
positively in all countries.
Digital sales
(By geography. Percentage of total sales YTD, number of transactions)
8.4
9.3
23.4
6.2
9.0
17.1
19.9
26.1
11.9
15.2
Spain
The United
States
Turkey Mexico South
America
December 2015 December 2016
New business models
New Digital Businesses (NDB) is the BBVA business
unit responsible for participating actively in the digital
disruption of the financial industry and thus reinventing
BBVA from the outside through a quest for new digital
business models for the Bank by leveraging our efforts on
the FinTech ecosystem.
Continuing with the strategy initiated in 2015, BBVA further
consolidated its position in 2016 as one of the banks that
are a benchmark in digital transformation and activity in the
FinTech ecosystem. Salient eorts were made throughout
the year to develop new business models through four key
levers:
8 projects at
the incubation
stage
M&A and strategic
investments Strategic alliances Internal incubator Venture capital
SIMPLE
29,5%
· DLG
Note: DriveMotors, Civi, Hippo, Guideline, Hixme and Brave are investments made by Propel Venture Partners U.S. Fund I, LP, a venture capital fund managed independently
by Propel Venture Partners LLC, in which BBVA Compass Bancshares Inc. is a Limited Partner.
1. M&A and strategic investments: thanks to our
active role in the FinTech ecosystem, BBVA is now
considered to be an attractive investor for startups
looking for not only a financial investor, but a strategic
ally. For BBVA, investment in companies of this sort
means accelerating our digital transformation and
is an excellent way to incorporate new products
and markets, not to mention talent and digital and
BBVA IN 2016
3. STRATEGY
P. 50
entrepreneurial capabilities. The activity in this area
intensified further in 2016, with over 100 companies
evaluated as potential targets. Three operations have
been concluded:
a. A strategic investment (29.5%) in the UK’s rst digital
bank with its own license (Atom).
b. The acquisition of a “neo-bank” focused on the small
business and self-employed segment, currently
operating in Finland and Germany (Holvi).
c. The conclusion of an agreement for the acquisition of
Openpay, a Mexican startup oering online payment
solutions.
2. Strategic alliances: BBVA’s ranking as leader in many
countries and its digital reputation have attracted
the interest of a number of FinTech and technology
companies. The goal is to reach mutually benecial
agreements that also provide our customers with a better
value proposition. In 2016, our teams were proactive in
the emerging ecosystem, with four agreements reached
during the year (Google, Prosper, R3 and Dwolla) and an
extensive portfolio of projects that we expect to close in
the next few quarters.
3. Internal incubator: As part of our strategy to be an active
member of this ecosystem, we have decided to create
an internal incubation model that combines internal
talent and know-how with the partnership of “resident”
entrepreneurs. The projects are selected by positioning
our customers or potential customers at the center and
harnessing technology that best meets their needs.
Various generation cycles were generated throughout
2016 in the United States of America and Europe, resulting
in a portfolio of eight projects currently at the incubation
stage, with the ambitious goal of going live in 2017.
The incubation process has already proved successful, as
our rst company BBVA Open Platform has reached the
marketplace in its Beta version. It is a pioneer in opening
APIs (Application Programming Interfaces) for third
parties with over 100 users in the test environment in
Spain and over 300 users in the United States.
4. Venture capital: In addition to our strategic activities, in
2016 we strengthened and made independent our venture
capital vehicle through Propel Ventures Partners.
Propel Venture Partners (Propel) is the new independent
venture-capital rm that manages BBVA funds destined
for startups that use technology for changing nancial
services for the benet of our customers. BBVA has
allocated US$250 million for investment in FinTech
companies, and these funds will be managed by the
Propel team.
Optimizing capital allocation
The objective of this priority is centered on improving
the protability and sustainability of the business while
simplifying and focusing it in on the most relevant activities.
We have been working throughout 2016 to adapt and make
our business model more ecient, protable and dynamic.
A number of initiatives (business portfolio optimization,
capital tracking committees in all geographic areas, etc.) have
been launched that have ensured BBVA Group will achieve
solid capital adequacy ratios. In this regard, at the end of
2016, BBVA Group had a fully-loaded CET1 of 10.9%. This
represents a rise of 58 basis points on the gure of 10.3% at
the close of 2015.
CET1 Fully-Loaded (Year-on-year trend in basis points)
+89
-32
+1
Net
attributable
profit
Dividends
+58
10.3%
10.9%
CET1
(Dec-2015)
CET1
(Dec-2016)
Other
Unrivaled eciency
In an environment of lower prot yields for the nancial
industry, eciency has become an essential priority in the
BBVA transformation plan. This priority is based on building a
new organizational model as agile, simple and automated as
possible.
In this regard, in 2016 we identied the key levers and
developed the action plans necessary to make this change
a reality. We are thus transforming our distribution model,
systems architecture, operational model, organizational
structures and processes. And we are doing so without
losing sight of providing a new standard in customer
experience.
BBVA IN 2016
3. STRATEGY
P. 51
Eciency ratio (BBVA Group. Percentage)
52.0
51.9
2015 2016
A rst-class workforce
Our priority at BBVA entails attracting, developing, motivating
and retaining a rst-class workforce, providing the best
employee experience and bringing corporate culture into line
with the Group’s transformation and its Purpose.
Achieving our objectives involves transforming the
Organization by implementing new ways of working
(organization based on projects, communities of expertise,
agile methodology, collaborative tools, etc.) and boosting a
culture of collaboration and entrepreneurship, with atter
structures. We have also launched a new model of variable
remuneration, aligned with BBVA’s strategic objectives. These
initiatives will help ensure that BBVA is the best place to work.
BBVA IN 2016
3. STRATEGY
P. 52
3. 4. Bringing the BBVA Purpose to life
A year ago, BBVA’s new Purpose was communicated
internally to all our employees. It was a highly anticipated
moment since over 28,000 employees had actively
participated in providing ideas on what our role should be in
creating a better World.
Our Purpose is to bring the age of opportunity to everyone
We’re starting 2017 by communicating externally our
inspiring message of bringing the age of opportunity to the
communities we serve. We are doing that through the launch
of our new corporate tagline: Creating Opportunities.
This tagline was also the result of a collaborative eort
where the marketing teams from all countries provided
suggestions and local insights. The ideas were consumer
tested to nd the best t with the Purpose and also tested
against the previous tagline. The nal choice was the winner in
every consumer survey.
Years ago, Adelante was an invitation to move forward. Now,
we’re inviting people and businesses to explore the amazing
opportunities that exist in a world where the access to knowledge
through technology is opening all sorts of possibilities. At BBVA,
we view ourselves as enablers to help people make better nancial
decisions, so they can seize opportunities, wherever they may be.
We’re passionate about the idea of ‘creating’, a verb that captures
the imagination of dreamers, shapers, entrepreneurs and people
with everyday aspirations.
The external expression of our Purpose is also part of a broad
Customer Solutions initiative. The new tagline comes with a
bold new exciting brand identity designed to create a stronger
emotional connection through our dierent consumer touch
points. Throughout the year, this new BBVA Brand will be
expressed in our online/mobile banking experience, through
our advertising, in our social media, through the way the
brand looks, feels and even sounds. We’re committed to
building an even more powerful BBVA Brand. That means
making our Brand more attractive, not only visually, but
providing it with more meaning. Over the years, we’ve worked
hard making our communication more TCR (transparent,
clear and responsible) and now our communication will
continue to evolve to express other aspects of our customer
service. We will reinforce aspects like advice/relevant
assistance, ease/convenience, anticipating people’s needs.
An inspiring Purpose, a new Brand look & feel, reinforcing
Brand principles and communicating how we’re helping
people create opportunities in their lives. All of this, so that
we continue to build BBVA into a power brand and one that
people relate to, admire and recommend.
This year will also be devoted to communicating internally the
behaviors associated to our new Purpose. All of us have a role in
bringing the age of opportunity to life. We can do that in the way
we collaborate, communicate, share, innovate and, especially,
serve our customers. BBVA Creating Opportunities.
BBVA IN 2016
3. STRATEGY
P. 53
3. 5. Responsible banking model
At BBVA we have a dierential banking model that we refer
to as responsible banking, based on seeking out a return
adjusted to principles, strict legal compliance, best practices
and the creation of long-term value for all stakeholders. It
is reected in the Bank’s Corporate Social Responsibility
or Responsible Banking Policy, which is approved by the
Board of Directors. The Policy’s mission is to manage the
responsibility for the Bank’s impact on people and society,
which is key to the delivery of BBVA’s Purpose.
All the business and support areas integrate this policy into
their operational models. The Responsible Business unit
coordinates their implementation and basically operates as a
second line for oering support.
In 2016 the governance of the responsible banking model has
been strengthened. It is supervised by the Board of Directors
and its dierent committees, as well as by the Global
Leadership of the Bank, chaired by the CEO. Furthermore,
this year a new BBVA Strategic Plan has been approved. It
integrates the strategic initiatives linked to the responsible
banking model and their respective action plans.
The main strategic responsible business initiatives for 2016-
2018 are:
Creation of lasting and more balanced relationships with
our customers through transparent, clear and responsible
communication and nancial literacy in the solutions that
we oer.
Full integration of how we do business through responsible
business policies, a reputational risk model, and a people-
centric culture throughout the Organization.
Promotion of responsible and sustainable growth through
nancial inclusion, sustainable nance, support for SMEs
and responsible investment.
Investment in the community, with priority for nancial
literacy initiatives for society, entrepreneurship, knowledge
and other social causes that are relevant from a local point
of view.
Indicators of reputation as aggregate indicators of responsible business
(2016)
External reputation among customers
Country
Position relative to
peer group
(1)
Spain 1st
The United States 2nd
Turkey 1st
Mexico 3rd
Argentina 2nd
(2)
Chile 3rd
Colombia 3rd
Peru 1st
Venezuela 2nd
Paraguay 1st
Uruguay n/av
Source: RepTrak (Reputation Institute); except in Turkey, source: TRI*M Index (TNS).
n/av = not available
(1)
Peer group: Spain: Santander, CaixaBank, Bankia; The United States: Regions,
Wells Fargo, Chase; Turkey: Is Bankasi, Ziraat, YKB, Akbank; Mexico: Banamex,
Banorte, Santander, HSBC; Argentina: Galicia, Santander, HSBC; Chile: Banco
de Chile, Santander, BCI; Colombia: Bancolombia, Bogotá, Davivienda; Peru:
BCP, Interbank, Scotiabank; Venezuela: Banesco, Mercantil, Banco de Venezuela;
Paraguay: Continental, Itaú.
(2)
Tie with other entities.
Internal reputation among employees
Country
Year-on-year score
variation
Spain =
The United States
↓
Turkey
↑
Mexico =
Argentina =
Chile
↑
Colombia =
Peru =
Venezuela
↑
Paraguay
↓
Uruguay
↑
Group =
Source: 2016 internal reputation study, RepTrak (Reputation Institute), except in
Turkey, source: TRI*M Index (TNS).
Note: The up/down arrows indicate positive/negative evolution statistically
signicant; the equals sign (=) indicates stability.
The specic responsible business indicators are included
below in the document in their corresponding chapter.
BBVA IN 2016
3. STRATEGY
P. 54
Strategic Responsible Business initiatives
STRATEGIC
INITIATIVE
STRATEGIC
PRIORITY
2018
OBJECTIVE
AND KPIs
PROGRESS IN
2016 2017 ACTION PLAN DELIVERABLES
1)
TCR to transform
the traditional
bank
TCR to create the
new Bank
1. New standard in
customer experience
2. Drive digital sales
1
st
in clarity and
transparency
(Net TCR score)
1
st
in
recommendations
(NPS)
TCR
Communication
TCR product leaets
100% of the units sold in the individual customer
segment (80% in Turkey); 80% of units sold in SMEs
(except for Turkey and Chile)
TCR contracts 80% of units sold. (all countries)
TCR in call centers
Implementation of the script in 80% of the units sold
in Argentina, Chile, Colombia, Venezuela, Peru and
Turkey
TCR in complaints
management
Pilot projects in Venezuela and Peru
TCR Advertising Code Monitoring and feedback
TCR in key customer journeys Implementation in Spain, Mexico, Turkey and Peru
TCR in non-commercial
communications
Pilot project in Spain
TCR in global products
TCR integrated in the GLOMO initiative (global mobile
application)
TCR in other Single
Development Agenda projects
API market, the API platform with a variety of
functionalities available for companies
TCR incorporated into scrums TCR integrated into the agile methodology
TCR Training
Training in contracts; training in relevant information,
and engagement in the Google + community
TCR in the UX System
TCR integrated in the design principles
2)
Financial
capabilities
in customer
solutions
1. New standard in
customer experience
1
st
in clarity and
transparency
(Net TCR score)
1
st
in
recommendations
(NPS)
Financial
education
Global products TCR integrated in the design principles
Local products Pilot projects in Spain, Mexico and the United States
3)
Corporate Social
Responsibility
(CSR) insights
in the area
of customer
solutions
1. New standard in
customer experience
Integration in
the Customer
Solutions creation
process
People-centric
solutions
Donations from employees
and customers in GLOMO
Integration in the GLOMO initiative
High-impact solutions in retail
banking
Local developments in all the main markets
Sustainable nances Dened business plan for wholesale banking
4)
Responsible
Business as a
second line
4. Optimize capital
allocation
6. A rst-class
workforce
1
st
/2
nd
in reputation
among customers
(RepTrak pulse)
Maintain internal
reputation (annual
survey)
Standards of
conduct
Materiality
analysis
Social,
environmental
and reputational
risks
The team
The environment
Suppliers
Reputational risk
Transition to a new governance model led by GRM
Internal Control; annual exercise; ICAAP and risk
appetite process
Responsible business policies
Human Rights Commitment and dened action plan;
purchase approval process; denition of the social
and environmental framework
Monitoring of materiality and
reputation
New methodology for the materiality exercise based
on big data
Global Eco-Eciency Plan
Performance measured against dened objectives
for 2020
Talent & Culture initiatives
Values and Behavior project; work/life balance and
diversity plan; second edition of Responsible Banking
course
5)
Investment in the
community
1. 1. New standard
in customer
experience
5. Unrivaled
eciency
1
st
/2
nd
in citizenship
reputation
(RepTrak
citizenship)
Investment in
social programs
Entrepreneurship
Knowledge,
education and
culture
Momentum & Open
Innovation
Launch of the new global program in Spain, Mexico,
the United States, Turkey and Colombia
Center for education and
nancial capabilities
Launch of the center; annual summit
Volunteer work
Denition of local volunteer plans; global volunteering
initiative and global volunteer recognition plan
6)
Communication
and advocacy
1. 1. New standard
in customer
experience
A benchmark
for responsible
banking
(Synthetic
responsible
banking index)
Criteria and
standards
Responsible business
reporting
Integrated annual report; integration on the
corporate website www.bbva.com
Shareholders
Analyst and investor
engagement
Meetings and roadshows with investors and
shareholders
Customer engagement Communication and marketing plan
BBVA IN 2016
3. STRATEGY
P. 55
3. 6. Business organizational chart and structure
BBVA announced in July 2016 that it would simplify its
organizational structure to streamline and accelerate
transformation.
The main changes include direct reporting of the main
business areas and geographies to the CEO, and the
integration of key areas in Customer Solutions to develop our
value proposition for customers globally and locally.
BBVA Group. Organizational Chart
Corporate &
Investment Banking
Juan Asúa
Country Monitoring
1
Jorge Sáenz-Azcúnaga
Talent & Culture
Ricardo Forcano
Engineering
Ricardo Moreno
Finance
Jaime Sáenz de Tejada
Global Risk
Management
Rafael Salinas
Global Economics
Regulation & Public Aairs
José Manuel González-
Páramo
Legal & Compliance
Eduardo Arbizu
Strategy & M&A
Javier Rodríguez Soler
Accounting & Supervisors
Ricardo Gómez Barredo
Communications
Paul G. Tobin
General Secre
tary
Domingo Armengol
Internal Audit
José Luis de los Santos
Customer Solutions
2
Derek White
Mexico
Eduardo Osuna
The United States
Onur Genç
Spain
Cristina de Parias
Turkey
Fuat Erbil
CEO
CARLOS TORRES VILA
GROUP EXECUTIVE CHAIRMAN
FRANCISCO GONZÁLEZ
EXECUTION & PERFORMANCE NEW CORE COMPETENCIES RISK & FINANCE STRATEGY & CONTROL
(1)
Reporting channel to CEO for Argentina, Colombia, Chile, Peru, Venezuela, Uruguay and Paraguay, as well as monitoring of all countries, including Spain, Mexico, Turkey and
The United States.
(2)
Integrates Global Products & Digital Sales; Design &Marketing; Data & Open Innovation; Business Development in Spain, Mexico, Turkey, The United States and South
America; Distribution model; Asset Management & Global Wealth and New Digital Businesses.
The new organization chart is divided into four areas: Execution
& Performance, New Core Competences, Risk & Finance and
Strategy & Control. The CEO handles the rst three functions
while the Group Executive Chairman handles Strategy & Control.
1. Execution & Performance:
• The geographic areas now report directly to the CEO:
Spain, Mexico, the United States and Turkey directly, and
the rest of the countries through a newly created area
called Country Monitoring, which manages Argentina,
Chile, Colombia, Peru, Venezuela, Uruguay and Paraguay,
in addition to monitoring all the geographic areas
(including Spain, Mexico, the United States and Turkey).
• Corporate & Investment Banking is the area
responsible for managing the Group’s investment
banking, global markets, global lending and
transactional services for international corporate
clients and institutional investors.
2. New Core Competences: This group of areas
encompasses the critical capabilities and global talent
needed to compete in the new environment.
BBVA IN 2016
3. STRATEGY
P. 56
• Customer Solutions (CS) includes the key levers for
implementing the oering of products and services for
customers in all geographic areas. Its main responsibilities
are:
• Grow and transform our business, dening and shaping
the Bank’s relationship with our customers.
• Develop internal capabilities for creating products and
customer experiences.
• Continue attracting and fostering innovation at BBVA
• Create and acquire new businesses with a perspective
that diers from BBVA’s.
The new CS organization mainly comprises:
a. Execution units, which are the driving force of the
demand for creating products and experience
through innovation, and focus on the execution of
results in the countries. These units in turn include the
Business Development teams for Spain, Mexico, the
United States, Turkey and South America; New Digital
Businesses, CIB & Commercial and Asset Management
& Global Wealth.
b. Capability Units, dedicated to the creation of products
and experiences for our external and internal
customers, including: Design & Marketing and Data &
Open Innovation.
c. Product and experience units: the driving force for
creating and transforming the experience that our
customers have in digital and traditional channels,
including: Global Products & Digital Sales and
Distribution & Engagement.
• Engineering: In addition to managing technology
operations, the area develops the software and processes
for customer solutions with a global approach.
• Talent & Culture: focused on developing talent at the Entity
and dening the global models, policies and processes for
managing people and developing the Bank’s organization
and culture.
3. Risk & Finance comprises relevant aspects such as the
management of global risks, balance sheet and Group
solvency.
• Finance: the area in charge of managing asset and liability
risk and capital risk, relations with analysts, investors,
shareholders and rating agencies, management of
investments, and, starting 2016, planning, management
control and management information systems.
• Global Risk Management: the area responsible for risk
management and for ensuring Group solvency, supporting
its strategy and ensuring business development combined
with adequate risk management throughout the entire
life cycle and across all geographic areas where the Group
operates.
4. The Strategy & Control areas, under the responsibility of the
Group Executive Chairman, establish the Group’s strategy and
frameworks for action and control in issues as important as
compliance, communications, internal audit and accounting. It
is organized as follows:
• Global Economics, Regulation & Public Aairs: the
area responsible for the Group’s Economic Research
Department and for promoting and developing BBVA’s
institutional relations.
• Legal & Compliance: legal risk management, legal
advice to the Group, management of risks arising from
compliance issues (prevention of money laundering,
customer protection, personal data and markets) and
the compilation, standardization and presentation of the
Group’s main internal control issues to the Corporate
Assurance committees.
• Strategy & M&A: the area responsible for corporate
development functions, denition of the strategy
guidelines at Group level, and execution of mergers and
acquisitions. It also encompasses the Real Estate and
Equity Holdings units.
• Accounting & Supervisors: responsible for preparing
and reporting accounting, regulatory and tax related
information, and checking and balancing all the
information addressed to the Company’s governing
bodies, regulators and supervisors. It is also responsible
for relations with regulatory and supervisory bodies and
external auditors.
• Communications: manages BBVA Group communications
across all geographic areas, dening and implementing
brand journalism to boost BBVA’s reputation.
• General Secretary: provides legal and technical advice
and support to the company bodies and the dierent
BBVA areas on institutional, legal, corporate and corporate
governance matters.
• Internal Audit: provides an independent, objective
assurance and advice conceived to add value and improve
the Organization’s operations.
BBVA IN 2016
4. CORPORATE GOVERNANCE
P. 58
4. 1. Corporate governance system
Banco Bilbao Vizcaya Argentaria S.A. (“BBVA”, the
“Company” or the “Bank”) has a corporate governance
system made up of a set of principles, rules, structures
and processes which regulate and guide relations between
the Company, its management, shareholders and other
stakeholders, allowing, at the same time, for an adequate
management and oversight of the Bank (the “Corporate
Governance System”).
BBVA’s Corporate Governance System has been shaped
over time based on sound principles that underpin the Bank’s
corporate culture and ensure a suitable distribution of functions,
balance of powers, transparency and businesses ethics.
BBVA’s Corporate Governance System has been designed
on the basis of its own reality as a company, taking into
consideration its circumstances and needs, the dierent
external points of view derived from the dialogue with
shareholders and investors, supervisors and proxy advisors
(entities who provide advisory services related to voting
rights resulting from share ownership of listed companies),
as well as the best practices and recommendations on this
matter and regulations applicable to the Bank, in its capacity
as a nancial institution listed on national and international
markets.
Based on the foregoing, the essential features of BBVA’s
Corporate Governance System are as follow:
An adequate composition of its corporate bodies.
A clear distribution of duties between the Board
of Directors and its Committees, and between the
Committees and the senior management.
An orderly decision-making process.
A sound system for the monitoring, oversight and control
of the Company’s management.
BBVA’s Corporate Governance System comprises the
following core elements:
Shareholders. Oversight of the Board’s management and nal say on relevant matters
Board of Directors. Two roles: management and oversight of the Entity
Senior Management
Board Committees specialised to assist the Board in the perfomance of its duties
3 Executive Directors 12 Non-Executive Directors
(8 independent and 4 external)
Executive
Committee
Audit and
Compliance
Committee
Risk
Committee
Remunerations
Committee
Appointments
Committee
Technology
and Cybersecurity
Committee
Executive Chaiman Lead independent directorChief Executive Ocer
BBVA IN 2016
4. CORPORATE GOVERNANCE
P. 59
Shareholders
Considering BBVA’s shareholding structure, which has 100%
free-oat and an important presence of retail and institutional
shareholders, both national and international, the Bank’s
relationship model with its shareholders is predicated on
three basic pillars:
1. Respect for the “one share, one vote” principle, without
imposing limitations on the exercise of shareholders’
rights and guaranteeing that all shareholders in the same
position are treated equally and aorded the same rights.
2. The General Shareholders’ Meeting is reserved the nal
say on matters of signicant relevance for the Company.
3. The existence of a formal Policy on shareholders and
investors’ communication and contact, which: (i)
encourage shareholders to participate and exercise
their right to vote at the General Meeting; (ii) ensure
utmost transparency and disclosure of information
for the exercise of their rights; and (iii) promote an
active engagement policy with institutional and retail
shareholders.
This Policy, which species the communication channels
with the Bank and the principles of transparency,
veracity, immediacy and consistency in the disclosure of
information, is available on the Bank’s website.
Board of Directors
In line with Spanish regulations, BBVA has a one-tier board
system which entails the existence of a single collegiate
body (the Board of Directors) which is responsible,
collectively and individually, for the management of the
Bank as well as the oversight and control of the senior
management, with the aim of furthering the corporate
interest.
The Board’s most relevant functions are as follows:
Strategy and general policies Remuneration policy
Risk management and
control (RAF)
Financial and accounting
information
Annual budgets
Appointment/removal of
Senior Management
Capital and solvency
Oversight of Senior
Management
Strategic transactions
Internal organization and
annual self-assessment
The fact that these responsibilities are reserved to the Board,
without the possibility of delegating them, is a key element
for the balance of powers and control, ensuring that the most
relevant matters aecting the Company are analysed and
decided by the corporate bodies, which also carry out general
oversight functions over the Bank.
The composition of the Board of Directors is one of the
key elements of BBVA’s Corporate Governance System,
and is aimed at ensuring the appropriate performance of
its functions, so that decisions are taken after debating,
analysing and critically reviewing the proposals submitted for
its consideration, promoting also the necessary consensus
for appropriate decisions to be taken, as well as ensuring
eective management oversight and control.
For this purpose, BBVA has a Policy on the selection,
appointment, rotation and diversity of the Board of
Directors, which is available on its corporate website. This
Policy outlines the principles and procedures for the selection,
appointment and rotation of the Bank’s directors, as well as
the necessary requirements to be fullled in order to hold the
position of director.
Policy on the selection, appointment, rotation and
diversity:
Suitable composition to ensure the adequate
performance of the corporate bodies in the pursuit of the
best corporate interest.
Encourages diversity of experience, knowledge, skills and
gender.
Absence of biases that may entail any kind of
discrimination, and female representation target of 30%
by 2020.
Suitable balance between the dierent categories of
directors, with at least 50% being independent directors.
Director training plans.
Progressive and continuous refreshment in the Board’s
composition.
Suitability, dedication and absence of incompatibilities in
directors.
To ensure a correct composition at all times, the Bank has been
carrying out an orderly refreshment process in the Board,
based on an adequate rotation planning, in order to achieve the
objectives set out in the aforementioned Policy, identifying the
needs of the corporate bodies and the most suitable candidates
to be incorporated at any given time. This process also considers
the composition of the various Board Committees, which assist
the Board in the performance of its duties.
BBVA IN 2016
4. CORPORATE GOVERNANCE
P. 60
For these purposes, BBVA’s Appointments Committee, as
part of its duties, regularly analyses the Board’s structure, size
and composition, and whether these are adequate to meet
the needs of the corporate bodies, and as a consequence it
identies and assesses possible changes in such composition
that may be necessary or advisable. As a result, selection
process may be initiated, where appropriate, for the
identication and selection of candidates to be proposed as
new members of the Board.
BBVA’s Board of Directors has a high level of independence,
both on the Board and its Committees, which promotes the
correct performance of the management, oversight and
control functions, guaranteeing objective and independent
judgment in the decisions adopted by the corporate bodies.
As of the date of this document, BBVA’s Board of Directors
comprises fteen directors, three of which are executive
directors and twelve are non-executive directors. Of them,
eight are independent directors and four external directors,
which entail a level of independence that exceeds the 50%
threshold established in the Policy.
The composition of the Bank’s Board of Directors is very
diverse and combines directors with experience and
knowledge of the Group, its businesses and the nancial
sector in general, with others having relevant training, skills,
knowledge and expertise in other elds and sectors of
particular interest for the Bank (such as risks, audit, digital
businesses, technology and cyber-security), thereby ensuring,
as a whole, a suitable balance in the composition of the Board
and its Committees for a better performance of duties.
Additionally, the members of the Board have the necessary
suitability, repute, skills, experience and qualications
required to hold their positions, fullling the requirements
legally established in this regard. They also have the
availability and dedication necessary to perform their
functions. For these purposes, directors are subject to, among
others, the incompatibilities and limitation rules set forth in
applicable regulations, which provide for a maximum number
of directorships they may hold at the same time
In order to assist the directors in acquiring, updating
and reinforcing their knowledge and skills for the better
performance of their duties, the Board of Directors
has various initiatives in place for the training of its
members. These are aimed at oering sucient and
relevant information on various matters, to ensure a proper
understanding of all the issues submitted for consideration
of the Bank’s corporate bodies, which are combined with the
extensive information provided in the ordinary meetings of
the dierent corporate bodies.
The Board of Directors has an executive chairmanship
model, as well as a CEO who is responsible for the day-to-day
management of BBVA’s business. This model provides for
a separation between both the positions and the duties of
the Group Executive Chairman and of the CEO, ensuring an
adequate balance of powers between both roles. Additionally,
to reinforce the checks and balances and control system,
the Board of Directors has also a Lead Independent
Director, with the functions conferred both by law and good
governance recommendations.
Board’s Committees
To better perform the management and control duties, have
a suitable decision-making process in place and promote the
checks and balances, BBVA’s Board of Directors has set up
specic Committees to assist it in matters falling within their
remit. A coordinated working scheme among the Committees
and between the Committees and the Board has been
established.
The Board of Directors has created an Executive
Committee, which performs management functions and
oversight and control functions. The Executive Committee
is a delegated body of the Board of Directors and its mission
is to assist the Board in its general oversight function and,
in particular, in overseeing the running of the business
and monitoring the risks to which the Bank is or may be
exposed, as well as in the decision-making regarding those
matters falling within the remit of the Board of Directors,
provided that they do not constitute non-delegable powers
under Law.
There are also four Board Committees (Audit and
Compliance, Risk, Remunerations and Appointments)
which assist the Board in carrying out control and oversight
functions, as well as analysing and preparing decisions within
the scope of their functions.
Finally, in order to assist the Board in matters regarding
technology and associated risks, which is an area of particular
interest for the Group, in 2016 the Board has set up a
Technology and Cybersecurity Committee to assist it in the
understanding and acknowledgment of the risks associated
to technology and information systems related to the Group’s
activity and its management and control, particularly with
regard to the Group’s technology strategy.
These Committees help ensure that the oversight and control
functions and the day-to-day management of the Bank
are more appropriate and broader in scope. The Audit and
Compliance Committee and the Risk Committee have key
roles in this regard. The Committees also ensure that the
corporate bodies have a suitable decision-making process
in place, guaranteeing, through the performance of the
duties entrusted by the Board, the analysis and detail of the
proposals submitted for consideration and the challenge
BBVA IN 2016
4. CORPORATE GOVERNANCE
P. 61
of the approaches presented by the senior management
through the direct interaction with them.
The Group’s Corporate Governance System ensures
the correct operation of the Board Committees and the
independent performance of the duties through various
means, i.e. a suitable composition, a clear and broad allocation
of duties, necessary resources and a relevant role attributed
to the respective Chairmen, who also have autonomy to act
and organise the operation as they see t. The Committees
are also able to request assistance from external expert where
necessary to assist them in their functions.
Interaction between the Board and its Committees
As part of its basic elements, BBVA’s Corporate Governance
System incorporates and promotes a suitable decision-
making process, in which the work of the Committees and
the Board of Directors is integrated and the interaction of the
corporate bodies among them and with the Bank’s Senior
Management is reected.
In the framework of this process, the Board Committees
analyse in detail matters falling within their remit and perform a
critical challenge and in-depth review of those issues submitted
by Senior Management, for the adoption of the relevant
decisions prior to submission to the Board, so that proposals to
be submitted to the Board for consideration take into account
the opinions, approaches and requirements that arise from this
analysis and discussion process and they are in line with the
strategies and policies approved by the Board of Directors.
Once these proposals have been approved by the various
Committees, they are submitted to the Board for approval
and nal decision. When the corresponding resolution has
been adopted by the relevant corporate body, it delegates
the implementation and development of the decisions, at
both Bank and Group level, to the managers in charge of the
relevant areas, and the appropriate oversight and control
systems are established.
This decision-making process allows for the existence of
an oversight and monitoring system of the Group by the
corporate bodies, which is completed with a control structure
in the executive area covering all the companies in BBVA Group.
BBVA’s senior management, comprising the heads of the
Group’s corresponding business, control and support areas,
reports directly to the corporate bodies on matters falling
within their remit, thus receiving the information needed at all
times to properly perform the duties.
As a result, the performance of the duties of the Board and
its Committees promotes the oversight by non-executive
directors not only of the proposals submitted by the
heads of the Group’s management areas, but also of the
implementation and development of the matters that have
been approved by the Board, assisted by the work carried out
by the dierent Committees.
Self-evaluation
The quality and eciency of the operation of the Board
and of its Committees is assessed on an annual basis
by the Board of Directors through a process directed
and coordinated by the Chairman of the Board with the
Chairmen of the relevant Committees. This is based on an
analysis carried out by the Appointments Committee on
the structure, size and composition of the corporate bodies
and the activity reports prepared during the year by each
Committee, which are submitted to the Board for analysis
and assessment.
In order to assess the Board’s performance, the
Appointments Committee may engage, when necessary,
renowned independent experts. The rm Russell Reynolds
assisted, as independent expert, in the assessment of the
performance of the Board and its Committees carried out in
2015.
This annual, on-going self-assessment helps analyse the
eciency of BBVA’s Corporate Governance System, which
in turn ensures the correct operation of its corporate bodies
and allows for constant evolution in line with the needs
and the circumstances that might aect the Bank and its
environment.
For further information in this regard, please see the
document “Corporate Governance and Remunerations
in BBVA - Overview 2016”, which is available at the Bank’s
website.
BBVA IN 2016
4. CORPORATE GOVERNANCE
P. 62
4. 2. Compliance system
The Group’s Compliance System constitutes one of the
bases upon which BBVA consolidates its institutional pledge
to conduct all operations and businesses in accordance with
strict codes of ethical conduct. In line with the principles
set forth by the
Bank for International Settlements (BIS)
and the reference regulations in this area, the Compliance
Department continues to articulate its business around the
development and implementation of policies and procedures,
communicating and training in matters of compliance, and
the identication, assessment and mitigation of potential
compliance risks, understood as those that aect the
following issues:
Market conduct.
Dealing with conicts of interest.
Prevention of money laundering and terrorism nancing.
Personal data protection.
The model of compliance risk assessment and
management associated with these matters is global
in nature. It is not a static concept; it evolves over time,
strengthening those elements and pillars on which it is based
and anticipating new developments and initiatives that may
arise in this eld. This model is built on the following pillars:
A suitable organizational structure with a clear
assignment of roles and responsibilities throughout the
Organization.
Policies and procedures that clearly dene positions and
requirements to be applied.
Mitigation processes and controls applied to enforce the
compliance of these policies and procedures.
A technology infrastructure focused on monitoring and
designed to guarantee the above objective.
Communication, training systems and policies
implemented to raise employee awareness of the
applicable requirements.
Metrics and indicators that allow the supervision of the
global model implementation.
Independent periodic review of eective model
implementation.
In 2016 the documentation and management of the model
was strengthened through a set of technological tools and
improvements to the internal processes in the dierent
countries. This eort has been particularly signicant in
Turkey, following the integration of the Garanti group in
BBVA.
Standards of conduct
A basic element in BBVA’s compliance system is the Code
of Conduct, updated in 2015 and available on the website
bbva.com.
The commitments that contribute to the prevention of
corruption in the Group in its relations with suppliers, anti-
bribery policies, acceptance of gifts, events management,
prevention of money laundering, and commitments regarding
politically exposed persons, are all included in the Code
of Conduct, and in the specic policies that develop and
complement it.
In 2016 BBVA completed a review of the anti-corruption
framework to adapt it to the new Code of Conduct. Its
gradual implementation across the Group is planned for
the upcoming months. In addition, stricter precautionary
measures have been applied specically to the group of
politically exposed persons, as already introduced in the past
and included in the corporate procedure for action in relation
to this matter.
The Policy for Conduct in the Securities Markets includes the
principles and general criteria for action designed to uphold
BBVA’s integrity in the markets. Specically, this document
contains the minimum procedural guidelines regarding the
treatment of privileged information, the prevention of price
manipulation, the management of potential conicts of
interest and own account trading by employees.
In addition to these mechanisms, BBVA has established other
specic instruments for managing core commitments in each
functional area. The most salient of these are:
Internal standards of conduct in securities markets.
The Compliance Statue.
The Code of Ethics for Recruitment of Personnel.
The principles applicable to those parties involved in the
BBVA procurement process.
BBVA IN 2016
4. CORPORATE GOVERNANCE
P. 63
The basic principles of risk management and the risk
management Policy Manual.
The regulation on dealing with individuals and entities
of public importance in matters of finances and
guarantees.
Other basic commitments acquired by the Group are:
BBVA’s Rules of Conduct in Defense.
The Environmental policy.
The Responsible Procurement Policy.
The Commitment to Human Rights (see section on
human rights at the end of this chapter).
In relation to conduct with customers, in 2016, the
Compliance Department has focused its activity on preparing
for the entry into force of the new regulations on investor
protection, such as the Markets in Financial Instruments
Directive (MiFID II) and the PRIIPs (Packaged Retail and
Insurance-based Investment Products). Other measures
geared to customer protection during the year have been the
following:
Assessment of risks associated with the Group’s products,
services and activities and the implementation of
measures for their mitigation through the presence of the
Compliance Department in the New Product Committees.
In 2016 these committees have reviewed 288 new
activities, products and operations. In addition, control
procedures and routines of the new products and services
have been strengthened, and new requirements prior to
these products and services have been incorporated and
must be veried before their launch.
Coordination of action plans to adapt to any new
requirements and criteria issued by the Spanish Securities
and Investment Board (CNMV) and the Bank of Spain on
the protection of investors and bank users.
Close and continuous collaboration with wholesale and
retail product and business development units, focusing
on digital banking initiatives, with the aim of instilling the
concept of customer/investor protection into its projects
from the outset.
Maintenance of the internal regulatory framework up
to date to ensure that all product and service sales are
compliant with requirements.
Participation in improvement projects and updating sales
processes, as well as the supporting IT systems, seeking
to ensure they are in line with best practices in terms of
protecting customer interests.
Promotion of communication and training initiatives for
the sales network and support departments, specically
on advisory and sales practices to related customers .
Review of the information made available to the public and
the sales forces, as well as the promotional campaigns
and sales of investment products.
Enhancement of the compliance risk monitoring metrics
and indicators to promote a proactive approach, with a
particular focus on customer complaints.
Evaluation of the internal measures in force, based
on internal and external audit reviews and regulatory
inspections and requirements.
With respect to the standards of conduct in the markets,
as a result of the entry into force of Regulation (EU) No.
596/2014 of the European Parliament and of the Council on
market abuse and its secondary legislation, the standards
for integrity have been increased and the compliance units
dedicated to these matters have been enhanced. Thus in
2016 capacities in the area of prevention and detection
of market abuse have been strengthened, to respond to
the new legal requirements. These changes have mainly
taken shape in the review of the internal regulatory body
to adapt its content to new requirements, improved tools
and capacities for detecting suspicious transactions and
employee training. Specically, 811 individual training
actions have been developed for employees aected
by the regulation. In addition, a general rule has been
drawn up for activity related to nancial indices. It serves
as a general framework that tackles the integrity and
appropriate behavior in the area of markets and prevention
or management of conicts of interest in activities related to
nancial indices.
Prevention of money laundering and terrorist nancing
Prevention of money laundering and terrorist nancing
(hereinafter, PML&TF) constitutes above all an ever-present
objective that BBVA Group associates with its pledge to
make improvements in the dierent communities in which it
operates
For BBVA, ensuring that its products and services are
not used for illegal purposes also constitutes an essential
requirement for safeguarding its corporate integrity, and
thereby one of its main assets: the trust of people and
institutions it deals with on a day-to-day basis (customers,
employees, shareholders, suppliers, etc.) in the dierent
jurisdictions where it operates.
BBVA IN 2016
4. CORPORATE GOVERNANCE
P. 64
To achieve this objective, as a global nancial group with
branches and subsidiaries that operate in numerous
countries, BBVA has adopted a corporate PML&TF risk
management model that covers all the compliance issues
described above. This model is applicable to all of the entities
forming part of BBVA Group within the scope of PML&TF
and not only takes into account regulations on prevention
of money laundering in the jurisdictions in which BBVA
operates, but also incorporates the best practices in the
international nancial industry in this regard, as well as the
recommendations issued by international institutions such
as the FATF (Financial Action Task Force). This management
model is constantly evolving. In particular, risk analysis
ensures that controls can be tightened and any additional
mitigating measures that may be required to enhance the
model can be implemented.
Progress in 2016 on this area includes the following:
Increasing human resources assigned directly to the
PLD&TF units of each jurisdiction.
Making progress in improving through centralized
guidelines for customer risk categorization or in assigning
systems with regard to PLD&TF, based on the factors
identied by the sector which are relevant for quantifying
the risk of money laundering.
Upgrading the monitoring systems already in place in
all Group areas. In 2015, BBVA adopted the decision
to replace the main monitoring tool implemented in
the Group. Deployment began in 2016 in Spain and
Turkey, and it will continue in the rest of the jurisdictions.
Associated with this deployment, best practices will be
implemented in the management of alerts to increase the
eciency of the process.
The development of initiatives opens up new technological
opportunities (for example, big data and robotics) that
improve BBVA Group’s ability to detect suspicious
activities in its dierent entities.
The risk management model of PML&TF is subject to
continuous independent review. Pursuant to Spanish
regulations, an independent expert annually audits the
company’s system matrix (including supervision of
subsidiaries and branches abroad) and all companies subject
to PML&TF standards in Spain. This review is complemented
by internal and external audits carried out by local
supervisory bodies.
Finally, it is worth noting BBVA’s collaboration with the
dierent governmental bodies and international organizations
in this eld.
Ethical and legal behavior consultancy
Following its update in 2015, in 2016 eorts have been
focused on the communication and dissemination of the new
Code of Conduct, as well as training in its contents.
The new Code has been distributed through audiovisual
means at a global level, with the involvement of senior
management and related departments in the dierent
countries. Videos have been distributed on each of the
chapters of the Code at the global level, supplemented with
specic communication initiatives for individual groups or
countries.
In addition, an online course has been launched at global
level, to allow all Group employees to become familiar with
the contents of the Code. In 2016 over 96,000 employees
have taken the course and the Group’s whole workforce is
expected to nish it by 2017. In addition, reminders have been
issued on the content of the Code at global level, coinciding
with events or facts that are particularly relevant and related
to their content.
The Compliance team has also continued in 2016 to oer
its advice on applying the Code of Conduct. Specically, 50
individual written and phone queries have been answered.
Basically, they focused on carrying out other professional
activities, and on the handling and management of potential
conicts of interest.
In the area of PML&TF, each of the Group’s entities has an
annual training plan for all its employees, which establishes
training actions of a varied nature according to the needs
identied for each. These training actions are carried out
on site, using methods that include
e-learning, videos and
leaets, and its content is adapted to the group that is the
target of the training.
In 2016, a total of 79,798 employees in the whole Group
received training in PML&TF. Of these, 25,149 correspond to
groups of employees whose function requires more specic
training in the area of PML&TF.
Whistleblowing channels
One of the main mechanisms for managing conduct risk
in the Group is its whistleblowing channels. As set out in
the Code of Conduct, BBVA employees have the obligation
not to tolerate any conduct that is contrary to the Code, or
any conduct in the performance of their professional duties
that may harm the reputation or good name of BBVA. This
whistleblowing channel is a mean for enabling employees
to report any breaches they observe or are notied by their
collaborators, customers, suppliers or colleagues.
BBVA IN 2016
4. CORPORATE GOVERNANCE
P. 65
The means by which employees can report any action or
situation that may be in violation of the regulations or values
and guidelines of the Code of Conduct are as follows:
Discuss the case with their supervisor or contact at Talent
& Culture.
Report the case through the whistleblowing channel of the
geography or area where they work.
Make use of the corporate whistleblowing channel, by
reporting the case to the Compliance Department at the
email address canaldenuncia@bbva.com or the phone
number: (34) 91 537 7222. The whistleblowing channel is
open to the Group’s suppliers.
Human rights
Since 2007 BBVA has a Commitment to human rights,
which denes the minimum behavioral basics applicable
to all the entities making up BBVA´s Group, including all its
employees and management team. These fundamentals
also guide BBVA’s relations with its customers, suppliers and
the communities in which it carries out its businesses and
activities.
Although this Commitment has been updated periodically
since its approval in 2016, an in-depth review has been
initiated, taking as a reference the United Nations Guiding
Principles on Business and Human Rights. The Principles set
out the actions that both states and companies must carry
out to comply with their respective obligations to protect
and respect human rights and implement the mechanisms
needed to restore any adverse impact to those aected by
breaches of their rights.
Aware of the key role that companies play because of their
responsibility to respect human rights, which is included
in the current text of the document, we have begun an
integrated cross-cutting process of due diligence (applicable
to all the functional areas and the Bank’s business and all the
geographical areas where BBVA operates).
The aim of this due diligence is to identify issues most
relevant to human rights that may impact BBVA’s activity. As
a result of the process, we will have an updated human rights
Commitment and an action and monitoring plan to ensure
compliance.
In addition, since 2011 BBVA has participated in the
sessions and debates of the Thun Group, an informal
group of representatives of banks that work together
with the primordial aim of understanding the Guiding
Principles better in the area of banking and considering
how they can be applied in the different banking activities.
The Thun Group places particular focus on the exchange
of knowledge and experience with the aim of supporting
the incorporation of the Guiding Principles in the policies
and practices of financial institutions. Occasionally, the
Thun Group expresses the results of its deliberations in
discussion papers. In January 2017 the Group published
its latest discussion paper, on which it has been working
in recent years. It proposes a conceptual framework to
help consider the significance and scope of Principle 13 for
banks in a context of corporate and investment banking.
In addition, it reflects on the due diligence addressed in
Principle 17.
With the publication of these documents we aim to generate
a constructive dialogue between the banks and other
stakeholders interested in the issues addressed.
BBVA IN 2016
4. CORPORATE GOVERNANCE
P. 66
4. 3. Internal control model
Based on best operational risk management practices, BBVA
Group has established and maintained an internal control
model organized around three lines of defense (3LoD), as well
as a governance scheme called Corporate Assurance. The
Group’s internal control model has two components.
The rst component is the model based on three lines of
defense, which ensures compliance with the most advanced
internal control standards and is organized as follows:
The Group’s areas and/or business units constitute the
rst line of defense. They are responsible for managing
current and emerging risks, implementing control
procedures and reporting to their unit/business or
support area.
The second line of defense consists of the areas/
units specializing in control, the main ones being the
following: Compliance, Accounting & Supervisors
(specifically, Internal Financial Control), Global Risk
Management (including, Internal Risk Control) and
Engineering (specifically, Internal Operations Control
and Internal Technology Control). This line helps
identify current and emerging risks, defines the control
policies within the scope of its cross-sector aspect,
ensures that they are implemented correctly, and
provides training and advice to the unit representing
the first line. In addition, one of its main functions is to
monitor and question the control activity carried out
by the first line of defense. The control activity of the
first and second lines of defense will be coordinated by
the Global Internal Control Unit within the Global Risk
Management area, which will also be responsible for
providing these areas/units with a common internal
control methodology.
The third line of defense is made up of the Internal Audit
area, for which the Group assumes the guidelines of the
Basel Committee on Banking Supervision and of the
Institute of Internal Auditors. Its function is designed
to provide independent and objective assurance and
consulting activity intended to add value and improve the
Organization’s operations. The duties and lines of work of
this area are described below.
Business units
OR and
control specialist
Internal
Audit
1
st
2
nd
3
rd
Global Corporate
Assurance Committee
Group Corporate Assurance
Operanting Committee
Local Corporate
Assurance Committees
The second component is the Corporate Assurance
scheme, which has the role of providing a comprehensive
and standardized approach to the Board of Directors and
the management bodies on the Group’s internal control
situation. This provides timely information on the main
control weaknesses that may arise in the dierent assurance
processes and makes it possible to prioritize their solution
and monitor the implementation of measures for mitigating
them more eectively.
To ensure correct operation, the model includes an orderly
mechanism for reporting to management. The mechanism
is made up of a number of committees that meet every four
months, in which members of the senior management of the
Group and its subsidiaries take part. The committees seek
to discover and make decisions on control issues that may
have a signicant impact on the objectives of the dierent
areas/units, both at the local level and for the consolidated
Group.
BBVA IN 2016
4. CORPORATE GOVERNANCE
P. 67
Internal Audit
The Internal Audit area depends directly on the Group’s
Executive Chairman. It is completely independent from the
functions being audited and is not part of any other activity
that may be subject to an audit.
Its functions imply a universal scope and include all activities
and entities in BBVA Group, with no exceptions and irrespective
of the geographic location or reporting situation. Its scope also
extends to the activities and services the Group has outsourced.
This area has unrestricted access to employees, workplaces,
systems, IT and physical records and, in general, any
information required to perform its functions eectively. It
must maintain such information condential and comply with
data protection laws.
A three-year plan was drawn up in 2016, in compliance with
ECB guidelines, in response to the expectations of the main
stakeholders.
The plan is structured based on 11 types of risk, from which
the following main points for action have been derived:
To cover the main sources of risk in the business model;
work has been carried out on dening the indicators
linked to the Strategic Priorities, as well as on the circuits
established for reporting and monitoring.
The assessment of internal governance risk is based on
evaluation of the organization´s framework, the global risk
management and the Entity’s control framework.
To cover operational risk, the focus has been placed on data
governance and information quality, preventive evaluation of
the risks associated with the Group’s main transformation
initiatives, the operational risk associated with the Group’s
business processes and management of the projects for
integrating the banking platforms in Spain, whose current
key process is migration of information from Catalunya Banc,
Uno-e and Banco Depositario to the BBVA platform.
To cover legal risk in the Group the legal risk control
framework has been reviewed in Spain and Venezuela and
work has been developed on compliance with accounting
standards, the nancial information control model and
regulatory reporting in the main geographic areas.
Reviews have been carried out on compliance risk in all
functional and geographic areas. In addition, audits have
been carried out on the prevention policies of money
laundering and terrorist nancing, the specic laws on
consumer protection in various countries, the new Code of
Conduct and the reputational risk management model in
the Group, as well as the crime prevention model in Spain
and compliance with the data protection law in Peru.
Through the work on cybersecurity, both the exposure
and the response capacity to IT security risks have been
precisely evaluated.
The outsourcing lifecycle has been reviewed to cover risks
associated with the outsourcing processes in the Group.
The sources of credit risk identied have been covered
through a review of the portfolios associated with the
energy sector in Mexico, Colombia and the United States,
through the analysis of the credit quality of customers
managed by Corporate & Investment Banking, and
through the evaluation of the governance of the provision
model dened in the new Bank of Spain Circular (4/2016).
With respect to nancial risks in market activities, annual
revisions of the internal models used by the Group have
been carried out to determine the capital charges for
market risk.
Asset and liability risks are covered with respect to
liquidity by a review of the internal liquidity adequacy
assessment process (ILAAP), as well as a review of the
mechanisms for the governance, management and
control of structural risks.
The framework of the three-year audit plan covers all the
internal capital adequacy assessment process (ICAAP),
as well as the compliance with local capital adequacy
requirements to which the Group is subject in each of
the geographical areas in which it operates. In 2016 the
internal stress tests and calculation of the leverage ratio
were also reviewed.
Internal Audit Activity: Reports issued by type of risk (BBVA Group. 2016)
Business models 20
Assurance work 11
Due diligence 9
Internal governance 39
Operational 1,269
Assurance work 162
On-site 723
Fraud 384
Legal 67
Compliance 100
Technological 75
Extended enterprise 30
Credit 90
Market 29
Structural risks 18
Capital 19
TOTAL 1,756
BBVA IN 2016
5. PRIMARY STAKEHOLDERS
P. 68
5. Primary stakeholders
5. 1. Materiality analysis P.6 9
5. 2. The customer P.7 1
5. 2. 1. Customer experience P.7 1
5. 2. 2. Customer protection P.76
5. 2. 3. TCR Communication P.7 7
5. 2. 4. People-centric solutions P. 80
5. 3. The team P. 87
5. 3. 1. Professional development P.89
5. 3. 2. Workplace P.91
5. 3. 3. Remuneration P.9 3
5. 3. 4. Volunteer work P.94
5. 4. Shareholders P.95
5. 5. Society P.99
5. 5. 1. Social, environmental and reputational risks P.99
5. 5. 2. Investment in social programs P.101
5. 5. 3. Financial education P.102
5. 5. 4. Entrepreneurship P.105
5. 5. 5. Knowledge, education and culture P.108
5. 5. 6. Fiscal transparency P.112
5. 5. 7. The environment P.113
5. 6. Suppliers P.115
5. 6. 1. Supply chain P.116
5. 6. 2. Supplier management P.117
5. 7. Supervisors and regulators P.119
BBVA IN 2016
5. PRIMARY STAKEHOLDERS
P. 69
5. 1. Materiality analysis
In 2016 BBVA has taken a great step forward in materiality
analysis to make it more solid and ensure that the focus is
on the most relevant aspects for both the stakeholders and
the BBVA business. This involved carrying out a review of the
material issues based on the data collected from a variety of
sources, providing a broad information base that is auditable
and objective, ensuring that the analysis is more robust than
in previous years.
During this process, analysis has been conducted on the
current and emerging issues from the perspective of dierent
stakeholders and BBVA’s strategy. The tools used were the
E-Revalue data analysis platform Datamaran, as well as other
usual sources used in previous years.
Stakeholder input
The priorities of stakeholders have been obtained by
analyzing two information groups. First, the data has been
gathered directly from the stakeholders themselves:
Direct opinions of customers and non-customers from
countries where we operate, are collected through
surveys. These surveys measure the key factors to ensure
that consumers trust banks, in particular BBVA, as well as
the relative importance of each of these factors (source:
RepTrak).
Direct opinions of employees are identied through very
similar methods to the above, and carried out in the
Group’s main countries (source: RepTrak.).
Investors and analysts´ opinions are gathered through
surveys answered by BBVA’s Investor Relations unit. It
reects the issues relevant to this group and distinguishes
between institutional investors and other shareholders. In
addition, an analysis of sustainability - oriented priorities
is being carried out based on specialized sources such as
the Principles for Responsible Investment (PRI) and the
Sustainable Investment and Finance Association (SIF).
The main concerns, demands and requirements of the
NGOs most active in the nancial sector are analyzed
through their campaigns, reports, policies and news.
As well as the above, information has been gathered from
other sources contained in the E-Revalue data analysis
platform Datamaran, to complete and consolidate the opinion
of stakeholders, such as:
Regulatory analysis to identify the main laws and
directives that impact the nancial sector in all the regions
where BBVA operates. An inquiry has been carried out
of both mandatory regulations and recommendations
issued by institutions, as well as emerging issues that
have arisen from the regulatory changes that took place in
recent years.
Analysis of the latest news related to issues relevant to the
nancial sector in the online media and social networks
like Twitter.
Series of benchmarking exercises on the reports
published by other banks in 2016, as well as the
documents from dierent companies presented before
the Securities & Exchange Commission of the U.S.
Government (SEC) for the nancial sector in BBVA´s key
markets, including annual sustainability and integrated
reports.
Trend analysis of the sector based on the reports
developed by the nancial institutions and expert
consultants over the last two years, in relation to the way
banks oer services to customers.
Sources used in the materiality analysis
Sources of materiality analysis based on stakeholders’ surveys and analysis
included in Datamaran (the same number of documents in English and Spanish
have been analyzed)
Customers/non-customers and employees
RepTrack surveys in the key geographical areas of BBVA:
4,500 customer and non-customer surveys
6,000 employee surveys
Analysts and investors
Department of Investor Relations surveys for investors and analysts
9 sustainability investment reports
NGO
19 NGO documents
Regulator
264 regulatory documents
News feeds and social networks
153 news feeds analyzed, considering:
2,300 news feeds written in English and 2,000 news feeds written in Spanish
30,000 tweets written in English and 10,000 tweets written in Spanish
Benchmark
88 competitors’ reports coming from 36 banks
Trends:
13 industry trend reports
BBVA IN 2016
5. PRIMARY STAKEHOLDERS
P. 70
Each of these sources has been analyzed based on the
dierent level of importance. Based on the results, a
hierarchical list of relevant issues has been dened for the
dierent stakeholders, which has been completed with an
analysis of the contribution of each issue to BBVA’s strategy
and business.
These issues are represented in the materiality matrix
shown below. The vertical axis reects the importance of
the issues for the stakeholders and the horizontal axis the
importance for BBVA’s strategy and business. The issues
colored in green have a rst-level relevance and those in
orange a second-level.
BBVA Materiality matrix in 2016
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
0.90
0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80 0.90 0.10
IMPORTANCE FOR BBVA'S STRATEGY AND BUSINESS
Responsible procurement/outsourcing
Community involvement
Contribution to the development
of local societies
Financial education
Talent attraction,
development and retention
Transparency and
selling practices
Solvency and nancial management
Ethical conduct
Customer service quality
Quality and fair products that
respond to customer needs
Digital
transformation
Security, privacy and customer protection
Good corporate governance
Diversity and work life balance
Social & environmental
responsible funding
Human rights, employee rights
and employment quality
Eco-eciency, environment,
climate change
Financial inclusion
IMPORTANCE OF THESE ISSUES FOR STAKEHOLDERS
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
0.90
0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80 0.90 0.10
IMPORTANCIA PARA LA ESTRATEGIA Y EL NEGOCIO DE BBVA
Compras Responsables
Acción social
Contribución al desarrollo
de las sociedades locales
Educación Financiera
Atracción, desarrollo y
retención del talento
Transparencia y prácticas
de comercialización
Solvencia y gestión nanciera
Conducta ética
Servicio al cliente de calidad
Productos de calidad y
con condiciones justas que
responden a las necesidades
de los clientes
Transformación digital
Protección y privacidad del cliente
Buen Gobierno Corporativo
Diversidad y conciliación
Financiación social y
medioambientalmente responsable
Derechos Humanos
y calidad del empleo
Cambio climático y ecoeciencia
Iclusión nanciera
IMPORTANCIA PARA LOS GRUPOS DE INTERÉS
BBVA IN 2016
5. PRIMARY STAKEHOLDERS
P. 71
5. 2. The customer
5. 2. 1. Customer experience
One of BBVA’s main Strategic Priorities is to provide “a
new standard in customer experience” that stands out
for its simplicity, transparency and swiftness; empowering
customers while oering them personalized advice.
As mentioned in the section on Strategy, enriching customer
experience is done through a customer-centric business
model that oers a dierential service with a very ambitious
goal: to be leaders in customer satisfaction across our
global footprint.
Further, as part of the organizational changes taking place
within the Group, in July 2016 the Customer Solutions
area, responsible for the creation and development of new
products, was restructured to adapt to our customers’ needs.
The new area has four main tasks:
Grow and transform our business, redening and shaping
the Bank’s relationship with our customers.
Develop internal capabilities for creating new products
and customer experiences.
Maintain innovation as a fundamental pillar of BBVA.
Launch and acquire new businesses that dier from
BBVA’s usual activities.
A customer-centric approach
The way in which customers interact with their banks has
changed radically. We are rmly in the “do-it-yourself” era,
an era of new technologies, where customers want to be
connected anytime, anywhere. To remain competitive and
still be a key player in a changing environment, the Customer
Solutions area is promoting a customer-centric mentality
throughout the Organization. We want to put the customer
at the heart of everything we do, in accordance with the
following principles:
The transformation of the Group should be guided
by our customers’ demand for unique and innovative
experiences.
We are investing in capital and talent to create a future of
opportunities for our customers.
We are seeking to take advantage of our relations with
customers in a fair and transparent manner.
At BBVA we are all creators of experiences for our
customers.
In order to achieve this, we rely mostly on the power of design
thinking as the basis for designing our products and services.
Design thinking is much more than making things look
attractive; it involves mainly the ability of leading companies
to put their customers at the center of their businesses. It
combines social factors, demographic and technological
trends and a deep understanding of consumer behavior. It
starts with obtaining an understanding of our customers;
knowing who they are and what drives their behavior. It helps
us to dene the problems we want to resolve and ensures that
customers are always at the heart of any solution.
BBVA is also becoming an increasingly global bank through
its focus on creating global products and experiences. This
allows us to leverage our best practices, wherever they come
from, to the benet of our customers.
To do this we are reorganizing around a new concept known
as the Triangle. The Triangle has three vertices: business,
customer experience and technology, where Customer
Solutions would be at the center.
Business Technology
Experience
Our Customer Solutions team relies on design thinking and
collaborative work to create an inspiring vision for the future.
It is also responsible for project planning and execution. The
focus on creativity and execution ensures us the possibility to
make digital innovation available for our customers. This team
was originally located in Spain, the United States and Mexico.
BBVA IN 2016
5. PRIMARY STAKEHOLDERS
P. 72
It is made up of specialists from the nancial industry and
from other industries who can oer an analysis under a wider-
ranging perspective.
In addition, the opening of the Creation Center in Dallas was
a step forward for Customer Solutions and our investment
in the improvement of customer experience. A group of 55
highly-qualied employees has been hired, with experience
in data, computer engineering, user experience and design.
They will work with local teams in all BBVA’s geographical
areas to develop global products and processes used to
improve the customer experience from start to nish.
New customer-centric solutions launched in 2016
In 2016, key customer-centric solutions were developed,
and have helped to improve customer experience and drive
transformation through the digital channels. Some of the new
initiatives implemented for customers include:
Spain
Digital Onboarding: it is a new functionality for opening
accounts online and setting up direct billing for payments
using smartphones. It is a simple, 100% online solution
that allows customers to be fully operative in less than ten
minutes. Customers can also migrate their bills to BBVA
simply by photographing them.
BBVA Valora and Commerce 360: two projects that
provide customers with the benets of big data. BBVA
Valora is a tool that is available as an app and also
online. It is designed to help customers obtain the most
information possible to negotiate and make the best
decisions with respect to their homes (real-estate prices,
impact on their nances, etc.). The app connects to the
home purchasing process and concludes with a mortgage
oer tailored to the customer’s prole. The Commerce
360 project converts anonymous card purchase data into
useful information for businesses and SMEs, helping them
to make the best decisions and implement marketing
campaigns.
No waiting at branches, prioritized queue number
at the teller window, and online appointments: this
is an initiative that oers customers the possibility of
arranging face-to-face or telephone meetings with their
managers online or using their smartphones. When
customers visit their branches, they have the option to
ask to wait in the priority line of the teller so they won’t
waste their time. Both solutions save time and allow
customers to choose the most convenient time to speak
with their advisor.
The United States
Origination of online signature express loans: BBVA
Compass has introduced its rst online credit product,
where customers can apply for a loan and receive
conrmation, both online and in minutes.
Improvements to the BBVA Wallet, with new functions
for activating cards, canceling cards if they are lost or
stolen and applying for new cards without having to visit
the branch in person.
Easy payments and transfers: an innovative, simple
and fast solution to move money between BBVA
Compass accounts and other bank accounts, repay
loans and transfer money, available via smartphone
and online. The initiative was recognized by Javelin
Research as the best solution of this kind in the United
States.
Turkey
New mobile app solutions (Garanti Cep), featuring an
interactive mobile assistant (IMA) and an intelligent virtual
voice assistant that respond immediately to customer
needs and enable banking transactions to be made using
voice commands.
New user experiences at ATMs. The ATM application has
been adjusted to reduce user time.
GarantiOne, a service that oers a view of the customers’
nancial position, can compare their expenditure with
peers and send digital gifts peer-to-peer (P2P), such as
digital subscriptions, game credits, etc.
Seamless Technology for Enterprise Platform (STEP).
A mobile platform created to assist the sales force, and
designed as a uid work space under the slogan of “a
bank on a tablet”. It gives employees up-to-date access to
all customer information using a simple and easy-to-use
interface.
Digital Onboarding
Spain
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5. PRIMARY STAKEHOLDERS
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Mexico
N2 Digital Account, a new account that allows individuals
to become new customers without having to visit a
branch through a simple registration process on their
smartphone
. This is the rst 100% digital account that
allows card-less cash withdrawals from more than 11,000
ATMs.
Salary portability, a clear and simple process that
enables customers to migrate their salary payments to
BBVA Bancomer. The portability process may be carried
out in-branch or using digital channels, by selecting the
“do it yourself” option. The omni-channel experience
has produced positive results and underscores BBVA
Bancomer’s position as leader in salary portability.
Digital Auto Credit, the rst 100% digital auto loan
arranged online, oering customers an easy, fast and
secure experience. Customers and non-customers alike
can make loan simulations, and, if they wish, apply for
an auto loan online. BBVA Bancomer will respond to all
applications by email in approximately one hour.
South America
In Argentina, new experiences on the web have been
developed. For example, an online risk assessment engine
has been launched in real time for certain products, in
addition to a new function for opening deposits, new tools
oering more information on account movements and a
new credit card site.
In Chile, new adjustments have been launched for the
mobile banking app, BBVA Cloud has been introduced
for the web and new One-Click products have been
developed, in addition to a new function for the BBVA
Wallet that includes the
online exchange of points in the
Bank’s loyalty program.
In Colombia, a new website has been developed, in
addition to an online process for opening salary accounts.
A system has also been introduced for small consumer
loans (ADN) through ATMs, aimed at payroll customers.
A new BBVA Wallet has been launched that enables
payments to be made simply, safely and comfortably
using a sticker
.
Further, the mobile app now includes
the option to contract time deposits, with the possibility
of using a ngerprint sensor to sign documents via
smartphones.
In Peru, new web experiences have been implemented,
such as a system for opening accounts online
,
which
is digital from start to nish for new customers. A
single support system has also been introduced for
branches. This is a new tool that includes oers available
to customers, their historical data, a planning tool
that monitors employees’ sales performance, and an
improvement in the application process for credit cards
and loans. A new value proposition has also been launched
for senior customers (Cuenta Mundo Senior), in addition
to a range of loans through digital channels (mobile, web,
ATM). BBVA Continental is the rst entity in the country to
oer this service.
In Venezuela, a new function has been developed for the
mobile app that allows cash to be transferred via BBVA
Provincial ATMs to anyone with a cell phone (customers or
non customers). Net Cash has launched a new design for
accessing the channel, with the introduction of Provinet
Chat (assistance) and the possibility of using a digital
ngerprint for identication purposes. This makes it easier
to access Provinet Empresas (for companies), improving
the user experience.
Big data
Big data is no longer a trend; it is a reality, and at BBVA
data analysis is becoming increasingly important for
our business. The banking of the future is data-driven
banking; knowledge banking. Data-driven companies are
transforming the essence of the customer experience.
Thanks to data collection, selection, analysis and
interpretation, new business opportunities can be detected,
companies can remain one step ahead of consumer trends,
new experiences can be designed to help customers make
decisions and knowledge can be gained from the decisions
they make. The information and knowledge held on each
customer, among other factors, can be used to create a
unique experience.
In big data, the ability to work in real time is a fundamental
aspect. One of the most ambitious challenges facing
the Bank is how to feed the information obtained from
customers back into the system so that action can be
possible in real time.
Our objective is to oer a better service to customers,
becoming more ecient and competitive, but at BBVA we
are aware of the risk of handling personal data. Data are
Digital Auto Credit
Mexico
BBVA IN 2016
5. PRIMARY STAKEHOLDERS
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therefore used in a generic, aggregate and anonymous
format. In this way, our contact with customers is more
personalized and signicant, but their privacy is not
jeopardized at any time.
Complaints and claims
At BBVA we know that good complaints and claims
management is key to making us a better bank for our
customers.
We oer our customers experiences and solutions related
to their money. Because of this, we understand and are
aware that mistakes and bad experiences are becoming
less and less tolerable. Furthermore, we are aware that bad
experiences are not only harmful to our image but can also
lead to trusting issues. Knowing and recognizing our mistakes
and resolving them quickly and dynamically are part of our
objective to provide a new standard in customer experience.
In BBVA Group, the dierent complaints units are constantly
evolving with the aim of improving and optimizing their
management models. Further, the analysis and management
of complaints and claims provide relevant information on
the factors and causes leading to the lack of customer
satisfaction. To address this issue, a special site has
been created that contains all the information relating to
complaints, claims and lack of customer satisfaction. These
aspects are also monitored periodically in a simple, dynamic
and transparent report that examines the dierent areas
relating to complaints at BBVA, contributing value to internal
customers that is then transmitted to external customers.
Main indicators of complaints (Spain, Mexico and South America)
2016 2015 2014
Average time for settling complaints (days) 12 11 12
Number of claims settled by First Contact
Resolution (FCR) (%)
16 30 14
Number of claims before the banking
authority (for each billion euros of activity)
62 58 131
In addition to complaints and claims, there is a growing
tendency to collect and address informal complaints and
customer requests. The aim of collecting this wealth of
information is to assess root causes and establish action
plans to resolve any issues on time.
The following are the conclusions of the complaints
management process at BBVA:
We are improving the customer experience.
We continue to identify the root causes of problems in
order to draw up specic action plans.
The Bank’s digital transformation process is supported
by sharing customer insights (NPS index, feedback,
complaints and claims, etc.).
Conversations on social networks are monitored.
The Activity Report is published periodically at Group level
on a special website.
Annex 2 - Average time for setting complaints
Annex 3 - Complaints settled at the rst contact with
customer (FCR)
Annex 4 - Complaints brought before the banking authorities
Net Promoter Score
Digitalization and simplicity are key factors that mark the
improvement initiatives implemented at Group level to make
all customer interactions with us a positive experience.
The Net Promoter Score (NPS or Net Recommendation
Index - IReNe) methodology shows us the level of
recommendation, and hence, the level of satisfaction of our
customers with the dierent products, channels and services.
This index is based on a survey that measures, on a scale of
0 to 10, whether a bank’s customers are positive (score of 9
or 10), neutral (score of 7 or 8) or negative (score of 0 to 6)
when asked if they would recommend their bank to a friend
or family member. This is vital information for identifying their
needs and drawing up quality plans, in addition to projects
that, in collaboration with the dierent areas of the Bank,
make it possible for us to create unique experiences.
The results of these eorts, coordinated throughout the
dierent countries, have been positive. We have observed
an increase in this index that has also been partly due to
the exchange of best practices within the Group. Highlights
include:
In Spain, the consolidation of the
Calidad en Red Banco
10 - 3.0
(Bank network quality 10 - 3.0) program.
In the United States, a new tool has been launched to
improve interaction with customers, speed up processes
and reduce paperwork through the digitalization of a
variety of products and services.
In Turkey, improvements have been made in
communication channels and mechanisms and changes
BBVA IN 2016
5. PRIMARY STAKEHOLDERS
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carried out in the most critical customer processes to
oer the best experience possible.
In Mexico, various tools have been introduced to assess
customers’ recent experiences with BBVA.
In Argentina, a platform for digital surveys has been
installed for the sales network, which has boosted
business volumes, improved response times and
increased contact with customers; in addition, a
new customer contact channel was launched (Chat
Automático).
In Chile, a survey tool has been set up online and on the
retail network.
In Colombia, a diagnosis has been carried out and actions
improving matters related to transparency have been
implemented; in addition a support model has been
introduced for the retail network that responds directly to
questions addressed to central areas.
Net Promoter Score (NPS) (By geography. Percentage)
13
36
64
44
26
25
42
21
68
86
31
-2
42
47
40
26
28
45
17
51
54
19
Spain
The United
States
Turkey
Mexico
Argentina
Chile
Colombia
Peru
Venezuela
Paraguay
Uruguay
BBVA Peer group average
1º
9º
1º
1º
1º
3º
2º
2º
1º
1º
1º
Peer Group: Spain: Santander, CaixaBank, Bankia, Sabadell, Popular / The United States: Bank of America, Bank of the West, Comerica, Frost, Chase, Regions, US Bank,
Wells Fargo / Mexico: Banamex, Santander, Banorte , HSBC / Peru: BCP, Interbank, Scotiabank / Argentina: Banco Galicia, HSBC, Santander Rio / Colombia: Bancolombia,
Davivienda, Banco de Bogotá / Chile: BCI, Banco de Chile, Santander / Venezuela: Banesco, Mercantil, Banco de Venezuela / Paraguay: Continental, ITAU, Regional /
Uruguay: ITAU, Santander, Scotiabank.
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5. 2. 2. Customer protection
One of the most important initiatives for the future in terms
of the security and protection of technological channels is
the complete account opening process via mobile devices,
meaning customers do not have to go into a branch to open
an account. This service has been designed by following
the directives of the Executive Service of the Spanish
Commission for the Prevention of Money Laundering and
Monetary Oenses (SEPBLAC), and by incorporating modern
facial recognition technologies, with the capacity to identify
forged national ID cards (DNI). These technologies will be
incorporated into the most critical processes for customer
relations via technological channels.
A number of lines of work have been developed within the
scope of business continuity, meaning contingency plans for
low-probability but extremely high-impact events. Business
impact analyses have been updated and implemented, and
there has been a review of the technological dependencies on
critical processes that improve service recovery in the event
of IT system malfunction. Business continuity plans have also
been activated in several incidents that have aected BBVA
Group, such as the ooding of the Mapocho River aecting
the bank’s headquarters in Chile, social disturbances that
aected the headquarters in Mexico and Venezuela, and the
impact of Hurricane Mathew in the Southeastern United
States.
At the same time, digital transformation has established
itself as a strategic priority for the nancial sector in general
and for BBVA in particular. In this context, it is vital that we
ensure eective protection for BBVA’s brand and assets,
as well as our customers’ data, from the threats present in
the virtual environment. To achieve this, BBVA has created
a reliable and ecient center for cyber-attack prevention,
alerts and response. In this way the Group keeps pace with
developments in organized technological crime.
BBVA has also consolidated deployment of the cybersecurity
standard designed by NIST (National Institute for Standards
and Technologies) as a benchmark framework for
management and control.
BBVA is rmly committed to protecting its customers. It
therefore works closely with regulators and the rest of the
industry across its global footprint.
Protection of personal data, a fundamental right that
ensures respect for people’s privacy, it is becoming
increasingly relevant due to the fact that advances in new
technology and communications will give rise to fresh
challenges for ecient control of data protection. BBVA
Group is aware of how much importance our customers,
shareholders and other people involved in its daily activity
place on the condentiality, security and eective protection
of the personal data they give us. In this context, in 2016
BBVA has continued with the process of adapting, improving
and strengthening the personal data protection risk
management model, placing particular emphasis on certain
jurisdictions. Specic actions have been launched aiming at
undertaking the progressive implementation and adaptation
of the new requirements contained in Turkey’s new law on
personal data protection, which was approved in April 2016.
Additionally, in Spain, the mandatory external biennial audits
on security measures were conducted at the end of 2016
on the aected entities (54 companies) of BBVA Group in
Spain, under Royal Decree 1720/2007 of December 21. No
signicant deciencies have been detected.
Lastly, this year has seen the launch of the Implementation
Project for the new EU General Data Protection Regulation
(GDPR). The project’s rst milestone was to analyze and
evaluate the new data protection requirements that will be
applicable to all BBVA Group entities within the European
Union, and to identify and progressively implement the
necessary actions until they are fully operative.
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5. 2. 3. TCR Communication
The Transparent, Clear and Responsible (TCR)
Communication project was launched in 2014 to promote
transparent, clear and responsible relations between BBVA
and its customers.
T is for transparency, providing customers with all relevant
information at the right time, maintaining a balance
between benets and costs.
C is for clarity, meaning easy to understand. It is achieved
through language, structure and design.
R is for responsibility, and means looking after the
customers’ interests in the short, medium and long term.
The objective is to help customers make informed decisions,
improve customer relations with the Bank, look out for their
interests and dierentiate ourselves as the clearest and most
transparent entity in all the markets where we operate. The
aim is also to attract new customers and encourage existing
customers to recommend us. Work is being done to this end
at two levels:
To implement TCR Communication and transform the
traditional Bank, by extending and broadening the scope
of the 2014 and 2015 initiatives.
To consolidate TCR Communication in the new Bank,
by extending the project to new solutions in digital
environments, from mobile to online banking.
This is being achieved through a network of TCR owners
located in the main countries where the Bank operates,
together with a global coordination team, in addition to the
direct involvement of many other areas and employees of the
Entity.
The BBVA Group has various initiatives in place to make the
TCR Communication project a reality. The most relevant are
described below.
TCR Communication to transform the traditional Bank
TCR product leaets
Short documents used by managers to describe a product to
customers, detailing its benets, advantages, cost and risks.
In 2016, the use of product leaets in concluding the
contracts with private customers in Spain, Mexico, Argentina,
Chile, Peru, Colombia and Venezuela has increased from 80%
to 90%. In the United States, coverage is slightly lower. The
project will be implemented in Turkey in 2017.
The use of these leaets has been included in business
protocols for managers. Managers have also received
training on the importance and the way of using TCR
product leaets.
The initiative has been extended to the SME and retailers
segment in Spain, Peru and Venezuela.
For 2017, the objective is to extend the use of leaets in this
segment to all other countries.
TCR contracts
This initiative involves reworking current customer contracts
and structuring them more intuitively with language that is
easy to understand.
In 2016 new TCR contracts were introduced in Spain,
Argentina, Colombia, Peru, Venezuela and Uruguay (total of
14 new TCR contracts in 2016).
For 2017 the aim is to provide all countries with 80% of
products having their own TCR contract, in addition to
extending the initiative to Turkey.
Telesales script
In 2016 the main telesales scripts were reviewed in Colombia,
Peru, Argentina and Venezuela to ensure that the information
provided during the calls complies with the TCR initiative.
Workshops on using clear language were organized for
the people involved in writing these scripts and call center
managers.
There are currently 20 sales scripts already written,
accounting for 80% of new contracts in these countries,
which will be implemented in 2017.
In 2017, the scripts may be further adapted in other
geographical areas, and ad-hoc metrics will be included to
ensure they are being used.
Complaints
A pilot project was carried out in Colombia in 2016 that
involved the review and modication of the structure and
wording of response letters to customer complaints, using
plain language. The review resulted in changes of 67 letters,
which are now adapted and implemented into the system. The
project began with a training course for sta responsible for
complaints.
The objective for 2017 is to continue implementing these
letters in other countries (Venezuela, Peru and Chile).
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TCR advertising
BBVA’s TCR Advertising Code came into force on January
1, 2015. In 2016 advertising campaigns in the dierent
countries were monitored to measure their compliance with
the Code and, specically, the extent to which the campaigns
were perceived as transparent and clear by their target
audience. The results of this study have enabled a process of
continuous improvement to be established.
The target for 2017 is to carry out more of these studies and
work to secure BBVA’s position as leader in global clarity and
transparency.
TCR Communication in the new Bank
TCR in new digital solutions
In 2016 TCR Communication principles have been applied in
BBVA’s key global digital projects such as One-Click contracts
for specic products, the online registration of new customers,
and BBVA Valora. Experts in TCR Communication have joined
the global work teams for these initiatives. These experts have
also supported the development of local projects, such as the
mobile banking product catalog in Spain, in order to transfer
their skills and experiences to other countries.
The plan for 2017 is to continue including TCR
Communication principles in BBVA’s main new global digital
solutions through direct collaboration with these experts.
TCR in agile methodology
For several years, the Bank has been using agile
methodologies to design digital solutions in all the countries
where it operates. For these solutions to comply with
TCR values from the very start, the principles of TCR
Communication must be included in the routine work of the
scrums (agile work groups).
In 2016, we identied that the best way to integrate these
principles in their routine work was through product owners
(or scrum leaders)
.
This was done in Spain, Mexico, Chile,
Colombia, Peru and Venezuela.
In 2017, the objective is to expand this initiative to other
countries and monitor the projects managed using agile
methodology, through beta testing, customer feedback
and web analytics to undertake a process of continuous
improvement.
TCR training
To ensure the Bank adopts TCR values in all its activities, and
specically, in all new initiatives in the digital transformation
process, requires employees to be aware of the principles of
TCR Communication.
In 2016, in addition to the workshops mentioned above, which
focused on specic lines of work, online training content
was also developed (watch & learn videos), directed mainly
at agile teams, and the rst global online course in plain
language was launched, aiming to be extended on a mass
scale in 2017.
Additionally, the TCR community for BBVA employees was
launched with the dual purpose of oering training and
promoting engagement among the sta involved in the TCR
Communication project. In 2017, the aim is to maintain this
community and strengthen the initiatives started in 2016,
incorporating TCR Communication principles in Group
training plans.
TCR Indicators
The Net TCR Score (NTCRS) indicator measures the degree
to which customers perceive BBVA as a transparent and clear
bank in comparison with its peers in the main geographic
areas where the Group operates.
In 2016 we were ranked rst in 6 of the 10 countries where
this indicator applies.
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5. PRIMARY STAKEHOLDERS
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Net TCR Score (NTCRS)
(1)
(By geography. Percentage)
20
54
56
39
47
42
27
56
91
50
7
60
55
39
49
41
27
38
60
42
Spain
The United
States
Mexico
Argentina
Chile
Colombia
Peru
Venezuela
Paraguay
Uruguay
BBVA
Average peer group
1
8
1
2
3
1
2
1
1
1
st
th
st
nd
rd
st
nd
st
st
st
Peer Group: Spain: Santander, CaixaBank, Bankia, Sabadell, Popular / The United States: Bank of America, Bank of the West, Comerica, Frost, Chase, Regions, US Bank,
Wells Fargo / Mexico: Banamex, Santander, Banorte , HSBC / Peru: BCP, Interbank, Scotiabank / Argentina: Banco Galicia, HSBC, Santander Rio / Colombia: Bancolombia,
Davivienda, Banco de Bogotá / Chile: BCI, Banco de Chile, Santander / Venezuela: Banesco, Mercantil, Banco de Venezuela / Paraguay: Continental, ITAU, Regional /
Uruguay: ITAU, Santander, Scotiabank .
(1)
The NTCRS is an indicator, which is calculated based on the valuation (between 0 to 10) given by the customers for each of the entities and that directly answers the
following question: Is the information you receive considered to be clear and complete?
BBVA IN 2016
5. PRIMARY STAKEHOLDERS
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5. 2. 4. People-centric solutions
BBVA seeks to incorporate products with distinctive social
or environmental attributes into its catalog. This enables
BBVA to reach groups that might otherwise remain outside
the banking system, or bring products to the market that
contribute to the social or environmental development of the
communities where it operates.
These products include solutions favoring the nancial
inclusion and support of SMEs and individuals with special
needs, as well as a variety of sustainable nancing and
socially responsible investment instruments.
Financial inclusion
BBVA has developed a nancial inclusion (FI) business
model to cover the low-income population in emerging
countries within its global footprint. This is an initiative to
provide customers with access to nancial services through
solutions rich in human capital that oer an alternative to the
traditional model, by developing channels and digital products
that are low-cost, easy to open and simple to work with.
These solutions let customers make queries, transactions
and transfers quickly and securely, while also oering them
availability and proximity.
The FI strategy is based on a long-term responsible and
sustainable business model that:
Uses new technologies and platforms with no need for
branches.
Creates low-cost nancial solutions designed specically
to cover the needs of each segment.
Explores non-traditional methodologies for risk
assessment.
Creates standard customer experiences across all
channels.
BBVA has a specialized FI unit within the BBVA Research
department. This unit’s primary duty entails monitoring
the main FI indicators to detect the most relevant areas of
opportunity and generating debates on how to increase
nancial inclusion.
The main initiatives implemented in 2016 were:
Mexico: reduction in the transactional costs of low-
income customers (migration of transactions to
alternative channels) and development of specic oers
for the segment (microloans and micro-insurance).
Colombia: installation of cash-recycling ATMs to increase
banking coverage and development of a microloan oer
for the segment (salary advances).
Peru: expansion of the network of banking
correspondents.
Venezuela: development of basic transactional services
enabling mass monetary disbursements to pay
government social benets or wages for low-paid workers,
using text messages without the need for cards. With this
service, beneciaries of the program receive the funds by
entering a password they receive via their mobile device
into the ATM.
BBVA’s specialist FI unit also continues working with banking
correspondents. Banking correspondents are retailers and
institutions (retail chains, pharmacies or supermarkets) with
which BBVA enters into a business relationship to act upon
the Bank’s behalf. They allow customers to carry out simple
banking transactions, as well as serving as points for deposit
and withdrawal of money within the mobile banking model.
Financial inclusion segment (Number of clients)
2016 2015 2014
Spain 1,401,777 1,218,754 1,265,839
United States n/a n/a n/a
Mexico 5,546,218 6,682,025 4,938,985
Argentina 534,640 556,345 548,254
Chile 66,209 24,847 36,202
Colombia 397,544 292,875 267,987
Perú 880,477 1,394,243 1,128,322
Venezuela 884,634 872,871 881,305
Paraguay 24,096 23,752 21,412
Uruguay 64,310 61,733 49,236
TOTAL 9,799,905 11,127,445 9,137,542
n/a = not applicable
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Banking correspondents. (Mexico and South America)
2016 2015 2014
Number of
points
Number of
transactions
Number of
points
Number of
transactions
Number of
points
Number of
transactions
Mexico 30,169 44,375,737 26,312 39,485,818 24,504 43,520,112
Argentina 4,000 1,530,144 4,000 1,342,236 4,000 1,194,384
Colombia 5,826 1,507,738 7,136 1,961,796 11,160 2,439,996
Peru 10,358 29,788,001 8,993 32,688,993 5,608 23,225,413
TOTAL 50,353 77,201,620 46,441 75,478,843 45,272 70,379,905
For a second consecutive year, BBVA has presented the
special nancial inclusion award: Open Talent 2016. This
year’s award went to Musoni, a company that provides
micronance institutions with cloud-based administration
services. The company makes an important contribution in
bringing quality nancial solutions to the low-income sector of
the population and thus providing an opportunity for a better
future.
In addition to the above, the Group has a non-prot
organization, BBVA Micronance Foundation. Its purpose
is to promote the social and economic development of the
most vulnerable parts of the population through productive
and responsible nance. The foundation has two main
activities: creating micronance institutions in Latin America
and developing initiatives that benet this industry. The
progress made by the Foundation in 2016 is described in the
Entrepreneurship chapter of this report.
Sustainable nance
In 2016, BBVA declared its commitment to achieve the
targets set by the Paris COP21
(Conference of the Parties)
and the United Nations Sustainable Development Goals.
Therefore, it has decided that one of the core elements of
its business is the integration of opportunities arising from
the transition toward global sustainability, thus providing
its customers with innovative solutions for nancing their
investments with positive environmental and social impacts.
For this reason, in 2016 BBVA created the Sustainable
Finance Work Group, in which a number of the Bank’s
departments participate. The purpose is to foster sustainable
nancing, analyze its strategic impact and boost and manage
transformation initiatives that best prepare us to respond to
future challenges particularly those related to climate change.
a. Sustainable bonds and loans
Sustainable bonds and loans are instruments used for
channeling funds to nance our customers’ projects in
sectors such as renewable energies, energy eciency,
waste management, water treatment or access to essential
necessities and services such as homes or inclusive nance.
BBVA has been a signatory of the Green Bond Principles
(GBP) since 2014. The GBP are voluntary guidelines that set
out requirements for emission transparency and promote
integrity in the development of the green bond market. In
2016, BBVA has been the Spanish leader in the sustainable
bond market, participating in eight green and social bond
issues that placed €5,350m for institutional investors. The
following are some of the most prominent issues in which the
Bank has had a role as advisor and placement agent in 2016:
Acciona’s inaugural green bond for nancing the
construction of two renewable energy projects in Chile.
Iberdrola’s third green bond issuance for nancing its
investments in wind power in the United Kingdom.
Debut of Caja Rural de Navarra with a sustainable
bond (environmental and social) for nancing social
and environmental projects in regions where the entity
operates.
In the Spanish public sector, BBVA has taken the lead in
the placement of the second social bond for the Instituto
de Crédito Ocial (ICO) to create or maintain jobs in
Spain’s most economically disadvantaged regions. The
funds from this issue will be channeled to SME projects
in autonomous regions whose per capita income is below
the Spanish average.
In the European market, BBVA has participated in a green
bond placement for the French power utility EDF.
BBVA has participated in the issuance of the rst
local-currency Mexican green bond to nance Nan’s
renewable energy projects. It has also participated in the
issuance of Latin America’s most valuable green bond
to date, amounting to US$2 billion, to nance the new
Mexico City airport.
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2016 Green bond credentials
Bookrunner
October 2016
10 years
€ 1,750,000,000
September 2016
September 2016
Bookrunner Bookrunner
Bookrunner Bookrunner Bookrunner
August 2016 April 2016
Bookrunner
€700,000,000
9 years
November 2016
€ 22,000,000
15 years
€ 500,000,000
7 years
November 2016
$ 1,000,000,000
$1,000,000,000
10 & 30 years
MXN 2,000,000,000
8 years
€
500,000,000
2 years
The BBVA Global Markets Research unit analyzes xed-
income and credit markets for sovereign, nancial and
corporate issuers, including the analysis of the sustainable
bond market. According to the analysis, in 2016 a volume of
sustainable bond issues amounted to approximately US$87
billion, a year-on-year increase of 111%, spurred on by the
favorable results of the 2015 Paris Agreement, and with an
actively growing base of issuers in terms of geography and
industrial sectors.
In this environment, BBVA’s objective is to maintain
leadership in its natural markets and contribute to the
development of the most innovative sustainable nance
instruments.
b. Financing renewable energy
BBVA has been committed to the renewable energy sector
for years. In 2016 the Group has nanced projects with a total
installed power capacity of over 5,194 MW for a total of over
€4,444m.
Moreover, BBVA seeks to support its customers in
the transition to a low-carbon economy. As further
demonstration of this commitment, the revenue of the leading
Spanish utilities in the CDP has increased from €7,610m to
€10,222m over the last two years.
c. Restructuring
The crisis has aected the development and growth of
many sectors and companies. Some of BBVA customers
have witnessed their sales and prots shrink, in some cases
compromising the viability of their companies. In these
circumstances, BBVA has returned their loan commitments
to customers who have requested it, to ensure the continuity
of viable companies and jobs. In recent years the Group’s
wholesale banking unit CIB has been restructuring customer
debt, which, at the close of 2016, totaled over €11 billion.
d. Activity with multilateral institutions
BBVA maintains extensive institutional and business
relations with multilateral institutions worldwide such as
the Spanish Instituto de Crédito Ocial (ICO), the European
Investment Bank (EIB), World Bank Group, Inter-American
Development Bank (IDB), Corporación Andina de Fomento
(CAF) and other agencies including the German Investment
and Development Corporation (DEG), the Nertherlands
Development Finance Company (FMO) and the Société
de Promotion et de Participation pour le Développement
(Proparco).
This activity covers a broad range of products and
geographical areas, including international trade nance,
project co-nance, nancial brokerage transactions, debt
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5. PRIMARY STAKEHOLDERS
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issuance on local capital markets, and transactional and
treasury operations.
In 2016, this strategic relationship was strengthened by
several high-level institutional meetings. Particularly notable
in this regard have been the meetings that were held in
October during the Annual Assembly of the International
Monetary Fund (IMF) and World Bank in Washington and
representation on panels at the Annual Seminar of Public
Investors and Issuers that BBVA organized in March. BBVA
Group’s work alongside these multilateral institutions covers
various core areas of activity:
Financial intermediation: operations for multilateral
institutions in Europe and Latin America to channel
nance to priority sectors (e.g., green energy, urban
development, SMEs, export sector, etc.) for transactions
that meet the required eligibility criteria. There was a
particularly high level of nancial intermediation in Spain
where €4,700m was intermediated with lines granted
by the EIB and ICO. Specically, 12,462 operations were
arranged through ICO for a total of €287m. Elsewhere,
IFC, IDB, DEG, FMO and Proparco are key nancial
intermediation institutions for our subsidiaries in Latin
America.
Project co-nance: key products oered by multilateral
institutions for project nance in the private sector to
contribute to development. In these cases we always have
the support of multilateral organizations to co-nance or
guarantee projects in which BBVA has an interest.
Foreign trade nance: programs developed by
supranational organizations to promote foreign trade
activities in the countries where they operate. They oer
partial or full guarantees to conrming banks to cover
political and commercial risks in operations with local
banks. Their aim is to promote inter-regional South-South
trade for SMEs in Ibero-American countries. With eight
subsidiary banks in Latin America, BBVA’s role is crucial.
Local capital market development: through the
structuring of debt issuances of multilateral institutions
and through the provision of new liquidity sources. CABEI
and the Latin American Export Bank (BLADEX) issuances
were structured in the Mexican market in 2016 to enable
development project nancing in local currency.
Internationalization of SMEs: BBVA participates in the
IDB’s Connect Americas platform, the rst social network
for internationalizing SMEs, which is based on three basic
pillars: (i) education, (ii) connectivity and (iii) nancing.
They are currently incorporated within the nancing
modules of all BBVA banks in the region.
Responsible investment
BBVA assumed its commitment to socially responsible
investment (SRI) in 2008 when it joined the United
Nations Principles for Responsible Investment (PRI)
through the employee pension plan and one of the
Group’s major asset managers, Gestión de Previsión y
Pensiones.
The goal then was to start building its own SRI model
from the ground. From the outset, implementation of this
commitment would span the entire employment fund
business and gradually extend to the entire BBVA Asset
Management (BBVA AM) unit.
Garanti Asset Management also became a signatory to
the United Nations PRI in 2011 and has since been working
within the framework of this initiative, in line with BBVA
Group’s commitment. Moreover, BBVA is a founding partner
of the Spanish Responsible Investment Forum (Spainsif).
Sponsorship of Novaster’s SRI Observatory in Spain was
renewed in 2016.
We have continued working throughout 2016 to expand and
improve SRI solutions oered by taking a variety of steps,
including the hosting of events streamed via our website,
our regular newsletters
addressing SRI matters, which are
also posted on the BBVA AM website, and in particular the
personal meetings held with our customers to address their
particular concerns in this eld.
BBVA AM’s SRI model has implemented the following
strategies:
a. Integration of ESG criteria in the investment
process
The inclusion of ESG (Environmental, Social and corporate
Governance) criteria was carried out by developing a
proprietary model that incorporates extra-nancial criteria
into a model portfolio, constructed according to fundamental
analysis. The model was initially implemented in equity and
later in xed income.
Likewise, an internal ESG rating was also developed that
directly aects the specic management decision-making
process, which is communicated to customers in the fund
management reports made available periodically.
Lastly, and with a view to having more reliable and specialized
information to hand, the Bank commissions the services of an
independent external agent that regularly provides us with
information on each company and country in our investable
pool.
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b. Exclusion: Rules of Conduct in Defense
The Rules of Conduct in Defense apply to all BBVA Group
areas, units and subsidiaries, including the asset managers of
employment pension funds.
To apply them, BBVA uses exclusion lists of companies and
countries, which are drawn up and updated on a regular basis
with the help of an independent expert adviser. These lists
include companies and countries related to defense materiel,
military, police and security armaments, ammunition,
explosives, etc., which are automatically excluded from the list
of companies and countries in which BBVA can invest. This
exclusion also applies to all vehicles managed by BBVA AM.
c. ESG analysis of third-party funds
Gradually, and by extending the model, third-party investment
funds in the portfolio for certain assets and geographical
areas and their respective asset managers are subject to an
in-depth due diligence conducted by the team of analysts
on the Quality Funds internal platform. This analysis includes
questions regarding their SRI engagements and status as
signatories to the United Nations PRI.
As the proportion of these vehicles has been growing in
employment pension fund portfolios, a highly relevant
change was made in 2015 regarding the selection of vehicles
to incorporate into these pension fund portfolios to ensure
BBVA’s SRI policy is consistent with the one implemented by
the funds.
Thus, after verifying compliance by the asset managers with
the United Nations PRI, the study then has been focused
on the exclusions applied by the managers and the voting
policies in place, both of which are mandatory elements to
be eligible for incorporation in the managed employment
pension fund portfolios. We have thus extended SRI-related
coverage for portfolios by including the percentage managed
by third parties.
In addition to the foregoing, in 2016, 100% of the vehicle
managing entities incorporated in pension funds were
signatories to the United Nations PRI initiative.
d. Engagement and exercise of voting rights
BBVA AM’s responsibility as a managing entity is not limited
to the management function itself. It also exercises the right
to vote at all the annual general meetings of shareholders
of European and Spanish companies when the portfolio
positions make it possible. This engagement is not restricted
to employment pension funds that have delegated this
responsibility to the asset manager; it applies equally to all
individual pension funds, mutual funds and SICAVs managed
by BBVA AM. The services of an independent external supplier
are used for this purpose, whose opinion complements that of
BBVA AM’s own analysts.
In 2016 we attended a total of 166 Annual General Meetings
(of Spanish and European companies) whose securities are
in the portfolios of various investment vehicles managed by
BBVA AM, and voted against some items on the agendas.
Assets under SRI management by investment vehicle (BBVA Asset
Management. 31-12-2016)
Investment
funds
Pension
plans and
employee
EPSVs
Pension
plans and
individual
EPSVs
Total assets
managed (million
euros)
32,294 14,271 7,980
SRI strategy
Integration (%) 0.14
(1)
7 37
Exclusion (%) 100 100 100
Vote (%) 100 100 100
EPSVs refer to Voluntary Social Welfare Entities.
(1)
It refers to BBVA Desarrollo Sostenible fund, which is totally managed under the
integration strategy.
e. Solidarity funds
BBVA currently manages the following solidarity funds:
BBVA Solidaridad is a mixed xed-income fund that
invests at least 30% of the portfolio in equity assets. At
the time of subscription, the investor can choose one
or more NGOs to which the asset manager will donate
a percentage of 0.55% of the fund’s total assets under
management every six months,
BBVA Bolsa Desarrollo Sostenible is an equity SRI fund
that invests in the shares of companies considered as a
sustainable investment. The fund also makes an annual
donation of €15,000 to the Foundation for Applied Medical
Research (FIMA), which is intended to fund research
projects.
B+EDUCA is a xed-income fund that allocates 25%
of the monthly returns directly to the
Por los que se
quedan
(For those left behind) integration grant program
in Mexico. BBVA Bancomer also charges a lower fee for
funds of this kind, and makes direct contributions to this
scholarship program.
BBVA Leer es Estar Adelante was the rst investment
fund in Peru to support a social cause. It is a xed-
income fund through which investors donate one tenth
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5. PRIMARY STAKEHOLDERS
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of the share value (fund price) to the BBVA Continental
Foundation program
Leer es Estar Adelante
(Reading
Means Keeping Ahead). BBVA Asset Management
Continental undertakes to contribute to the equivalent in
dollars for each tenth of the share value, in addition to the
unitholders donation.
Amount donated, volume and unitholders of solidarity funds (BBVA Asset
Management. 31-12-2016)
Quantity
donated
(euros)
Volume
(million
euros)
Members and
beneciaries
BBVA Solidaridad 37,084 11 444
BBVA Desarrollo
sostenible
15,000 46 4,808
B+Educa 6,629,978 719 37,605
Leer es Estar Adelante 2,041 13 142
TOTAL 6,684,103 789 42,999
Support for individuals
Social Housing Policy
In Spain, the comprehensive plan to help families in diculties,
which BBVA has applied since the start of the crisis, has been
consolidated under BBVA’s Social Housing Policy, whose main
aim is to help customers keep their homes.
This plan focuses on three core areas:
Oering solutions to all families struggling to pay their
mortgage loans.
Ensuring that any family that is a BBVA customer and at
risk of exclusion has a roof over its head and cannot be
evicted.
Oering personal support to families through integration
programs that allow customers to regain condence and
self esteem.
BBVA Group and the Regional Government of Catalonia
reached an agreement in July 2016 to provide access to
housing for families in a situation of social vulnerability. The
social project includes the assignment of 1,800 homes to the
regional government for eight years.
BBVA abides by the Code of Good Practices, proactively
reporting on the benets of Spanish Law 1/2013 and has
contributed nearly 1,716 houses to the Social Housing Fund
(FSV). As of December 2016, BBVA had already arranged
4,047 rented social homes for vulnerable customers.
BBVA is looking at every re-nancing option available in
accordance with the customers’ ability to pay, in order
to allow them to keep their homes. We have done this for
66,772 customers so far. Any situation can be referred to the
Committee for the Protection of Mortgage Debtors for
review. It analyzes every case in which customers or their
families face the risk of exclusion without legal protection, and
provides individual solutions in accordance with each family’s
specic circumstances (re-nancing, debt remission, dation
in payment, rented social housing in the debtor’s own home
or the Bank’s available houses, etc.).Since the beginning of
the crisis, BBVA has received more than 15,600 property
transfers in lieu of payment from its customers (this transfers
in lieu include products such as home buyers loans and
personal loans among others).
Community Reinvestment Act
In the United States, BBVA Compass has continued in
its commitment to the Community Reinvestment Act
(CRA), which was set up by federal legislation to guarantee
that nancial institutions meet the credit needs of the
communities for which they provide services.
Progress was made on the following points in 2016:
Clear Choice Free Checking. With no monthly charges,
this product provides the possibility of issuing unlimited
written checks, personalized debit card and cash
withdrawals at no cost from BBVA Compass ATMs. A total
of 211,429 accounts were opened in 2016.
Clear Choice Savings. With 66,586 accounts opened, the
Clear Choice Savings program provides an opportunity to
begin saving with an initial deposit starting at 25 dollars.
Clear Spend. Prepaid card with the same benets as
a checking account yet with no risk of overdrawing. An
application sets a budget, tracks expenses and suggests
a monthly budget. The application also provides real-
time information on purchases and expenses, preventing
any risk of the customer overspending. In total, 67,027
accounts were opened in 2016 through this program.
Easy Checking. This helps customers monitor their
personal nances by going online to check and congure
alerts and personalized notications. The option even
lets customers associate a debit card for shopping.
Additionally, accounts that remain positive for a year have
the possibility to issue checks at no cost. A total of 18,017
accounts of this kind were opened in 2016.
First Time Home Buyer Mortgage. This loan oers initial
payments or a grace period and minimizes the impact of
the costs of buying a home. A total 2,957 mortgages were
granted in 2016 under this system.
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Moreover, the Community Development Finance Department
(CDF), which is part of the Corporate Responsibility and
Reputation Department at BBVA Compass, is responsible
for developing and implementing these products for CDFIs
(Community Development Financial Institutions), and
for providing investment-related technical support. This
team works together with the Real-Estate Department to
provide capital for assisting in the development low-income
communities. The following tools are employed to achieve this
goal and reach more and a greater diversity of customers:
Investments in LIHTC (Low Income Housing Tax Credits).
Small Business Investment Companies (SBIC) or SBA
Programs.
Community Development Financial Institutions (CDFI),
through Equity Equivalent Loans (EQ2s).
New Market Tax Credit (NMTC) investments.
Other eligible community development tools.
Mejora Mutualista (Community Improvments)
In Mexico, the integrated Mejora Mutualista recovery model
has after 5 years of operation concluded 5 interventions
in various developments of Tijuana city, Baja California. In
total 5,150 homes have been developed; of which 3463
correspond to Bancomer. A total of 15,500 people have
beneted from the program. The model is applied mainly to
housing developments supported by mortgage loans that
are currently highly deteriorated. Their recovery requires
intervention through a comprehensive recovery scheme in
three parallel lines of action:
Social recovery: Constitution of a wide range of 18
aliates including dierent governmental agencies, civil
associations, police and the academic world. MXN 4m
have been used for the repair of municipal public services,
security, recovery of public spaces and social and cultural
activities.
Financial recovery: 229 restructured loans in the last two
years. Any defaulted portfolio has been written o, and an
initiative has been implemented to prevent the performing
portfolio from defaulting. This has helped reduce the
number of returned homes and signicantly increased
sales of homes for ownership.
Restoration of the urban environment: investments
in civil works, conditioned on full payment by customers
(mortgage, water, property tax and maintenance fee) in
monthly repayments.
The study of 7 additional developments has shown the need
to intervene in Tijuana, Baja California, using the model at the
earliest opportunity. Furthermore, other developments are
being analyzed in other states in the country.
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5. 3. The team
One of BBVA’s six Strategic Priorities is “a rst-class
workforce”. This entails attracting, developing, motivating
and retaining the best team, and providing the best employee
experience. To do so, as explained in the chapter on Strategy,
the Organization is being transformed, fostering a new
culture, with new ways of working and atter structures.
A new variable compensation model has also been
implemented in line with the strategic objectives.
As of December 31, 2016, BBVA Group has 134,792
employees located in 35 countries, 54% of them women and
46% men. The average age of the workforce is 37 years. The
average tenure in the Organization is 10 years, with a sta
turnover of 8.2% over the year.
37,378
Mexico
30,543
South America
31,451
Spain
1,198
Rest of Eurasia
23,678
Turkey
BBVA Group:
134,792
employees
10,544
The United
States
46% 54%
Age average 37 years
The workforce declined by 3,176 employees in 2016. This
reduction is the result of two factors; rst, the regulator’s
requirements to make the workforce more ecient
following the purchase of Catalunya Banc (CX), which has
led to a decline of 1,974 in employees in Spain; and second,
the transformation process in the sector, leveraged on
technology, leading to the automation of numerous processes
that until now were carried out manually. This is happening
with greater force in the geographic areas where the process
is most advanced, such as Spain, the United States and
Mexico, and to a lesser extent in other areas such as South
America, where around 100 net jobs have been created.
This process complies with the framework of the legislation
current in each country.
At the same time, new talent is also being incorporated, with
skills that were not common in the sector before, but in the
future will be essential for this process of transforming the
banking business (specialists in big data, Blockchain, articial
intelligence, customer experience, etc.).
Also in 2016, as part of the reorganization carried out on the
structure of the Group, Talent & Culture has dened its role
as an area that must support the Bank to achieve its strategic
objectives and create a competitive advantage through a
rst class workforce, inspired by our Purpose and working
together as a single team.
Talent & Culture bases its activity on two fundamental pillars:
transparency and consistency. Three basic principles have
also been dened to guide this activity:
Proximity to the business: acting as business partners for
the other areas.
Focus on execution: delivering new data-based solutions
with committed deadlines, and making things simple.
One team: working as a single team across all regions,
with no functional silos.
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Talent & Culture has conducted a strategic prioritization
process for selecting the global programs in which to make
progress. Thus, among the new projects launched were those
related to professional careers, internal mobility, values,
performance and the leadership model.
BBVA has again obtained the Great Place to Work® seal in
2016. It recognizes BBVA as one of the best companies to
work for in Argentina, Chile, Spain, Mexico and Uruguay, and
one of the ten best at global level.
Pride
Camaraderie
Respect
Credibility
Fairness
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5. 3. 1. Professional development
A relevant aspect for professional development at BBVA is
the biennial process for determining each professional’s
strengths and areas for improvement. The last process was
carried out in 2015, when each professional received feedback
from his/her manager and training and development plans
were established and subsequently executed in 2016. In
addition to the performance indicators, the results of the
process proved to be key in identifying critical talent in the
Group and supporting promotion decisions.
In this sense, BBVA Group makes a variety of resources
available to employees so they can grow professionally and
improve their skills.
Recruitment and development
Recruitment processes are based on equal opportunity,
evaluation based on the requirements of the job position and
objectivity of the criteria used. The ultimate goal is to attract
and incorporate the best talent in each eld. In 2016, BBVA
Group received 352,477 resumes worldwide with a ratio of
men to women of 57%-43%, of which 75,42% are from young
people under the age of 30. Throughout the year, 15,243
people have hired by the Group, 62% of them under the age
of 30.
BBVA has a global internal job posting application called
apúntate+, that fosters development and transparency in
promotion criteria, as it publishes vacancies available for
which employees can apply.
Training
BBVA Group invested €45.5m in training in 2016. There has
been an increase in training actions during the year to an
average of 39 hours of training per employee, of which 66%
are delivered via the Group’s global e-learning platform called
Campus BBVA.
Basic training data (BBVA Group)
2016 2015 2014
Total investment in training (million euros) 45.5 35.9 34.9
Investment in training per employee (euros)
(1)
337 326 317
Hours of training per employee
(2)
39 40 52
Employees who received training (%) 91 93 96
Satisfaction with the training
(rating out of 10)
8.8 8.6 8.8
Subsidies received from FORCEM for training
in Spain (million euros)
2.7 2.7 2.4
Note: excluding Turkey in 2016, except for Investment in training, and in 2015.
(1)
Ratio calculated considering the Group’s workforce at closing.
(2)
Ratio calculated considering the workforce of BBVA with access to the training
platform.
BBVA provides access to training programs available on
the training platform to boost self-development. Campus
BBVA has been refurbished in 2016, incorporating a more
attractive design, new content and functionalities with the aim
of guaranteeing an outstanding learning experience and an
innovative oering that is permanently updated and accessible
through dierent devices for all the Group’s employees.
BBVA emphasizes the need for its professionals to specialize
and update their skills in order to help them achieve the
strategic objectives and to create a rst-class workforce.
The strategic training agenda includes a number of global
programs, such as: Responsible Banking Management,
an e-learning initiative delivered by BBVA experts and the
Institute for Stock Market Studies (IEB, for its acronym in
Spanish) and targeted at retail banking middle management,
designed to boost cultural exchange and promote
entrepreneurship that generates value for society and for the
Bank; Responsible Business, an online program for all BBVA
employees, which transmits the principles underpinning
our dierential position in the current environment and
the principle of return adjusted to principles; and the Code
of Conduct, mandatory online training that includes the
principles, behavioral guidelines and procedures for helping
to resolve doubts and facilitate compliance with obligations as
BBVA employees. As well as this, a number of training actions
are provided in TCR (transparency, clarity and responsibility)
principles, which enhance the Group’s responsibility and
ethics. The Commitment on Human Rights course provides
employees with knowledge on the commitment adopted by
BBVA in this area, as well as the actions carried out by the
Group to ensure corporate integrity, the values on which its
Code of Conduct is based and the implications of the Ten
Principles of the United Nations Global Compact.
With regard to the legal requirements established by the
MiFID II Directive, on the knowledge that employees must
have when distributing information or providing advice on
nancial products/services within Europe, there are 7,610
professionals with ocial EFPA certications (DAF/EIP,
EFA and EFP) in Spain. In all, there are over 10,500 current
employee certications in BBVA, including CFA, FRM and CIA.
Diversity
BBVA is aware that correctly managed diversity multiplies the
impact of talent and represents a competitive advantage. In a
disruptive environment such as the current one, companies
must encourage the presence of women in organizations
because their contribution is a source of strength. Thus women
account for 54% of the Group’s workforce and their presence
on the management team has continued to grow since 2011,
to a proportion of 20.8% in 2016. BBVA is a signatory to the
Diversity Charter at European level and to the United Nations
Women’s Empowerment Principles.
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In Spain, BBVA has renewed the company’s Equality Seal
and the commitment to the initiative More Women, Better
Companies, both organized by the Ministry of Health, Social
Services and Equality, as well as the Family-Responsible
Company Certicate, highlighting the commitment of our
professionals to the promotion of equal opportunities. BBVA
also forms part of the Promociona Project, fostered by the
CEOE and the Institute for Women and Equal Opportunities,
with the aim of increasing the number of women in positions
of responsibility in Spanish business.
In Mexico, BBVA Bancomer has been chosen as one of the 10
most gender equitable companies, according to Great Place
To Work®, which has evaluated the presence of women in
positions of responsibility and recruitment and employment
practices that promote gender equality.
Dierent capabilities
BBVA continues to demonstrate its pledge to ensure
the labor integration of people with dierent capabilities
through the Plan Integra, which was conceived in the belief
that employment is an essential pillar for achieving equal
opportunity for everyone. As part of the Plan, each year since
2009, the BBVA Integra Awards have recognized the work of
organizations that carry out projects bringing people into the
labor market and boosting the development of new initiatives
and good practices in this eld. The business group Gureak
was awarded €150,000 at the 8th Awards.
There are 231 employees with dierent capabilities working
in the Group, located in Spain (162), Mexico (37) and South
America (32). For its part, Mexico has implemented the
Inclusion Program for people with dierent capabilities
within the framework of occupational health, with the aim
of guaranteeing a secure environment for this group. In
Venezuela a strategic plan has been designed to increase
the eective labor integration of workers with disabilities,
as required by local law. Work is also progressing on making
bank branches accessible in these geographic areas, and the
Group’s corporate oces are already accessible in Madrid, as
are those of BBVA Bancomer in Mexico and BBVA Chile.
In collaboration with the Adecco Foundation, BBVA has
created the Familia Plan for its employees with children with
dierent capabilities. The Plan oers advice and guidance,
as well as implementing a Personal Support Plan to improve
the children’s development, autonomy and social integration,
focusing particular attention on the medical, family, social,
training and employment areas.
In addition, BBVA’s commercial network in Spain promotes
the labor integration of people with Down syndrome, thanks
to agreements between the dierent territorial divisions and
associations involved with this group. These alliances have
provided over 35 students with the opportunity to carry out
professional work experience in our branches across the
whole of Spain.
Annex 5 - Employees by gender
Annex 6 - Promoted employees by gender
Annex 7 - Average employee age and breakdown by age
bracket
Annex 8 - Average length of service
Annex 9 - Breakdown of employees job category and gender
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5. 3. 2. Workplace
BBVA conducts a general satisfaction and commitment
survey involving all employees every two years. The purpose
of this survey is to ascertain the views of our employees,
their concerns and the areas for improvement on which they
consider we should work in the future. The 2016 survey was
answered by over 70% of BBVA employees worldwide, with
83% of them being satised or very satised with BBVA as a
place to work. Satisfaction surveys at the local level have also
been conducted to monitor the impact of the improvement
plans being addressed.
Occupational health and safety
BBVA honors its commitment to guarantee healthy working
environments and improve the quality of life of people through
health promotion and prevention campaigns and training,
information and awareness-raising activities.
The occupational health and safety plan in Spain is part of
the preventive planning that sets yearly targets based on
the occupational risk prevention activities scheduled for
the period. It includes risk assessments and monitoring
of corrective measures, evacuation drills and emergency
plans, training for workers, coordination of business activity,
healthcare monitoring through medical checkups, health
promotion campaigns, protection for vulnerable workers,
adapting workstations with specic ergonomic material
to prevent related pathologies (back pain, carpal tunnel
syndrome, etc.).
Occupational health (Spain. Number)
2016 2015 2014
Technical preventive actions 2,424 3,033 2,157
Preventive actions to improve working conditions 2,981 3,761 2,869
Appointments for health checks 15,100 17,6 59 16,145
Employees represented in health and safety
committees (%)
100 100 100
Absenteeism rate (%)
(1)
2.4 2.5 2.2
(1
) Excluding Catalunya Banc in 2015.
With respect to awards and recognition, BBVA has
received the Company Prevention Prize for the year (in
the Large Company category), grated by Prevencionar.
com, for its activity in areas of health and safety; in other
words, for the way in which it has used new technologies
as a tool to integrate and develop its various actions
related to the prevention and promotion of health and
safety. In addition, BBVA has won the Zaldívar Scholastic
Award for the promotion of a preventive culture among its
workers.
In Mexico BBVA Bancomer has implemented health plans,
with actions related to control of risk at work, occupational
health and safety, an ergonomic program for the prevention of
occupational disease, as well as healthy work plans including
health communication campaigns and access to the Healthy
Life Portal (Mayo Clinic).
The commitment to maintain the health and safety of
all BBVA Francés employees in Argentina is focused on
minimizing risks and ensuring the correct use of facilities and
safety equipment. This is done through a team that provides
occupational health care and workshops on healthy living.
BBVA Chile has developed a risk prevention program that
clearly species the legal compliance applicable in matters
of occupational health and safety. The program includes
risk assessment and preventive measures, compliance with
regulations on health and safety conditions in the workplace,
assessment of musculoskeletal and ergonomic risks, the
design and communication of emergency and evacuation
protocols, and prevention of occupational accidents.
Freedom of association and representation
The rights and working conditions of Group employees
are included in the rules, conventions and agreements
concluded in each entity with the corresponding workers’
representatives in accordance with local legislation.
On matters of freedom of association and labor union
representation, BBVA always aims for solutions via
consensus. It places a very high value on dialog and
negotiation as the best way of resolving any conict in
accordance with the pertinent local regulations in force in the
countries where BBVA operates.
The XXIII Collective Labor Agreement for the Spanish
banking sector, covering our entire workforce, was signed in
April 2016 and will remain in force until December 31, 2018.
Additional business agreements supplement and develop the
provisions of the Labor Agreement, such as the agreement to
adapt the provisions of the Collective Labor Agreement with
respect to remuneration.
Labor union representatives sitting on company committees
are elected every four years by personal, free, direct and
secret vote. The labor representatives are kept apprised
of any changes in relevant organization that could occur in
the Company, as provided for by the pertinent legislation
currently in force.
BBVA Spain has also concluded a Merger Labor Agreement
to integrate the employees of Catalunya Banc (CX) into
BBVA. This was done in July, harmonizing the employment
conditions of all CX employees to those current in BBVA.
BBVA IN 2016
5. PRIMARY STAKEHOLDERS
P. 92
In other countries in South America such as Argentina, Chile
and Colombia, BBVA employees are included in collective
agreements. BBVA Chile has a collective agreement with the
Sindicato Unicado union, in force until November 30, 2018.
It covers the 47% of the bank employees who are unionized,
but the benets extend to non-unionized employees and its
subsidiaries. Colombian legislation provides for two forms of
representation for employees, as a result of which there are
two agreements in the bank: the
Pacto Colectivo
(Collective
Pact), which covers 81% of the workforce, with representation
exercised directly by employees; and the
Convención
Colectiva
(Collective Convention), which benets 19% of
the workforce and is concluded with the labor unions, which
chose the representatives eligible.
Annex 10 - Voluntary resignations (turnover) and breakdown
by gender
Annex 11 - Recruitment of employees by gender
Annex 12 - Discharge of employees by discharge type and
gender
Annex 13 - Breakdown of employees by contract type and
gender
Annex 14 - Amount and type of absenteeism of employees
BBVA IN 2016
5. PRIMARY STAKEHOLDERS
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5. 3. 3. Remuneration
BBVA has an advanced remuneration system based on the
reciprocal long-term generation of value for professionals in
line with shareholder interests and dependent on prudent
management. This system is adapted to legal specications
in force at any time and also incorporates the standards
and principles of the best generally accepted national and
international practices.
This model has been designed in accordance with four
objectives:
To oer transparency, equity and consistency.
To channel the importance of achieving the Strategic
Priorities, which include both nancial and non-nancial
goals.
To recognize that all employees form part of a team and
to identify the critical inter-dependency that requires
teamwork to achieve joint success.
The importance of maintaining a constant dialog on
performance between the supervisor and collaborator
during the whole year.
Remuneration is made up of two clearly dierentiated parts:
A xed remuneration, which is established by considering
the employee’s level of responsibility and professional
career path in the Group and setting a salary benchmark
for each function.
Variable remuneration, with a new model that is linked
to the Group’s strategic objectives through indicators
formed by both nancial and non-nancial indicators. In
this new model, each employee’s variable remuneration is
directly linked to the results at Group, area and sub-area/
individual level.
BBVA IN 2016
5. PRIMARY STAKEHOLDERS
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5. 3. 4. Volunteer work
The BBVA Corporate Volunteering Policy covers all
countries. It manifests BBVA’s pledge to volunteer work of
this type and provides employees with the conditions in which
they can engage in corporate volunteer work that generates a
positive social impact.
In addition to the impact at the level of corporate social
responsibility, the activity of corporate volunteering enhances
the development of employees, channeling their spirit of
solidarity, and allowing them to make a personal contribution
of their time and knowledge to provide help for people who
need it most. This improves self-esteem, increases the sense
of pride in belonging to the company and thus has an eect
on talent attraction and retention.
The number of BBVA employees who participated in
corporate volunteering actions in 2016 was more than 8,000
at global level, representing 6% of the workforce. These
employees have dedicated more than 100,000 hours to
tasks of this kind. Over 56% of these activities are designed
to boost initiatives arising from employees themselves or
in coordination with BBVA, in connection with education,
primarily to boost nancial education, and thus support the
strategic lines set out in the responsible banking model.
In Spain 1,389 working employees and 180 on early
retirement/retirement have participated in the dierent
volunteering initiatives, of which 75% were dedicated to
issues of education, mainly nancial education, and the rest
were environmental and social action activities. The actions
carried out with BBVA volunteers in Spain are channeled
through the BBVA Volunteer website and implemented
through the Volunteer Oce.
The main educational projects through which volunteering is
developed in the dierent business areas are:
In Spain: the JAES Foundation programs, such as
Ventajas
de permanecer en el colegio
(Advantages of staying in
school),
Habilidades para el éxito
(Skills for success) and
Socios por un Día
(Partners for a day).
In the United States: the Summer/Fall Day of Service
initiatives and the NBA Cares community engagement
program.
In Mexico: the
Valores de Futuro
(Future Values)
nancial education program and the Momentum Project
entrepreneurship support program.
In South America: nancial education workshops in
Argentina, the
Adelante con tu Futuro
(Forward with
your Future) nancial education program in Venezuela,
the
Leer es Estar Adelante
(Reading is getting ahead)
program in Peru, and the
Becas de Integración Jóvenes
con Futuro Adelante
(Integration Grants for Young People
with a Future) and a nancial education program in
Uruguay.
BBVA IN 2016
5. PRIMARY STAKEHOLDERS
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5. 4. Shareholders
BBVA seeks to create long-term value for all its stakeholders,
particularly for its shareholders. To do so, the Bank is working
hard to position itself as a model in the new environment for
the banking industry, with a transformation based on and
designed for the customers, transforming the business as
it is today, creating new business models and maintaining a
unique banking model.
Among its Strategic Priorities, BBVA includes capital
optimization as one of the pillars to achieve its Purpose,
which is: to bring the age of opportunity to everyone.
Managing capital correctly will allow us to be more aware of
the risks, make better decisions and have a clearer vision of
the future. All this will help us to ensure greater value for our
shareholders.
In 2016 BBVA Group:
Has improved its ROE to 6.7%, from 5.2% of 2015.
Has increased its ROA to 0.64%, from 0.46% of
2015.
Continues to demonstrate a solid risk prole, with an NPL
ratio down 48 basis points over the year to 4.9% as of
31-Dec-2016, and a cost of risk down 22 basis points to
0.84% (cumulative gure for 2016).
Maintains sound capital adequacy ratios that are above
legal requirements, with a fully-loaded CET1 of 10.9% as of
31-Dec-2016, an improvement of 58 basis points over the
last twelve months.
The Bank has also had to deal with a complex environment in
2016; marked by low interest rates in Europe and the United
States; a slowdown in growth in developed economies; a
dicult political situation in a number of regions, growing
regulatory pressure; and the transformation of the banking
industry mentioned earlier, with the entry of new competitors
(startups and FinTech) and the increased use of mobile
devices as the customers’ channel of choice.
In this context, the performance of the main stock-market
indices has varied greatly over the last twelve months. The
Stoxx 50 lost 2.9%, while in the Eurozone the Euro Stoxx 50
gained 0.7% and in Spain, the Ibex 35 fell by 2.0%. The S&P
500, which tracks the share prices of U.S. companies, closed
the year up 9.5%, most of the gain being in the second half of
the year.
In the banking sector, the Stoxx Banks index of European
banks, including those in the United Kingdom, slowed its
decline of the rst half of the year, and closed 2016 with a
decline of 6.8%. The same trend is reected in the Eurozone
bank index, the Euro Stoxx Banks, which lost 8.0%. In the
United States, the S&P Regional Banks sector index gained
32.4% in 2016, with the growth focused at the end the year
following the results of the U.S. elections.
The BBVA share performed relatively better in 2016 than the
European banking system as a whole. As of December 31,
2016, the BBVA share price was €6.41, a rise over the quarter
of 19.2% and a year-on-year decline of 4.8%.
BBVA share evolution compared with European indices
(Base indice 31-12-2015=100)
30
40
50
60
70
80
90
100
110
120
130
31/12/2015 31/3/2016 30/6/2016 30/9/2016
31/12/2016
BBVA share evolution compared with Europeans
indices (Base indice 31-12-2015 = 100)
BBVA Euro Stoxx 50 Euro Stoxx Banks
The BBVA share and share performance ratios
31-12-16 31-12-15
Number of shareholders 935,284 934,244
Number of shares issued 6,566,615,242 6,366,680,118
Daily average number of shares traded 47,180,855 46,641,017
Daily average trading (million euros) 272 393
Maximum price (euros) 6.88 9.77
Minimum price (euros) 4.50 6.70
Closing price (euros) 6.41 6.74
Book value per share (euros) 7.22 7.47
Tangible book value per share (euros) 5.73 5.88
Market capitalization (million euros) 42,118 42,905
Yield (dividend/price; %)
(1)
5.8 5.5
(1)
Calculated by dividing shareholder remuneration over the last twelve months over
the closing price at the end of the period.
BBVA IN 2016
5. PRIMARY STAKEHOLDERS
P. 96
As regards shareholder remuneration, two cash dividends
have been paid for a gross €0.08 per share each. These
payments were made on July 11, 2016 and January 12,
2017. The Board of Directors of BBVA also decided at its
meetings on March 31 and September 28, 2016, to carry
out two capital increases against voluntary reserves to
implement the “dividend-option” system, in accordance with
the terms agreed at the Annual General Meeting of March
11, 2016. In the rst increase, the holders of 82.13% of the
rights opted to receive new shares, while in the second, the
gure was 87.85%. These percentages once more conrm
the popularity of this remuneration system among BBVA
shareholders. In the Note number 4 of the Consolidated
Financial Statements, Management Report and Auditors’
Report, more information about BBVA Group shareholder
remuneration system is included.
Shareholder remuneration (Gross euros/share)
0.08 0.08 0.08
0.129
0.08 0.08 0.08
July
2015
October
2015
January
2016
April
2016
July
2016
October
2016
January
2017
Cash
Dividend-option
The number of BBVA shares as of 31-Dec-2016 is
6,566,615,242. The number of shareholders is 935,284.
Residents in Spain hold 45.4% of the share capital, while
the percentage owned by non-resident shareholders stands
at 54.6%. It is worth noting that at the last Annual General
Meeting both institutional and minority shareholders gave
their mass support in a large turnout in favor of the points on
the agenda. The percentage approving the annual accounts
was over 99%, representing a very strong backing for the
management of BBVA.
BBVA share
BBVA share
Listed on the main international
stock markets
New York London
Mexico City
Lima
Madrid
Weighting (31/12/2016)
IBEX 35 8.7%
Euro Stoxx 50 1.9%
Euro Stoxx Baks 9.3%
Stoxx Europe 600 Banks 4.4%
Figures as of 31
st
December 2016
SHAREHOLDER BREAKDOWN
Banks
1.4%
Institutions
6.3%
Employees
2.6%
Individuals
35.0%
Resident
45.4%
Non- resident
54.6%
935,284
Shareholders
BBVA shares are traded on the Continuous Market of the
Spanish Stock Exchanges and also on the stock exchanges in
London and Mexico. BBVA American Depositary Shares (ADS)
are traded on the New York Stock Exchange and also on the
Lima Stock Exchange (Peru) under an exchange agreement
between these two markets. Among the main stock-market
indices, BBVA shares are included on the Ibex 35, Euro Stoxx
50 and Stoxx 50, with a weighting of 8.70%, 1.90% and 1.21%
respectively. They are also listed on several sector indices,
such as the Stoxx Banks, with a weighting of 4.39%, and the
Euro Stoxx Banks, with a weighting of 9.29%.
BBVA IN 2016
5. PRIMARY STAKEHOLDERS
P. 97
Shareholder and Investor Relations
The bank has a communication policy with shareholders
and investors, which can be accessed via the corporate
website. Its basic principles are:
Transparency, truthfulness, immediacy and
standardization in providing information.
Facilitate awareness of those issues that may be necessary
to enable an appropriate exercise of shareholders’ rights,
providing clear and direct communication channels and lines
which allow any doubt on the provided information to be
cleared up.
Publish information periodically, adequately and available
in time to enable shareholders and investors to be
informed of the most relevant aspects of the Bank at any
time.
Equal treatment for all shareholders and investors in the
same situation, in terms of information, participation and
exercise of their rights as shareholders and investors.
Use a variety of communication instruments and channels
that enable shareholders to access the Bank in the easiest
and most convenient way.
In addition, through its website the Investor Relations unit
gives all BBVA shareholders access to the Shareholder Oce,
which provides information on relevant aspects related to
the BBVA share and the Group, oers special products and
responds to suggestions. Below are some of the most relevant
initiatives carried out by the Shareholder Oce in 2016:
Improved access to quarterly information for shareholders
and investors, with a digital version of the shareholder report.
Inclusion of an interactive tool for analyzing the results of
the Group and business areas.
Finally, it is worth noting that in 2016 the Shareholder Oce
has dealt with 3,676 e-mails and 4,216 phone queries. There
have also been numerous meetings with both minority and
institutional shareholders.
Sustainability ratings
Lastly, BBVA maintains a significant presence on a
number of international sustainability indices or ESG
(environmental, social and governance), which evaluate the
performance of companies in this area, as summarized in
the table below.
BBVA IN 2016
5. PRIMARY STAKEHOLDERS
P. 98
Sustainability indices on which BBVA is listed as of 31-12-2016.
Listed on the MSCI Global Sustainability indices
AAA rating
Listed on the FTSE4Good Global, FTSE4Good
Europe and FTSE4Good IBEX indices
Industry leader according to the latest ESG 2015 rating
Listed on the Euronext Vigeo Eurozone 120 indices
Included on the Ethibel Excellence Investment Register
In 2016, BBVA obtained a “B” rating
(1)
The inclusion of BBVA in any MSCI index, and the use of MSCI logos, trademarks, service marks or index names herein donot constitute a sponsorship, endorsement or
promotion of BBVA by MSCI or any of its aliates. The MSCI indices are the exclusive property of MSCI. MSCI and MSCI index names and logos are trademarks or service
marks of MSCI or its aliates.
Since 2014 BBVA has also been part of the investment
universe of Triodos Investment Management, the Triodos
Group subsidiary that manages socially responsible mutual
funds. It is the only Spanish Bank on this list.
(1)
BBVA IN 2016
5. PRIMARY STAKEHOLDERS
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5. 5. Society
5. 5. 1. Social, environmental and reputational
risks
As a nancial institution, BBVA has an impact on the
environment and society directly through the consumption
of natural resources and its relationship with stakeholders,
and indirectly through its credit activity and the projects
it nances. These impacts lead to direct, indirect and
reputational risks.
These extra-nancial risks may aect the credit prole
of borrowers or the projects nanced. To manage such
risks, BBVA takes into account environmental, social and
reputational aspects in its risk management, alongside
traditional nancial variables.
Their integration into risk management is consistent with the
principle of prudence that governs BBVA’s activity and is
focused on various lines of action.
In 2016 we began working with all the areas involved,
within a framework that comprehensively encompasses
the way in which BBVA manages social and environmental
impacts, as well as the opportunities associated with such
issues.
Equator Principles
The energy, transport and social services infrastructures that
boost economic development and create jobs can have an
impact on the environment and society. BBVA is committed
to manage the nance of these projects in order to avoid and
reduce negative impacts and boost their economic, social and
environmental value.
All the decisions on project nance are based on the criterion
of return adjusted to principles. Placing people at the core
of the business implies dealing with stakeholder expectations
and demand from society to ght against climate change and
respect human rights.
In line with this commitment, BBVA adhered to the Equator
Principles (EP) in 2004. Based on the International Finance
Corporation’s (IFC) Policy and Performance Standards
on Social and Environmental Sustainability and the World
Bank’s Environmental, Health and Safety guidelines, the
Equator Principles are a set of standards established to
manage the environmental and social risks in project nance.
These principles have set the benchmark for responsible
nance. Once more in 2016 BBVA has contributed to their
development and dissemination as a member of the working
groups in which it takes part.
The CIB Sustainable Finance and Reputational Risk
team takes on responsibility for analyzing the nanced
projects, representing the Bank before its stakeholders,
being accountable to Senior Management and designing
and implementing the management system, proposing the
adoption of best practices and contributing toward training
and communication on matters related to the EP.
Project analysis involves subjecting each transaction to a
process of environmental and social due diligence that starts
with assigning a category (A, B or C), which reects the
project’s level of risk. The documentation submitted by the
customer and the independent advisors is reviewed, allowing
the level of compliance with the requirements established
in the EP to be graded in accordance with the project
category. Finance agreements incorporate the customer’s
environmental and social obligations, which are monitored by
a specialist CIB team.
Monitoring
Financial
close
Approval
Initial
review
Due
diligence
Selection of independent advisor
Project classication
Review of the Environmental and Social Impact Assessment
Environmental and Social Due Diligence Report
Sanction by the CIB Reputational Risk Departament
Inclusion of conditions in the approval of the Risks Commitee
Preparation of an Action Plan
Environmental and social clauses in the nance contract
Monitoring reports by the independent advisor
IReport on the environmental and social impact of the project
To guarantee integrity in BBVA’s application of the
EP, their management is integrated into the internal
transaction structuring, admitting and monitoring
processes and is subject to regular control by the Internal
Audit Department.
For BBVA, the EP are the basis for applying best practices
in responsible nance and the framework for dialog with
customers and stakeholders in the projects we nance. BBVA
provides public information on the environmental and social
management of the projects nanced and advised by the
Group.
BBVA IN 2016
5. PRIMARY STAKEHOLDERS
P. 100
Details of Equator Principles operations analyzed (BBVA Group)
2016 2015 2014
Number of operations 32 26 44
Total amount (million euros) 6,863 24,557 170,265
Amount nanced by BBVA
(million euros)
1,451 1,933 1,867
Ecorating
The Ecorating tool is used to rate the risk portfolio of SMEs
from an environmental point of view. This is done by assigning
a level of credit risk to each customer in accordance with a
combination of several factors such as location, polluting
emissions, consumption of resources, potential to aect
the environment and applicable legislation. In 2016 the
environmental risk of 232,204 customers was rated in Spain,
with a total exposure volume of €93,665m.
Ecorating Data (Spain, 2016)
Environmental
risk level
Volume
(million euros) Customers
Low 81,772 192,392
Medium 11,571 39,263
High 322 549
Total 93,665 232,204
Reputational risk management
Since 2006, BBVA has had a methodology in place for
identifying, evaluating and managing reputational risk.
Through this methodology, the Bank regularly denes and
reviews a map in which it prioritizes the reputational risks it
faces, together with a set of action plans to mitigate them.
This prioritization is carried out according to two variables:
the impact on stakeholder perceptions and the strength of
BBVA’s resilience to risk.
This reputational exercise is carried out in each country and
the integration of all of them leads to a consolidated view
of the Group. Since 2015, this exercise has been performed
using a computer tool that allows risks to be assessed by the
appropriate areas. Reputational risk is by nature highly cross-
cutting.
The main progress made related to reputational risk
management in 2016 is:
Strengthening of the governance and reporting model.
The result of the reputational risk assessment process
was submitted through the Risks Committee to both
the Corporate Assurance Committee and the Board of
Directors.
Integration of reputational risk into the risk appetite
framework and the ICAAP (Internal Capital Adequacy
Assessment Process).
Review of the reputational risk management model by the
Internal Audit area.
Denition of the key risk indicators for each risk factor in
order to complete the management model.
Reputation in society (2016)
Country Position relative to peer group
(1)
Spain 2nd for customers and 1st
(2)
for non-customers
United States 2nd for customers and 1st
(2)
for non customers
Turkey 1st for customers
(2)
and 1st
(2)
for non customers
Mexico 3rd
(2)
for customers and 2nd
(2)
for non customers
Argentina 1st
(2)
for customers and 1st
(2)
for non customers
Chile 3rd
(2)
for customers and 3rd for non customers
Colombia 2nd
(2)
for customers and 2nd
(2)
for non customers
Peru 1st
(2)
for customers and 1st for non customers
Venezuela 1st
(2)
for customers and 1st for non customers
Paraguay 1st
(2)
for customers and 2nd
(2)
for non customers
Uruguay n/av
Source: RepTrak (Reputation Institute); except in Turkey, source: TRI*M Index (TNS).
n/av = not available.
(1)
Peer group: Spain: Santander, CaixaBank, Bankia; The United States: Regions,
Wells Fargo, Chase; Turkey: Is Bankasi, Ziraat, YKB, Akbank; Mexico: Banamex,
Banorte, Santander, HSBC; Argentina: Galicia, Santander, HSBC; Chile: Banco
de Chile, Santander, BCI; Colombia: Bancolombia, Bogotá, Davivienda; Peru:
BCP, Interbank, Scotiabank; Venezuela: Banesco, Mercantil, Banco de Venezuela;
Paraguay: Continental, Itaú.
(2)
Tied with other entities.
BBVA IN 2016
5. PRIMARY STAKEHOLDERS
P. 101
5. 5. 2. Investment in social programs
In 2016 BBVA allocated over €93 millions to social projects.
This gure accounts for 2.7% of the Group’s net attributable
prot for the year.
Investment in social programs in relation to the net attributable prot
(Percentage)
4.09
3.90
2.68
2014 2015 2016
Graphical Investment data by focused action (Percentage)
11
7
67
15
Financial education
Entrepeneurship
Knowledge, education
and culture
Others
Investment in social programs by geographical area and Foundation (Thousand euros)
2016 % 2015 % 2014 %
Spain and corporative areas 16,923 18% 22,230 21% 39,993 37%
United States 8,732 9% 7,609 7% 4,867 5%
Turkey 6,193 7% 8,518 8% n/a n/a
Mexico 24,612 27% 28,068 27% 23,441 22%
South America
6,380 7% 7,586 7% 11,300 11%
BBVA Foundation 25,598 28% 24,288 23% 22,430 21%
BBVA Micronance Foundation 4,827 5% 5,307 5% 5,119 5%
TOTAL 93,265 100% 103,606 100% 107,150 100%
n/a = not applicable
BBVA also launched the Community Investment Plan in
2016 for the period 2016-2018, which is an ambitious initiative
setting out the following main areas of action:
Financial education, aimed at promoting training in
nancial literacy to enable people to make informed
nancial decisions.
Social entrepreneurship, designed to support the most
vulnerable entrepreneurs and those whose companies
have a positive social impact.
Knowledge, through support for initiatives that drive
development and create opportunities for people.
Education for society was one of the main areas of the
previous Plan, which from 2016 onward has been framed
within the strategic line of knowledge. Nonetheless, it retains
a signicant weight in BBVA’s social investment, which
continues to support access to education and educational
quality as sources of opportunity. However, it also shares
this space with other Group initiatives such as the BBVA
Foundation activities and research work by the BBVA
Research Department.
BBVA’s community support activities will focus on these
three lines over the next three years, although the Group’s
banks will maintain their commitment to investment in the
community to address local social problems. In this regard,
the Support to Social Organizations program will continue
to back educational and community development projects
carried out by non-governmental organizations and other
non-prot associations and institutions. In order to establish a
global action framework for this program, work has continued
in 2016 to prepare a manual that oers guidance on assessing
and approving donations by all of the Group’s banks and
foundations. This manual will be issued in the rst half of 2017.
BBVA IN 2016
5. PRIMARY STAKEHOLDERS
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5. 5. 3. Financial education
Financial education remains one of our priorities and is thus
part of the three main lines of action established in the 2016-
2018 Community Investment Plan.
Our overall objective is to foster nancial education based on
the acquisition of knowledge, skills and attitudes with a vision
to change the way customers make nancial decisions and
thus improving their experience.
At a local level, we run our own programs and work together
with other actors to provide nancial education adapted
to the environment and economic reality across our global
footprint. These programs are designed for a diverse target
audience, including children, young people and adults, and
also managers of small businesses. They cover a broad range
of topics, from nancial planning to savings and investment.
At BBVA we work with a variety of national and multinational
organizations to promote the importance of nancial
knowledge and skills as critical matters that have a direct
impact on a people’s welfare.
Main progress in 2016
Since the Global Financial Education Plan was launched in
2008, we have invested over €67m to help over 9 million
people.
Beneciaries of the Global Financial Educational Plan (BBVA Group)
2016 2015 2014
Children and Young People 2,143,161 1,108,755 1,009,430
Adults 396,988 368,055 244,543
SMEs 34,305 59,398 41,474
Total number of beneciaries of
Financial Education 2,574,454 1,536,208 1,385,447
Number of total workshops 1,166,251 1,076,452 1,010,681
Total investment in FE (millon
euros)
10,166,675 12,448,665 17,42 7,972
Throughout 2016, in addition to continuing our work on a
more practical approach toward financial education, we
designed and developed the Financial Education and Skills
Center. This Center is a virtual platform created to promote
the importance of financial knowledge and skills through
research, information sharing and learning geared toward
action. The Center has a team of experts from different
fields with solid experience in the world of financial
education.
We have also transferred our experience in the eld of
practical nancial education to customer experience. This is
achieved by helping customers improve their personal nance
decisions through tips, communications and reminders,
optimizing their nancial capabilities while accompanying
them on their nancial education path. In doing so we help
them discover new opportunities and achieve their goals.
Promoting financial education is a collective task.
Since 2010, BBVA has been helping the Organization
for Economic Cooperation and Development (OECD)
to draw up the PISA Report on Financial Competence,
which assesses the financial literacy of 15-year-olds. The
evaluation has been conducted every three years since
2012 and its results have shed light on a vast improvement
in the majority of the participating countries. The results of
the assessment conducted in 2015 will be available in the
first half of 2017. In 2016, BBVA renewed its agreement with
the OECD and will continue supporting this assessment
in 2018. Through this partnership with the OECD and
other contributions, BBVA honors its commitment to the
advocacy and promotion of financial education, for which it
invested €2,140,000 euros until 2016.
Annex 15 - Financial Education. Data by country
A signicant part of our investment in nancial education
programs is geared to improving the nancial culture of
children and young adults and promoting values related to
the responsible use of money. All the programs that we run
for this social group are developed by educational experts
through workshops in schools and even online courses in
some countries, including cross-curricular material available
for teachers and educators.
The workshops for children aged 6 to 14 promote the
development of values associated with the use of money
(eort, solidarity, savings, etc.) and the acquisition of nancial
culture skills in line with the nancial literacy skills included in
the PISA report. One of our most important initiatives is the
Valores de Futuro (Future Values) program. Created in Spain
in 2009 and extended to include Mexico in 2012, Valores de
Futuro comprises over 60 awareness and active participation
workshops given by teachers, in some cases with the
participation of BBVA volunteers. A total of 1,149,335 students
participated in
Valores de Futuro
workshops in Mexico and
Spain in 2016.
Targeted at young people aged 14 to 20, the programs
focus on knowledge of basic personal nance concepts and
planning. The most salient programs are:
Tus Finanzas Tu Futuro
(Your Finances, Your Future),
promoted by the Spanish Banking Association (AEB)
and run by the Junior Achievement Foundation.
This pioneering sector-specific initiative draws on
an extensive partnership of 24 private financial
institutions. It has been a case study and example
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of good practices in the Sharpening Financial
Education Report prepared by the Junior Achievement
Foundation Europe and Visa, in collaboration with
the European Banking Federation, the OECD and
the Vienna University of Economics and Business.
The initiative has benefited 7,461 students in 136
educational centers in the country.
BBVA Entrepreneurship School in Colombia.
Liga de Educación Financiera BBVA
(BBVA Financial
Literacy League) is an educational and interactive game
that allows young people to assess the status of their
personal nances, plan personal nancial goals and learn
the importance of savings. The initiative has beneted
10,304 young people in Chile.
Online Financial Education Course for Young People,
which is being run in Venezuela and has 158 beneciaries.
The Banco Francés Financial Education Program,
in place to help children aged between 12 and 19 learn
nancial and nance management knowledge and skills.
Annex 16 - Financial education programs for children and
young people
The nancial education initiatives for adults were created
to provide knowledge that can help in decision-making, thus
improving nancial well-being and increasing opportunities.
Among them are:
Adelante con tu Futuro
(Forward with your Future)
was created in Mexico in 2008 and has extended to
Chile, Colombia, Paraguay, Uruguay and Venezuela
as the nancial education program with the largest
infrastructure in Latin America. It has xed classrooms,
mobile classrooms and equipment, instructors, volunteers
and contents aligned with people’s nancial life cycle. In
this way, it can assist them at dierent stages of life with
the tools necessary for managing better their personal
nances. The program provides free workshops on
saving, saving for retirement, credit cards, credit health,
mortgages, life insurance, mutual funds, electronic
banking, stock market literacy, economics and the
secure usage of digital banking.
Adelante con tu Futuro
has run over 4 million face to face and online workshops,
beneting over 1.6 people since its launch in 2008.
In Chile and Colombia, nancial inclusion initiatives were
implemented in 2016, promoting nancial knowledge and
skills in the work centers of companies and institutions
that are customers of BBVA through workshops for their
employees. Over 37,530 people have participated in these
workshops in 2016.
In collaboration with the Federal Deposit Insurance
Corporation (FDIC), BBVA Compass uses Money Smart
as an initiative to help people, whether bank users or not,
to acquire nancial knowledge and use banking services
eectively. In 2016, a total of 5,718 people beneted from
this program.
The
Mi Jubilación
(My Retirement) initiative was
launched in 2013 in Spain and has since then become
a benchmark for information related to retirement and
pensions. In 2016 its website received over 398,469 visits
and more than 390,000 simulations were made using
the tools. Strategically,
Mi Jubilación
continues driving
economic research in the eld of pension reforms through
the BBVA Pensions Institute and contributes to the
discussion on pensions with proposals that guarantee the
future of the pension system.
In addition to education for children, young people and adults
alike, we support training in nancial skills for the management
and growth of small and medium-sized businesses through
educational workshops on subjects related to nancial
decision-making SMEs. Our main initiatives are:
Finance for Entrepreneurship and Growth
.
Since
2012, Mexico has supported entrepreneurs and micro-
businesses, whether customers or non-customers,
with classroom and online workshops, interactive
videos and practical exercises. Since the initiative was
launched, 259,358 companies have benefited from
this training.
Activa Tu Negocio
, (Activate Your Business) is an
initiative launched in Spain in 2016 in collaboration
with Google to provide free training in digital marketing,
combining a classroom workshop with 40 hours of online
study. Over 519 companies have beneted from these
courses.
Camino al Éxito
(Road to Success) has become a
comprehensive solution for helping SMEs grow, become
solid and be better prepared. Focused on Argentina, Chile,
Peru, Paraguay, Uruguay and Venezuela, this program has
allowed companies to access courses designed to address
their needs, given by top local universities and business
schools. In 2016, a total of 548 companies received the
classroom courses and over 4,171 signed up for online
courses
in nance, business and e-commerce.
SME skills training programs provided in Spain and
Mexico to support small and medium-sized enterprises
with major growth potential through cognitive tools and
management and administrative skills that allow them
to consolidate and grow their projects. Programs that
consolidated their success in 2016 were: a diploma course
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from Anáhuac University, a specialized course at the
IPADE Business School in Mexico, and programs provided
by Deusto University, ESADE, Instituto de Empresa, ESIC
and San Telmo.
Annex 17 - Financial education programs for SMEs
Financial education was also promoted in the digital
media in 2016. The website www.bbva.com shares
information and extends understanding of the financial
knowledge and skills that can make society more aware
of financial risks and opportunities, and enable people to
make informed and effective decisions to improve their
personal financial well-being. These contents received
over 4 million visits in 2016.
Financial literacy and encouraging formal savings among
people with limited resources in rural areas represent
an opportunity for the development of families and
communities. One example is the activity carried out
by BBVA Microfinance Foundation, which promotes
education and the development of financial skills,
providing ethical and responsible advice on financial
decisions related to access to appropriate financial
services and the creation of productive activities by
customers.
In Chile, the Entrepreneurship School has been created
for all the Bank’s customers through Fondo Esperanza,
which integrates financial education as one of the
objectives of its investment strategy. In Colombia,
Bancamía
launches personalized advice and nancial
education workshops for customers and communities. In
Peru, BBVA Micronance Foundation, through Financiera
Conanza, implements nancial education and initiatives
to promote savings among entrepreneurs and vulnerable
groups of the population with projects such as
Ahorro para
Todos
(Savings for Everyone).
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5. 5. 4. Entrepreneurship
In 2016, entrepreneurship gained ground as a main priority.
Isolated entrepreneurship support programs were grouped
together into a single line of action that became a key part of
the 2016-2018 Community Investment Plan. BBVA wishes to
support, primarily, two types of entrepreneurs:
The most vulnerable, which are supported through the
BBVA Micronance Foundation.
Those who create high and positive social impact through
their enterprises, and are supported by the BBVA
Momentum program.
BBVA Micronance Foundation
As part of its commitment to nancial inclusion, in 2007 BBVA
set up the BBVA Micronance Foundation
1
(hereinafter,
the Foundation). It is a non-prot institution whose mission
is to promote sustainable and inclusive economic and social
development for the most underprivileged people in society
through responsible productive nance. This model seeks
the professional development of its customers and oers
vulnerable entrepreneurs a customized service by bringing
a full range of nancial products and services to their homes
or companies, as well as advice and training related to the
nancial administration and management of their small
businesses.
The Foundation publishes an annual Social Performance
Report, entitled “Measuring What Really Matters”. It presents
1
The BBVA Micronance Foundation was created as a response to BBVA Group’s corporate responsibility, but as a non-prot institution it is independent of the Group in both
governance and management. This is why BBVA Group makes it clear that the BBVA Micronance Foundation is not part of the BBVA nancial group. For this reason, BBVA
Group neither manages nor is responsible for the activity undertaken by the Foundation or by those nancial institutions that the Foundation may acquire in pursuit of its
goals.
the main gures summarizing the impact of its activity on the
life of its customers. This social measuring system has been
highlighted by the UN and is a benchmark in the sector.
Since the Foundation was set up, it has disbursed
an aggregate volume of US$ 8,397m to low-income
entrepreneurs in Latin America for the development of their
productive activities. It is now one of the largest private
philanthropic initiatives in the region.
BBVA Micronance Foundation (Basic data)
2016 2015 2014
Number of Customers 1,826,607 1,712,801 1,544,929
Social Impact (millons of people)
(1)
7.3 6.9 6.2
Number of Employees 8,038 7,910 7,472
Number of Oces 507 509 488
Volume of credit protfolio (millon
euros)
(2)
1,009 936 907
Average amount for microcredits
(euros)
(3)
1,161 1,046 1,026
Number of countries footprint 5 7 7
(1)
It is calculated by multiplying the number of customers by the average family unit
ratio.
(2)
Composed of current portfolio, portfolio in default and interest.
(3)
Weighted by cumulative number of operations.
In 2016, the Foundation, which has more than 8,000
employees, continued to work on the most disadvantaged
areas, serving 1.8 million customers. Over half of the
entrepreneurs served by the Foundation are women, which
directly helps to reduce gender inequality.
Data from a gender perspective of the BBVA Micronance Foundation.
2016 2015 2014
Number
of Women
Customers
Women/ Total
Customers (%)
(1)
Number
of Women
Customers
Women/ Total
Customers (%)
(1)
Number
of Women
Customers
Women/ Total
Customers (%)
Emprende Micronanzas (Chile) 6,469 58 6,386 60 8,548 63
Fondo Esperanza (Chile) 91,793 83 85,549 84 78,210 84
Bancamía (Colombia) 463,663 56 443,239 56 397,499 57
Financiera Conanza (Peru) 228,393 49 213,740 49 198,620 49
Microserfín (Panamá) 7,198 42 6,754 43 6,152 43
ADOPEM (Rep. Dominicana) 259,996 67 244,577 68 218,959 69
TOTAL 1,057,512 58 1,000,858 58 908,572 59
(1)
For the percentage of women, both the assets and liabilities are informed (in net terms).
The mission and methodology of the Foundation have been
acknowledged by the United Nations on various occasions
for their contribution to the Sustainable Development Goals
(SDGs) of the 2030 Agenda, such as ending all forms of
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5. PRIMARY STAKEHOLDERS
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poverty, ght gender inequality and support decent work and
inclusive, sustainable economic growth. In 2016, the United
Nations Economic and Social Council (ECOSOC) granted the
Foundation consultative status, with an acknowledgment of
its work within its eld of micronance for development. The
Foundation is consulted by the United Nations to steer and
recommend actions conducive to sustainable development.
The United Nations Sustainable Development Goals Fund
(SDG Fund) has renewed the Foundation’s membership of
its Private Sector Advisory Panel for 2017-2019. In April 2015,
the Foundation became one of the 13 international institutions
chosen as founding members of this Advisory Panel, which
provides strategic support for the UN to achieve better results
in sustainable development in coordination with the private
sector. Since 2016, the Foundation has also participated in the
Secretariat of the UN Secretary-General’s High-Level Panel on
Women’s Economic Empowerment, which has selected the
Foundation as a case study.
Disaggregated data by micronance institution of the BBVA Micronance Foundation
2016 2015 2014
Customers Employees Oces Customers Employees Oces Customers Employees Oces
Emprende Micronanzas (Chile) 11,106 163 21 10,568 159 21 13,641 145 26
Fondo Esperanza (Chile) 110,817 560 53 102,141 514 52 92,605 499 53
Bancamía (Colombia) 828,499 3,542 199 785,535 3,583 200 698,642 3,290 187
Financiera Conanza (Perú) 468,902 2,137 149 435,879 2,168 153 408,413 2,225 155
Microserfín (Panamá) 17,084 243 11 15,674 224 11 14,197 200 9
ADOPEM (Rep. Dominicana) 390,199 1,393 74 361,722 1,238 70 316,324 1,085 56
TOTAL 1,826,607 8,038 507 1,712,801 7,910 509 1,544,929 7,47 2 488
In 2017, the Foundation will continue working on the
development of its scale and scope, with an extended value
proposition that allows its entrepreneurs to develop and
progress through technology-based solutions, as well as to
improve eciency and processes.
Credit portfolio data by micronance institution of the BBVA Micronance Foundation
2016 2015 2014
Average
Loan
Amount
(euros)
(1)
Default
Rate (%)
Volume
of Credit
Portfolio
(thousand
euros)
Average
Loan
Amount
(euros)
(1)
Default
Rate (%)
Volume
of Credit
Portfolio
(thousand
euros)
Average
Loan
Amount
(euros)
(1)
Default
Rate (%)
Volume
of Credit
Portfolio
(thousand
euros)
Emprende Micronanzas
(Chile)
1,262 6.36 13,861 909 4.87 10,473 828 7.4 10,672
Fondo Esperanza (Chile) 691 0.59 61,308 566 0.66 46,895 492 0.8 35,885
Bancamía (Colombia) 1,205 5.33 354,004 999 5.1 329,843 1,153 4.7 377,731
Financiera Conanza (Peru) 1,871 2.85 434,566 1,820 2.24 419,894 1,709 3 383,776
Microserfín (Panama) 1,397 4.43 25,888 1,278 4.28 22,167 1,043 4.8 16,656
ADOPEM (Rep. Dominicana) 669 3.66 119,571 584 3.48 104,809 486 3.2 80,557
(1)
Calculation. Microcredit average amount: amount disbursed accumulated in the current year, divided by the number of accumulated operations of the same period.
Volume of credit portfolio: Protable Portfolio + Past-due Portfolio (Change of appraoch, excluding accrued interests as of 2Q16).
Momentum Project
Alongside the Foundation, there are other initiatives that support
entrepreneurship, such as the Momentum Project, a social
entrepreneurship support program aimed at promoting the growth
and consolidation of innovative social enterprises. The program is
carried out by coordination with top business schools and with the
participation of BBVA executives, who provide a strategic mentoring
service. Created in 2011 and developed in three countries (Spain,
Mexico and Peru), it was remodeled in 2016 and became BBVA
Momentum, an updated version of the program that has been
simultaneously launched in ve countries in February 2017.
Since the launch of the program, 112 companies have
participated in the integrated training, strategic mentoring,
visibility, nancing and follow-up program for the social
entrepreneurs taking part, to consolidate and extend the
social impact they generate. In 2016, the program was only
run in Mexico and beneted 20 entrepreneurs.
Annex 18: BBVA Momentum
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Other initiatives
It is important to mention initiatives adapted to the local
environment, such as the Women Entrepreneur Executive
School program, implemented in 2012 by Garanti Bank
in Turkey for training women entrepreneurs through the
Boğaziçi University Lifelong Learning Center. As part of the
program, women entrepreneurs receive 100 hours of training
on subjects such as business creation, innovation and
sustainable management. Since 2015, initiatives have been
developed in collaboration with various local organizations to
drive the process of digitalization in Turkish SMEs.
In Colombia, the Emprendimiento Met Colombia (Colombia
Met Entrepreneurship) program was developed in 2016,
promoting sustainable, responsible and innovative female
entrepreneurship through training, support, networking and
communication. It fosters the intensive use of technology
and is particularly focused on social innovation. This program
has been developed in partnership with the Met Community
organization and has beneted 550 women entrepreneurs.
Lastly, BBVA Open Talent is a program for entrepreneurs,
which was run for the eighth time in 2016, when 1,217 startups
from 77 countries took part. Open Talent is the mechanism
that connects these startups to BBVA, seeking partnership
options that lead to the disruption of the nancial industry.
When mutual interest exists for both sides, they explore areas
that are mutually benecial to startups, customers and BBVA.
Over 350 BBVA executives and experts from around the world
also took part in this year’s program, allowing them to meet
the entrepreneurs in person.
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5. 5. 5. Knowledge, education and culture
Knowledge, education and culture are three areas of activity
that are grouped together in a new line of action included in
the new Community Investment Plan for 2016-2018. They
basically include the activities of the BBVA Foundation and
the BBVA Research department in addition to local programs
and initiatives focusing on education, science and culture.
BBVA Foundation
In 2016, the BBVA Foundation strengthened its commitment
to drive and disseminate knowledge by supporting the
community of researchers and creators in Spain, recognizing
and raising the prole of the best representatives of these
communities and providing objective information in relation
to some of the main topics of public debate. In addition to
maintaining its close collaboration with leading institutions
in all areas, the BBVA Foundation has enhanced its own
activities and has been positioned as a benchmark in sectors
such as the environment and contemporary music, as well as
the publication of socioeconomic research.
The third annual BBVA Foundation Grants for Research
and Creation have enabled 87 individual and research team
projects to be set up in 11 dierent scientic and cultural
areas, and in ve scientic areas of high social impact. These
grants have become a model for Spain’s scientic and
creative community, supporting researchers with a strong
career path, who are examples of excellence and destined
to be leaders in their respective elds. Through this scheme,
the Foundation oers them the support they need to develop
personal projects, in many cases resulting in a qualitative
leap in their careers, with a positive impact on society as a
whole. To ensure the selection process for the beneciaries
of the grants is rigorous, in this case (as in all its activities)
the Foundation has been advised by specic high-level
committees of experts for each area covered, which act with
complete independence.
In the case of grants for individuals, the scheme is notable
for the extensive and diverse range of specialization (11 elds
of research and creation), the prole of the recipients (at an
intermediate position in their studies or professional activities,
with outstanding results) and the exibility oered in the use of
funds. This year, 60 grants for individuals were awarded.
Grants for research teams were awarded to 27 applied
research projects in ve areas of preferential interest for the
BBVA Foundation: Biomedicine, Ecology and Conservation
Biology, Economics and the Digital Society; Digital Humanities
and big data.
The grants awarded in previous years have already had
positive results. In 2016, the BBVA Foundation showcased the
creations of the ten audiovisual artists who received grants in
the rst year.
Through the Multiverso Videoarte show, the Foundation
has opened its doors to the public as an exhibition center
for one of the most innovative and representative cultural
demonstrations of our times. This new line of action will
be continued and aspires to emulate the success of the
Foundation’s involvement with contemporary music.
Together with these grants, the dissemination of research
and creation remains one of the key cross-cutting elements
of the BBVA Foundation’s work, with a number of cycles of
conferences and the production of audiovisual materials.
The successful cycle of conferences on astrophysics and
cosmology
La ciencia del cosmos
(the Science of the
Cosmos) continued in 2016. Speakers at the fth edition of
this event included Nobel Prize winner Samuel Ting, professor
Mark McCaughrean from the European Space Research
and Technology Center, and David Reitze from the California
Institute of Technology (Caltech), one of the leaders behind
the direct detection of gravitational waves, considered the
scientic milestone of the year. Elsewhere, CERN (European
Organization for Nuclear Research) has continued to
cooperate with the BBVA Foundation with a new series of
conferences. Highlights included the talk given by Michael
Benedikt, head of the Future Circular Collider study. The talks
in both cycles are available in Spanish and English on the
BBVA Foundation website.
The dierent families of awards that the BBVA Foundation
organizes exclusively or in collaboration with other
institutions, have continued to give visibility and recognition
to people who contribute signicantly to scientic and
technological and cultural progress. This goal can be seen
in its highest form at the BBVA Foundation Frontiers of
Knowledge Awards, which are outstanding for the number
of categories, the standing of its jury and the international
prestige of the prizewinners. In 2016, the winners included
Stephen Hawking, who shared the Pure Sciences prize with
Viatcheslav Mukhanov.
The importance of the 11th year of the BBVA Foundation
Awards for Biodiversity Conservation was reected in the
awards ceremony, which has become a meeting point for the
Spanish conservation community.
The two families of awards organized in collaboration with
the Royal Spanish Society of Physics and the Royal Spanish
Society of Mathematics, have linked the BBVA Foundation
with the best of several generations of Spanish researchers in
these two pillars of scientic knowledge.
The Foundation oers support to other scientic societies
and helps ensure that international gures speak at their
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5. PRIMARY STAKEHOLDERS
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congresses. For example, the SEBBM-BBVA Foundation
Conference this year was hosted by Paul Nurse, winner of the
Nobel Prize for Medicine, and speakers at the 12th Spanish
Sociology Congress included sociologist and professor at the
universities of Princeton and Miami, Alejandro Portes.
As part of its cultural activities and the annual exhibitions
program, BBVA Foundation has been the exclusive sponsor
of an exhibition celebrating the 5th centennial of Hieronymus
Bosch, which attracted an all-time record of visitors (600,000)
to the Prado Museum. Louise Bourgeois,
Estructuras de la
existencia: las Celdas
(Structures of Existence: Cells), was this
year’s exhibition at the Guggenheim-Bilbao Museum, and
Fin
de partida: Duchamp, el ajedrez y las vanguardias
(Endgame:
Duchamp, Chess and the Avant-Gardes) was organized by
Fundació Miró, in Barcelona.
In addition to these sponsorships, the BBVA Foundation
is partnering with the Thyssen Bornemisza Museum on
the electronic front, with the launch this year of new digital
publications and apps such as Second Canvas.
Music is a key part of the Foundation’s cultural activity,
both through its support of some of the country’s leading
institutions (the Teatro Real in Madrid, the Bilbao Association
of Friends of the Opera (ABAO) and the Gran Teatre del
Liceu in Barcelona), and above all through its own initiatives
promoting the creation, performance and dissemination of
contemporary music.
In addition to the concerts held regularly in Madrid and Bilbao,
in 2016 BBVA Foundation played an important role in the
production of the latest CDs by pianists Judith Jáuregui (
X
)
and Alberto Rosado (
e-piano video & electronics
, with DVD
included).
Composer Tomás Marco gave a cycle of talks in 2016 called
“
Escuchar la Música de los siglos XIX y XX
” (Listening to
19th and 20th century music),
open to the public at the
Foundation’s oces in Bilbao and Madrid.
As part of its collaboration with regional symphonic
orchestras, the 4th AEOS-BBVA Foundation Conference was
held in 2016, and was used to identify rst-hand innovative
international experiences that help bring classical music to
new audiences.
In the socioeconomic eld, research produced as part of
the collaboration with the Valencia Institute of Economic
Research (Ivie) had a signicant impact. Highlights include
the regular projects, the U-Ranking report, the
Esenciales
(Essentials) series and the following monographs:
Distribution of income, economic crisis and redistribution
policies.
Educational accounts in Spain 2000-2013: resources,
expenses and results.
The competitiveness of Spanish regions in the knowledge
economy.
BBVA Research
BBVA makes available to shareholders, investors and the
public in general a wide range of reports, analyses and
studies on developments in the economy and the nancial
sector, both nationally and internationally, particularly
across the Group’s global footprint. The BBVA Research
Department prepares macroeconomic forecasts, in-depth
studies, research work and economic analyses on a variety of
topics: national and regional macroeconomics, central banks,
the nancial sector and regulations, the digital economy,
geostrategy, migration, nancial inclusion and country risk,
across various sectors. In 2016, BBVA Research has drafted
more than 1,650 economic publications.
These publications have been prepared in dierent
formats and document types: ashes, computer graphics,
presentations, working papers, books, observatories and
magazines, published with a varying frequency, ranging from
daily to quarterly and annual.
BBVA Research has won increasing prestige through its work.
In fact, its forecasts and analyses are regarded as a credible
alternative to ocial statistics, as can be seen by the frequent
mentions of its forecasts in the media and among analysts. As
a result, it has become, in fact, an opinion leader.
All this information is available and constantly updated on
the website www.bbvaresearch.com and the social media,
through which it participates very actively.
Lastly, BBVA Research has a global reach, as reected in the
languages in which the documents are available. Spanish
and English account for over 95% of the total, but documents
have also been written in Catalan, Basque and Portuguese.
Local educational and cultural initiatives
In 2016, in addition to supporting nancial education, BBVA
continued to focus on education in values to promote social
integration and training among children and young people.
A total of 150,165 people beneted directly from these social
and educational programs.
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Social and Educational Programs (BBVA Group. Direct Beneciaries)
2016 2015 2014
Pre-School and Primary Education 85,295 83,720 71,599
Secondary Education 17,575 53,451 200
Trainings for adults 47,295 152,945 244,893
TOTAL 150,165 290,116 316,629
BBVA continues to promote access to quality education for
underprivileged children and young people in South America
and Mexico through the Niños Adelante (Forward, children)
program. In 2016, €9,658,129 was allocated to it, beneting
73,273 school children. The program is adapted to the reality of
each country, and thus benets a variety of groups. In Mexico,
it helps children of Mexican parents who emigrate to the United
States in search of a better future; in Colombia, children in
deprived areas; and in Peru, children with poor reading skills. In
2016, initiatives continued to increase third-party commitment
to the program, with the participation of employees
volunteering as sponsors and donations from customers
through ATMs, online banking and nancial instruments.
Annex 19 -
Niños Adelante
(Forward, children)
BBVA also develops programs that address other aspects
of education, such as educational quality, focusing on
support for teachers, providing them with ongoing training
and tools to improve their educational work. At a global level,
BBVA has been a partner in the areas of science and culture
with the Organization of Ibero-American States (OIS) since
2008. BBVA supports the creation and development of the
OIS’s Ibero-American Institute for Early Childhood and the
Becas Paulo Freire
(Paulo Freire Scholarships) program
aimed at promoting the mobility of undergraduates and
university graduates who are taking studies that lead to a
teaching profession. It is also working to develop the project
Metas educativas 2021: La educación que queremos para la
generación de los bicentenarios
(Educational targets for 2021:
the education we want for the bicentennial generation).
Various programs are also being developed locally to improve
the quality of education. In Turkey, Garanti created the
Teachers Academy Foundation (ÖRAV) in 2009. Its aim is to
contribute to the personal and professional development of
teachers, who are the fundamental pillars for the growth of
the new generations. ÖRAV, the rst and only NGO in Turkey
working with a focus in this area, has provided support for
more than 90,000 teachers in 81 towns and cities. The
program also has a platform for the continuous training and
exchange of information accessed by more than 80,000
users.
In Spain, BBVA has supported the
Acción Magistral
(Teacher
Action) project since 2012. It is a joint initiative with the
FAD (Drug Addiction Support Foundation), UNESCO and
BBVA that, in addition to promoting the work of teachers
through the Teacher Action Prize, oers them online and in-
person training in a variety of areas and provides them with
educational resources to improve their performance. In 2016,
a total of 6,539 teachers participated in the program through
the platform and face-to-face meetings.
BBVA also works in the United States in partnership with
Teach for America, an organization that works to eliminate
educational imbalances for students with limited incomes.
The organization recruits, trains and supports talented
people who are committed to give classes in schools with
limited resources for two years. In 2016, a total of 1,110 people
beneted from this program.
BBVA is also working on a program to oer training in
values, through initiatives such as the BBVA Route, an
educational trip sponsored and organized by BBVA since
1993. In 2016 the latest trip was made to Mexico and Spain.
In addition to working actively on values such as eort, equal
opportunities, mutual respect and eliminating inequality,
the 182 participants from 21 countries received training
in developing entrepreneurial skills through the Social
Entrepreneurship Program developed by the INIT Group.
This encourages young people to get involved in resolving
social problems in their communities relating to health,
environmental sustainability, the collaborative economy and
educational innovation.
In addition to these projects to promote access to education,
educational quality and education in values, BBVA develops
other local training programs such as:
The Reading Counts initiative developed with Scholastic
Inc in the United States to encourage reading among
underprivileged children.
A partnership with NBA Cares, with initiatives including
nancial education sessions.
A partnership with the Government of the State of Chiapas
and the See Well to Learn Better Foundation in Mexico,
which works to help high-school children by providing
them with customized glasses.
The Children’s Knowledge Olympics also held in
Mexico, in collaboration with the Department of Public
Education. Each year prizes for academic excellence
are awarded to the top students in the sixth year of
elementary school.
The National Teaching Awards in Colombia is an initiative
that recognizes the eort made every day by thousands
of teachers across the country to promote reading and
writing among students.
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5. PRIMARY STAKEHOLDERS
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Annex 20 - Main educational programs
Additionally, BBVA has continued to support culture in a
number of countries across its global footprint in 2016.
In Mexico, the BBVA Bancomer Foundation, through its
Fomento Cultural
(Cultural Promotion) program, supported
art exhibitions attended by more than 14 million visitors,
musical festivals, theater workshops and lm projects
through various grants and schemes. The Bancomer Grant
for the Arts has become a unique cultural promotion platform
in Mexico. It makes use of private initiative to drive the
production of avant-garde cultural projects and excellence
in all art disciplines. It also invests with commitment and
enthusiasm in the professionalization and development of
the artistic community. The Bancomer-MACG (Carrillo Gil
Art Museum) program is a biannual initiative whose objective
is the professionalization of ten visual artists under the age
of 35. Each artist receives a personalized training program
and the support of specialist advisors. In addition, they are
given the opportunity to exhibit at prestigious museums that
also include a bilingual publication summarizing the process
involved in the program.
In Turkey, Garanti has focused on making cultural
environments suitable for research and production available
to society and on creating a truly authentic and independent
cultural institution that develops through interaction with
its users. This vision led to the reconstruction of the highly
successful Platform Garanti Current Art Center, Ottoman
Bank Museum and Garanti Gallery, which formed part of the
bank, as a single independent institution called SALT in 2011.
Since it was created, SALT has housed 9 exhibitions and
attracted more than 175,000 visitors.
A number of initiatives have also been supported in Argentina,
Chile, Colombia, the United States, Paraguay, Peru, Uruguay
and Venezuela that impact directly the development of the
cultural sector in the country. These include:
Sponsorship of the Art Song Concert at the Higher
Institute of Art in Argentina.
Also in Argentina, BBVA Francés supported the 6th
San
Isidro Jazz y Más
(San Isidro Jazz and More) Festival,
organized by the municipality of San Isidro.
In Venezuela, the Banco Provincial Foundation’s
exhibition program: Of note this year, as one of the events
celebrating the 4th centennial of the death of Miguel de
Cervantes, was the exhibition
Miguel EN Cervantes: El
retablo de las maravillas
.
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5. PRIMARY STAKEHOLDERS
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5. 5. 6. Fiscal transparency
Fiscal strategy
In 2015, the BBVA Board of Directors approved the
“Corporate principles in BBVA’s tax and scal strategy”.
The strategy forms part of BBVA’s corporate governance
system and establishes the policies, principles and values that
guide the way the Group behaves with respect to taxes. This
strategy has a global scope and aects everyone who is part
of the Bank. Compliance with the strategy is very important,
given the scale and impact that the tax contributions of large
multinationals such as BBVA have on the jurisdictions where
they operate.
Eective compliance with the scal strategy is duly monitored
and supervised by BBVA’s governing bodies.
Accordingly, BBVA’s scal strategy consists of the following
basis points:
BBVA´s decisions concerning scal-related matters are
determined by the payment of taxes, given that they
contribute heavily to the economies of all the jurisdictions
in which it operates. Tax payments are aligned with
eective business practices and the generation of value in
the dierent geographic areas in which BBVA operates.
Active adaptation to the new digital environment, also
in terms of taxation, through the incorporation of virtual
presence into the generation of value, and its consequent
valuation.
The establishment of reciprocal cooperative relations
with tax authorities that are based on the principles of
transparency, mutual trust, good faith and fairness.
Promotion of a clear, transparent and responsible
reporting strategy to stakeholders on its main scal-
related matters.
Total tax contribution
BBVA is committed to providing full transparency in tax
payments, which is why every year since 2011 we have
voluntarily disclosed all major tax payments in the countries
where we have a signicant presence.
The BBVA Group’s total tax contribution (TTC), which
uses a method created by PwC, includes its own and third-
party payments of corporate taxes, VAT, local taxes and fees,
income tax withholdings, Social Security payments, and
payments made during the year arising from tax litigation
in relation to the aforementioned taxes. In other words, it
includes both the taxes related to the BBVA Group companies
(taxes which represent a cost to them and aect their results)
and taxes collected on behalf of third parties. The TTC Report
gives all the stakeholders an opportunity to understand
our tax payment process and represents a forward-looking
approach and commitment to corporate social responsibility
by which BBVA assumes a leading position in scal
transparency.
Global Tax Contribution (BBVA Group. Millon euros)
2016 2015 2014
Own taxes 3,762 2,816 3,185
Third-party taxes 5,678 5,341 4,994
Total tax contribution 9,440 8,157 8,179
BBVA IN 2016
5. PRIMARY STAKEHOLDERS
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5. 5. 7. The environment
BBVA’s commitment to the environment is reected in
its global environmental policy. BBVA has adhered to the
major international agreements related to this matter,
such as the United Nations Environment Program Finance
Initiative (UNEP FI), the Equator Principles, the Principles
for Responsible Investment (PRI), the United Nations
Global Compact, the Green Bond Principles and the Carbon
Disclosure Project (CDP). BBVA is also a member of the
Spanish Green Growth Group and has subscribed to various
initiatives in support of a strong, ambitious response to
climate change, such as the statements by the European
Financial Services Round Table (EFR), the Alliance of Energy
Eciency Financing Institutions, and the Energy Ecient
Mortgage initiative of the European Mortgage Federation.
BBVA seeks to address the management of environmental
risks and the opportunities arising from such risks,
especially those related to climate change, by implementing
an integral approach. To that end, in 2016 it began working
on a framework that encompasses both aspects, and which
is expected to be released in 2017. The environmental risk
management tools at our disposal are described in this
Report, specically in the chapter on Social, Environmental
and Reputational Risk; the opportunities are set out in the
section on People-Centric Solutions, within the chapter on
Customers.
Eco-eciency
In 2015 we concluded our second Global Eco-eciency Plan
(GEP), far exceeding all the targets that were set. In 2016 we
worked on dening a new GEP, focused on positioning BBVA
among the world’s leading eco-eciency organizations. The
GEP has established the following core strategic areas and
global targets for 2016-2020:
1. Environmental management and sustainable
construction:
42% of occupants in environmentally certied
buildings
2. Energy and climate change:
5% reduction in electricity consumption per person
48% of energy comes from renewable sources
8% reduction in CO2 emissions per person
3. Water:
5% reduction in water consumption per person
9% of people in properties with alternative water
supply sources
4. Paper and waste:
5% reduction in paper consumption per person
30% of people in properties with sorted waste
collection
5. Extending the commitment:
Awareness campaigns for employees and suppliers
Main GEP indicators (BBVA Group)
2016 2015 2014
People working in certied
buildings (%)
(1)
(2)
40 33 18
Electricity usage per person (MWh) 5.8 6.4 6.4
Energy coming from renewable
sources (%)
(3)
25 30 n/av
CO2 emissions per person (T) 2.5 2.7 2.7
Water consumption per person (m
3
) 21.1 22.3 24
People working in buildings with
alternative sources of water supply (%)
10 14 n/av
Paper consumption per person (T) 0.1 0.1 0.1
People working in certied buildings (%) 32 33 18
n/av = not available.
(1)
Including IS0 14001 and LEED certications.
(2)
Including Torre Reforma and BBVA Bancomer Operational Center buildings in
Mexico, which are currently in the process of certication.
(3)
It corresponds to the electrical energy consumption of Spain with respect to the
total.
Note: indicators calculated based on employees and external sta.
To achieve these targets, in 2016 BBVA continued its eorts to
minimize its environmental footprint through initiatives in all
the countries where the Group is present, most notably:
100% of the energy supply in Spain to be procured from
renewable sources. In Mexico, a fteen-year agreement
has been signed to provide renewable energy to the
branch network and corporate head oces starting
in 2017. In Uruguay, 52 photovoltaic panels have been
installed in one of the main branches in the country, as
part of a pilot project aimed at implementing renewable
energy in the branch network.
Implementation of the new IFM (Integrated Facility
Management) model for properties in Spain, which has
saved 3.2 million kWh in its rst year, equivalent to the
consumption of 110 retail network branches and the
emission of 1,300 tons of CO2. This model is in its initial
implementation phase in Mexico and has already reported
an average saving of 15% on consumption at 251 branches.
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5. PRIMARY STAKEHOLDERS
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Automation of air conditioning and lighting systems in the
branches of countries such as Mexico, Colombia and Peru,
with average energy savings of 19% per year.
Renewal of Environmental Management System
certications under ISO 14001 in Argentina, Colombia,
Spain, Mexico, Peru, Uruguay and Turkey. In total, 1,047
branches and 77 of the Group’s buildings around the
world possess this certication. Likewise, Environmental
Management System certications under Standard ISO
50001 have been renewed for buildings on the La Moraleja
Campus and Ciudad BBVA in Madrid.
The new BBVA City corporate headquarters and the La
Isla service building in Madrid were granted the Gold
LEED certication for sustainable construction and
design, while the training buildings in Mexico, Toreo and
Murano received the Silver LEED certication. Tower A
in the Parque Titanium complex, Santiago, BBVA’s new
headquarters in Chile, was awarded a Gold LEED Core
& Shell certication. These certications are in addition
to the 16 BBVA buildings that have already received this
prestigious environmental certication.
Participation in the Earth Hour campaign, during which
123 buildings and 342 branches in 154 cities throughout
Spain, Portugal, Mexico, Colombia, Argentina, Peru,
Paraguay, Uruguay, Chile, the United States and Turkey
turned o their lights.
Annex 21 - Public water consumption
Annex 22 - Paper consumption.
Annex 23 - Consumption of energy.
Annex 24 - CO
2
emissions
Annex 25 - Waste management
BBVA IN 2016
5. PRIMARY STAKEHOLDERS
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5. 6. Suppliers
For BBVA, its suppliers are a fundamental part of its business
model. For this reason, given the possible impacts that could
be generated in the countries where the Bank operates, it was
decided in 2015 that its relationship with suppliers should be
governed not only by the Responsible Procurement Policy
and the corporate standard for Procurement of Goods and
Contracting Services, but also by the same Code of Conduct
in force within the rest of the Organization. These three
documents together establish criteria that aect both the
approval process and the tender specications and contracts.
The principles included in the Code of Conduct are
transferred to the purchasing function through the Principles
Applicable in the Procurement Process (IPA). They apply to
all units involved in the supply process, in any of the entities
of the BBVA Group, and link all the people who carry out
their work in some of the functions that are part of this
procurement process.
Basic supplier data (BBVA Group)
2016 2015 2014
Number of suppliers 4,240 4,598 4,321
Supplier turnover (million euros)
(1)
7,751 8,443 7,186
Supplier satisfaction index
(2)
n/a 81.6 81.6
Number of approved suppliers
(3)
1,148 1,037 893
n/a= not applicable.
(1)
Payments made to third parties. Does not include suppliers with amounts below
€100,000.
(2)
Biennial survey until 2015.
(3)
Data corresponding to BBVA, S.A.
BBVA IN 2016
5. PRIMARY STAKEHOLDERS
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5. 6. 1. Supply chain
BBVA has a global technological platform that supports
every stage of the procurement process in the Group
(budgeting, purchasing and nance): the Global Procurement
System (GPS). The platform is operational in Spain, Mexico,
Peru, Colombia, Chile, Argentina, Venezuela and the regional
procurement organization of South America (hub in Chile),
which provides the procurement services for the rest of the
countries in the region. GPS is integrated into the Adquira
marketplace technology platform. The platform enables
online interaction between the Group’s companies and
their suppliers in a collaborative environment through the
electronic exchange of documents.
It thus covers the main stages in the procurement process,
from the issue of orders to the registration of invoices, including
electronic invoicing, and ensures legal validity in Spain and
Mexico. In 2016 the Adquira marketplace functionality was
extended, allowing suppliers to manage online the exchange of
documents and information supporting the supplier approval
process, as well as storing their data with BBVA.
Within the GPS, BBVA has an electronic catalog procurement
tool (SRM) accessible through the intranet, which is designed
to issue decentralized procurement requests; i.e., directly
from the user area. SRM is available in Spain, Mexico and
Chile, and will be implemented in Peru in the rst quarter
of 2017. In addition, it is expected to be implemented in
Colombia and Argentina in the future.
Supplier Portal
In 2016, BBVA launched the Supplier Portal to facilitate
the Group’s online relationship with its suppliers. It is a
collaborative environment that targets companies and self-
employed workers or people interested in working with BBVA
Group, allowing them to interact with the Bank electronically
during the whole procurement cycle.
The Supplier Portal consists of two environments:
A public environment, accessible from the website
(https:/suppliers.bbva.com), which provides general
information on the procurement process in BBVA, as well
as relevant aspects of its purchasing model. In addition,
companies and self-employed workers who want to oer
their products and services to the Bank can register on
the portal and keep their data updated.
A private environment, that allows suppliers who are
already working with BBVA to operate fully online, from
the tender process (online auctions) and approval, to the
payment (e-invoice) through the Adquira platform.
In addition to the Portal, a Supplier Directory has also been
created. This is a new internal tool that can be accessed
via the intranet, allowing users to consult contact data and
general information about the Bank’s suppliers.
BBVA IN 2016
5. PRIMARY STAKEHOLDERS
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5. 6. 2. Supplier management
Approval process
BBVA has an approval process in place for its recurrent
suppliers with signicant procurement volumes. This approval
process assesses the nancial, legal, labor and reputational
position of the suppliers, gives information on their basic
technical capacities and veries that the shared values are the
same as the Group with respect to social responsibility. It also
determines whether suppliers are complying with their legal
responsibilities (employment or environmental regulations,
etc.) and whether they promote their civic responsibilities,
through compliance with the following aspects:
Compliance with UN social and environmental principles.
Adoption of internal measures to guarantee diversity and
equal opportunities inhuman resources management.
Adoption of measures to promote occupational health and
safety, preventing accidents and incidents at work.
Support freedom of association and collective bargaining
of workers in all the countries in which they operate.
Existence of a code of conduct or policy to prevent forced
labor, child labor, and other human rights violations, by the
company itself and by its subcontractors.
Existence of a code of conduct or policy to avoid bribery
and corruption.
Involvement in activities through direct actions or
donations or in collaboration with other organizations
and institutions to promote culture, scientic knowledge,
sport, the environment or marginalized sectors.
Hiring people with disabilities.
Existence of a corporate social responsibility policy in the
company.
The approval is reviewed periodically and is subject to
continuous monitoring. As part of the constant improvement
in this process, in 2016 an alert system for approved suppliers
was implemented, to ensure that updated information on
certain events, which could aect their solvency or risk is
available. Work is being done to establish global approval
criteria for all the geographical areas and to determine a
reputational risk assessment procedure for suppliers, which
aims to strengthen the current approval procedure.
The percentage of approved suppliers is 30%, which
accounts for 71% of the total awarded.
Percentage of local suppliers
BBVA has a rm commitment to contribute to economic and
social growth in the countries where it operates. Thus 97% of
the suppliers are local, and they account for 87% of the total
orders. For this purpose, local suppliers are considered those
whose tax identication code coincides with the country of
the company that receives the goods or services.
Impact management
A proper management of the real and potential impacts a
company such as BBVA can provoke is needed within the
procurement process. BBVA has a series of mechanisms and
rules in place to manage these impacts: Procurement Policy,
Approval Process and Corporate Standard for Procurement of
Goods and Contracting Services.
These impacts may be:
Environmental impacts.
Impacts created by unethical employment practices
within the suppliers’ companies.
Impacts derived from the lack of freedom of association.
Impacts on human rights (HR).
Positive or negative impacts on society.
The Responsible Procurement Policy establishes that during
the procurement process special attention should be paid to
comply with the legal requirements applicable with respect
to human rights, employment rights, rights of association
and environmental rights by all those involved in the
process, and to involve them in the Group’s eorts aimed at
preventing corruption. Likewise, the aim is to ensure that the
choice of suppliers is adapted to the internal rules in place at
any time, and in particular aligned to the values of the Group’s
Code of Conduct, based on respect for the law, commitment
to integrity, competition, objectivity, transparency, value
creation and condentiality. The clauses included in the
specications and the contractual models include the
following:
Compliance with the law in each geographical area, and
in particular with the obligations it imposes with respect
to personnel, Social Security or the systems of alternative
social insurance, recruitment of foreign workers, the Tax
Authority, public records, etc.
Compliance with current legislation on the social
integration of people with dierent capabilities.
BBVA IN 2016
5. PRIMARY STAKEHOLDERS
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Clauses that ensure policies are in place to avoid gender
discrimination, as well as measures to reconcile work and
family life.
Equality clause.
Compliance with labor, security and occupational health
legislation.
Anti-corruption declaration.
Adhesion to the United Nations Global Compact.
The Responsible Procurement Policy also establishes as one
of its principles to “raise awareness in social accountability
of sta and other stakeholders involved in the Group’s
procurement process.”
With respect to security rms, which are particularly critical
on these matters, the specications and contracts establish
compliance with current law, with particular attention to labor
law and law specic to these kinds of companies, as well as
compliance with human rights, non-discrimination policies,
equality, etc.
In order to promote inclusion and diversity BBVA in Spain
has been in contact with various Special Employment
Centers (CEE) to examine in depth the areas of potential
collaboration. As a result of this engagement we have signed a
signicant volume of contracts with CEE. The total volume of
purchases in 2016 was over €2.1m.
BBVA maintains its commitment to the environment, and
uses green energy for its buildings and branches in Spain.
Green energy certies a 100% renewable energy production
and source, avoiding emissions of CO2 and other polluting
gases. This commitment has been applied to Mexico, creating
a renewable energy integration plan for its buildings and
branches. LEED and ISO 14001 energy certications are
further proof of this commitment.
Annex 26 - Number of suppliers and annual turnover
Annex 27 - Average payment period to suppliers
Annex 28 - Supplier satisfaction index
Annex 29 - Supplier Approval
BBVA IN 2016
5. PRIMARY STAKEHOLDERS
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5. 7. Supervisors and regulators
The nature of the operations involved makes banking one
of the key sectors of a country’s economy, as much of the
savings, investment and nance are channeled through
it. That is why banks are subject to special scrutiny,
which is known as banking regulation and supervision.
The regulators and supervisors are therefore important
stakeholders in the nancial industry in general and BBVA in
particular.
Public regulation aims to ensure that nancial institutions
operate correctly, strengthen their resilience to adverse
events and harmonize the interests of all the parties directly
aected (such as banks, savers and investors) with the
general interest.
Over the last few years, a number of European authorities
such as the European Banking Authority (EBA), the European
Securities and Markets Authority (ESMA), the European
Commission, etc. and also global authorities such as the
Financial Stability Board (FSB), Basel, etc. have developed a
regulatory framework to improve the strength of the nancial
system and thus reduce the virulence and also the probability
of future nancial crises.
Normative context
Procedure for the adoption of laws
Mandate
Stakeholders
consultation
Analysis and issue of a
Legistative Proposal from the
European Commission
EBA technical
standards
mandate
Proposal for
implementing technical
standards
EBA
Co-decision procedure
initiated
If favorable opinion issued by
European Parliament and the
Coucil: the law isadopted
published in the Ocial
Journal of the European Union
G-20
FSB / BIS
1 2 3
6
7
4
5
Leer más
Given the importance of the new regulatory agenda, BBVA
has maintained a constant dialog with the dierent regulators
to adapt to this new reality under the best conditions.
Parallel to this regulation, over the last few years changes
have also taken place in the supervisory environment,
especially in the Eurozone. In June 2012 the heads of state
and government of the European Union promoted the
creation of a single banking supervisor with the aim of
improving the quality of supervision in the Eurozone, boosting
market integration and breaking the negative vicious circle
that had been created between the lack of condence in
banking institutions and the doubts about the sustainability of
public debt.
Thus, the launch of the Single Supervisory Mechanism
(SSM) on November 4, 2014 has been one of the fundamental
milestones in banking union. Thanks to the SSM, all the
nancial institutions in the Eurozone of a certain size will be
supervised under the same regulatory and methodological
framework, regardless of their geographic location. The
appearance of this new mechanism, which is now in fact
the supervisor with the greatest volume of assets under its
responsibility, requires banks to adapt to the new environment.
BBVA IN 2016
5. PRIMARY STAKEHOLDERS
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In addition, the entry into force of Directive 2014/59/EU on
January 1, 2015 has involved the establishment of a new
European framework for the restructuring and resolution of
credit institutions and investment rms, called the Single
Resolution Mechanism (SRM), which has been fully
operational since January 2016. Its mission is to ensure an
orderly resolution of insolvent banks or banking groups,
with the minimum impact on the real economy and public
nances of the member states participating in the banking
union. Its role is not limited to crisis situations; its priority
objective is to implement and identify preventive and
preparatory measures, such as developing resolution plans,
establishing a minimum requirement for own funds and
eligible liabilities (MREL) and identifying and dealing with
barriers to resolution.
In the case of BBVA it was decided to strengthen the
relationship with this supervisor with the creation of the
Global Supervisory Relations unit, which is responsible for
coordinating relations with the SSM and other supervisors,
such as the Single Resolution Mechanism (SRM), and to
facilitate relations with local supervisors. SSM supervision
takes place through mixed groups made up of Bank of Spain
teams located in Madrid and ECB teams located in Frankfurt,
together named Joint Supervisory Teams (JST). For this
reason, BBVA has decided to open an oce in Frankfurt to
facilitate dialog with the ECB teams. The SRM itself is made
up of the Single Resolution Board (SRB), based in Brussels,
and the National Resolution Authorities (NRA), which in the
case of Spain are the Bank of Spain, the preventive resolution
authority, and the Fund for Orderly Bank Restructuring
(FROB), the executive resolution authority.
Joint Supervisory Team
(JST)
Global Risk Management
Finance
General Secretary
Legal & Compliance
Business areas
Internal Audit
Accounting & Supervisors
Main areas involved in the
day by day supervision
Global Supervisory
Relations (GSR)
Message coherence
Internal and external dialogue
Global Supervisory Relations
(GSR)
Facilitador / Coordinador
Holistic vision of supervision
In 2016, supervisory activity was intense in terms of requests
for information, meetings and dialog between BBVA and the
supervisor.
In the case of SSM this ongoing communication is based on
four pillars:
Review of the business model.
Corporate governance and risk appetite.
Capital risk.
Liquidity risk.
Thus prudential supervision is acquiring a holistic component
that extends beyond a simple nancial review of the entity,
with long-term vision acquiring increasing relevance. As well
as the relationship with the SSM, the dialog with the SRM
also took on signicant relevance in 2016. Although the focus
of the SRM is dierent from that of the SSM, it will play a
signicant role over the coming years as another player to
be taken into account within the supervisory and regulatory
spectrum.
In conclusion, for BBVA constant dialog with the supervisor
and regulator has become a fundamental task for adapting
to this new environment, characterized by greater regulatory
pressure and a stronger and more intrusive supervisory
culture. Only this way BBVA can guarantee a correct response
to the supervisors’ new regulatory requirements and
demands.
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6. REPORT PREPARATION GUIDELINES
P. 121
6. Report preparation
guidelines
6. 1. Criteria and standards P.122
6. 1. 1. Principles to guarantee information quality P.123
6. 2. GRI indicators P.124
6. 2. 1. General standard disclosures GRI G4 P.124
6. 2. 2. Specic standard GRI G4 disclosures P.129
6. 3. Independent assurance report P.139
BBVA IN 2016
6. REPORT PREPARATION GUIDELINES
P. 122
6. 1. Criteria and standards
The BBVA in 2016 report has been prepared in accordance
with the latest reporting trends. This involves following various
internationally recognized standards, such as the Conceptual
Framework of the IIRC (hereinafter the <IR> Framework),
the G4 Sustainability Reporting Guidelines under the Global
Reporting Initiative, at a comprehensive level, and the AA1000
standard.
The <IR> Framework has been developed by the International
Integrated Reporting Council (IIRC), the global coalition of
regulators, investors, companies, regulators of standards,
issuers of regulations, accounting professionals and non-
governmental organizations (NGOs). This <IR> Framework
sets out the principles and contents that govern an integrated
report.
In accordance with the <IR> Framework, the BBVA in
2016 report contains relevant and concise nancial and
non-nancial information about the strategy, corporate
governance and performance of BBVA Group in the year
ending 31 December 2016. This eort focuses not only on
nancial results but also on the progress, achievements and
impacts achieved in our relationships with stakeholders.
The report includes a materiality analysis, which identies the
relevant issues for stakeholders. Dierent approaches to deal
with these issues are used throughout the report.
In addition, it includes information on the social impacts
generated from the Bank´s activity, based on the
recommendations for reporting on the creation of value and
social impact, which are proposed in the application Guide of
the concept of capitals of the <IR> Banking Network. BBVA
has been a member of this group since 2011, as a pioneer in
Spain.
This report has also been drafted in accordance with the
Global Reporting Initiative Sustainability Reporting Guidelines
(GRI G4), at a comprehensive level, including relative
information about basic, general and specic content and the
nancial supplement for which information has been available
for publication. It also follows the AA1000 APS standard.
In addition, this information reects the 2016 Progress
Report on the United Nations Global Compact and includes
BBVA actions related to the United Nations Millennium
Development Goals.
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6. 1. 1. Principles to guarantee information quality
The principles for preparing the non-nancial information of
the BBVA in 2015 report are in line with the GRI G4 guidelines
in terms of denition of content and information quality:
Stakeholder engagement: BBVA species its stakeholders
and explains how it has responded to their reasonable
expectations and interests.
Sustainability context: The non-nancial information
in the BBVA in 2016 report presents the organization’s
performance in the broadest context of sustainability,
considering the information available.
Materiality: The non-nancial information in the BBVA in
2016 report covers aspects that show the organization’s
signicant economic, environmental and social impact, or
that considerably inuence stakeholder evaluations and
decisions.
Exhaustiveness: The non-nancial information in the
BBVA in 2016 report deals with material aspects and
their coverage, reecting their signicant economic,
environmental and social impacts. The stakeholders can
also analyze the organization’s performance during the
period under analysis.
Equilibrium: The non-nancial information in the BBVA
in 2016 report reects both the positive and negative
aspects of its performance in order to provide an informed
evaluation of its overall performance.
Comparability: BBVA presents the information
consistently so that stakeholders can analyze the changes
in BBVA’s performance.
Accuracy: The information is accurate and detailed
enough for stakeholders to analyze the organization’s
performance.
Punctuality: BBVA presents its reports in accordance with
a regular calendar, so that stakeholders can access the
information when required and make informed decisions.
Clarity: The information is presented in such a way that
the stakeholders at which it is targeted can easily access
and understand it.
Reliability: The information has been compiled, registered,
analyzed and presented so that it can be evaluated
by an external auditor. The scope and methodology
of the external review conducted can be viewed in
the “Independent Review Report of the non-nancial
information in the BBVA Group’s BBVA in 2016 report”.
An action plan is then drawn up to ensure that the
recommendations arising from review processes are
implemented.
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6. 2. GRI indicators
6. 2. 1. General standard disclosures GRI G4
Indicator Page / Omission Review
Strategy and analysis
G4-1
Provide a statement from the most senior decision-maker of the organization (such as CEO, Chair
or equivalent senior position) about the relevance of sustainability to the organization and the
organization’s strategy for addressing sustainability.
Letter from the Group Executive Chairman
✓
G4-2
Provide a description of the key impacts, risks and opportunities.
Global Risk Management
Impact on people through the business
✓
Indicator Page / Omission Review
Organizational prole
G4-3
Report the name of the organization
Performance
✓
G4-4
Report the primary brands, products and services
Performance
✓
G4-5
Report the location of the organization's headquarters
Performance
✓
G4-6
Report the number of countries where the organization operates, and names of countries where
either the organization has signicant operations or that are specically relevant to the sustainability
topics covered in the report
Performance
✓
G4-7
Report the nature of ownership and legal form
Performance
CFS (Report management)
ACGR (section A)
✓
G4-8
Report the markets served (including geographic breakdown, sectors involved and types of
customers and beneciaries)
Performance
✓
G4-9
Report the scale of the organization, including:
- total number of employees;
- total number of operations;
- net sales or net revenues;
- total capitalization broken down in terms of debt and equity (for private sector organizations); and
- quantity of products or services provided
Performance
✓
G4-10
a. Report the total number of employees by employment contract and gender.
b. Report the total number of permanent employees by employment type and gender.
c. Report the total workforce by employees and supervised workers and by gender.
d. Report the total workforce by region and gender.
e. Report whether a substantial portion of the organization’s work is performed by workers who are
legally recognized as self-employed, or by individuals other than employees or supervised workers,
including employees and supervised employees of contractors.
f. Report any signicant variations in employment numbers
The team
✓
G4-11
Report the percentage of total employees covered by collective bargaining agreements
The team
✓
(1)
G4-12
Describe the organization's supply chain
Suppliers
✓
G4-13
Report any signicant changes during the reporting period regarding the organization's size,
structure, ownership or its supply chain
Suppliers
CFS (Note 3)
✓
Commitments to external initiatives
G4-14
Report whether and how the precautionary approach or principle is addressed by the organization
Responsible banking model
Compliance system
Internal control model
✓
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Indicator Page / Omission Review
G4-15
List externally developed economic, environmental and social charters, principles or other initiatives
to which the organization subscribes or which it endorses
Responsible banking model
Compliance system
Social, environmental and reputational risks
✓
G4-16
List memberships of associations and national or international advocacy organizations in which the
organization:
- holds a position on the governance body;
- participates in projects or committees;
- provides substantive funding beyond routine membership dues;
- views membership as strategic
Responsible banking model
Compliance system
Social, environmental and reputational risks
✓
Indicator Page / Omission Review
Identied material aspects and boundaries
G4-17
a. List all entities included in the organization's consolidated nancial statements or equivalent
documents
b. Report whether any entity included in the organization's consolidated nancial statements or
equivalent documents is not covered by the report
Performance
CFS (Note 3)
✓
G4-18
a. Explain the process for dening the report content and the aspect boundaries
b. Explain how the organization has implemented the reporting principles for dening report content.
Materiality analysis
Criteria and standards
✓
G4-19
List all the material aspects identied in the process for dening report content
Materiality analysis
✓
G4-20
For each material aspect, report the aspect boundary within the organization
Materiality analysis
Criteria and standards
✓
G4-21
For each material aspect, report the aspect boundary outside the organization
Materiality analysis
Criteria and standards
✓
G4-22
Report the eect of any restatements of information provided in previous reports and the reasons for
such restatements
Criteria and standards
✓
G4-23
Report signicant changes from previous reporting periods in the scope and aspect boundaries
Criteria and standards
✓
Indicator Page / Omission Review
Stakeholder engagement
G4-24
Provide a list of stakeholder groups engaged by the organization
Materality analysis
✓
G4-25
Report the basis for identication and selection of stakeholders with whom to engage
Materality analysis
✓
G4-26
Report the organization's approach to stakeholder engagement, including frequency of engagement
by type and by stakeholder group, and an indication of whether any of the engagement was
undertaken specically as part of the report preparation process
Materality analysis
✓
G4-27
Report key topics and concerns that have been raised through stakeholder engagement, and how
the organization has responded to those key topics, including through its reporting. Report the
stakeholder groups that raised each of the key topics and concerns
Materality analysis
✓
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Indicator Page / Omission Review
Report prole
G4-28
Reporting period (such as scal or calendar year) for the information provided
Criteria and standards
✓
G4-29
Date of most recent previous report (if any)
Criteria and standards
✓
G4-30
Reporting cycle (such as annual, biennial, etc.)
Criteria and standards
✓
G4-31
Provide the context point for questions regarding the report or its contents
Criteria and standards
✓
GRI content index
G4-32
a. Report the “in accordance” option the organization has chosen
b. Report the GRI content index for the chosen option
c. Report the reference to the External Assurance Report, if the report has been externally assured
Optional comprehensive conformity
Criteria and standards
✔
Assurance
G4-33
a. Report the organization’s policy and current practice with regard to seeking external assurance for
the report
b. If not included in the assurance report accompanying the sustainability report, report the scope
and basis of any external assurance provided
c. Report the relationship between the organization and the assurance providers
d. Report whether the highest governance body or senior executives are involved in seeking
assurance for the organization’s sustainability report
Criteria and standards
✔
Indicator Page / Omission Review
Governance
G4-34
Report the governance structure of the organization, including committees of the highest governance
body. Identify any committees responsible for decision-making on economic, environmental and
social impacts
Corporate governance system
ACGR (Section C)
✓
G4-35
Report the process for delegating authority for economic, environmental and social topics from the
highest governance body to senior executives and other employees
Responsible banking model
Corporate governance system
ACGR (Section C)
✓
G4-36
Report whether the organization has appointed an executive-level position or positions with
responsibility for economic, environmental and social topics, and whether post holders report
directly to the highest governance body
Responsible banking model
ACGR
✓
G4-37
Report processes for consultation between stakeholders and the highest governance body on
economic, environmental and social topics. If consultation is delegated, describe to whom and any
feedback processes to the highest governance body
Corporate governance system
Compliance system
✓
G4-38
Report the composition of the highest governance body and its committees
Corporate governance system
ACGR (Section C)
✓
G4-39
Report whether the chair of the highest governance body is also an executive ocer (and, if so, his or
her function within the organization's management and the reasons for this arrangement)
ACGR (Section C)
✓
G4-40
Report the nomination and selection processes for the highest governance body and its committees,
and the criteria used for nominating and selecting the highest governance body members
ACGR (Section C)
✓
G4-41
Report processes for the highest governance body to ensure conicts of interest are avoided and
managed. Report whether conicts of interest are disclosed to stakeholders
Highest governance body´s role in setting purpose, values, and strategy.
ACGR (Section C)
✓
G4-42
Report the highest governance body's and senior executive's roles in the development, approval, and
updating of the organization's purpose, values or mission statements, strategies, policies and goals
related to economic, environmental and social impacts
Corporate governance system
ACGR (Section C)
✔
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Indicator Page / Omission Review
Highest governance body’s competencies and performance evaluation
G4-43
Report the measures taken to develop and enhance the highest governance body's collective
knowledge of economic, environmental and social topics
Corporate governance system
Compliance system
✔
G4-44
a. Report the processes for evaluation of the highest governance body’s performance with respect to
the governance of economic, environmental and social topics. Report whether such evaluation is
independent or not, and its frequency. Report whether such evaluation is a self-assessment
b. Report actions taken in response to evaluation of the highest governance body’s performance with
respect to governance of economic, environmental and social topics, including, as a minimum,
changes in membership and organizational practice
Corporate governance system
ACGR (Section C)
✔
Highest governance body’s role in risk management
G4-45
a. Report the highest governance body’s role in the identication and management of economic,
environmental and social impacts, risks, and opportunities. Include the highest governance body’s
role in the implementation of due diligence processes
b. Report whether stakeholder consultation is used to support the highest governance body’s
identication and management of economic, environmental and social impacts, risks, and
opportunities
ACGR (Section C and E)
✔
G4-46
Report the highest governance body's role in reviewing the eectiveness of the organization's risk
management processes for economic, environmental and social topics
ACGR (Section C and E)
✔
G4-47
Report the frequency of the highest governance body's review of economic, environmental and social
impacts, risks and opportunities
ACGR (Section C and E)
✔
Highest governance body's role in sustainability reporting
G4-48
Report the highest committee or position that formally reviews and approves the organization's
sustainability report and ensures that all material aspects are covered
Responsible banking system
✓
Highest governance body’s role in evaluating economic, environmental and social performance
G4-49
Report the process for communicating critical concerns to the highest governance body
Materiality analysis
ACGR (Section C)
✔
G4-50
Report the nature and total number of critical concerns that were communicated to the highest
governance body and the mechanism(s) used to address and resolve them
Materiality analysis
✔
Remuneration and incentives
G4-51
a. Report the remuneration policies for the highest governance body and senior executives
The team
Remuneration Committee Activity Report
✓
b. Report how performance criteria in the remuneration policy relate to the highest governance
body's and senior executives' economic, environmental and social objectives
The team
Remuneration Committee Activity Report
✓
G4-52
Report the process for determining remuneration. Report whether remuneration consultants are
involved in determining remuneration and whether they are independent of management. Report any
other relationships which the remuneration consultants have with the organization...
The team
Remuneration Committee Activity Report
✓
(2)
G4-53
Report how stakeholder's views are sought and taken into account regarding remuneration, including
the results of votes on remuneration policies and proposals, if applicable
Materiality analysis
Corporate governance system
Remuneration Committee Activity Report
✓
G4-54
Report the ratio of the annual total compensation for the organization's highest-paid individual in
each country of signicant operations to the median annual total compensation for all employees
(excluding the highest-paid individual) in the same country
Condential information
✗
G4-55
Report the ratio of percentage increase in annual total compensation for the organization's highest-
paid individual in each country of signicant operations to the median percentage increase in annual
total compensation for all employees (excluding the highest-paid individual) in the same country
Condential information
╳
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Indicator Page / Omission Review
Ethics and integrity
G4-56
Describe the organization's values, principles, standards and norms of behavior such as codes of
conduct and codes of ethics
Responsible banking model
Compliance system
✓
G4-57
Report the internal and external mechanisms for seeking advice on ethical and lawful behavior, and
matters related to organizational integrity, such as helplines or advice lines
Compliance system
✓
G4-58
Report the internal and external mechanisms for reporting concerns about unethical or unlawful
behavior, and matters related to organizational integrity, such as escalation through line
management, whistleblowing mechanisms or hotlines
Compliance system
✓
ACGR Annual Corporate Governance Report
CFS Consolidated Financial Statements 2016
✓ Content revised according to the scope described and through procedures indicated in the Independent Review Report of the Responsible Banking information.
✗ Content not reviewed
(1)
Percentage not reported.
(2)
The processes are only reported to determine the remuneration.
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6. 2. 2. Specic standard GRI G4 disclosures
Economic category
Indicator Page / Omission Scope Review
Material aspects identied and
coverage of the material aspect
Economic performance
G4-EC1
Direct economic value generated and
distributed
Impact on people through the
business
Global
✓
Solvency and nancial management (Internal)
Contribution to the development of local
societies (internal)
G4-EC2
Financial implications and other risks and
opportunities for the organization’s activities
due to climate change
People-Centric Solutions
Social, environmental and
reputational risks
CDP 2016 Climate Change (CCO.1
and CCO.2)
Global
✓
Eco-eciency, environment, climate change
(internal)
G4-EC3
Coverage of the organization’s dened benet
plan obligations
CFS (Note 2.2.12) Global
✓
Talent attraction, development and retention
G4-EC4
Financial assistance received from government
The team
CFS (Appendix XIII, Anual Banking
report)
Spain
✓
Solvency and nancial management (internal)
Market presence
G4-EC5
Ratios of standard entry level wage by gender
compared to local minimum wage at signicant
locations of operation
Condential information
✗
Talent attraction, development and retention
(internal)
Human rights, employee rights and employment
quality (internal)
Diversity and work life balance (internal)
G4-EC6
Proportion of senior management hired from
the local community at signicant locations of
operation
The percentage of management
team working in their country of
birth is 87%
Global ✓
(3)
Talent attraction, development and retention
(internal)
Human rights, employee rights and employment
quality (internal)
Diversity and work life balance (internal)
Indirect economic impacts
G4-EC7
Development and impact of infrastructure
investments and services supported
Impact on people through the
business
Global
✓
Contribution to the development of local
societies (external)
G4-EC8
Signicant indirect economic impacts, including
the extent of impacts
Impact on people through the
business
Global
✓
Contribution to the development of local
societies (external)
Procurement practices
G4-EC9
Proportion of spending on local suppliers at
signicant locations of operation
Suppliers Global ✓
(3)
Responsible procurement/ outsourcing
(external)
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Environmental category
Indicator Page / Omission Scope Review
Material aspects identied
and coverage of the
material aspect
Materials
G4-EN1
Materials used by weight or volume (paper).
Environment Global ✓
(5)
(4)
Eco-eciency, environment, climate
change (external)
G4-EN2
Percentage of materials used that are recycled
input materials (paper).
Environment Global ✓
(5)
Eco-eciency, environment, climate
change (external)
Energy
G4-EN3
Energy consumption within the organization.
Environment Global ✓
(5)
Eco-eciency, environment, climate
change (external)
G4-EN4
Energy consumption outside of the
organization.
Given the activities of BBVA Group, this indicator
is not considered material
✗
G4-EN5
Energy intensity (per employee).
Environment Global ✓
(5)
Eco-eciency, environment, climate
change (external)
G4-EN6
Reduction of energy consumption.
Environment Global ✓
(5)
Eco-eciency, environment, climate
change (external)
G4-EN7
Reductions in energy requirements of products
and services.
Given the activities of BBVA Group, this indicator
is not considered material
✗
Water
G4-EN8
Total water withdrawal by source.
Environment Global ✓
(5)
(6)
Eco-eciency, environment, climate
change (external)
G4-EN9
Water sources signicantly aected by
withdrawal of water.
Given the activities of BBVA Group, this indicator
is not considered material
✗
G4-EN10
Percentage and total volume of water recycled
and reused.
Given the activities of BBVA Group, this indicator
is not considered material
✗
Biodiversity
G4-EN11
Operational sites owned, leased, managed in, or
adjacent to, protected areas and areas of high
biodiversity value outside protected areas.
The BBVA oces are in urban settings, which
therefore have no impact on protected natural
areas and/or biodiversity.
✗
G4-EN12
Description of signicant impacts of activities,
products, and services on biodiversity in
protected areas and areas of high biodiversity
value outside protected areas.
The BBVA oces are in urban settings, which
therefore have no impact on protected natural
areas and/or biodiversity.
✗
G4-EN13
Habitats protected or restored.
The BBVA oces are in urban settings, which
therefore have no impact on protected natural
areas and/or biodiversity.
✗
G4-EN14
Total number of IUCN Red List species and
national conservation list species with habitats
in areas aected by operations, by level of
extinction risk.
The BBVA oces are in urban settings, which
therefore have no impact on protected natural
areas and/or biodiversity.
✗
Emissions
G4-EN15
Direct greenhouse gas emissions (scope 1).
Environment Global ✓
(5)
Eco-eciency, environment, climate
change (external)
G4-EN16
Energy indirect greenhouse gas emissions
(scope 2).
Environment Global ✓
(5)
Eco-eciency, environment, climate
change (external)
G4-EN17
Other indirect greenhouse gas emissions
(scope 3).
Environment Global ✓
(5)
(7)
Eco-eciency, environment, climate
change (external)
G4-EN18
Greenhouse gas emissions intensity.
Environment Global ✓
(5)
Eco-eciency, environment, climate
change (external)
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Indicator Page / Omission Scope Review
Material aspects identied
and coverage of the
material aspect
G4-EN19
Reduction of greenhouse gas emissions.
Environment Global ✓
(5)
Eco-eciency, environment, climate
change (external)
G4-EN20
Emissions of ozone-depleting substances.
Given the activities of BBVA Group, this indicator
is not considered material
✗
G4-EN21
NOx, SOx and other signicant air emissions.
Given the activities of BBVA Group, this indicator
is not considered material
✗
Euents and Waste
G4-EN22
Total water discharge by quality and destination.
Given the activities of BBVA Group, this indicator
is not considered material
✗
G4-EN23
Total weight of water by type and disposal
method.
Environment Global ✓
(5)
Eco-eciency, environment, climate
change (external)
G4-EN24
Total number and volume of signicant spills.
Given the activities of BBVA Group, this indicator
is not considered material
✗
G4-EN25
Weight of transported, imported, exported, or
treated waste deemed hazardous under the
terms of the Basel Convention annex I, II, III,
and VIII, and percentage of transported waste
shipped internationally.
Given the activities of BBVA Group, this indicator
is not considered material
✗
G4-EN26
Identity, size, protected status, and biodiversity
value of water bodies and related habitats
signicantly aected by the organization’s
discharges of water and runo.
Given the activities of BBVA Group, this indicator
is not considered material
✗
Products and Services
G4-EN27
Extent of impact mitigation of environmental
impacts of products and services.
Compliance system
Social, environmental and reputational risks
Environment
Global
✓
Social and environmentally
responsible nance (external)
Eco-eciency, environment, climate
change (external)
G4-EN28
Percentage of products sold and their
packaging materials that are reclaimed by
category.
Given the activities of BBVA Group, this indicator
is not considered material
✗
Compliance
G4-EN29
Monetary value of signicant nes and total
number of non-monetary sanctions for
non-compliance with environmental laws and
regulations.
As of December 31, 2016, the BBVA Group has
no nes or penalties for non-compliance with
regulations related to signicant environmental
aspects.
Global
✓
Ethical conduct (external)
Human rights, employee rights and
employment quality (external)
Transport
G4-EN30
Signicant environmental impacts of
transporting products and other goods and
materials for the organization’s operations, and
transporting members of the workforce.
Given the activities of BBVA Group, this indicator
is not considered material
✗
Environmental investments and expenditures
G4-EN31
Total environmental protection expenditures
and investments by type.
The GEP includes a series of investments
needed to achieve the targets set. They are not
signicant in economic terms with respect to
BBVA Group’s equity and earnings
✓
(14)
Eco-eciency, environment, climate
change (external)
Supplier Environmental Assessment
G4-EN32
Percentage of new suppliers that were screened
using environmental criteria.
Material aspects identied: 15 and 23
Coverage of the material aspect: External
BBVA has not screened suppliers using
environmental criteria given that the perceived
impact on the Group is not signicant
✗
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Indicator Page / Omission Scope Review
Material aspects identied
and coverage of the
material aspect
G4-EN33
Signicant actual and potential negative
environmental impacts in the supply chain and
actions taken.
Material aspects identied: 23
Coverage of the material aspect: External
BBVA has not analyzed the impacts in this
aspect because the level of risks for the Group is
not signicant given the nature of its suppliers
✗
Environment Grievance Mechanisms
G4-EN34
Number of grievances about environmental
impacts led, addressed, and resolved through
formal grievance mechanisms.
Material aspects identied: 14 and 18
Coverage of the material aspect: External
BBVA has not been subject to any signicant
sanctions or grievances for breach of
environmental regulations
Global
✓
Ethical conduct (external)
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Social category
Indicator Page / Omission Scope Review
Material aspects identied and
coverage of the material aspect
Labor practices and decent work
Employment
G4-LA1
Total number and rates of new employee hires
and employee turnover by age group, gender and
region
The team Global
✓
Talent attraction, development and
retention (internal)
Human rights, employee rights and
employment quality (internal)
Diversity and work life balance (internal)
G4-LA2
Benets provided to full-time employees that
are not provided to temporary or part-time
employees, by signicant locations of operation
Not available.
The proportion of temporary employees in
BBVA is not signicant (5,7%)
✗
Talent attraction, development and
retention (internal)
Human rights, employee rights and
employment quality (internal)
Diversity and work life balance (internal)
G4-LA3
Return to work and retention rates after parental
leave, by gender
Not reported. There is no homogeneous
criterion of this indicator at the Group level
✗
Talent attraction, development and
retention (internal)
Human rights, employee rights and
employment quality (internal)
Diversity and work life balance (internal)
Labor/Management relations
G4-LA4
Minimum notice periods regarding operational
changes, including whether these are specied in
collective agreements
There is no established minimum notice
period. In any event, the organizational
changes in BBVA Group are analyzed on a
case-by-case basis, so the negative impact
on employees can be avoided or mitigated,
and always within the legal provisions of
each country
Global
✓
Talent attraction, development and
retention (internal)
Human rights, employee rights and
employment quality (internal)
Diversity and work life balance (internal)
Occupational health and safety
G4-LA5
Percentage of total workforce represented in
formal joint managementworker health and
safety committees that help monitor and advise
on occupational health and safety programs
100% of the workers are represented by a
State Health and Safety Committee that
channels and assumes the consultation
and the participation of workers in all
matters related to the prevention of
occupational hazards in the company.
It is composed of eleven prevention
delegates and 11 members of the business
representation. Likewise, there are Health
and Safety Committees in the large
centers and in the territorial ones
Spain
✓
Human rights, employee rights and
employment quality (internal)
G4-LA6
Type of injury and rates of injury, occupational
diseases, lost days, and absenteeism, and total
number of work-related fatalities, by region and
by gender
The team Spain ✓
(3) (5)
Human rights, employee rights and
employment quality (internal)
G4-LA7
Workers with high incidence or high risk of
diseases related to their occupation
Given the nature of BBVA’s activity, no
high risk of serious diseases related to the
workers’ occupation has been identied
✗
G4-LA8
Health and safety topics covered in formal
agreements with trade unions
Condential information
✗
Human rights, employee rights and
employment quality (internal)
Training and education
G4-LA9
Average hours of training per year per employee
by gender, and by employee category
The team Global ✓
(5)
(8)
Talent attraction, development and
retention (internal)
Human rights, employee rights and
employment quality (internal)
G4-LA10
Programs for skills management and lifelong
learning that support the continued employability
of employees and assist them in managing career
endings
The team Global
✓
Talent attraction, development and
retention (internal)
Human rights, employee rights and
employment quality (internal)
BBVA IN 2016
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Indicator Page / Omission Scope Review
Material aspects identied and
coverage of the material aspect
G4-LA11
Percentage of employees receiving regular
performance and career development reviews, by
gender and by employee category
The team Global
✓
Talent attraction, development and
retention (internal)
Human rights, employee rights and
employment quality (internal)
Diversity and work life balance (internal)
Diversity and equal opportunity
G4-LA12
Composition of governance bodies and
breakdown of employees per employee category
according to gender, age group, minority group
membership, and other indicators of diversity
The team
ACGR (Section C)
Global
✓
Talent attraction, development and
retention (internal)
Human rights, employee rights and
employment quality (internal)
Diversity and work life balance (internal)
Equal remuneration for women and men
G4-LA13
Ratio of basic salary and remuneration of women
to men by employee category, by signicant
locations of operation
Condential information
✗
Talent attraction, development and
retention (internal)
Human rights, employee rights and
employment quality (internal)
Diversity and work life balance (internal)
Supplier assessment for labor practices
G4-LA14
Percentage of new suppliers that were screened
using labor practices criteria
BBVA has not screened suppliers using
labor practices criteria, given that the
perceived impact on the Group is not
signicant
✗
G4-LA15
Signicant actual and potential negative impacts
for labor practices in the supply chain and actions
taken
BBVA has not analyzed the impacts in this
aspect because the level of risks for the
Group is not signicant given the nature of
its suppliers
✗
Labor Practices grievance mechanisms
G4-LA16
Number of grievances about labor practices led,
addressed, and resolved through formal grievance
mechanisms
Compliance system Global ✓
(14)
Ethical conduct (external)
Human rights
Investment
G4-HR1
Total number and percentage of signicant
investment agreements and contracts that
include human rights clauses or that underwent
human rights screening
Compliance system
Social, environmental and reputational
risks
Global ✓
(10)
Social and environmentally responsible
nance (mixed)
Human rights, employee rights and
employment quality (mixed)
G4-HR2
Total hours of employee training on human rights
policies or procedures concerning aspects of
human rights that are relevant to operations,
including the percentage of employees trained
Compliance system Global ✓
(11)
Ethical conduct (mixed)
Human rights, employee rights and
employment quality (mixed)
Non-discrimination
G4-HR3
Total number of incidents of discrimination and
corrective actions taken
Compliance system Global ✓
(14)
Ethical conduct (mixed)
Human rights, employee rights and
employment quality (mixed)
Freedom of association and collective bargaining
G4-HR4
Operations and suppliers identied in which
the right to exercise freedom of association
and collective bargaining may be violated or at
signicant risk, and measures taken to support
these rights
BBVA has not identied any operations or
suppliers as having signicant risk related
to freedom of association and collective
bargaining
Spain
✓
Responsible procurement/ outsourcing
(mixed)
Human rights, employee rights and
employment quality (mixed)
Child labor
G4-HR5
Operations and suppliers identied as having
signicant risk for incidents of child labor, and
measures taken to contribute to the eective
abolition of child labor
BBVA has not identied any operations
or suppliers as having signicant risk for
incidents of child labor
Spain
✓
Responsible procurement/ outsourcing
(mixed)
Human rights, employee rights and
employment quality (mixed)
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Indicator Page / Omission Scope Review
Material aspects identied and
coverage of the material aspect
Forced or compulsory labor
G4-HR6
Operations and suppliers identied as having
signicant risk for incidents of forced or
compulsory labor, and measures to contribute
to the elimination of all forms of forced or
compulsory labor
BBVA has not identied any operations
or suppliers as having signicant risk for
incidents of forced or compulsory labor
Spain
✓
Responsible procurement/ outsourcing
(mixed)
Human rights, employee rights and
employment quality (mixed)
Security practices
G4-HR7
Percentage of security personnel trained in
the organization’s human rights policies or
procedures that are relevant to operations
Not reported. The security personnel
belong to external companies. Although
these companies are committed to
assume BBVA’s human rights standards,
there is no specic commitment on
training in this area
✗
Human rights, employee rights and
employment quality (mixed)
Indigenous rights
G4-HR8
Total number of incidents of violations involving
rights of indigenous peoples and actions taken
BBVA has not identied any signicant
incidents with relation to this aspect
Global
✓
Ethical conduct (mixed)
Human rights, employee rights and
employment quality (mixed)
Assessment
G4-HR9
Total number and percentage of operations that
have been subject to human rights reviews or
impact assessments
BBVA has not identied any signicant
impacts with respect to human rights in its
workplaces
Global
✓
Human rights, employee rights and
employment quality (mixed)
Supplier human rights assessment
G4-HR10
Percentage of new suppliers that were screened
using human rights criteria
BBVA has not screened suppliers using
human rights criteria given that the
perceived impact on the Group is not
signicant except in aspects of legal
compliance
✗
G4-HR11
Signicant actual and potential negative human
rights impacts in the supply chain and actions
taken
BBVA has not screened suppliers using
human rights criteria given that the
perceived impact on the Group is not
signicant except in aspects of legal
compliance
✗
Human rights grievance mechanisms
G4-HR12
Number of grievances about human rights
impacts led, addressed, and resolved through
formal grievance mechanisms
BBVA has not been subject to any
signicant sanctions for breaches related
to human rights
Global
✓
Ethical conduct (mixed)
Human rights, employee rights and
employment quality (mixed)
Society
Local communities
G4-SO1
Percentage of operations with implemented local
community engagement, impact assessments,
and development programs
Financial Education
Knowledge, education and culture
Global
✓
Contribution to the development of local
societies (external)
Social action (external)
G4-SO2
Operations with signicant actual and potential
negative impacts on local communities
Compliance system
The customer
Global ✓
(14)
Contribution to the development of local
societies (external)
Human rights, employee rights and
employment quality (mixed)
FS13
Access points in low-populated or economically
disadvantaged areas by type
People-Centric Solutions
Knowledge, education and culture
Global
✓
Customer service quality (external)
Quality and fair products that respond to
customer needs (external)
Contribution to the development of local
societies (external)
Financial inclusion (external)
FS14
Initiatives to improve access to nancial services
for disadvantaged people
People-Centric Solutions
Knowledge, education and culture
Global
✓
Quality and fair products that respond to
customer needs (external)
Contribution to the development of local
societies (external)
Financial inclusion (external)
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Indicator Page / Omission Scope Review
Material aspects identied and
coverage of the material aspect
Anti-corruption
G4-SO3
Total number and percentage of operations
assessed for risks related to corruption and the
signicant risks identied
Internal control model
Compliance system
Global
✓
Good corporate governance (mixed)
Ethical conduct (mixed)
G4-SO4
Communication and training on anti-corruption
policies and procedures
Compliance system Global
✓
Good corporate governance (mixed)
Ethical conduct (mixed)
G4-SO5
Conrmed incidents of corruption and actions
taken
Condential information
✗
Ethical conduct (mixed)
Public Policy
G4-SO6
Total value of political contributions by country
and recipient/beneciary
BBVA’s policy in countries does not allow
contributions of this type
Global ✓
(13)
Good corporate governance (mixed)
Anti-competitive behavior
G4-SO7
Total number of legal actions for anti-competitive
behavior, anti-trust, and monopoly practices and
their outcomes
BBVA has not identied any signicant
claim in which a nal judgment has been
handed down against this concept
Global
✓
Good corporate governance (mixed)
Ethical conduct (mixed)
Compliance
G4-SO8
Monetary value of signicant nes and total
number of non-monetary sanctions for non-
compliance with laws and regulations
Compliance system
The obligations arising from administrative
and judicial proceedings are registered in
the CFS (more information in Note 24)
Global
✓
Good corporate governance (mixed)
Ethical conduct (mixed)
Supplier assessment for impacts on society
G4-SO9
Percentage of new suppliers that were screened
using criteria for impacts on society
BBVA has not screened suppliers in this
aspect, given that the perceived impact on
the Group is not signicant
✗
G4-SO10
Signicant actual and potential negative impacts
on society in the supply chain and actions taken
BBVA has not screened suppliers in this
aspect, given that the perceived impact on
the Group is not signicant
✗
Grievance mechanisms for impacts on society
G4-SO11
Number of grievances impacts on society led,
addressed, and resolved through formal grievance
mechanisms
Compliance system
The obligations arising from administrative
and judicial proceedings are registered in
the CFS (more information in Note 24)
Global
✓
Ethical conduct (mixed)
Product responsibility
Customer health and safety
G4-PR1
Percentage of signicant product and service
categories for which health and safety impacts
are assessed for improvement
Customer protection Global ✓
(14)
Customer service quality (external)
Commercialization practices (external)
Ethical conduct (external)
G4-PR2
Total number of incidents of non-compliance
with regulations and voluntary codes concerning
the health and safety impacts of products
and services during their life cycle, by type of
outcomes
Compliance System
The customer
Global ✓
(12)
Customer service quality (external)
Commercialization practices (external)
Ethical conduct (external)
Product and service labeling
G4-PR3
Type of product and service information required
by the organization’s procedures for product and
service information and labeling, and percentage
of signicant product and service categories
subject to such information requirements
TCR Communication Global
✓
Customer service quality (external)
Commercialization practices (external)
Ethical conduct (external)
G4-PR4
Total number of incidents of non-compliance
with regulations and voluntary codes concerning
product and service information and labeling, by
type of outcomes
Compliance System
Complaints and claims
The obligations arising from administrative
and judicial proceedings are registered in
the CFS (more information in Note 24)
✓
Customer service quality (external)
Commercialization practices (external)
Ethical conduct (external)
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Indicator Page / Omission Scope Review
Material aspects identied and
coverage of the material aspect
G4-PR5
Results of surveys measuring customer
satisfaction
The best customer experience Global ✓
(9)
Customer service quality (external)
Commercialization practices (external)
Ethical conduct (external)
FS15
Policies for the fair design and sale of nancial
products and services
Compliance system
TCR Communication
Global
✓
Customer service quality (external)
Commercialization practices (external)
Ethical conduct (external)
FS16
Initiatives to enhance nancial literacy by type of
beneciary
Financial education Global
✓
Financial education (external)
Customer service quality (external)
Commercialization practices (external)
Marketing communications
G4-PR6
Sale of banned or disputed products
TCR Communication Global ✓
(15)
Customer service quality (external)
Commercialization practices (external)
Ethical conduct (external)
Security, privacy and customer protection
(external)
G4-PR7
Total number of incidents of non-compliance
with regulations and voluntary codes concerning
marketing communications, including advertising,
promotion, and sponsorship, by type of outcomes
The obligations arising from administrative
and judicial proceedings are registered in
the CFS (more information in Note 24)
TCR Communication Policy
Global ✓
(12)
Customer service quality (external)
Commercialization practices (external)
Ethical conduct (external)
Security, privacy and customer protection
(external)
Customer privacy
G4-PR8
Total number of substantiated complaints
regarding breaches of customer privacy and
losses of customer data
Customer protection Global ✓
(16)
Customer service quality (external)
Commercialization practices (external)
Ethical conduct (external)
Security, privacy and customer protection
(external)
Compliance
G4-PR9
Monetary value of signicant nes for non-
compliance with laws and regulations concerning
the provision and use of products and services
The obligations arising from administrative
and judicial proceedings are registered in
the CFS (more information in Note 24)
Global
✓
Customer service quality (external)
Commercialization practices (external)
Ethical conduct (external)
Product portfolio
FS1
Policies with specic environmental and social
components applied to business lines
People-centric solutions
Social, environmental and reputational
risks
Environment
Suppliers
Global
✓
Quality and fair products that respond to
customer needs (external)
Commercialization practices (external)
Ethical conduct (external)
Eco-eciency, environment, climate
change (external)
FS2
Procedures for assessing and screening
environmental and social risks in business lines
Social, environmental and reputational
risks
Environment
Global
✓
Quality and fair products that respond to
customer needs (external)
Commercialization practices (external)
Ethical conduct (external)
Eco-eciency, environment, climate
change (external)
FS3
Processes for monitoring clients’ implementation
of and compliance with environmental and
social requirements included in agreements or
transactions
Social, environmental and reputational
risks
Global
✓
Quality and fair products that respond to
customer needs (external)
Commercialization practices (external)
Ethical conduct (external)
Eco-eciency, environment, climate
change (external)
FS4
Process(es) for improving sta competency to
implement the environmental and social policies
and procedures as applied to business lines
Social, environmental and reputational
risks
The team
Global
✓
Quality and fair products that respond to
customer needs (external)
Commercialization practices (external)
Ethical conduct (external)
Eco-eciency, environment, climate
change (external)
FS5
Interactions with clients/investors/business
partners regarding environmental and social risks
and opportunities
Materiality analysis
People-centric solutions
Social, environmental and reputational
risks
Global
✓
Social and environmentally responsible
nance (external)
BBVA IN 2016
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Indicator Page / Omission Scope Review
Material aspects identied and
coverage of the material aspect
FS6
Percentage of the portfolio for business lines by
specic region, size (e.g. micro/SME/large) and
by sector
Impact on people through the business
People-centric solutions
CFS (Note 7.3)
Global
✓
Contribution to the development of local
societies (external)
FS7
Monetary value of products and service designed
to deliver a specic social benet for each
business line broken down by purpose
People-centric solutions Global
✓
Contribution to the development of local
societies (external)
FS8
Monetary value of products and service designed
to deliver a specic environmental benet for
each business line broken down by purpose
People-centric solutions Global
✓
Contribution to the development of local
societies (external)
Eco-eciency, environment, climate
change
Audit
FS9
Coverage and frequency of audits to assess the
implementation of environmental and social
policies and risk assessment procedures
Internal control model
Social, environmental and reputational
risks
Global ✓
(14)
Good corporate governance (internal)
Solvency and nancial management
(Internal)
Human rights, employee rights and
employment quality (internal)
Active ownership
FS10
Percentage and number of companies held in the
institution’s portfolio with which the reporting
organization has interacted on environmental or
social issues
People-centric solutions Global ✓
(14)
Social and environmentally responsible
nance (external)
FS11
Percentage of assets subject to positive and
negative environmental or social screening
Social, environmental and reputational
risks
Global ✓
(14)
Social and environmentally responsible
nance (external)
FS12
Voting polic(ies) applied to environmental or
social issues for shares over which the reporting
organization holds the right to vote shares or
advises on voting
People-centric solutions Global
✓
Social and environmentally responsible
nance (external)
ACGR Annual Corporate Governance Report
CFS Consolidated Financial Statements 2016
✓ Content revised according to the scope described and through procedures indicated in the Independent Review Report of the BBVA in 2016 report.
✗ Content not reviewed
Note: the identied material aspects correspond to the relevant material issues in the materiality analysis.
(1)
Percentage not reported.
(2)
The processes are only reported to determine the remuneration.
(3)
Not broken down by geographical area.
(4)
The information from Turkey has not been veried.
(5)
The limits on the indicator, scope and the criteria applied to the estimates are shown in the table of reference. The intensity indicators have been calculated according to
the number of occupants of the buildings, meaning the sum of the average workforce and the estimation of the third parties working in the Bank’s facilities. The verication of
the number of occupants has been made exclusively for Spain.
(6)
The consumption in the branch network has been estimated using a limited sample of branch oces.
(7)
With respect to business trips, only the emissions derived from trips by the Group’s employees by plane are reported.
(8)
Not broken down by gender or employment category.
(9)
The results of the Net Promoter Score depend on the comparative group used, a change in that group could change the results of the NPS.
(10)
Only the operations analyzed with respect to compliance with the Equator Principles are reported.
(11)
The information reported is about the number of employees trained in relation to the Code of Conduct of BBVA.
(12)
Number of incidents are not reported.
(13)
BBVA’s corporate policy is reported.
(14)
The reporting is qualitative.
(15)
BBVA’s product communication policy is reported.
(16)
The audits of security measures for the processing of personal data implemented in BBVA Group companies are reported.
BBVA IN 2016
6. REPORT PREPARATION GUIDELINES
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6. 3. Independent assurance report
BBVA IN 2016
6. REPORT PREPARATION GUIDELINES
P. 140
Annex
BBVA IN 2016
ANNEX
P. 142
Annex 1 - Economic value generated, distributed and retained
(1)
(BBVA Group and its Foundations. Million euros)
2016 2015 2014
Gross income
(2)
24,653 23,362 20,725
Gains (losses) from written-o assets 70 (2,135) 46
Prot of non-current assets (31) 1,019 (47)
Discontinued operations 0 0 0
Economic value generated 24,692 22,246 20,724
Employees - personnel expenses 6,722 6,273 5,410
Suppliers - other administrative expenses
(2)
4,211 4,097 3,532
Public sector
(3)
2,132 1,740 1,316
Shareholders - dividends 1,043 1,145 715
Community involvement (excl. foundations) 33 43 54
Economic value distributed 14,141 13,298 11,027
Community involvement (foundations) 60 61 53
Total economic value distributed 14,201 13,359 11,080
Economic value retained 10,551 8,948 9,697
(1)
Calculated according to the GRI calculation protocol for EC1.
(2)
Approximation adjusted to payments made to third parties under the heading of purchases and services rendered, once taxes have been deducted.
(3)
Including corporate tax and tax accrued for the year.
BBVA IN 2016
ANNEX
P. 143
Annex 2 - Customer experience - Average time for settling complaints
(Spain, Turkey, Mexico, and South America. Normal days)
2016 2015 2014
Spain 15 35 15
The United States n/av n/av n/av
Turkey
(1)
1 1 n/a
Mexico 13 10 14
Argentina 8 6 5
Chile 6 9 9
Colombia 4 4 4
Peru 15 19 10
Venezuela 4 4 5
Paraguay 5 6 7
Uruguay 6 6 9
Portugal 3 4 6
n/a = not applicable/ n/av = not available.
(1)
In Turkey, the weighting is calculated based on the number of total customers.
BBVA IN 2016
ANNEX
P. 144
Annex 3 - Complaints settled at the rst contact with customer (FCR)
(Spain, Turkey, Mexico and South America. Percentage)
2016 2105 2014
Spain
(1)
n/a n/a n/a
The United States n/av n/av n/av
Turkey
(3)
40 43 n/a
Mexico 40 18 13
Argentina 34 42 30
Chile 18 10 7
Colombia 78 63 45
Peru 4 17 24
Venezuela 8 21 19
Paraguay 35 60 14
Uruguay 16 17 12
Portugal
(2)
n/a n/a n/a
n/a = not applicable/ n/av = not available.
(1)
In Spain, the FCR is applicable to credit card incidents, but not complaints.
(2)
This kind of management is not applied in Portugal.
(3)
In Turkey, the weighting is calculated by the total number of customers.
Note: They are not settled complaints, but complaintas in FCR.
BBVA IN 2016
ANNEX
P. 145
Annex 4 - Complaints before the Banking Authority
(Spain, Turkey, Mexico and South America)
2016
(1)
2015
(1)
2014
Spain 2 1 2
The United States n/av n/av n/av
Turkey 32 35 n/a
Mexico 308 285 632
Argentina 34 41 131
Chile 12 16 16
Colombia 169 156 135
Peru 19 15 10
Venezuela 436 350 55
Paraguay 0 n/a 1
Uruguay 3 6 15
Portugal 41 32 20
n/a = not applicable/ n/av = not available.
(1)
Complaints in Banking have increased over the last year, because in 2015,
countries like Mexico did not provide quarterly data related to this section, so the
data of total 2015 is not complete. The data of Mexico 2015 has been modied by
the correct one.
Nota: For every billion euros of activity. Activity: gross credit to customers + total
customer resources. The Banking Authority refers to the external body in which the
customers can complain against BBVA.
BBVA IN 2016
ANNEX
P. 146
Annex 5 - Employees by gender (BBVA Group)
2016 2015 2014
Number of
employees Men Women
Number of
employees Men Women
Number of
employees Men Women
Spain 31,451 15,699 15,752 32,903 16,656 16,247 28,620 14,962 13,658
The United
States
10,544 4,187 6,357 11,153 4,446 6,707 10,944 4,250 6,694
Turkey 23,678 10,087 13,591 23,691 10,106 13,585 16 10 6
Mexico 37,378 17,335 20,043 38,499 17,907 20,592 38,107 17,856 20,251
South America 30,543 13,921 16,622 30,448 13,713 16,735 29,640 13,400 16,240
Rest of Eurasia 1,198 682 516 1,274 723 551 1,443 805 638
Total 134,792 61,911 72,881 137,968 63,551 74,417 108,770 51,283 57,4 87
Annex 6 - Promoted employees by gender (BBVA Group)
2016 2015 2014
Number of promoted
employees Men Women
Number of promoted
employees Men Women
Number of promoted
employees Men Women
Spain 3,694 1,906 1,788 3,016 1,490 1,526 2,286 1,191 1,095
The United States 793 257 536 3,515 1,332 2,183 1,077 421 656
Turkey 736 325 411 1,039 438 601 n/a n/a n/a
Mexico 7,301 3,469 3,832 7,622 3,907 3,715 10,244 4,724 5,520
South America 3,610 1,312 2,298 3,205 1,453 1,752 2,821 1,245 1,576
Rest of Eurasia 124 74 50 124 71 53 159 94 65
Total 16,258 7,343 8,915 18,521 8,691 9,830 16,587 7,675 8,912
n/a = not applicable.
BBVA IN 2016
ANNEX
P. 147
BBVA IN 2016
ANNEX
P. 148
Annex 7 - Average employee age and breakdown by age bracket (BBVA Group. Years and percentage)
2016 2015 2014
Average
age <25 25-45 >45
Average
age <25 25-45 >45
Average
age <25 25-45 >45
Spain 42.2 1.0 66.2 32.8 42.0 1.5 65.0 33.5 42.1 0.5 64.8 34.7
The United States 40.9 5.8 59.4 34.8 40.0 7.9 58.9 32.8 40.0 7.9 60.0 32.1
Turkey 32.9 6.6 88.6 4.8 32.4 8.2 87.6 4.2 n/a n/a n/a n/a
Mexico 34.2 10.8 74.0 15.2 34.2 11.3 73.6 15.1 34.0 13.3 72.3 14.4
South America 37.6 7.4 68.9 23.7 37. 3 8.4 68.6 23.1 37.2 8.8 68.9 22.2
Rest of Eurasia 42.6 0.7 59.3 40.0 42.2 0.5 61.2 38.3 41.8 0.7 62.0 37.3
Total 37.2 6.5 72.3 21.2 37.0 7.4 71.5 21.1 37.7 8.0 68.1 24.0
n/a = not applicable.
BBVA IN 2016
ANNEX
P. 149
Annex 8 - Average length of service (BBVA Group. Years)
2016 2015 2014
Total Men Women Total Men Women Total Men Women
Spain 16.0 17. 5 14.6 16.4 18.3 14.4 16.6 18.8 14.2
The United States 7.3 5.9 8.2 6.7 5.3 7.6 6.7 5.3 7.6
Turkey 6.9 7.0 6.8 6.4 6.6 6.3 n/a n/a n/a
Mexico 8.2 8.4 8.0 8.1 8.5 7.8 8.0 8.4 7.6
South America 9.9 10.8 9.2 9.7 10.7 8.9 9.6 10.6 8.8
Rest of Eurasia 11.5 10.8 12.4 11.1 10.6 11.8 11.3 10.9 11.9
Total 10.1 10.9 9.5 10.1 11.0 9.2 10.6 11.8 9.6
n/a = not applicable.
BBVA IN 2016
ANNEX
P. 150
Annex 9 - Breakdown of employees job category and gender (BBVA Group. Percentage)
2016 2015 2014
Total Men Women Total Men Women Total Men Women
Spain
Management team 3.3 7 7.5 22.5 3.1 78.1 21.9 3.7 80.0 20.0
Middle management 5.9 64.5 35.5 5.1 65.0 35.0 5.6 66.7 33.3
Specialists 25.0 54.0 46.0 21.7 53.9 46.1 25.4 54.0 46.0
Sales force 45.5 45.4 54.6 53.0 47.0 53.0 44.8 47. 5 52.5
Rank and le 20.3 46.2 53.8 17. 1 48.3 51.7 20.5 51.5 48.5
The United States
Management team 0.3 79.4 20.6 1.3 81.8 18.2 1.5 83.0 17.0
Middle management 18.4 59.1 40.9 16.3 59.1 40.9 13.0 58.9 41.1
Specialists 17. 9 41.4 58.6 13.8 41.3 58.7 16.4 44.5 55.5
Sales force 32.5 49.2 50.8 33.1 48.6 51.4 33.3 48.4 51.6
Rank and le 30.9 16.9 83.1 35.6 20.9 79.1 35.8 18.3 81.7
Turkey
Management team 0.1 91.7 8.3 0.1 91.7 8.3 n/a n/a n/a
Middle management 20.6 41.7 58.3 18.8 43.0 57.0 n/a n/a n/a
Specialists 34.6 35.8 64.2 37. 8 34.7 65.3 n/a n/a n/a
Sales force 37.0 38.8 61.2 35.5 39.7 60.3 n/a n/a n/a
Rank and le 7. 8 93.4 6.6 7. 8 93.1 6.9 n/a n/a n/a
Mexico
Management team 0.7 86.2 13.8 0.8 8 7.7 12.3 0.9 87.9 12.1
Middle management 1.7 70.3 29.7 1.5 70.3 29.7 1.5 73.9 26.1
Specialists 34.2 50.2 49.8 34.3 49.9 50.1 31.8 51.3 48.7
Sales force 31.1 52.2 47.8 33.6 51.4 48.6 35.7 50.9 49.1
Rank and le 32.3 34.7 65.3 29.9 34.9 65.1 30.1 34.7 65.3
South America
Management team 0.8 74.9 25.1 0.9 76.4 23.6 1.0 76.8 23.2
Middle management 7. 5 56.3 43.7 9.7 53.0 47.0 9.8 53.1 46.9
Specialists 36.9 50.6 49.4 33.0 50.2 49.8 32.7 50.1 49.9
Sales force 40.7 38.9 61.1 38.8 39.0 61.0 35.6 39.8 60.2
Rank and le 14.1 44.2 55.8 1 7.6 42.7 57.3 20.9 41.6 58.4
Rest of Eurasia
Management team 6.2 89.2 10.8 6.3 91.3 8.8 5.4 88.5 11.5
Middle management 10.4 66.4 33.6 10.7 63.2 36.8 9.9 63.6 36.4
Specialists 41.1 51.8 48.2 40.3 51.1 48.9 41.2 51.5 48.5
Sales force 36.1 58.4 41.6 36.0 57. 5 42.5 35.6 56.1 43.9
Rank and le 6.2 33.8 66.2 6.8 44.2 55.8 8.0 44.3 55.7
Group average
Management team 1.2 79.2 20.8 1.3 80.4 19.6 1.8 81.5 18.5
Middle management 8.7 52.9 47. 1 8.4 52.8 47. 2 6.1 59.7 40.3
Specialists 31.5 47.8 52.2 30.0 47.1 52.9 28.9 51.2 48.8
Sales force 37. 8 44.6 55.4 39.7 45.4 54.6 37. 8 46.9 53.1
Rank and le 20.7 40.6 59.4 20.6 40.9 59.1 25.4 37.6 62.4
n/a = not applicable.
BBVA IN 2016
ANNEX
P. 151
Annex 10 - Voluntary resignations (turnover)
(1)
and breakdown by gender (BBVA Group. Percentage)
2016 2015 2014
Total
workforce
turnover Men Women
Total
workforce
turnover Men Women
Total
workforce
turnover Men Women
Spain 0.9 55.9 44.1 0.9 45.8 54.2 0.5 42.2 57.8
The United States 17.7 38.7 61.3 18.2 44.0 56.0 15.2 39.9 60.1
Turkey 8.2 40.3 59.7 2.2 44.4 55.6 n/a n/a n/a
Mexico 13.5 50.1 49.9 11.5 48.4 51.6 14.4 52.8 47. 2
South America 6.1 43.9 56.1 6.6 45.4 54.6 6.4 41.5 58.5
Rest of Eurasia 4.2 61.1 38.9 4.2 54.7 45.3 4.3 46.8 53.2
Total 8.2 45.6 54.4 8.5 45.4 54.6 8.4 48.1 51.9
(1)
Turnover = [Resignations (excluding early retirement)/Number of employees at start of period] x 100.
n/a = not applicable.
BBVA IN 2016
ANNEX
P. 152
Annex 11 - Recruitment of employees by gender (BBVA Group. Number)
2016 2015 2014
Total Men Women Total Men Women Total Men Women
Spain 3,515 1,450 2,065 7,929 3,629 4,300 1,989 840 1,149
The United States 2,244 949 1,295 2,910 1,279 1,631 2,762 1,102 1,660
Turkey 3,058 1,225 1,833 25,158 11,176 13,982 n/a n/a n/a
Mexico 8,084 4,056 4,028 7,74 3 3,751 3,992 9,516 5,022 4,494
South America 4,220 2,016 2,204 4,549 2,066 2,483 4,831 2,005 2,826
Rest of Eurasia 111 70 41 95 52 43 78 36 42
Total 21,232 9,766 11,466 48,384 21,953 26,431 19,176 9,005 10,171
Of which new hires are (*):
Spain 1,038 632 406 692 431 261 588 336 252
The United States 2,219 932 1,287 2,885 1,263 1,622 2,648 1,098 1,550
Turkey 2,879 1,164 1,715 1,803 789 1,014 n/a n/a n/a
Mexico 6,016 2,930 3,086 5,063 2,585 2,478 5,745 2,986 2,759
South America 3,045 1,519 1,526 3,309 1512 1797 3,101 1297 1804
Rest of Eurasia 46 27 19 159 61 98 68 34 34
Total 15,243 7,204 8,039 13,911 6,641 7, 270 12,150 5,751 6,399
(*) Including hires through consolidations.
n/a = not applicable.
BBVA IN 2016
ANNEX
P. 153
Annex 12 - Discharge of employees by discharge type and gender (BBVA Group. Number)
2016 2015 2014
Total Men Women Total Men Women Total Men Women
Spain
Retirement and early retirement 1,384 1,128 256 1,395 1,021 374 1,831 1,353 478
Voluntary redundancies 110 71 39 40 27 13 76 47 29
Resignations 281 157 124 271 161 110 160 98 62
Others 3,192 1,075 2,117 1,947 725 1,222 1,678 647 1,031
The United States
Retirement and early retirement 57 8 49 50 8 42 56 13 43
Voluntary redundancies 25 23 2 7 3 4 8 4 4
Resignations 1,977 765 1,212 1,988 778 1,210 1,711 660 1,051
Others 794 386 408 656 275 381 1,331 487 844
Turkey
Retirement and early retirement 85 46 39 31 23 8 n/a n/a n/a
Voluntary redundancies 65 30 35 35 20 15 n/a n/a n/a
Resignations 1,944 783 1,161 528 197 331 n/a n/a n/a
Others 977 393 584 887 452 435 n/a n/a n/a
Mexico
Retirement and early retirement 423 269 154 197 122 75 320 246 74
Voluntary redundancies 78 46 32 99 57 42 255 153 102
Resignations 5,184 2,596 2,588 4,387 2,235 2,152 5,418 2,801 2,617
Others 3,520 1,716 1,804 2,668 1,290 1,378 2,935 1,387 1,548
South America
Retirement and early retirement 20 9 11 1 1 0 1 0 1
Voluntary redundancies 940 423 517 671 328 343 614 315 299
Resignations 1,856 814 1,042 1,961 876 1,085 1,820 813 1,007
Others 1,309 562 747 1,108 544 564 1,247 507 740
Rest of Eurasia
Retirement and early retirement 6 2 4 1 1 0 3 2 1
Voluntary redundancies 52 28 24 12 10 2 15 5 10
Resignations 54 33 21 61 27 34 70 40 30
Others 75 49 26 185 97 88 162 76 86
Total
Retirement and early retirement 1,975 1,462 513 1,675 1,176 499 2,211 1,614 597
Voluntary redundancies 1,270 621 649 864 445 419 968 524 444
Resignations 11,296 5,148 6,148 9,196 4,274 4,922 9,179 4,412 4,767
Others 9,867 4,181 5,686 7,451 3,383 4,068 7,353 3,104 4,249
n/a = not applicable.
BBVA IN 2016
ANNEX
P. 154
Annex 13 - Breakdown of employees by contract type and gender (BBVA Group. Percentage)
2016 2015 2014
Total Men Women Total Men Women Total Men Women
Spain
Full-time permanent or
indenite-term
92.2 51.9 48.1 93.6 52.2 47.8 95.0 53.6 46.4
Part-time permanent or
indenite-term
2.7 6.1 93.9 1.9 5.1 94.9 1.9 4.4 95.6
Temporary 5.1 37.6 62.4 4.6 37.5 62.5 3.0 40.5 59.5
The United States
Full-time permanent or
indenite-term
97. 5 40.3 59.7 95.6 40.7 59.3 95.3 39.6 60.4
Part-time permanent or
indenite-term
2.5 1 7.9 82.1 4.3 21.5 78.5 4.7 23.1 76.9
Temporary 0.0 0.0 100.0 0.1 3 7.5 62.5 0.0 0.0 100.0
Turkey
Full-time permanent or
indenite-term
99.3 42.6 57.4 99.0 42.6 57.4 n/a n/a n/a
Part-time permanent or
indenite-term
0.0 0.0 0.0 0.0 0.0 0.0 n/a n/a n/a
Temporary 0.7 50.0 50.0 1.0 51.9 48.1 n/a n/a n/a
Mexico
Full-time permanent or
indenite-term
89.6 46.4 53.6 89.4 46.9 53.1 89.4 46.9 53.1
Part-time permanent or
indenite-term
0.7 23.5 76.5 0.9 26.3 73.7 1.2 30.8 69.2
Temporary 9.7 47.7 52.3 9.7 45.0 55.0 9.4 48.5 51.5
South America
Full-time permanent or
indenite-term
89.4 46.3 53.7 89.8 45.8 54.2 90.3 45.9 54.1
Part-time permanent or
indenite-term
3.0 34.6 65.4 2.8 31.7 68.3 2.5 28.4 71.6
Temporary 7.6 41.2 58.8 7.3 41.1 58.9 7. 2 41.9 58.1
Rest of Eurasia
Full-time permanent or
indenite-term
98.7 5 7.1 42.9 99.0 56.9 43.1 99.4 56.1 43.9
Part-time permanent or
indenite-term
0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Temporary 1.3 40.0 60.0 1.0 46.2 53.8 0.6 0.0 100.0
Group average
Full-time permanent or
indenite-term
92.6 46.5 53.5 92.7 46.7 53.3 91.9 47.8 52.2
Part-time permanent or
indenite-term
1.7 20.9 79.1 1.7 21.7 78.3 2.1 21.9 78.1
Temporary 5.7 43.6 56.4 5.6 42.6 57.4 6.0 45.2 54.8
n/a = not applicable.
BBVA IN 2016
ANNEX
P. 155
Annex 14 - Amount and type of absenteeism of employees
(BBVA Group
(1)
. 2016)
Number of
employees Men Women
Total leave 58,247 21,425 36,822
New leave 56,100 20,718 35,382
Additions 50,262 19,219 31,043
Number of days of sick leave
or total accident in the year
606,711 201,988 404,723
Absenteeism rate (%) 1.6 0.5 1.1
(1)
Excluding BBVA Compass and Garanti.
BBVA IN 2016
ANNEX
P. 156
Annex 15 - Financial Education. Data by country (Number of beneciaries. 2016)
Children Adults SMEs
(2)
Total beneciaries Total workshops
Spain 1,140,700 12,578 615 1,153,893 5358
The United States 45,909 5,505 973 52,387 160
Mexico 897,577 331,264 32,169 1,261,010 1010415
South America 58,975 47,641 548 107,164 150,318
Argentina 9,406 0 30 9,436 84
Chile 10,304 1,000 83 11,387 256
Colombia 39,107 36,530 0 75,637 149656
Peru 0 1464 200 1,664 55
Venezuela 158 5,685 188 6,031 111
Paraguay 0 2,336 20 2,356 102
Uruguay 0 626 27 653 54
Group
(1)
2,143,161 396,988 34,305 2,574,454 1,166,251
(1)
Turkey did not develop nancial education programs in 2016.
(2)
Number of beneciary SMEs does not include beneciaries of online courses of the Camino al Éxito program in South America.
BBVA IN 2016
ANNEX
P. 157
Annex 16 - Financial education programs for children and young people
(Number of beneciaries. 2016)
Spain 1,140,700
Future Values 1,133,239
Your Finances, Your Future (collaborative porgram) 7,461
The United States 45,909
EVERFI 45,909
Mexico 897,577
Future Values 16,096
Kidzania 826,237
Sala valores de futuro MIDE 46,242
Sub 14 League 1,200
Ambassadors "For those who remain" 5,998
SNEF 1,804
South America 58,975
Argentina 9,406
BBVA France Financial Education Program 1,466
BBVA France Financial Education "Go for your dreams"” 7,823
My First Company 117
Chile 10,304
BBVA Financial Education league 10,304
Colombia 39,107
BBVA Entrepreneurship School in Colombia 39,107
Venezuela 158
Online Financial Education Course for Young People 158
Group 2,143,161
BBVA IN 2016
ANNEX
P. 158
Annex 17 - Financial education programs for SMEs
Financial education for SMEs in Mexico 2016 2015 2014
Number of nancial education workshops given to SMEs 62,433 47,672 77,616
Number of SMEs beneting from nancial education workshops 31,852 25,410 39,685
(1)
The main target for this initiatives are SMEs, though acces is not restricted that is why some beneciaries could be individual customers
Training for SMEs growth 2016 2015
(2)
2014
(1)
Spain 615 589 1,009
Camino al Éxito (Road to success) 548 704 553
Training of SMEs Mexico 317 734 n/a
Total 1,480 2,027 1,562
n/a = not applicable.
(1)
A pilot project for Camino al Éxito was developed in 2014.
(2)
Camino al Éxito 2015 only includes SMEs beneting from face-to-face training for growth. It doesn´t include SMEs beneting from online courses.
BBVA IN 2016
ANNEX
P. 159
Annex 18 - Main indicators of BBVA Momentum (BBVA Group)
Spain Mexico Peru
Candidates 713 660 187
Participants 56 50 6
BBVA Mentors 54 20 6
Job Supported 1,717 2,433 n/a
Turnover of nancial companies (euros)
(1)
61,662,670 67,895,041 n/a
Companies nanced 18 32 n/a
Investment in companies (euros)
(2)
5,007,125 355,979 n/a
Investment in high-impact products (euros)
(3)
7,579,594 n/a n/a
n/a = not applicable.
(1)
It only includes Spanish and Mexican companies participating in Momentum Project 2011-2016 as of December 2016.
(2)
Investment in capital and loans. BBVA nances the growth of these companies through many products (In Spain an investment fund, in Mexico loans in condition they are
out of the market).
(3)
BBVA´s investment in Spanish fund is greater than the amount actually injected by the fund into these companies.
Note: It includes 5 editions from Spain, 4 from Mexico, 1 from Peru.
BBVA IN 2016
ANNEX
P. 160
Annex 19 - Main indicators of
Niños Adelante
(Forward Children)
Investment (euros) Number of internships Indirect beneciaries Number of aliates
2016 2015 2014 2016 2015 2014 2016 2015 2014 2016 2015 2014
Mexico 8,667,317 11,755,786 11,533,128 17,393 18,000 17,815 69,572 72,000 71,260 0 0 n/a
Colombia 567,441 487,704 454,285 29,904 18,963 6,690 119,616 75,852 41,332 122 18 n/a
Peru 230,909 345,650 318,873 21,303 23,012 25,149 85,212 92,408 100,596 9 13 n/a
Venezuela 10,458 52,414 1,832,934 4,500 4,500 4,872 22,500 26,295 22,500 0 0 n/a
Paraguay 60,086 34,600 109,850 38 192 391 n/av 7,585 7,644 12 1 n/a
Uruguay 121,918 122,932 104,027 135 140 120 n/av 100 32 4 6 n/a
TOTAL 9,658,129 12,799,086 14,761,525 73,273 64,807 59,433 296,900 274,240 249,958 147 38 n/a
n/a = not applicable.
n/av = not available.
BBVA IN 2016
ANNEX
P. 161
Annex 20 - Main educational programs (Direct beneciaries)
2016
Knowledge Olympics (Mexico) 2923
Becas Niños Adelante (South America and Mexico) 73,273
Papagayo program(Venezuela) 9099
Total child and primary education 85,295
Adelante scholarships (Mexico) 17,393
BBVA Route 182
Total secondary education 17,575
Acción Magistral (Spain) 6539
Teach for America (The United States) 1,110
Teachers Academy Foundation (Turkey)
(1)
21012
Educational and Production Centers (Mexico) 18634
Total training given to adults 47295
TOTAL 150,165
(1)
Garanti data not veried
Beneciaries from the Acción Magistral program (Spain)
2016 2015 2014
Trained Teachers 265 237 222
Teachers using the platform 6,052 4,327 3,034
Acción Magistral meeting 222 355 147
Prize Magistral Action (Winning
centers and mentions to students and
teachers)
106 1,286 23
Total 6,645 6,189 3,426
BBVA IN 2016
ANNEX
P. 162
Annex 21 - Public water consumption (BBVA Group. Cubic meter)
2016 2015 2014
Spain and Portugal 410,174 423,036 361,183
The United States 1,122,956 1,035,531 963,547
Turkey 264,480 269,780 n/a
Mexico 625,619 580,804 805,343
South America 857,436 776,132 875,040
TOTAL 3,280,665 3,085,283 3,005,112
n/a = not applicable.
BBVA IN 2016
ANNEX
P. 163
Annex 22 - Paper consumption (BBVA Group. Tons)
2016 2015 2014
Spain and Portugal
(1)
3,024 2,615 3,431
The United States 1,198 850 1,363
Turkey
(2)
1,597 n/av n/a
Mexico 1,770 2,185 1,924
South America 1,897 1,641 1,652
TOTAL 9,485 7,292 8,370
n/a = not applicable / n/av = not available.
(1)
Paper consumption data for 2015 do not include OPPLUS and Insurance.
(2)
Paper consumption data for Garanti are not externally reviewed.
BBVA IN 2016
ANNEX
P. 164
Annex 23 - Consumption of energy (BBVA Group. Megawatt hour)
2016 2015 2014
Spain and Portugal 244,721 263,625 257,260
Electricity
(2)
229,328 249,036 244,800
Fossil fuels
(1)
15,393 14,589 12,460
The United States 133,397 141,839 153,481
Electricity 127,297 134,423 143,512
Fossil fuels
(1)
6,100 7,41 6 9,970
Turkey 149,781 148,346 n/a
Electricity 116,502 115,693 n/a
Fossil fuels
(1)
33,279 32,653 n/a
Mexico 266,836 260,690 229,517
Electricity 261,238 254,074 221,782
Fossil fuels
(1)
5,598 6,616 7,73 5
South America 162,480 179,337 189,953
Electricity 160,153 177,693 186,892
Fossil fuels
(1)
2,327 1,644 3,062
TOTAL 957,215 993,838 830,212
Electricity 894,518 930,919 796,985
Fossil fuels
(1)
62,697 62,919 33,227
n/a = not applicable.
(1)
The consumption of gasoil, natural gas and LP gas are included.
(2)
Consumption data for Catalunya Banc premises and branches are not included.
BBVA IN 2016
ANNEX
P. 165
Annex 24 - CO
2
emissions
(1)
(BBVA Group. Tons)
2016 2015 2014
Spain and Portugal 89,998 98,136 102,653
Electricity 68,730 74,163 81,860
Fossil fuels 3,118 3,045 2,496
Air travel 18,150 20,928 18,297
The United States 72,187 77,123 77,564
Electricity 63,836 67,0 03 71,589
Fossil fuels 1,206 1,442 1,927
Air travel 7,145 8,678 4,049
Turkey 66,587 75,099 n/a
Electricity 54,435 63,875 n/a
Fossil fuels 6,681 11,224 n/a
Air travel 5,472 n/av n/a
Mexico 128,874 126,827 113,711
Electricity 117,838 113,917 99,802
Fossil fuels 1,350 1,968 2,241
Air travel 9,686 10,943 11,669
South America 36,334 38,722 43,194
Electricity 29,682 32,735 34,388
Fossil fuels 594 404 722
Air travel 6,058 5,583 8,084
TOTAL 393,979 415,906 337,123
Electricity 334,520 351,692 287,638
Fossil fuels 12,948 18,083 7,386
Air travel 46,511 46,131 42,099
n/a= not applicable / n/av = not available.
(1)
The emission factors used for the calculation of CO2 emissions per electricity,
fossil fuels and air travel consumption, have been updated according to the best
estimation available. In the case of CO2 emitted from electricity consumption in
Spain, the last factor published by UNESA for 2011 has been used, whereas in the
case of the rest of the Group´s countries, the last factor published by DEFRA has
been used.
BBVA IN 2016
ANNEX
P. 166
Annex 25 - Waste management (BBVA Group. Kilograms)
2016 2015 2014
Spain and Portugal 835,893 975,714 771,164
Non-hazardous waste 657,415 775,052 596,779
Hazardous waste 178,478 200,662 162,620
The United States n/av n/av 2,142,465
Non-hazardous waste n/av n/av 2,102,201
Hazardous waste n/av 40,263
Turkey 122,382 n/av n/a
Non-hazardous waste n/av n/av n/a
Hazardous waste 122,382 n/av n/a
Mexico 81,552 99,896 1,098,987
Non-hazardous waste 79,912 65,080 1,051,703
Hazardous waste 45,019 34,816 n/av
South America 223,700 179,847 271,775
Non-hazardous waste 140,552 150,248 182,483
Hazardous waste 51,627 29,598 89,292
TOTAL 1,263,527 1,255,457 4,284,391
Non-hazardous waste 877,879 990,381 3,933,167
Hazardous waste 397,506 125,316 143,343
n/a = not applicable / n/av = not available.
BBVA IN 2016
ANNEX
P. 167
Annex 26 - Suppliers
(1)
and annual turnover
(2)
2016 2015 2014
Number of
suppliers
Annual tunover
(million euros)
Number of
suppliers
Annual tunover
(million euros)
Number of
suppliers
Annual tunover
(million euros)
Spain 1,240 2,457 1,277 2,660 1,233 1,1
The United States 489 704.28 524 484 419 370
Turkey n/av n/av n/av n/av n/av n/av
Mexico 1,142 3,381 1,238 3,974 1,101 3,577
Argentina 408 458.16 559 576 456 340
Chile 242 171.47 250 197 227 151
Colombia 180 197.76 216 198 213 205
Perú 285 246.32 290 257 270 193
Venezuela 81 61.39 59 20 236 347
Paraguay 49 16.04 51 20 51 17
Uruguay 54 26.72 24 7 51 26
Portugal 70 31.45 110 48 64 29
Bolivia n/av n/av 0 0 0 0
TOTAL 4,240 7,7 51 4,598 8,441 4,321 7,186
Total suppliers
(3)
2016 2015 2014
Number of
suppliers
Annual tunover
(million euros)
Number of
suppliers
Annual tunover
(million euros)
Number of
suppliers
Annual tunover
(million euros)
Spain 14,020 2,588 14,785 2,796 14,088 2,067
The United States 2,073 731.33 2,241 678 2,370 398
Turkey n/av n/av n/av n/av n/av n/av
Mexico 5,988 3,486 5,674 4,081 5,286 3,677
Argentina 2,262 490.5 2,701 618 2,598 376
Chile 1,462 189.73 1,995 216 1,545 169
Colombia 2,827 222.5 4,146 224 3,070 232
Perú 2,972 273.89 4,421 287 3,444 220
Venezuela 869 67.87 856 41 1,104 362
Paraguay 1,119 23.04 1,141 27 1,106 24
Uruguay 567 33.37 475 11 525 31
Portugal 844 38 1,015 57 1,123 36
Bolivia n/av n/av 0 0 0 0
TOTAL 35,003 8,144 39,450 9,036 36,259 7,592
(1)
Including suppliers and creditors.
(2)
Payments made to third parties (not including suppliers with amounts less than €100,000). Cash ow criterion.
(3)
Including all suppliers, creditors and third parties invoicing to BBVA without a limit to the amount.
n/av = not available.
BBVA IN 2016
ANNEX
P. 168
Annex 27 - Average payment period to suppliers (Days)
2016 2015 2014
Spain 46.5 47 39
The United States 3.6 7 n.d.
Mexico 21.3 17 20
Argentina 33.6 34 35
Chile 25.5 27 30
Colombia 13.2 16 7
Perú 26.3 31 31
Venezuela 26 19 16
Paraguay 30 30 15
Uruguay 5 5 30
TOTAL 23 23 23
Average pyment period calculated as an average resulting from the dierence
between the payment date and the base date. With no weighing by amount.
BBVA IN 2016
ANNEX
P. 169
Annex 28 - Customer satisfaction index
2016
(1)
2015 2014
Spain n/av 78 79
The United States n/av 74 72
Mexico n/av 82 80
Argentina n/av 83 84
Chile n/av 78 83
Colombia n/av 86 86
Perú n/av 82 79
Venezuela n/av 86 88
Uruguay n/av 87 n/av
Paraguay n/av 80 n/av
TOTAL 81.6 82
(1)
Biennial. To be done in 2017.
n/av= not available.
Annex 29 - Supplier approval
Number of suppliers who have passed
the approval process
Purchases from suppliers who have taken part
in the approval process (%)
(1)
Number of suppliers who have failed
the approval process
2016 2015 2014 2016 2015 2014 2016 2015 2014
Spain 1,148 1,037 893 84 85 84 12 10 2
The United States 579 n/av n/av 72 n/av n/av 154 n/av n/av
Mexico 340 n/av n/av 74 n/av n/av 108 n/av n/av
Argentina 356 n/av n/av 69 n/av n/av 0 n/av n/av
Chile 783 n/av n/av 89 n/av n/av 24 n/av n/av
Colombia 776 n/av n/av 92 n/av n/av 16 n/av n/av
Peru 463 n/av n/av 77 n/av n/av 3 n/av n/av
Venezuela 253 n/av n/av 57 n/av n/av 0 n/av n/av
Total 4,698 1,037 893 614 85 84 317 10 2
n/av = Not available.
(1)
Other purchases are from suppliers who do not meet the internal criteria that require them to take part in the approval process.
BBVA IN 2016
ANNEX
P. 170
