UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 6-K

REPORT OF FOREIGN ISSUER PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the six months ended June 30, 2016

Commission file number: 1-10110

BANCO BILBAO VIZCAYA ARGENTARIA, S.A.

(Exact name of Registrant as specified in its charter)

BANK BILBAO VIZCAYA ARGENTARIA, S.A.

(Translation of Registrant’s name into English)

Calle Azul, 4

28050 Madrid

Spain

(Address of principal executive offices)

Ricardo Gómez Barredo

Calle Azul, 4

28050 Madrid

Spain

Telephone number +34 91 537 7000

Fax number +34 91 537 6766

(Name, telephone, e-mail and /or facsimile number and address of Company contact person)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F  x            Form 40-F  ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes  ¨            No   x

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes  ¨            No   x

BANCO BILBAO VIZCAYA ARGENTARIA, S.A.

TABLE OF CONTENTS

Certain Terms and Conventions	1
Cautionary Statement Regarding Forward-Looking Statements	1
Presentations of Financial Information	3
Selected Interim Consolidated Financial Data	4
Business Overview	8
Selected Statistical Information	16
Operating and Financial Review and Prospects	36
Unaudited Interim Consolidated Financial Statements	F-1

This Form 6-K is incorporated by reference into BBVA’s Registration Statement on Form F-3 (File No. 333-212729) filed with the Securities and Exchange Commission.

CERTAIN TERMS AND CONVENTIONS

The terms below are used as follows throughout this report:

• “BBVA”, the “Bank”, the “Company”, the “Group” or the “BBVA Group” means Banco Bilbao Vizcaya Argentaria, S.A. and its consolidated subsidiaries unless otherwise indicated or the context otherwise requires.

• “BBVA Bancomer” means Grupo Financiero BBVA Bancomer, S.A. de C.V. and its consolidated subsidiaries, unless otherwise indicated or the context otherwise requires.

• “BBVA Compass” means BBVA Compass Bancshares, Inc. and its consolidated subsidiaries, unless otherwise indicated or the context otherwise requires.

• “Interim Consolidated Financial Statements” means our unaudited interim consolidated financial statements as of June 30, 2016 and for the six-month periods ended June 30, 2016 and June 30, 2015 prepared in accordance with the International Financial Reporting Standards adopted by the European Union (“EU-IFRS”) required to be applied under the Bank of Spain’s Circular 4/2004 and in compliance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS-IASB”).

• “Latin America” refers to Mexico and the countries in which we operate in South America and Central America.

First person personal pronouns used in this report, such as “we”, “us”, or “our”, mean BBVA, unless otherwise indicated or the context otherwise requires.

In this report, “$”, “U.S. dollars”, and “dollars” refer to United States Dollars and “€” and “euro” refer to Euro.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This report contains statements that constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) Section 21E of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may include words such as “believe”, “expect”, “estimate”, “project”, “anticipate”, “should”, “intend”, “probability”, “risk”, “VaR”, “target”, “goal”, “objective” and similar expressions or variations on such expressions and includes statements regarding future growth rates. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those in the forward-looking statements as a result of various factors. The accompanying information in this report on Form 6-K, including, without limitation, the information under the items listed below, identifies important factors that could cause such differences:

• “Business Overview”;

• “Selected Statistical Information” and

• “Operating and Financial Review and Prospects”.

Other important factors that could cause actual results to differ materially from those in forward-looking statements include, among others:

• general political, economic and business conditions in Spain, the European Union (“EU”), Latin America, Turkey, the United States and other regions, countries or territories in which we operate;

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• changes in applicable laws and regulations, including increased capital and provision requirements and taxation, and steps taken towards achieving an EU fiscal and banking union;

• the monetary, interest rate and other policies of central banks in the EU, Spain, the United States, Mexico, Turkey and elsewhere;

• changes or volatility in interest rates, foreign exchange rates (including the euro to U.S. dollar exchange rate), asset prices, equity markets, commodity prices, inflation or deflation;

• ongoing market adjustments in the real estate sectors in Spain, Mexico and the United States;

• the effects of competition in the markets in which we operate, which may be influenced by regulation or deregulation;

• changes in consumer spending and savings habits, including changes in government policies which may influence spending, saving and investment decisions;

• adverse developments in emerging countries, in particular Latin America and Turkey, including unfavorable political and economic developments, social instability and changes in governmental policies, including expropriation, nationalization, international ownership legislation, interest rate caps and tax policies;

• our ability to hedge certain risks economically;

• downgrades in our credit ratings or in the Kingdom of Spain’s credit ratings;

• the success of our acquisitions (including the recent acquisition of an additional stake in Türkiye Garanti Bankası A.Ş. and the acquisition of Catalunya Banc, S.A.) divestitures, mergers and strategic alliances;

• our ability to make payments on certain substantial unfunded amounts relating to commitments with personnel;

• the performance of our international operations and our ability to manage such operations;

• weaknesses or failures in our Group’s internal processes, systems (including information technology systems) and security;

• our success in managing the risks involved in the foregoing, which depends, among other things, on our ability to anticipate events that are not captured by the statistical models we use; and

• force majeure and other events beyond our control.

Readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. We undertake no obligation to release publicly the result of any revisions to these forward-looking statements which may be made to reflect events or circumstances after the date hereof, including, without limitation, changes in our business or acquisition strategy or planned capital expenditures, or to reflect the occurrence of unanticipated events.

2

PRESENTATION OF FINANCIAL INFORMATION

Accounting Principles

Under Regulation (EC) no. 1606/2002 of the European Parliament and of the Council of July 19, 2002, all companies governed by the law of an EU Member State and whose securities are admitted to trading on a regulated market of any Member State must prepare their consolidated financial statements for the years beginning on or after January 1, 2005 in conformity with EU-IFRS. The Bank of Spain issued Circular 4/2004 of December 22, 2004 on Public and Confidential Financial Reporting Rules and Formats (as amended or supplemented from time to time, “Circular 4/2004”), which requires Spanish credit institutions to adapt their accounting system to the principles derived from the adoption by the European Union of EU-IFRS.

Differences between EU-IFRS required to be applied under the Bank of Spain’s Circular 4/2004 and IFRS-IASB are not material for the six months ended June 30, 2016 and June 30, 2015. Accordingly, the Interim Consolidated Financial Statements included in this report on Form 6-K have been prepared in accordance with EU-IFRS required to be applied under the Bank of Spain’s Circular 4/2004 and in compliance with IFRS-IASB.

Changes in operating segments

On July 27, 2015, we acquired 62,538,000,000 shares (in the aggregate) of the Turkish bank Türkiye Garanti Bankası A.Ş. (“Garanti”) from Doğuş Holding A.Ş., Ferit Faik Şahenk, Dianne Şahenk and Defne Şahenk, under certain agreements entered into on November 19, 2014. Following this acquisition, we hold 39.90% of Garanti’s share capital and fully consolidate Garanti’s results in our consolidated financial statements as we determined we were able to control such entity.

This acquisition resulted in certain changes in our operating segments. In particular, since January 1, 2015, our former Eurasia segment has been recast into the following two segments: Turkey, which consists of our stake in Garanti (25.01% until July 27, 2015 and 39.90% since July 27, 2015), and Rest of Eurasia, which includes the retail and wholesale businesses carried out in Europe and Asia, other than in Spain and Turkey.

Statistical and Financial Information

The following principles should be noted in reviewing the statistical and financial information contained herein:

• Average balances, when used, are based on the beginning and the month-end balances during each six-month period. We do not believe that such monthly averages present trends that are materially different from those that would be presented by daily averages.

• Unless otherwise stated, any reference to loans refers to both loans and advances.

• Financial information with respect to segments or subsidiaries may not reflect consolidation adjustments.

• Certain numerical information in this report on Form 6-K may not compute due to rounding. In addition, information regarding period-to-period changes is based on numbers which have not been rounded.

Venezuela

The local financial statements of the Group subsidiaries in Venezuela are expressed in Venezuelan bolivar and they are converted into euros for purposes of preparing the Interim Consolidated Financial Statements. Venezuela has strict foreign exchange restrictions and different exchange rates in place.

In past years, we have used different exchange rates to prepare the Group’s consolidated financial statements:

• Until January 1, 2014, we used the CADIVI exchange rate (named after the acronym, in Spanish, of the Foreign Exchange Administration Commission, currently the National Center for Foreign Trade or

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CENCOEX). As of December 31, 2013 the exchange rate was 8.68 Venezuelan bolivars per euro. For purposes of preparing our consolidated financial statements as of and for the year ended December 31, 2013 we used the CADIVI exchange rate.

• In 2014 the Venezuelan government approved a new exchange rate system referred to as the “foreign-currency system”, in which the exchange rate against the U.S. dollar was determined in an auction which was open to both individuals and companies, resulting in an exchange rate that fluctuated from auction to auction and was published on the website of the Complementary Currency Administration System (SICAD I). Subsequently, in July 2014, the Venezuelan government established a new type of auction called SICAD II only applicable to certain types of transactions and not applicable to credit institutions. As of December 31, 2014 the applicable exchange rate (SICAD I) was 14.71 Venezuelan bolivars per euro. For purposes of preparing our consolidated financial statements as of and for the year ended December 31, 2014 we used the SICAD I exchange rate.

• On February 10, 2015, the Venezuelan government announced the cancellation of SICAD II and its combination with SICAD I in order to create a new SICAD and the creation of a new foreign-currency system called SIMADI. The Group used the SIMADI exchange rate starting in March 2015 for purpose of the Group’s interim financial statements. The SIMADI exchange rate increased rapidly until approximately 218 Venezuelan bolivars per euro and stabilized during the second half of 2015 reaching 216.3 Venezuelan bolivars per euro as of December 31, 2015. However, as explained below, we have not used this exchange rate to prepare the Group’s Interim Consolidated Financial Statements.

• Our Board of Directors considered that the use of the SIMADI exchange rate as of December 31, 2015 for preparing the Interim Consolidated Financial Statements would not lead to an accurate picture of the consolidated financial statements of the Group or the financial position of the Group subsidiaries in Venezuela. Consequently, we used an alternative conversion exchange rate of 469.5 Venezuelan bolivars per euro for the conversion of the financial statements of the Group’s subsidiaries in Venezuela as of and for the year ended December 31, 2015. This alternative exchange rate has been calculated by the Research Service of the Group taking into account the estimated evolution of inflation in Venezuela in 2015 (170%) (see Notes 2.2.16 and 2.2.20 to the Interim Consolidated Financial Statements).

• In February 2016, the Venezuelan government approved a new exchange rate agreement which sets two new mechanisms that regulate the purchase and sale of foreign currency and the suspension of the SIMADI exchange rate.

• As of December 31, 2015 and June 30, 2016, the Board of Directors considers that the use of the new exchanges rates and, previously, SIMADI for converting bolivars into euros in preparing the consolidated financial statements does not reflect the true picture of the financial statements of the Group and the financial position of the Group subsidiaries in Venezuela.

• Consequently, as of December 31, 2015 and June 30, 2016, the Group has used in the conversion of the financial statements of these foreign exchange rates amounting to 469 and 1,170 Venezuelan bolivars per euro, respectively. These exchanges rates have been calculated taking into account the estimated evolution of inflation in Venezuela at those dates (170% and 133.6%, for the year ended December 31, 2015 and the six months ended June 30, 2016, respectively) by the Research Service of the Group (see Note 2.2.16 to the Interim Consolidated Financial Statements).

SELECTED INTERIM CONSOLIDATED FINANCIAL DATA

The historical financial information set forth below for the six months ended June 30, 2016 and June 30, 2015 has been selected from, and should be read together with, the Interim Consolidated Financial Statements included herein.

For information concerning the preparation and presentation of the financial information contained herein, see “Presentation of Financial Information”.

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	Six Months Ended June 30,
	2016			2015			Change (%)
	(In Millions of Euros, Except Per Share/ADS Data (In Euros))
Consolidated Statement of Income Data
Interest and similar income		13,702			10,665			(28.5	%)
Interest and similar expenses		(5,338	)		(3,570	)		49.5	%
Net interest income		8,365			7,096			17.9	%
Dividend income		301			236			27.5	%
Share of profit or loss of entities accounted for using the equity method		1			195			(99.5	)%
Fee and commission income		3,313			2,801			18.3	%
Fee and commission expenses		(963	)		(682	)		41.2	%
Net gains (losses) on financial assets and liabilities (2)		642			827			22.4	%
Net exchange differences		533			620			(14.0	)%
Other operating income		715			546			31.0	%
Other operating expenses		(1,186	)		(911	)		30.2	%
Income on insurance and reinsurance contracts		1,958			1,725			13.5	%
Expenses on insurance and reinsurance contracts		(1,446	)		(1,233	)		17.3	%
Gross income		12,233			11,219			9.0	%
Administration costs		(5,644	)		(4,927	)		14.6	%
Depreciation		(689	)		(572	)		20.5	%
Provisions (net)		(262	)		(392	)		(33.2	)%
Impairment losses on financial assets (net)		(2,110	)		(2,137	)		(1.3	)%
Net operating income		3,528			3,191			10.6	%
Impairment losses on non-financial assets (net)		(99	)		(128	)		(22.7	)%
Gains (losses) on derecognized of non-financial assets and subsidiaries, net		37			23			60.9	%
Negative goodwill		—			22			n.m.	(1)
Profit (loss) from non-current assets and disposal groups classified as held for sale not qualifying as discontinued operations		(75	)		791			n.m.	(1)
Operating profit before tax		3,391			3,899			(13.0	)%
Tax expense (income) related to profit or loss from continuing operations		(920	)		(941	)		(2.2	)%
Profit from continuing operations		2,471			2,958			(16.5	)%
Profit from discontinued operations (net)		—			—			—
Profit		2,471			2,958			(16.5	)%
Profit attributable to parent company		1,832			2,759			(33.6	)%
Profit attributable to non-controlling interests		639			200			219.5	%
Per share/ADS (3) Data
Profit from continuing operations		2,471			2,958
Diluted profit attributable to parent company (4)		0.27			0.41
Basic profit attributable to parent company		0.27			0.41
Dividends declared (In euros)		0.08			0.08
Dividends declared (In U.S. dollars)		0.09			0.09
Number of shares outstanding (at period end)		6,480,357,925			6,305,238,012

(1) Not meaningful

(2) Comprises the following income statement line items contained in the Interim Consolidated Financial Statements: “Gains or (-) losses on derecognition of financial assets and liabilities not measured at fair value through profit or loss, net”; “Gains or (-) losses on financial assets and liabilities designated at fair value through profit or loss, net”; “Gains or (-) losses on financial assets and liabilities held for trading, net” and “Gains or (-) losses from hedge accounting, net”.

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(3) Each American Depositary Share (“ADS”) represents the right to receive one ordinary share.

(4) Calculated on the basis of the weighted average number of BBVA’s ordinary shares outstanding during the relevant period including the average number of estimated shares to be converted and, for comparative purposes, a correction factor to account for the capital increases carried out in January 2015, April 2015, October 2015 and April 2016, and excluding the weighted average number of treasury shares during the period (6,447 million and 6,264 million shares for the six months ended June 30, 2016 and June 30, 2015, respectively). See Note 5 to the Interim Consolidated Financial Statements.

	As of and for the Six Months Ended June 30,			As of and for the Year Ended December 31,			As of and for the Six Months Ended June 30,
	2016			2015			2015
	(In Millions of Euros, Except Percentages)
Consolidated Balance Sheet Data
Total assets		746,040			750,078			669,204
Net assets		55,962			55,439			50,997
Common stock		3,175			3,120			3,090
Loans and receivables (net)		470,543			471,828			405,108
Customer deposits		406,284			403,362			351,598
Debt certificates and subordinated liabilities		75,498			81,980			76,901
Non-controlling interest		8,527			8,149			1,728
Stockholders’ equity		55,962			55,439			50,997
Consolidated ratios
Profitability ratios:
Net interest margin (1)		2.25	%		2.27	%		2.15	%
Return on average total assets (2)		0.7	%		0.5	%		0.8	%
Return on average equity (3)		7.2	%		5.3	%		9.5	%
Credit quality data
Loan loss reserve (4)		17,439			18,742			17,736
Loan loss reserve as a percentage of total loans and receivables (net)		3.71	%		3.97	%		4.28	%
Non-performing asset ratio (NPA ratio) (5)		5.14	%		5.38	%		6.27	%
Impaired loans and advances to customers		24,212			25,333			25,300
Impaired contingent liabilities to customers (6)		622			664			590
		24,834			25,997			25,890
Loans and advances to customers		433,366			432,921			378,979
Contingent liabilities to customers		50,127			49,876			34,230
		483,493			482,797			413,209

(1) Represents net interest income as a percentage of average total assets. In order to calculate “Net interest margin” for the six months ended June 30, 2016 and June 30, 2015, respectively, net interest income is annualized by multiplying the net interest income for the period by two.

(2) Represents profit as a percentage of average total assets. In order to calculate “Return on average total assets” for the six months ended June 30, 2016 and June 30, 2015, respectively, profit is annualized by multiplying the profit for the period by two.

(3) Represents profit attributable to parent company as a percentage of average total equity, excluding “Non-controlling interest”. In order to calculate “Return on average equity” for the six months ended June 30, 2016 and June 30, 2015, respectively, profit attributable to parent company is annualized by multiplying the profit attributable to parent company for the period by two.

(4) Represents impairment losses on loans and receivables to credit institutions and loans and advances to customers.

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(5) Represents the sum of impaired loans and advances to customers and impaired contingent liabilities to customers divided by the sum of loans and advances to customers and contingent liabilities to customers.

(6) We include contingent liabilities in the calculation of our non-performing asset ratio (NPA ratio). We believe that impaired contingent liabilities should be included in the calculation of our NPA ratio where we have reason to know, as of the reporting date, that they are impaired. The credit risk associated with contingent liabilities (consisting mainly of financial guarantees provided to third-parties on behalf of our customers) is evaluated and provisioned according to the probability of default of our customers’ obligations. If impaired contingent liabilities were not included in the calculation of our NPA ratio, such ratio would generally be higher for the periods covered, amounting to approximately 5.6% as of June 30, 2016, 5.9% as of December 31, 2015 and 6.7% as of June 30, 2015.

Exchange Rates

Spain’s currency is the euro. Unless otherwise indicated, the amounts that have been converted to euro in this report on Form 6-K have been done so at the corresponding exchange rate published by the European Central Bank (“ECB”), at the end of each relevant period for purposes of the balance sheet, and the average exchange rate during the period for purposes of the income statement.

For convenience in the analysis of the information, the following tables describe, for the periods and dates indicated, information concerning the noon buying rate for euro, expressed in dollars per €1.00. The term “noon buying rate” refers to the rate of exchange for euros, expressed in U.S. dollars per euro, in the City of New York for cable transfers payable in foreign currencies as certified by the Federal Reserve Bank of New York for customs purposes.

Year ended December 31,	Average (1)
2011		1.4002
2012		1.2908
2013		1.3303
2014		1.3210
2015		1.1032
2016 (through September 16, 2016)		1.1132

(1) Calculated by using the average of the exchange rates on the last day of each month during the period.

Month ended	High		Low
March 31, 2016		1.1390		1.0845
April 30, 2016		1.1441		1.1239
May 31, 2016		1.1516		1.1140
June 30, 2016		1.1400		1.1024
July 31, 2016		1.1145		1.0968
August 31, 2016		1.1334		1.1078
September 16, 2016 (through September 16, 2016)		1.1271		1.1158

The noon buying rate for euro from the Federal Reserve Bank of New York, expressed in dollars per €1.00, on September 16, 2016, was $1.1160.

As of June 30, 2016, approximately 47% of our assets and approximately 46% of our liabilities were denominated in currencies other than euro. See Note 2.2.16 to our Interim Consolidated Financial Statements.

For a discussion of our foreign currency exposure, please see Note 7.4.2 to our Interim Consolidated Financial Statements (“Market Risk—Structural Exchange Rate Risk”).

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Business Overview

BBVA is a highly diversified international financial group, with strengths in the traditional banking businesses of retail banking, asset management, private banking and wholesale banking. We also have investments in some of Spain’s leading companies.

Operating Segments

Set forth below are the Group’s current seven operating segments:

• Banking Activity in Spain

• Real Estate Activity in Spain

• Turkey

• Rest of Eurasia

• Mexico

• South America

• United States

In addition to the operating segments referred to above, the Group has a Corporate Center which includes those items that have not been allocated to an operating segment. It includes the Group’s general management functions, including costs from central units that have a strictly corporate function; management of structural exchange rate positions carried out by the Financial Planning unit; specific issues of capital instruments to ensure adequate management of the Group’s overall capital position; proprietary portfolios such as holdings in some of Spain’s leading companies and their corresponding results; certain tax assets and liabilities; provisions related to commitments with pensioners; and goodwill and other intangibles. With respect to the first six months of 2015, it also includes the following items: the capital gains resulting from the various sale transactions of an aggregate 6.34% stake in CNCB, the effect of the valuation at fair value of the 25.01% initial stake held by BBVA in Garanti, the impact of the sale of BBVA’s 29.68% stake in CIFH and the negative goodwill generated from the acquisition of Catalunya Banc.

The breakdown of the Group’s total assets by operating segments as of June 30, 2016 and December 31, 2015 is as follows:

	As of June 30, 2016		As of December 31, 2015
	(In Millions of Euros)
Banking Activity in Spain		345,640		339,775
Real Estate Activity in Spain		14,988		17,122
United States		86,614		86,454
Turkey		90,520		89,003
Mexico		93,097		99,594
South America		71,224		70,661
Rest of Eurasia		19,495		23,469
Subtotal Assets of Operating Segments		721,579		726,079
Corporate Center and other adjustments		24,461		23,999
Total Assets BBVA Group		746,040		750,078

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The following table sets forth information relating to the profit (loss) attributable to parent company by each of BBVA’s operating segments and Corporate Center for the six months ended June 30, 2016 and June 30, 2015:

	Profit/(Loss) Attributable to Parent Company						% of Profit/(Loss) Attributable to Parent Company
	Six months ended June 30,
	2016			2015			2016			2015
	(In Millions of Euros)						(In Percentage)
Banking Activity in Spain		619			731			33.8			26.5
Real Estate Activity in Spain		(209	)		(301	)		(11.4	)		(10.9	)
Turkey (1)		324			174			17.7			6.3
Rest of Eurasia		75			43			4.1			1.6
Mexico		968			1,045			52.8			37.9
South America		394			475			21.5			17.2
United States		178			276			9.7			10.0
Subtotal operating segments		2,350			2,444
Corporate Center		(518	)		315
Profit attributable to parent company		1,832			2,759

(1) The information for the six months ended June 30, 2015 is presented under management criteria, pursuant to which Garanti’s results were proportionally consolidated under the equity method based on our 25.01% interest in Garanti until July 2015, when the acquisition of an additional 14.89% stake in Garanti was completed and we started fully consolidating the Garanti group. See Note 3 to the Interim Consolidated Financial Statements.

The following table sets forth information relating to the income of each operating segment for the six months ended June 30, 2016 and 2015 and reconciles the income statement of the various operating segments to the consolidated income statement of the Group:

	Banking Activity in Spain		Real Estate Activity in Spain			Turkey (1)		Rest of Eurasia		Mexico		South America		United States		Corporate Center			Total		Adjustments (2)			BBVA Group
	(In Millions of Euros)
June 2016
Net interest income		1,943		42			1,606		86		2,556		1,441		938		(247	)		8,365		—			8,365
Gross income		3,293		11			2,154		281		3,309		1,999		1,330		(144	)		12,233		—			12,233
Net operating income		1,493		(56	)		1,321		111		2,112		1,078		424		(583	)		5,901		—			5,901
Operating profit /(loss) before tax		897		(289	)		1,022		104		1,300		804		240		(686	)		3,391		—			3,391
Profit		619		(209	)		324		75		968		394		178		(518	)		1,832		—			1,832
June 2015
Net interest income		1,980		(12	)		425		85		2,731		1,652		883		(224	)		7,521		(425	)		7,096

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Gross income	3,709	(64	)	510	265	3,565	2,296	1,321	(49	)	11,554	(335	)	11,219
Net operating income	2,088	(124	)	289	89	2,252	1,285	440	(482	)	5,836	(116	)	5,720
Operating profit /(loss) before tax	1,041	(436	)	219	66	1,384	929	381	(538	)	3,046	853		3,899
Profit	731	(301	)	174	43	1,045	475	276	315		2,759	—		2,759

(1) The information for the six months ended June 30, 2015 is presented under management criteria, pursuant to which Garanti’s results were proportionally consolidated under the equity method based on our 25.01% interest in Garanti until July 2015, when the acquisition of an additional 14.89% stake in Garanti was completed and we started fully consolidating 100% of the Garanti group. See Note 3 to the Interim Consolidated Financial Statements.

(2) Includes adjustments due to Garanti Group accounted for using the equity method and other inter-areas adjustments. See Note 2 to the Interim Consolidated Financial Statements

The following table sets forth information relating to the balance sheet of the main operating segments as of June 30, 2016 and December 31, 2015:

As of June 30, 2016	Banking Activity in Spain		Turkey		Rest of Eurasia		Mexico		South America		United States
	(In Millions of Euros)
Total Assets		345,640		90,520		19,495		93,097		71,224		86,614
Loans and advances to customers		193,324		60,587		15,019		47,776		46,565		60,148
Of which:
Residential mortgages		83,756		6,629		2,509		8,591		10,667		12,434
Consumer Finance		6,567		15,122		289		11,198		9,454		7,257
Loans		5,009		9,685		275		6,571		6,966		6,704
Credit cards		1,559		5,437		14		4,627		2,488		553
Loans to enterprises		44,120		32,931		11,650		18,315		19,803		31,697
Loans to public sector		21,283		—		73		3,787		780		4,501
Total Liabilities		334,648		80,963		18,109		89,251		67,160		82,658
Customer deposits		183,906		52,112		13,426		50,477		43,485		62,484
Of which:
Current and savings accounts		86,998		9,926		3,640		30,151		20,444		45,808
Time deposits		72,940		36,837		9,313		7,213		18,954		13,807
Other customer funds		11,659		—		394		6,905		4,598		—
Total Equity		10,992		9,557		1,386		3,846		4,064		3,957

As of December 31, 2015	Banking Activity in Spain		Turkey		Rest of Eurasia		Mexico		South America		United States
	(In Millions of Euros)
Total Assets		339,775		89,007		23,469		99,594		70,661		86,454
Loans and advances to customers		192,068		57,768		16,143		49,075		44,970		60,599
Of which:

10

Residential mortgages	85,002	6,215	2,614	9,099	9,810	13,182
Consumer finance	6,145	14,156	322	11,588	9,278	7,364
Loans	4,499	9,010	305	6,550	6,774	6,784
Credit cards	1,646	5,146	17	5,037	2,504	580
Loans to enterprises	43,763	31,918	12,619	18,160	19,896	31,882
Loans to public sector	20,975	—	216	4,197	630	4,442
Total Liabilities	329,195	83,246	22,319	93,413	66,287	82,413
Customer deposits	185,471	47,148	15,053	49,553	41,998	63,715
Of which:
Current and savings accounts	81,218	9,697	5,031	32,165	21,011	45,717
Time deposits	78,403	33,695	9,319	7,049	16,990	14,456
Other customer funds	14,906	—	609	5,738	4,031	—
Total Equity	10,581	5,757	1,150	6,181	4,374	4,041

Banking Activity in Spain

The Banking Activity in Spain operating segment includes all of BBVA’s banking and non-banking businesses in Spain, other than those included in the Corporate Center area and Real Estate Activity in Spain. The main business units included in this operating segment are:

• Spanish Retail Network: including individual customers, private banking, small companies and businesses in the domestic market;

• Corporate and Business Banking (CBB): which manages small and medium sized enterprises (“SMEs”), companies and corporations, public institutions and developer segments;

• Corporate and Investment Banking (C&IB): responsible for business with large corporations and multinational groups and the trading floor and distribution business in Spain; and

• Other units: which include the insurance business unit in Spain (BBVA Seguros), and the Asset Management unit, which manages Spanish mutual funds and pension funds.

In addition, Banking Activity in Spain includes certain loans and advances portfolios, finance and structural euro balance sheet positions.

The following table sets forth information relating to the activity of this operating segment as of June 30, 2016, and December 31, 2015:

	As of June 30, 2016		As of December 31, 2015
	(In Millions of Euros)
Total assets		345,640		339,775
Loans and advances to customers		193,324		192,068
Customer deposits		183,906		185,471
Mutual funds		30,561		31,484
Pension funds		22,772		22,897
NPA ratio (%)		6.0		6.6

11

Loans and advances to customers in this operating segment as of June 30, 2016 amounted to €193,324 million, a 0.7% increase from the €192,068 million recorded as of December 31, 2015.

Customer deposits in this operating segment as of June 30, 2016 amounted to €183,906 million, a 0.8% decrease from the €185,471 million recorded as of December 31, 2015.

Mutual funds in this operating segment as of June 30, 2016 amounted to €30,561 million, a 2.9 % decrease from the €31,484 million recorded as of December 31, 2015. Pension funds in this operating segment as of June 30, 2016 amounted to €22,772 million, a 0.5% decrease from the €22,897 million recorded as of December 31, 2015.

This operating segment’s non-performing asset ratio decreased to 6.0% as of June 30, 2016, from 6.6% as of December 31, 2015, mainly due to decreased impaired loans, particularly in the real estate and construction sectors. This operating segment’s non-performing assets coverage ratio increased to 60% as of June 30, 2016, from 59% as of December 31, 2015.

Real Estate Activity in Spain

This operating segment was set up with the aim of providing specialized and structured management of the real estate assets accumulated by the Group as a result of the economic crisis in Spain. It includes primarily lending to real estate developers and foreclosed real estate assets.

The Group’s exposure to the real estate sector in Spain, including loans and advances to customers and foreclosed assets, is declining. As of June 30, 2016 the balance stood at €11,404 million, 8.0% lower than as of December 31, 2015. Non-performing assets of this segment were 12.4% higher as of June 30, 2016 than at December 31, 2015. The coverage of non-performing and potential problem loans of this segment decreased to 60.6% as of June 30, 2016, compared with 63.3% of the total amount of real-estate assets in this operating segment.

The number of real estate assets sold amounted to 6,196 units for the six months ended June 30, 2016, 13.4% higher than in the six months ended June 30, 2015.

Turkey

This operating segment reflects BBVA’s stake in the Turkish bank Garanti. Following management criteria, assets and liabilities were proportionally consolidated under the equity method based on our 25.01% interest in Garanti until July 2015, when the acquisition of an additional 14.89% stake in Garanti was completed and we began to fully consolidate the Garanti group

The following table sets forth information relating to the business activity of this operating segment as of June 30, 2016, and December 31, 2015:

	As of June 30, 2016		As of December 31, 2015
	(In Millions of Euros)
Total assets		90,520		89,003
Loans and advances to customers		60,587		57,768
Customer deposits		52,112		47,148
Mutual funds		1,253		1,243
Pension funds		2,666		2,378
NPA ratio (%)		2.7		2.8

12

The Turkish lira depreciated against the euro as of June 30, 2016 compared to December 31, 2015, negatively affecting the business activity of the Turkey operating segment as of June 30, 2016 expressed in euro. See “Operating and Financial Review and Prospects—Factors Affecting the Comparability of our Results of Operations and Financial Condition—Trends in Exchange Rates.”

Loans and advances to customers in this operating segment as of June 30, 2016 increased 4.9% to €60,587 million from the €57,768 million recorded as of December 31, 2015, primarily supported by growth of loans in Turkish lira, a positive change in business banking loans, residential mortgages and general-purpose loans

Customer deposits in this operating segment as of June 30, 2016 increased 7.8% to €52,112 million from the €47,148 million recorded as of December 31, 2015, mainly as a result of a positive trend in current and savings accounts and term deposits.

Mutual funds in this operating segment as of June 30, 2016 increased 0.8% to €1,253 million from the €1,243 million recorded as of December 31, 2015.

Pension funds in this operating segment as of June 30, 2016 increased 12.1% to €2,666 million from the €2,378 million recorded as of December 31, 2015 as a result of a tax incentive implemented by the Spanish government on contributions to pension funds made by individuals.

This operating segment’s non-performing asset ratio was 2.7% as of June 30, 2016 compared to 2.8% as of December 31, 2015. This operating segment’s non-performing assets coverage ratio decreased to 128% as of June 30, from 129% as of December 31, 2015.

Rest of Eurasia

This operating segment includes the retail and wholesale banking businesses carried out by the Group in Europe (primarily Portugal) and Asia, excluding Spain and Turkey.

The following table sets forth information relating to the business activity of this operating segment as of June 30, 2016 and December 31, 2015:

	As of June 30, 2016		As of December 31, 2015
	(In Millions of Euros)
Total assets		19,495		23,469
Loans and advances to customers		15,019		16,143
Customer deposits		13,426		15,053
Pension funds		379		331
NPA ratio (%)		2.7		2.5

Loans and advances to customers in this operating segment as of June 30, 2016 amounted to €15,019 million, a 7.0% decrease from the €16,143 million recorded as of December 31, 2015, mainly as a result of the lower branch office activity in Asia and Europe.

Customer deposits in this operating segment as of June 30, 2016 amounted to €13,426 million, a 10.8% decrease from the €15,053 million recorded as of December 31, 2015, mainly as a result of decreased deposits in Europe, offsetting growth in Asia.

13

Pension funds in this operating segment as of June 30, 2016 amounted to €379 million, a 14.5% increase from the €331 million recorded as of December 31, 2015, mainly as a result of higher contributions and the appreciation of pension funds.

This operating segment’s non-performing asset ratio increased to 2.7% as of June 30, 2016 from 2.5% as of December 31, 2015. This operating segment’s non-performing assets coverage ratio increased to 97% as of June 30, from 96% as of December 31, 2015.

Mexico

The Mexico operating segment comprises the banking and insurance businesses conducted in Mexico by the BBVA Bancomer financial group.

The following table sets forth information relating to the business activity of this operating segment as of June 30, 2016 and December 31, 2015:

	As of June 30, 2016		As of December 31, 2015
	(In Millions of Euros)
Total assets		93,097		99,594
Loans and advances to customers		47,776		49,075
Customer deposits		50,477		49,553
Mutual funds		17,436		17,894
NPA ratio (%)		2.5		2.6

The Mexican peso depreciated 8.3% against the euro as of June 30, 2016 compared with December 31, 2015, negatively affecting the business activity of the Mexico operating segment as of June 30, 2016 expressed in euro. See “Operating and Financial Review and Prospects—Factors Affecting the Comparability of our Results of Operations and Financial Condition—Trends in Exchange Rates.”

Loans and advances to customers in this operating segment as of June 30, 2016 amounted to €47,776 million, a 2.6% decrease from the €49,075 million recorded as of December 31, 2015, primarily due to the depreciation of the Mexican peso against the euro, which offset an increase in lending in Mexican peso terms in both the wholesale and retail lending portfolios

Customer deposits in this operating segment as of June 30, 2016 amounted to €50,477 million, a 1.9% increase from the €49,553 million recorded as of December 31, 2015, mainly as a result of the positive performance of both current and saving accounts and time deposits.

Mutual funds in this operating segment as of June 30, 2016 amounted to €17,436 million, a 2.6% decrease from the €17,894 million recorded as of December 31, 2015, primarily due to the depreciation of the Mexican peso against the euro.

This operating segment’s non-performing asset ratio decreased to 2.5% as of June 30, 2016, from 2.6% as of December 31, 2015. This operating segment’s non-performing assets coverage ratio increased to 121% as of June 30, from 120% as of December 31, 2015.

South America

The South America operating segment includes the BBVA Group’s banking and insurance businesses in the region.

14

The business units included in the South America operating segment are:

• Retail and Corporate Banking: includes banks in Argentina, Chile, Colombia, Paraguay, Peru, Uruguay and Venezuela.

• Insurance: includes insurance businesses in Argentina, Chile, Colombia and Venezuela.

The following table sets forth information relating to the business activity of this operating segment as of June 30, 2016 and December 31, 2015:

	As of June 30, 2016		As of December 31, 2015
	(In Millions of Euros)
Total assets		71,224		70,661
Loans and advances to customers		46,565		44,970
Customer deposits		43,485		41,998
Mutual funds		4,232		3,793
Pension funds		6,243		5,936
NPA ratio (%)		2.7		2.3

The Venezuelan bolivar depreciated significantly against the euro in the six months ended June 30, 2016. Similarly, the Argentine peso depreciated against the euro during the same period. The effect of the devaluation of these two currencies more than offset the period-end appreciation of the currencies of other South American countries where we operate and negatively affecting the business activity of the South America operating segment as of June 30, 2016 expressed in Euro. See “Operating and Financial Review and Prospects—Factors Affecting the Comparability of our Results of Operations and Financial Condition.”

Loans and advances to customers in this operating segment as of June 30, 2016 amounted to €46,565 million, a 3.5% increase from the €44,970 million recorded as of December 31, 2015, as a result of increased activity, particularly in consumer loans (1.9% increase) and mortgages (8.7% increase).

Customer deposits in this operating segment as of June 30, 2016 amounted to €43,485 million, a 3.4% increase from the €41,998 million recorded as of December 31, 2015, primarily due to a positive growth in certain of our products, in particular saving accounts, which grew a 12.0% in the six months ended June 30, 2016, partially offset by the depreciation of the Venezuelan bolivar and the Argentine peso.

Mutual funds in this operating segment as of June 30, 2016 amounted to €4,232 million, a 10.3% increase from the €3,793 million recorded as of December 31, 2015, mainly due to the significant depreciation of the Venezuelan bolivar, which was partially offset by a positive performance in Argentina, Colombia and Chile.

Pension funds in this operating segment as of June 30, 2016 amounted to €6,243 million, a 4.9% increase from the €5,936 million recorded as of December 31, 2015, mainly as a result of the increased volumes in Bolivia.

This operating segment’s non-performing asset ratio increased to 2.7% as of June 30, 2016, from 2.3% as of December 31, 2015. This operating segment non-performing assets coverage ratio decreased to 111% as of June 30, 2016, from 123% as of December 31, 2015, mainly due to the asset quality improvement attributable to the moderation of the economic environment.

15

United States

This operating segment encompasses the Group’s business in the United States. BBVA Compass accounted for approximately 96% of the operating segment’s balance sheet as of June 30, 2016. Given its size in this segment, most of the comments below refer to BBVA Compass. This operating segment also includes the assets and liabilities of the BBVA office in New York, which specializes in transactions with large corporations.

The following table sets forth information relating to the business activity of this operating segment as of June 30, 2016 and December 31, 2015:

	As of June 30, 2016		As of December 31, 2015
	(In Millions of Euros)
Total assets		86,614		86,454
Loans and advances to customers		60,148		60,599
Customer deposits		62,484		63,715
NPA ratio (%)		1.6		0.9

The U.S. dollar depreciated against the euro as of June 30, 2016 compared with December 31, 2015, negatively affecting the business activity of the United States operating segment as of June 30, 2016 expressed in Euro. See “Operating and Financial Review and Prospects—Factors Affecting the Comparability of our Results of Operations and Financial Condition.”

Loans and advances to customers in this operating segment as of June 30, 2016 amounted to €60,148 million a 0.7% decrease from the €60,599 million recorded as of December 31, 2015, mainly due to the depreciation of the U.S. dollar against the Euro partially offset by increased loans and advances to enterprises and, to a lesser extent, the public sector.

Customer deposits in this operating segment as of June 30, 2016 amounted to €62,484 million, a 2.0 % decrease from the €63,715 million recorded as of December 31, 2015, mainly due to the depreciation of the U.S. dollar against the euro, partially offset by an increase in the balance of current and saving accounts.

This operating segment’s non-performing asset ratio as of June 30, 2016 was 1.6% compared with 0.9% as of December 31, 2015. This operating segment non-performing assets coverage ratio decreased to 90% as of June 30, 2016, from 151% as of December 31, 2015. Both changes are mainly as a result of an increase in the amount of impaired loans of some companies that operate in the energy, metal and mining sectors.

Selected Statistical Information

The following is a presentation of selected statistical information for the periods indicated. Where required under Industry Guide 3, we have provided such selected statistical information separately for our domestic and foreign activities, pursuant to our calculation that our foreign operations are significant according to Rule 9-05 of Regulation S-X.

Average Balances and Rates

The tables below set forth selected statistical information on our average balance sheets, which are based on the beginning and month-end balances in each period. We do not believe that monthly averages present trends materially different from those that would be presented by daily averages. Interest income figures, when used; include interest income on non-accruing loans to the extent that cash payments have been received. Loan fees are included in the computation of interest revenue.

16

	Average Balance Sheet - Assets and Interest from Earning Assets
	Six Months ended June 30, 2016							Six Months ended June 30, 2015
	Average Balance		Interest		Average Interest Yield (1)			Average Balance		Interest		Average Interest Yield (1)
	(In Millions of Euros, Except Percentages)
Assets
Cash and balances with central banks and other demand deposits		25,003		5		0.04	%		23,391		2		0.02	%
Securities portfolio and derivatives		207,222		2,562		2.49	%		204,974		1,951		1.92	%
Loans and receivables		457,080		11,010		0.08	%		387,315		8,620		0.07	%
Loans and advances to central banks		17,215		99		1.15	%		7,084		62		1.77	%
Loans and advances to credit institutions		27,865		163		1.18	%		26,839		120		0.90	%
Loans and advances to customers		412,000		10,748		5.25	%		353,392		8,437		4.81	%
In euro (2)		203,819		1,918		1.89	%		188,383		2,181		2.33	%
In other currencies (3)		208,182		8,830		8.53	%		165,009		6,256		7.65	%
Other assets		53,184		125		0.47	%		45,926		93		0.41	%
Total average assets		742,490		13,702		3.71	%		661,606		10,665		3.25	%

(1) Rates have been presented on a non-taxable equivalent basis.

(2) Foreign activity represents 50.8% of the total average assets for the six months period ended June 30, 2016.

	Average Balance Sheet - Liabilities and Interest Paid on Interest Bearing Liabilities
	Six Months ended June 30, 2016							Six Months ended June 30, 2015
	Average Balance		Interest		Average Yield% (1)			Average Balance		Interest		Average Yield % (1)
	(In Millions of Euros, Except Percentages)
Liabilities
Deposits from central banks and credit institutions		102,555		952		1.87	%		88,739		611		1.39	%
Customer deposits		404,701		3,027		1.50	%		338,154		1,719		1.03	%
In euro		203,558		420		0.41	%		174,434		566		0.65	%
In other currencies		201,143		2,607		2.61	%		163,720		1,154		1.42	%
Debt securities issued		89,982		876		1.96	%		84,612		837		2.00	%
Other liabilities		90,117		483		1.08	%		97,085		403		0.84	%
Equity		55,135		—		—			53,016		—		—
Total average liabilities (2)		742,490		5,338		1.44	%		661,606		3,570		1.09	%

(1) Rates have been presented on a non-taxable equivalent basis.

(2) Foreign activity represents the 45.3% of the total average liabilities for the six months period ended June 30, 2016.

17

Changes in Net Interest Income-Volume and Rate Analysis

The following tables allocate changes in our net interest income between changes in volume and changes in rate for the six months ended June 30, 2016 compared to the six months ended June 30, 2015 and for the six months ended June 30, 2015 compared to the six months ended June 30, 2014. Volume and rate variance have been calculated based on movements in average balances over the period and changes in interest rates on average interest-earning assets and average interest-bearing liabilities. The only out-of-period items and adjustments excluded from the following table are interest payments on loans which are made in a period other than the period in which they are due. Loan fees were included in the computation of interest income.

	For the Six Months Ended June 30, 2016/June 30, 2015
	Increase (Decrease) Due to Changes in
	Volume (1)			Rate (1) (2)			Net Change
	(In Millions of Euros)
Cash and balances with central banks and other demand deposits		—			3			4
Securities portfolio and derivatives		27			584			611
Loans and advances to central banks		89			(53	)		37
Loans and advances to credit institutions		5			38			43
Loans and advances to customers
In euros		185			(448	)		(263	)
In other currencies		1,659			915			2,574
Other assets		15			17			32
Interest income								3,037
Deposits from central banks and credit institutions		97			244			341
Customer deposits
In euros		96			(242	)		(146	)
In other currencies		268			1,186			1,454
Debt securities issued		56			(17	)		38
Other liabilities		(28	)		108			80
Interest expense								1,768
Net interest income								1,269

(1) The volume effect is calculated as the result of the average interest rate of the earlier period multiplied by the difference between the average balances of both periods.

(2) The rate effect is calculated as the result of the average balance of the earlier period multiplied by the difference between the average interest rates of both periods.

	For the Six Months Ended June 30, 2015/June 30, 2014
	Increase (Decrease) Due to Changes in
	Volume (1)			Rate (1) (2)			Net Change
	(In Millions of Euros)
Cash and balances with central banks and other demand deposits		2			(2	)		—
Securities portfolio and derivatives		402			(631	)		(228	)
Loans and advances to central banks		(63	)		15			(48	)
Loans and advances to credit institutions		39			(69	)		(30	)
Loans and advances to customers
In euros		226			(552	)		(326	)
In other currencies		2,106			(1,838	)		268
Other assets		10			18			29
Interest income								(335	)
Deposits from central banks and credit institutions		71			(140	)		(68	)
Customer deposits
In euros		192			(587	)		(394	)

18

In other currencies	349	(426	)	(77	)
Debt securities issued	44	(153	)	(110	)
Other liabilities	105	(161	)	(57	)
Interest expense				(706	)
Net interest income				371

(1) The volume effect is calculated as the result of the average interest rate of the earlier period multiplied by the difference between the average balances of both periods.

(2) The rate effect is calculated as the result of the average balance of the earlier period multiplied by the difference between the average interest rates of both periods.

Interest Earning Assets—Margin and Spread

The following table analyzes the levels of our average earning assets and illustrates the comparative gross and net yields and spread obtained for each of the years indicated.

	Six Months Ended June 30,
	2016 (*)			2015 (*)
	(In Millions of Euros, Except Percentages)
Average interest earning assets		689,307			615,680
Gross yield (1)		3.99	%		3.47	%
Net yield (2)		3.70	%		3.23	%
Net interest margin (3)		2.43	%		2.31	%
Average effective rate paid on all interest-bearing liabilities		1.79	%		1.40	%
Spread (4)		2.19	%		2.07	%

(*) Ratios are annualized.

(1) Gross yield represents total interest income divided by average interest earning assets.

(2) Net yield represents total interest income divided by total average assets.

(3) Net interest margin represents net interest income as percentage of average interest earning assets.

(4) Spread is the difference between gross yield and the average cost of interest-bearing liabilities.

ASSETS

Interest-Bearing Deposits in Other Banks

As of June 30, 2016, interbank deposits (excluding deposits with central banks) represented 3.93% of our total assets. Of such interbank deposits, 24.5% were held outside of Spain and 75.5% in Spain. We believe that our deposits are generally placed with highly rated banks and have a lower risk than many loans we could make in Spain. However, such deposits are subject to the risk that the deposit banks may fail or the banking system of certain of the countries in which a portion of our deposits are made may face liquidity or other problems.

Securities Portfolio

As of June 30, 2016, our total securities portfolio (consisting of investment securities and loans and receivables) was carried on our consolidated balance sheet at a carrying amount (equivalent to its market or appraised value as of such date) of €147,886 million, representing 19.8% of our total assets. €47,453 million, or 32.1%, of our securities

19

portfolio consisted of Spanish Treasury bonds and Treasury bills. The average yield for the six months ended June 30, 2016 on the investment securities that BBVA held was 4.0%, compared with an average yield of approximately 2.5% earned on loans and advances for the six months ended June 30, 2015. See Notes 10 and 12 to the Interim Consolidated Financial Statements. For a discussion of our investments in affiliates, see Note 16 to the Interim Consolidated Financial Statements. For a discussion of the manner in which we value our securities, see Notes 2.2.1 and 8 to the Interim Consolidated Financial Statements.

The following tables analyze the carrying amount and fair value of debt securities as of June 30, 2016 and December 31, 2015, respectively. The trading portfolio is not included in the tables below because the amortized costs and fair values of these items are the same. See Note 10 to the Interim Consolidated Financial Statements.

	As of June 30, 2016
	Amortized cost		Fair Value (1)		Unrealized Gains		Unrealized Losses
	(In Millions of Euros)
DEBT SECURITIES -
AVAILABLE FOR SALE PORTFOLIO
Domestic-		31,934		33,151		1,248		(31	)
Spanish Government and other government agencies debt securities		29,102		30,226		1,135		(11	)
Other debt securities		2,832		2,925		113		(20	)
Issued by Central Banks		—		—		—		—
Issued by credit institutions		1,357		1,419		63		—
Issued by other institutions		1,476		1,506		50		(20	)
Foreign-		52,349		53,011		1,389		(727	)
Mexico		11,577		11,706		279		(149	)
Mexican Government and other government agencies debt securities		9,597		9,748		232		(80	)
Other debt securities		1,980		1,958		47		(69	)
Issued by Central Banks		—		—		—		—
Issued by credit institutions		86		90		4		—
Issued by other institutions		1,894		1,867		43		(69	)
The United States		14,952		14,895		125		(182	)
U.S. Treasury and other U.S. government agencies debt securities		1,288		1,296		12		(4	)
States and political subdivisions debt securities		6,103		6,140		47		(10	)
Other debt securities		7,562		7,459		65		(168	)
Issued by Central Banks		—		—		—		—
Issued by credit institutions		79		80		1		—
Issued by other institutions		7,483		7,379		64		(168	)
Turkey		6,269		6,325		137		(81	)
Turkey Government and other government agencies debt securities		5,732		5,788		130		(74	)
Other debt securities		537		537		7		(7	)
Issued by Central Banks		—		—		—		—
Issued by credit institutions		475		476		6		(6	)
Issued by other institutions		61		61		1		(1	)
Other countries		19,551		20,085		848		(314	)
Other foreign governments and other government agencies debt securities		7,121		7,588		551		(84	)
Other debt securities		12,430		12,497		297		(230	)
Issued by Central Banks		1,911		1,912		1		—
Issued by credit institutions		3,290		3,348		137		(78	)

20

Issued by other institutions	7,229	7,237	159	(151	)
TOTAL AVAILABLE FOR SALE PORTFOLIO	84,283	86,162	2,637	(758	)
HELD TO MATURITY PORTFOLIO
Domestic-	9,899	10,051	152	—
Spanish Government and other government agencies debt securities	9,227	9,377	150	—
Other domestic debt securities	672	674	2	—
Issued by Central Banks	—	—	—	—
Issued by credit institutions	515	516	2	—
Issued by other institutions	157	158	1	—
Foreign-	9,396	9,590	194	—
Foreign government and other government agency debt securities	8,358	8,536	178	—
Other debt securities	1,038	1,054	17	—
TOTAL HELD TO MATURITY PORTFOLIO	19,295	19,641	346	—
TOTAL DEBT SECURITIES	103,578	105,803	2,983	(758	)

(1) Fair values for listed securities are determined on the basis of their quoted prices at the end of the period. Fair values are used for unlisted securities based on our estimates and valuation techniques. See Note 8 to the Consolidated Financial Statements.

21

	As of December 31, 2015
	Amortized cost		Fair Value (1)		Unrealized Gains		Unrealized Losses
	(In Millions of Euros)
DEBT SECURITIES -
AVAILABLE FOR SALE PORTFOLIO
Domestic-		43,500		45,668		2,221		(53	)
Spanish Government and other government agencies debt securities		38,763		40,799		2,078		(41	)
Other debt securities		4,737		4,869		144		(11	)
Issued by Central Banks		—		—		—		—
Issued by credit institutions		2,702		2,795		94		—
Issued by other institutions		2,035		2,074		50		(11	)
Foreign-		62,734		62,641		1,132		(1,226	)
Mexico		12,627		12,465		73		(235	)
Mexican Government and other government agencies debt securities		10,284		10,193		70		(160	)
Other debt securities		2,343		2,272		4		(75	)
Issued by Central Banks		—		—		—		—
Issued by credit institutions		260		254		1		(7	)
Issued by other institutions		2,084		2,019		3		(68	)
The United States		13,890		13,717		63		(236	)
U.S. Treasury and other U.S. government agencies debt securities		2,188		2,177		4		(15	)
States and political subdivisions debt securities		4,629		4,612		9		(26	)
Other debt securities		7,073		6,927		50		(195	)
Issued by Central Banks		—		—		—		—
Issued by credit institutions		71		75		5		(1	)
Issued by other institutions		7,002		6,852		45		(194	)
Turkey		13,414		13,265		116		(265	)
Turkey Government and other government agency debt securities		11,801		11,682		111		(231	)
Other debt securities		1,613		1,584		4		(34	)
Issued by Central Banks		—		—		—		—
Issued by credit institutions		1,452		1,425		3		(30	)
Issued by other institutions		162		159		1		(4	)
Other countries		22,803		23,194		881		(490	)
Other foreign governments and other government agencies debt securities		9,778		10,356		653		(76	)
Other debt securities		13,025		12,838		227		(414	)
Issued by Central Banks		2,277		2,273		—		(4	)
Issued by credit institutions		3,468		3,488		108		(88	)
Issued by other institutions		7,280		7,077		119		(322	)
TOTAL AVAILABLE FOR SALE PORTFOLIO		106,234		108,310		3,354		(1,278	)
HELD TO MATURITY PORTFOLIO
Domestic-		—		—		—		—
Foreign-		—		—		—		—
TOTAL HELD TO MATURITY PORTFOLIO		—		—		—		—
TOTAL DEBT SECURITIES		106,234		108,310		3,354		(1,278	)

(1) Fair values for listed securities are determined on the basis of their quoted prices at the end of the period. Fair values are used for unlisted securities based on our estimates and valuation techniques. See Note 8 to the Consolidated Financial Statements.

22

The following tables analyze the carrying amount and fair value of our ownership of equity securities as of June 30, 2016 and December 31, 2015, respectively. See Note 10 to the Interim Consolidated Financial Statements:

	As of June 30, 2016
	Amortized cost		Fair Value (1)		Unrealized Gains		Unrealized Losses
	(In Millions of Euros)
EQUITY SECURITIES -
AVAILABLE FOR SALE PORTFOLIO
Domestic-		3,457		2,396		9		(1,071	)
Equity listed		3,390		2,323		2		(1,070	)
Equity unlisted		67		73		7		(1	)
Foreign-		1,788		2,081		345		(53	)
United States-		589		611		24		(2	)
Equity listed		45		60		18		(2	)
Equity unlisted		544		550		6		—
Other countries-		1,199		1,471		321		(51	)
Equity listed		1,058		1,294		282		(48	)
Equity unlisted		141		177		39		(3	)
TOTAL AVAILABLE FOR SALE PORTFOLIO		5,246		4,477		354		(1,123	)
TOTAL EQUITY SECURITIES		5,246		4,477		354		(1,123	)
TOTAL INVESTMENT SECURITIES		108,824		109,972		3,109		(1,961	)

(1) Fair values for listed securities are determined on the basis of their quoted prices at the end of the year. Fair values are used for unlisted securities based on our estimates or on unaudited financial statements, when available.

23

	As of December 31, 2015
	Amortized cost		Fair Value (1)		Unrealized Gains		Unrealized Losses
	(In Millions of Euros)
EQUITY SECURITIES -
AVAILABLE FOR SALE PORTFOLIO
Domestic-		3,476		2,939		22		(559	)
Equity listed		3,402		2,862		17		(558	)
Equity unlisted		74		78		5		(1	)
Foreign-		1,728		2,177		501		(51	)
The United States-		590		616		26		—
Equity listed		41		62		21		—
Equity unlisted		549		554		5		—
Other countries-		1,138		1,561		475		(51	)
Equity listed		986		1,313		371		(44	)
Equity unlisted		152		248		103		(7	)
TOTAL AVAILABLE FOR SALE PORTFOLIO		5,204		5,116		522		(610	)
TOTAL EQUITY SECURITIES		5,204		5,116		522		(610	)
TOTAL INVESTMENT SECURITIES		111,438		113,426		3,876		(1,888	)

(1) Fair values for listed securities are determined on the basis of their quoted prices at the end of the year. Fair values are used for unlisted securities based on our estimates or on unaudited financial statements, when available.

The following table analyzes the maturities of our debt investment and fixed income securities, excluding trading portfolio, by type and geographical area as of June 30, 2016.

	Maturity at One Year or Less				Maturity After One Year to Five Years				Maturity after Five Years to 10 Years				Maturity after 10 Years				Total
	Amount		Yield % (1)		Amount		Yield % (1)		Amount		Yield % (1)		Amount		Yield % (1)		Amount
	(Millions of Euros, Except Percentages)
DEBT SECURITIES
AVAILABLE-FOR-SALE PORTFOLIO
Domestic
Spanish government and other government agency debt securities		4,480		4.38		4,293		3.54		15,963		3.47		5,490		4.79		30,226
Other debt securities		812		2.66		1,358		3.28		403		3.09		352		3.62		2,925
Total Domestic		5,292		4.10		5,651		3.47		16,366		3.45		5,842		4.70		33,151
International
Mexico		155		4.90		4,894		3.75		3,181		1.75		3,476		7.26		11,706
Mexican Government and other government agency debt securities		107		5.64		3,847		3.48		2,610		1.38		3,184		7.60		9,748
Other debt securities		48		3.26		1,047		4.66		571		3.49		292		5.29		1,958

24

United States	822	0.41	1,772	3.76	2,990	3.20	9,311	1.67	14,895
U.S. Treasury and other government agency debt securities	736	0.03	219	1.40	341	1.28	—	—	1,296
States and political subdivisions debt securities	1	5.97	3	6.52	22	2.47	6,114	1.59	6,140
Other debt securities	85	3.30	1,550	4.06	2,627	3.43	3,197	1.85	7,459
Turkey	1,119	9.29	2,745	9.91	2,450	10.18	11	6.18	6,325
Securities of other foreign governments	1,058	9.24	2,360	10.73	2,359	10.39	11	6.18	5,788
Other debt securities of other countries	61	10.27	385	4.88	91	5.44	—	—	537
Other countries	3,493	10.48	7,835	4.38	4,917	3.81	3,840	3.77	20,085
Securities of other foreign governments	607	4.11	3,069	4.50	1,244	2.82	2,668	3.74	7,588
Other debt securities of other countries	2,886	11.52	4,766	4.30	3,673	4.17	1,172	3.87	12,497
Total International	5,589	8.68	17,246	5.05	13,538	4.40	16,638	3.39	53,011
TOTAL AVAILABLE-FOR-SALE	10,881	6.40	22,897	4.66	29,904	3.87	22,480	3.68	86,162
HELD-TO-MATURITY PORTFOLIO
Domestic
Spanish government	3,127	3.38	3,420	4.40	858	2.28	1,822	3.08	9,227
Other debt securities	342	3.52	330	3.53	—	—	—	—	672
Total Domestic	3,469	3.39	3,750	4.32	858	2.28	1,822	3.08	9,899
Total International	317	6.15	4,343	6.10	2,937	9.01	1,799	6.95	9,396
TOTAL HELD-TO-MATURITY	3,786	3.58	8,093	5.28	3,795	7.48	3,621	5.03	19,295
TOTAL DEBT SECURITIES	14,667	5.67	30,990	4.82	33,699	4.28	26,101	3.87	105,457

(1) Rates have been presented on a non-taxable equivalent basis.

(2) Securities of other foreign Governments mainly include investments made by our subsidiaries in securities issued by the Governments of the countries where they operate.

Loans and Advances to Credit Institutions

As of June 30, 2016, our total loans and advances to credit institutions including central banks amounted to €43,559 million, or 5.8% of total assets. Net of our valuation adjustments, loans and advances to credit institutions amounted to €43,603 million as of June 30, 2016, or 6.5% of our total assets.

Loans and Advances to Customers

As of June 30, 2016, our total loans and advances to customers amounted to €430,819 million, or 57.7% of total assets. Net of our valuation adjustments, loans and advances amounted to €415,872 million as of June 30, 2016, or 44.7% of our total assets. As of June 30, 2016 our loans and advances in Spain amounted to €189,416 million. Our foreign loans and advances amounted to €241,405 million as of June 30, 2016. For a discussion of certain mandatory ratios relating to our loan portfolio, see “—Business Overview—Supervision and Regulation—Capital Requirements” and “—Business Overview—Supervision and Regulation—Investment Ratio” in our annual report on Form 20-F for the year ended December 31, 2015 (the “2015 20-F”).

Loans by Geographic Area

The following table shows, by domicile of the customer, our net loans and advances as of the dates indicated:

25

	As of June 30, 2016			As of December 31, 2015			As of June 30, 2015
	(In Millions of Euros)
Domestic		189,416			194,536			200,202
Foreign
Western Europe		23,843			20,500			17,782
Turkey		56,752			53,461			—
Mexico		50,174			48,032			51,153
South America		49,014			52,173			48,008
The United States		57,915			57,553			56,145
Other		3,706			4,553			3,768
Total foreign		241,405			236,272			176,855
Total loans and advances		430,819			430,808			377,057
Valuation adjustments (1)		(14,948	)		(16,643	)		(15,966	)
Total net lending		415,872			414,166			361,092

(1) Valuation adjustments are made up of impairment losses, accrued interests and fees and hedging derivatives and others.

Loans by Type of Customer

The following table shows, by domicile and type of customer, our net loans and advances at each of the dates indicated. The classification by type of customer is based principally on regulatory authority requirements in each country.

	As of June 30, 2016			As of December 31, 2015			As of June 30, 2015
	(In Millions of Euros)
Domestic
Government		23,767			23,549			24,911
Agriculture		1,070			1,064			1,023
Industrial		14,270			15,079			14,745
Real estate and construction		16,252			18,621			19,479
Commercial and financial		12,113			11,557			12,913
Loans to individuals (1)		105,094			105,157			108,195
Other		18,124			17,200			17,985
Total Domestic		190,690			192,227			199,251
Foreign
Government		14,487			15,062			14,861
Agriculture		3,093			3,251			2,702
Industrial		42,568			41,834			26,087
Real estate and construction		20,680			20,343			15,372
Commercial and financial		32,746			32,019			22,119
Loans to individuals		90,240			89,132			72,022
Other		38,763			38,989			26,389
Total Foreign		242,577			240,630			179,553
Total Loans and Advances		433,267			432,856			378,804
Impairment losses		(17,396	)		(18,691	)		(17,712	)
Total net lending		415,872			414,165			361,092

(1) Includes mortgage loans to households for the acquisition of housing.

26

The following table sets forth a breakdown, by currency, of our net loan portfolio as of June 30, 2016, December 31, 2015 and June 30, 2015:

	As of June 30, 2016		As of December 31, 2015		As of June 30, 2015
	(In Millions of Euros)
In euros		205,175		204,549		199,587
In other currencies		210,697		209,616		161,505
Total net lending		415,872		414,165		361,092

As of June 30, 2016, loans by BBVA and its subsidiaries to associates and jointly controlled companies amounted to €471 million, compared with €710 million as of December 31, 2015. Loans outstanding to the Spanish government and its agencies amounted to €23,767 million, or 5.5% of our total loans and advances as of June 30, 2016, compared with €23,549 million, or 5.4% of our total loans and advances as of December 31, 2015. None of our loans to companies controlled by the Spanish government are guaranteed by the government and, accordingly, we apply normal credit criteria in extending credit to such entities. Moreover, we carefully monitor such loans because governmental policies necessarily affect such borrowers.

Diversification in our loan portfolio is our principal means of reducing the risk of loan losses. We also carefully monitor our loans to borrowers in sectors or countries experiencing liquidity problems. Our exposure to our five largest borrowers as of June 30, 2016, excluding government-related loans, amounted to €25,387 million or approximately 5.9% of our total outstanding loans and advances. As of June 30, 2016 there did not exist any concentration of loans exceeding 10% of our total outstanding loans and advances, other than by category as disclosed in the table above.

Maturity and Interest Sensitivity

The following table sets forth an analysis by maturity of our total loans and advances to customers by domicile of the office that issued the loan and the type of customer as of June 30, 2016. The determination of maturities is based on contract terms.

	Maturity
	Due in One Year or Less		Due After One Year Through Five Years		Due After Five Years		Total
	(In Millions of Euros)
Domestic
Government		11,242		7,703		4,822		23,767
Agriculture		399		444		227		1,070
Industrial		5,919		4,977		3,375		14,270
Real estate and construction		5,093		4,438		6,722		16,252
Commercial and financial		6,755		3,442		1,916		12,113
Loans to individuals		10,968		20,173		73,952		105,094
Other		6,673		6,261		5,190		18,124
Total Domestic		47,048		47,439		96,202		190,690
Foreign								—
Government		1,831		1,999		10,657		14,487
Agriculture		1,681		893		519		3,093

27

Industrial	15,621	17,158	9,788	42,568
Real estate and construction	6,918	9,395	4,367	20,680
Commercial and financial	19,863	10,038	2,844	32,746
Loans to individuals	18,669	23,149	48,422	90,240
Other	12,085	18,098	8,580	38,763
Total Foreign	76,669	80,731	85,178	242,577
Total Loans and Advances (1)	123,816	128,170	181,380	433,267

(1) Includes accrued interests and fees and hedging derivatives valuation adjustments.

The following table sets forth a breakdown of our fixed and variable rate loans which had a maturity of one year or more as of June 30, 2016.

	Interest Sensitivity of Outstanding Loans and Advances Maturing in One Year or More
	Domestic		Foreign		Total
	(In Millions of Euros)
Fixed rate		15,251		87,664		102,916
Variable rate		128,390		78,244		206,634
Total loans and advances		143,642		165,908		309,550

Impairment Losses on Loans and Advances

For a discussion of loan loss reserves, see “Operating and Financial Review and Prospects—Critical Accounting Policies—Impairment losses on financial assets” “ in the 2015 20-F and Note 2.2.1 to the Interim Consolidated Financial Statements.

The following table provides information, by domicile of customer, regarding our loan loss reserve and movements of loan charge-offs and recoveries for periods indicated.

	As of and for the Six Months Ended June 30,			As of and for the Year Ended December 31,			As of and for the Six Months Ended June 30,
	2016			2015			2015
	(In Millions of Euros, Except Percentages)
Loan loss reserve at beginning of period:
Domestic		12,364			9,835			9,835
Foreign		6,378			4,439			4,439
Total loan loss reserve at beginning of period		18,742			14,274			14,274
Loans charged off:
Total domestic (1)		(1,853	)		(3,318	)		(1,286	)
Total foreign (2)		(1,178	)		(1,921	)		(996	)
Total Loans charged off:		(3,032	)		(5,239	)		(2,282	)

28

Provision for possible loan losses:
Domestic (3)	641		5,936		5,215
Foreign (3)	1,594		5,374		1,285
Total Provision for possible loan losses	2,235		11,310		6,500
Effect of foreign currency translation	(132	)	(862	)	(274	)
Other	(374	)	(741	)	(482	)
Loan loss reserve at end of period:
Domestic	10,364		12,364		12,079
Foreign	7,075		6,378		5,657
Total Loan loss reserve at end of period	17,439		18,742		17,736
Loan loss reserve as a percentage of total loans and receivables at end of period	3.71	%	4.10	%	4.44	%
Net loan charge-offs as a percentage of total loans and receivables at end of period	0.65	%	1.15	%	0.57	%

(1) Domestic loans charged off in the six months ended June 30, 2016 were mainly related to the real estate sector. Loans charged off in 2015 were also mainly related to the real estate sector.

(2) Foreign loans charged off in the six months ended June 30, 2016 include €993 million related to real estate loans and loans to individuals and others and €118 million related to commercial and financial loans. Loans charged off in 2015 include €1,904 million related to real estate loans and loans to individuals and others and €16 million related to commercial and financial loans.

(3) The above table includes amounts related to the acquisition of Garanti and Catalunya Banc. See Note 18 to the Interim Consolidated Financial Statements.

When the recovery of any recognized amount is considered to be remote, this amount is removed from the consolidated balance sheet, without prejudice to any actions taken by the consolidated entities in order to collect the amount until their rights extinguish in full through expiry, forgiveness or for other reasons.

The loans charged off amounted to €3,032 million during the six months ended June 30, 2016 compared with €2,282 million during the six months ended June 30, 2015.

Our loan loss reserves as a percentage of total loans and advances decreased to 3.7% as of June 30, 2016 from 4.1% as of December 31, 2015.

Impaired Loans

As described in Note 2.2.1 to the Interim Consolidated Financial Statements, loans are considered to be impaired loans when there are reasonable doubts that the loans will be recovered in full and/or the related interest will be collected for the amounts and on the dates initially agreed upon, taking into account the guarantees received by the consolidated entities to ensure (in part or in full) the performance of the loans.

Amounts collected in relation to impaired loans and receivables are used to recognize the related accrued interest and any excess amount is used to reduce the unpaid principal. The approximate amount of interest income on our impaired loans which was included in profit attributable to parent company for the six months ended June 30, 2016 and 2015 was €130.9 million and €117.6 million, respectively.

29

The following table provides information regarding our impaired loans, by domicile and type of customer, as of the dates indicated:

	As of June 30, 2016			As of December 31, 2015
	(In Millions of Euros, Except Percentages)
Impaired loans
Domestic		17,641			19,481
Public sector		215			191
Other resident sector		17,425			19,290
Foreign		6,595			5,876
Public sector		18			21
Other non-resident sector		6,577			5,855
Total impaired loans		24,236			25,358
Total loan loss reserve		(17,439	)		(18,742	)
Impaired loans net of reserves		6,797			6,616

Our total impaired loans amounted to €24,236 million as of June 30, 2016, a 4.4% decrease compared with €25,358 million as of December 31, 2015. This decrease is mainly attributable to a decline in domestic impaired loans, particularly in the real estate and construction sectors.

As mentioned in Note 2.2.1 to the Interim Consolidated Financial Statements, our loan loss reserve includes loss reserve for impaired assets and loss reserve for unimpaired assets but which present an inherent loss. As of June 30, 2016, the loan loss reserve amounted to €17,439 million, a 6.9% decrease compared with €18,742 million as of December 31, 2015. This decrease in our loan loss reserve is mainly due to the improved performance in Spain.

The following table provides information, by domicile and type of customer, regarding our impaired loans and the loan loss reserves to customers taken for each impaired loan category, as of June 30, 2016.

	Impaired Loans		Loan Loss Reserve			Impaired Loans as a Percentage of Loans by Category
	(In Millions of Euros)
Domestic:
Government		215		(45	)		0.91	%
Other sectors		17,425		(8,323	)		10.44	%
Agriculture		92		(32	)		8.59	%
Industrial		1,394		(796	)		9.77	%
Real estate and construction		6,757		(3,703	)		41.58	%
Commercial and other financial		1,195		(655	)		9.86	%
Loans to individuals		6,042		(2,025	)		5.75	%
Other		1,945		(1,110	)		10.73	%
Total Domestic		17,641		(8,368	)		9.25	%
Foreign:
Government		18		(9	)		0.12	%

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Other sectors	6,577	(3,354	)	2.88	%
Agriculture	112	(60	)	3.63	%
Industrial	1,466	(572	)	3.44	%
Real estate and construction	391	(182	)	1.89	%
Commercial and other financial	566	(323	)	1.73	%
Loans to individuals	2,835	(1,545	)	3.14	%
Other	1,207	(672	)	3.11	%
Total Foreign	6,595	(3,364	)	2.72	%
General reserve		(5,707	)
Total impaired loans	24,236	(17,439	)	5.96	%

Troubled Debt Restructurings

As of June 30, 2016, “troubled debt restructurings”, as described in Appendix X to our Interim Consolidated Financial Statements, totaling €9,970 million were not considered impaired loans.

Potential Problem Loans

The identification of “Potential problem loans” is based on the analysis of historical non-performing asset ratio trends, categorized by products/clients and geographical locations. This analysis is focused on the identification of portfolios with non-performing asset ratio higher than our average non-performing asset ratio. Once these portfolios are identified, we segregate such portfolios into groups with similar characteristics based on the activities to which they are related, geographical location, type of collateral, solvency of the client and loan to value ratio.

The non-performing asset ratio in our domestic real estate and construction portfolio was 41.6% as of June 30, 2016 (compared with 41.5% as of December 31, 2015), substantially higher than the average non-performing asset ratio for all of our domestic activities (9.3%) and the average non-performing asset ratio for all of our consolidated activities (6.0%). Within such portfolio, construction loans and property development loans (which exclude mainly infrastructure and civil construction) had a non-performing asset ratio of 48.9% as of such date (compared with 47.3% as of December 31, 2015). Given such non-performing asset ratio, we performed an analysis in order to define the level of loan provisions attributable to these loan portfolios (see Note 2.2.1 to our Interim Consolidated Financial Statements). The table below sets forth additional information on our domestic real estate and construction portfolio “Potential problem loans” as of June 30, 2016:

	Book Value		Allowance for Loan Losses		% of Loans in Each Category to Total Loans to Customers
	(In Millions of Euros, Except Percentages)
Domestic (1)
Doubtful Loans		5,598		3,148		1.3	%
Substandard loans		580		131		0.1	%
Of which:
Troubled debt restructurings		85		5		0.0	%

(1) Potential problem loans outside of Real Estate Activity in Spain as of June 30, 2016 were not significant.

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Foreign Country Outstandings

The following table sets forth, as of the dates indicated, the aggregate amounts of our cross-border outstandings (which consist of loans, interest-bearing deposits with other banks, acceptances and other monetary assets denominated in a currency other than the home-country currency of the office where the item is booked) where outstandings in the borrower’s country exceeded 1% of our total assets as of June 30, 2016 and December 31, 2015. Cross-border outstandings do not include loans in local currency made by our subsidiary banks to customers in other countries to the extent that such loans are funded in the local currency or hedged. As a result, they do not include the vast majority of the loans made by our subsidiaries in South America, Mexico and United States or other regions which are not listed below.

	As of June 30, 2016					As of December 31, 2015
	Amount		% of total assets			Amount		% of total assets
	(In Millions of Euros, Except %)
United Kingdom		6,746		0.9	%		7,306		1.0	%
Mexico		1,941		0.3	%		2,134		0.3	%
Other OECD		10,594		1.5	%		10,098		1.4	%
Total OECD		19,281		2.6	%		19,538		2.7	%
Central and South America		3,958		0.5	%		3,434		0.5	%
Other		4,673		0.6	%		4,888		0.7	%
Total		27,912		3.7	%		27,860		3.8	%

The Bank of Spain requires that minimum reserves be maintained for cross-border risk arising with respect to loans and other outstandings to countries, or residents of countries, falling into certain categories established by the Bank of Spain on the basis of the level of perceived transfer risk. The category that a country falls into is determined by us, subject to review by the Bank of Spain.

The following table shows the minimum required reserves with respect to each category of country for BBVA’s level of coverage as of June 30, 2016.

Categories (1)	Minimum Percentage of Coverage (Outstandings Within Category)
Countries belonging to the OECD whose currencies are listed in the Spanish foreign exchange market		0.0
Countries with transitory difficulties (2)		10.1
Doubtful countries (2)		22.8
Very doubtful countries (2) (3)		83.5
Bankrupt countries (4)		100.0

(1) Any outstanding which is guaranteed may be treated, for the purposes of the foregoing, as if it were an obligation of the guarantor.

(2) Coverage for the aggregate of these three categories (countries with transitory difficulties, doubtful countries and very doubtful countries) must equal at least 35% of outstanding loans within the three categories. The Bank of Spain has recommended up to 50% aggregate coverage.

(3) Outstandings to very doubtful countries are treated as impaired under Bank of Spain regulations.

(4) Outstandings to bankrupt countries must be charged off immediately. As a result, no such outstandings are reflected on our consolidated balance sheet. Notwithstanding the foregoing minimum required reserves, certain interbank outstandings with an original maturity of three months or less have minimum required reserves of 50%. We met or exceeded the minimum percentage of required coverage with respect to each of the foregoing categories.

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Our exposure to borrowers in countries with difficulties (the last four categories in the foregoing table), excluding our exposure to subsidiaries or companies we manage and trade-related debt, amounted to €148 million and €130 million as of June 30, 2016 and December 31, 2015, respectively. These figures do not reflect loan loss reserves of 26.4% and 29.2% respectively, of the relevant amounts outstanding at such dates. Deposits with or loans to borrowers in all such countries as of June 30, 2016 did not in the aggregate exceed 0.02% of our total assets.

The country-risk exposures described in the preceding paragraph as of June 30, 2016 and December 31, 2015 do not include exposures for which insurance policies have been taken out with third parties that include coverage of the risk of confiscation, expropriation, nationalization, non-transfer, non-convertibility and, if appropriate, war and political violence. The sums insured as of June 30, 2016 and December 31, 2015 amounted to $79 million and $81 million, respectively (approximately €71 million and €74 million, respectively, based on a euro/dollar exchange rate on June 30, 2016 of $1.00 = €0.90 and on December 31, 2015 of $1.00 = €0.92).

LIABILITIES

Deposits

The principal components of our customer deposits are domestic demand and savings deposits and foreign time deposits. The following tables provide information regarding our deposits by principal geographic area for the dates indicated.

	As of June 30, 2016
	Customer Deposits		Bank of Spain and Other Central Banks		Other Credit Institutions		Total
	(In Millions of Euros)
Total Domestic		164,739		26,522		8,959		200,220
Foreign
Western Europe		37,808		101		38,093		76,002
Mexico		53,688		376		5,678		59,742
South America		39,403		2,408		6,803		48,614
The United States		45,865		270		3,799		49,934
Turkey		59,014		1680		1,366		62,060
Other		5,767		1,351		4,420		11,538
Total Foreign		241,545		6,186		60,159		307,890
Total		406,284		32,709		69,118		508,111

	As of December 31, 2015
	Customer Deposits		Bank of Spain and Other Central Banks		Other Credit Institutions		Total
	(In Millions of Euros)
Total Domestic		168,689		19,014		8,262		195,965
Foreign
Western Europe		35,770		101		39,896		75,767
Mexico		51,422		11,254		1,643		64,319
South America		44,469		3,341		4,423		52,233
The United States		62,988		619		7,391		70,998
Turkey		36,036		4,348		1,786		42,170
Other		3,988		1,411		5,142		10,541
Total Foreign		234,673		21,073		60,281		316,027
Total		403,362		40,087		68,543		511,992

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For an analysis of our deposits, including non-interest bearing demand deposits, interest-bearing demand deposits, saving deposits and time deposits, see Note 22.1 to the Interim Consolidated Financial Statements.

As of June 30, 2016 the maturity of our time deposits (excluding interbank deposits) in denominations of $100,000 (approximately €89,658 considering the noon buying rate as of June 30, 2016) or greater was as follows:

	As of June 30, 2016
	Domestic		Foreign		Total
	(In Millions of Euros)
3 months or under		5,491		43,931		49,422
Over 3 to 6 months		4,770		8,767		13,536
Over 6 to 12 months		7,335		10,151		17,487
Over 12 months		9,773		17,540		27,313
Total		27,369		80,389		107,758

Time deposits from Spanish and foreign financial institutions amounted to €35,423 million as of June 30, 2016, substantially all of which were in excess of $100,000 (approximately €89,658 considering the noon buying rate as of June 30, 2016).

Large denomination deposits may be a less stable source of funds than demand and savings deposits because they are more sensitive to variations in interest rates. For a breakdown by currency of customer deposits as of June 30, 2016, December 31, 2015 and June 30, 2015, see Note 22.2 to the Interim Consolidated Financial Statements.

Short-term Borrowings

Securities sold under agreements to repurchase and promissory notes issued by us constituted the only categories of short-term borrowings that equaled or exceeded 30% of stockholders’ equity as of June 30, 2016, December 31, 2015 and June 30, 2015.

	As of and for the Six Months Ended June 30, 2016					As of and for the Year Ended December 31, 2015					As of and for the Six Months Ended June 30, 2015
	Amount		Average rate			Amount		Average rate			Amount		Average rate
	(In Millions of Euros, Except Percentages)
Securities sold under agreements to repurchase (principally Spanish Treasury bills)
As of end of period		36,879		1.2	%		50,342		1.0	%		40,680		0.7	%
Average during period		38,638		1.3	%		47,954		0.9	%		41,708		0.6	%
Maximum quarter-end balance		40,396		—			50,342		—			44,380		—
Bank promissory notes
As of end of period		1,092		1.5	%		516		0.3	%		458		1.2	%
Average during period		856		0.9	%		2,239		1.0	%		1,053		1.9	%
Maximum quarter-end balance		1,092		—			3,354		—			1,667		—
Bonds and Subordinated debt
As of end of period		15,210		3.1	%		14,741		3.4	%		11,786		3.9	%
Average during period		14,844		3.2	%		15,320		2.2	%		13,436		3.1	%
Maximum quarter-end balance		15,210		—			15,693		—			13,734		—
Total short-term borrowings as of end of period		53,182		1.8	%		65,598		1.5	%		52,924		1.4	%

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Return Ratios

The following table sets out our return ratios:

	As of and for the Six Months Ended June 30, 2016			As of and for the year ended December 31, 2015			As of and for the Six Months Ended June 30, 2015
	(In Percentages)
Return on equity (1)		7.2	%		5.3	%		9.8	%
Return on assets (2)		0.7	%		0.5	%		0.8	%
Equity to assets ratio (3)		7.4	%		7.7	%		8.0	%

(1) Represents profit attributable to parent company for the period as a percentage of average stockholders’ equity for the period. For June 30, 2016 and June 30, 2015 data, profit attributable to parent company is annualized by multiplying the profit attributable to parent company for the period by two.

(2) Represents profit attributable to parent company as a percentage of average total assets for the period. For June 30, 2016 and June 30, 2015 data, profit attributable to parent company is annualized by multiplying the profit attributable to parent company for the period by two.

(3) Represents average stockholders´ equity over average total assets.

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OPERATING AND FINANCIAL REVIEW AND PROSPECTS

Factors Affecting the Comparability of our Results of Operations and Financial Condition

Trends in Exchange Rates

We are exposed to foreign exchange rate risk in that our reporting currency is the euro, whereas certain of our subsidiaries and investees keep their accounts in other currencies, principally Mexican pesos, U.S. dollars, Turkish liras, Argentine pesos, Chilean pesos, Colombian pesos, Venezuelan bolivar and Peruvian new soles. For example, if Latin American currencies, the U.S. dollar or the Turkish lira depreciate against the euro, when the results of operations of our subsidiaries in the countries using these currencies are included in our consolidated financial statements, the euro value of their results declines, even if, in local currency terms, their results of operations and financial condition have remained the same. By contrast, the appreciation of Latin American currencies, the U.S. dollar or the Turkish lira against the euro would have a positive impact on the results of operations of our subsidiaries in the countries using these currencies when their results of operations are included in our consolidated financial statements. Accordingly, changes in exchange rates may limit the ability of our results of operations, stated in euro, to fully show the performance in local currency terms of our subsidiaries.

The assets and liabilities of our subsidiaries which maintain their accounts in currencies other than the euro have been converted to the euro at the period-end exchange rates for inclusion in our Interim Consolidated Financial Statements. Income statement items have been converted at the average exchange rates for the period. The following table sets forth the exchange rates of several Latin American currencies, the U.S. dollar and the Turkish lira against the euro, expressed in local currency per €1.00 as of and for the six months ended June 30, 2016 and June 30, 2015 according to the European Central Bank (“ECB”).

	Average Exchange Rates				Period-End Exchange Rates
	For the Six Months Ended June 30, 2016		For the Six Months Ended June 30, 2015		As of June 30, 2016		As of December 31, 2015
Mexican peso		20.1694		16.8845		20.6347		18.9147
U.S. dollar		1.1159		1.1155		1.1102		1.0887
Argentine peso		15.9880		9.8345		16.5467		14.1267
Chilean peso		769.2308		693.0007		734.2144		769.8229
Colombian peso		3,484.3206		2,770.0831		3,236.2460		3,424.6575
Peruvian new sol		3.7715		3.4576		3.6490		3.7092
Venezuelan bolivar (*)		1,170.9602		220.7506		1,170.9602		469.4836
Turkish lira		3.2589		2.8623		3.2060		3.1765

(*) With respect to 2016, the Venezuelan government approved a new exchange rate agreement which sets two new mechanisms that regulate the purchase and sale of foreign currency and suspended the SIMADI exchange rate. With respect to 2015, the SIMADI exchange rate has been used, as reference.

During the six months ended June 30, 2016, all of the above currencies depreciated against the euro in average terms. In particular, the Venezuelan bolivar depreciated significantly. With respect to period-end exchange rates, there was a period-on-period depreciation of all of the above currencies against the euro, except for the Chilean peso, Colombian peso and Peruvian new sol, all of which slightly appreciated. The overall effect of changes in exchange rates was negative for the period-on-period comparisons of the Group’s income statement and balance sheet.

Consolidation of Garanti

On November 19, 2014, we signed agreements with Doğuş Holding A.Ş., Ferit Faik Şahenk, Dianne Şahenk and Defne Şahenk to acquire 62,538,000,000 additional shares of Garanti in the aggregate (equivalent to 14.89% of the capital of Garanti). Since the closing of this acquisition in July 2015, we hold 39.90% of Garanti’s share capital and consolidate Garanti’s results in our consolidated financial statements as we determined we were able to control such entity. This

36

acquisition resulted in certain changes in our operating segments. In particular, since January 1, 2015, our former Eurasia segment has been broken down into the following two segments: Turkey, which consists of our stake in Garanti (25.01% until July 27, 2015 and 39.90% since July 27, 2015), and Rest of Eurasia, which includes the retail and wholesale businesses carried out in Europe and Asia, other than in Spain and Turkey.

Acquisition of Catalunya Banc

On April 24, 2015, once the necessary authorizations had been obtained and all the agreed conditions precedent had been fulfilled, we announced the acquisition of 1,947,166,809 shares of Catalunya Banc, S.A. (approximately 98.4% of its share capital) for a price of approximately €1,165 million. Previously, on July 21, 2014, the Management Commission of the FROB had accepted our bid in the competitive auction for the acquisition of Catalunya Banc. Such acquisition had an impact on the results of operations of the Banking Activity in Spain segment during 2015, affecting the comparability of the segment in 2015 with prior periods. As of June 30, 2016, Catalunya Banc had assets of approximately €38 billion, of which approximately €19 billion corresponded to loans and advances to customers. Financial liabilities at amortized cost amounted to approximately €33 billion as of such date. See Note 3 to our Interim Consolidated Financial Statements for additional information.

Operating Environment

Our results of operations are dependent, to a large extent, on the level of demand for our products and services (primarily loans and deposits and financial intermediary services) in the countries in which we operate. Demand for our products and services in those countries is affected by the overall performance of their respective economies regarding activity, employment, inflation and, particularly, interest rates. The demand for loans and saving products correlates positively with income (which in turn is closely correlated with the evolution of Gross Domestic Product, GDP), employment and corporate profits. Moreover, interest rates have a direct impact on banking results given that our banking activity relies on the generation of positive interest margin. However, higher interest rates, all else being equal, reduce the demand for banking loans. The demand for our financial intermediary services also depends on the general economic environment, both domestic and global.

Global GDP growth slightly slowed in the first half of 2016 to an annualized quarterly rate of around 2.8% in the second quarter of 2016 according to BBVA Research estimates, nearly 0.3 percentage points below the annual growth in 2015. The global economy has experienced a period of slow growth in the first half of 2016 in the context of worries regarding China’s accumulated imbalances, the uncertainty on policies and the negotiating strategy of the UK government after the Brexit decision and geopolitical events.

Regarding the evolution of key economic areas for the Group, Eurozone GDP grew 0.5% quarter-on-quarter in the first quarter of 2016 and 0.3% in the second quarter as domestic demand decelerated in the area. The recovery of the Spanish economy has continued during the last quarters (growing, on average, 0.8% quarter-on-quarter in each of the last four completed quarters) as a result of both external factors such as stimulus measures by the European Central Bank, tourism demand and low oil prices, and domestic factors in Spain such as an expansionary fiscal policy, investment resilience against the backdrop of economic reforms and improved credit conditions.

The Mexican economy was close to stagnation in the first half of 2016 due to sluggish domestic demand, the weakness of U.S. manufacturing and the low oil price environment. Inflation has remained in line with targets established by the Bank of Mexico. Moreover, stable inflation expectations and weakened demand offset the positive effects of a weaker Mexican peso on the prices of domestic goods.

Turkey’s GDP growth in the first and second quarters of 2016 (4.7% and 3.1% year-on-year, respectively) shows the resilience of the domestic demand in spite of the negative effects from lower demand in the tourism sector.

South America’s growth remained subdued in the first half of 2016 due to the combined impact of low commodity prices and the continued slowdown of Chinese demand. The Federal Reserve’s softened tone with respect to interest rate increases has been a supportive factor for regional funding conditions. The aggregate GDP of South America’s main economies (Argentina, Brazil, Chile, Colombia, Peru and Venezuela) fell by 1.6% year-on-year in the second quarter 2016 accordingly BBVA Research estimates, with very heterogeneous performances across countries.

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U.S. GDP growth remains subdued and slowed down in the first half of 2016 (on average annualized 0.9% quarter-on-quarter compared to 1.5% in the second half of 2015. Strong consumer spending supported by labor market improvements were offset by weak business investment and exports, against the background of a strong U.S. dollar and weak foreign demand.

BBVA Group Results of Operations for the Six Months Ended June 30, 2016 Compared to the Six Months Ended June 30, 2015

The table below shows the Group’s consolidated income statements for the six months ended June 30, 2016 and June 30, 2015.

	For the Six Months Ended June 30,
	2016			2015			Change (In %)
	(In Millions of Euros)
Interest and similar income		13,702			10,665			28.5
Interest and similar expenses		(5,338	)		(3,570	)		49.5
Net interest income		8,365			7,096			17.9
Dividend income		301			236			27.5
Share of profit or loss of entities accounted for using the equity method		1			195			(99.5	)
Fee and commission income		3,313			2,801			18.3
Fee and commission expenses		(963	)		(682	)		41.2
Net gains (losses) on financial assets and liabilities (2)		642			827			(22.4	)
Net exchange differences		533			620			(14.0	)
Other operating income		715			546			31.0	%
Other operating expenses		(1,186	)		(911	)		30.2	%
Income on insurance and reinsurance contracts		1,958			1,725			13.5	%
Expenses on insurance and reinsurance contracts		(1,446	)		(1,233	)		17.3	%
Gross income		12,233			11,219			9.0
Administration costs		(5,644	)		(4,927	)		14.6
Personnel expenses		(3,324	)		(2,888	)		15.1
General and administrative expenses		(2,319	)		(2,039	)		13.7
Depreciation		(689	)		(572	)		20.5
Provisions (net)		(262	)		(392	)		(33.2	)
Impairment losses on financial assets (net)		(2,110	)		(2,137	)		(1.3	)
Impairment losses on other assets (net)		(99	)		(128	)		(22.7	)
Gains (losses) on derecognized assets not classified as non-current assets held for sale		37			23			60.9
Negative goodwill		—			22			n.m.	(1)
Gains (losses) in non-current assets held for sale not classified as discontinued operations		(75	)		791			n.m.	(1)
Operating profit before tax		3,391			3,899			(13.0	)
Tax expense (income) related to profit or loss from continuing operations (5)		(920	)		(941	)		(2.2	)
Profit from continuing operations		2,471			2,958			(16.5	)
Profit from discontinued operations (net)		—			—			—
Profit		2,471			2,958			(16.5	)
Profit attributable to parent company		1,832			2,759			(33.6	)
Profit attributable to non-controlling interests		639			200			219.5

(1) Not meaningful.

(2) Comprises the following income statement line items contained in the Interim Consolidated Financial Statements: “Gains or (-) losses on derecognition of financial assets and liabilities not measured at fair value through profit or loss, net”; “Gains or (-) losses on financial assets and liabilities designated at fair value through profit or loss, net”; “Gains or (-) losses on financial assets and liabilities held for trading, net” and “Gains or (-) losses from hedge accounting, net”.

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Net interest income

The following table summarizes the principal components of net interest income for the six months ended June 30, 2016 and June 30, 2015.

	For the Six Months Ended June 30,
	2016			2015			Change (In %)
	(In Millions of Euros)
Interest and similar income		13,702			10,665			28.5
Interest and similar expenses		(5,338	)		(3,570	)		49.5
Total		8,365			7,096			17.9

Net interest income for the six months ended June 30, 2016 amounted to €8,365 million, a 17.9% increase compared with the €7,096 million recorded for the six months ended June 30, 2015, mainly as a result of the following factors:

• in the Banking Activity in Spain, the acquisition of Catalunya Banc contributed positively to net interest income, which was more than offset by the negative effect of declining yield on loans and a lower volume of loans and advances originated to customers;

• in Turkey, the change in the consolidation method of Garanti and, to a lesser extent, increased volumes of loans resulting from new loan production in most portfolios especially mortgage loans, and loans in the energy and service sectors, contributed positively to net interest income, which was partially offset by the negative exchange rate effect of the declining Turkish lira against the euro;

• in Mexico, economic growth has led to increased activity, especially in loans and advances to customers, which was offset by the negative exchange rate effect of the declining Mexican peso against the euro;

• in South America, increased activity and growing customer spreads contributed positively to net interest income, which was more than offset by the negative exchange rate effect of the declining currencies of the region against the euro, in particular the Venezuelan bolivar and the Argentine peso; and

• in United States, as a result of the growth in activity mainly attributable to the growth in loans and advances to customers, the stable cost of deposits and growth of the yield on new loan production, all contributed positively to net interest income. There is not an impact of the U.S. dollar against the euro, which experienced little change in the six months ended June 30, 2015.

For further information regarding the contribution of our operating segments to our consolidated net interest income, see “—Results of Operations by Operating Segment for the Six Months Ended June 30, 2016 Compared to the Six Months Ended June 30, 2015.”

Dividend income

Dividend income for the six months ended June 30, 2016 amounted to €301 million, a 27.5% increase compared with the €236 million recorded for the six months ended June 30, 2015. Dividend income for the six months ended June 30, 2016 was mainly attributable to the collection of dividends from our investments in Telefonica S.A. and CNCB.

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Share of profit or loss of entities accounted for using the equity method

Share of profit or loss of entities accounted for using the equity method for the six months ended June 30, 2016 amounted to €1 million, compared with the €195 million recorded for the six months ended June 30, 2015, due to the change in the consolidation method of Garanti from the equity method to full consolidation.

Fee and commission income

The breakdown of fee and commission income for the six months ended June 30, 2016 and June 30, 2015 is as follows below. Beginning January 1, 2016, we have modified the sub-captions included in fee and commission income. As a result, the breakdown shown below is not directly comparable with the sub-captions included in the 2015 20-F under fee and commission income:

	For the Six Months Ended June 30,
	2016		2015		Change (In %)
	(In Millions of Euros)
Bills receivables		27		38		(28.9	)
Demand accounts		224		176		27.3
Credit and debit cards		1,293		937		38.0
Checks		100		115		(13.0	)
Transfers and others payment orders		278		187		48.7
Insurance product commissions		88		61		44.3
Commitment fees		121		84		44.0
Contingent risks		201		154		30.5
Asset management		415		416		(0.2	)
Securities fees		171		143		19.6
Custody securities		60		67		(10.4	)
Other		335		424		(21.0	)
Total		3,313		2,801		18.3

Fee and commission income increased by 18.3% to €3,313 million for the six months ended June 30, 2016, from €2,801 million for the six months ended June 30, 2015, mainly as a result of the change in the consolidation method of Garanti, and to a lesser extent, increased collection and payment services income, particularly transfers, fees and commissions from credit cards in Mexico and South America, the greater contribution of Catalunya Banc in fees and commissions from mutual funds.

Fee and commission expenses

The breakdown of fee and commission expenses for the six months ended June 30, 2016 and June 30, 2015 is as follows. Beginning January 1, 2016, we have modified the sub-captions included in fee and commission expenses. As a result, the breakdown shown below is not directly comparable with the sub-captions included in the 2015 20-F under fee and commission expenses:

	For the Six Months Ended June 30,
	2016		2015		Change (In %)
	(In Millions of Euros)
Commissions for selling insurance		30		37		(18.9	)
Credit and debit cards		613		414		48.1
Transfers and others payment orders		51		39		30.8
Other fees and commissions		269		192		40.1
Total		963		682		41.2

40

Fee and commission expenses increased by 41.2% to €963 million for the six months ended June 30, 2016, from €682 million for the six months ended June 30, 2015, primarily due to the change in the consolidation method of Garanti, and to a lesser extent, the contribution of Catalunya Banc and due to higher revenues from insurance and credit and debit cards commissions

Net gains (losses) on financial assets and liabilities and net exchange differences

Net gains (losses) on financial assets and liabilities decreased by 18.8% to €1,175 million for the six months ended June 30, 2016, from €1,447 million for the six months ended June 30, 2015, mainly due to lower ALCO (Assets and Liabilities Committee) portfolio sales in Spain, and to a lesser extent, negative exchange differences.

The table below provides a breakdown of net gains (losses) on financial assets and liabilities for the six months ended June 30, 2016 and 2015. Beginning January 1, 2016, we have modified the sub-captions included in net gains (losses) on financial assets and liabilities and net exchange differences. As a result, the breakdown shown below is not directly comparable with the sub-captions included in the 2015 20-F under net gains (losses) on financial assets and liabilities and net exchange differences:

	For the Six Months Ended June 30,
	2016			2015			Change (In %)
	(In Millions of Euros)
Gains or losses on derecognition of financial assets and liabilities not measured at fair value through profit or loss, net		683			649			5.2
Available-for-sale financial assets		469			613			(23.5	)
Loans and receivables		77			37			108.9
Other		137			(1	)		n.m.	(1)
Gains or losses on financial assets and liabilities designated at fair value through profit or loss, net		24			17			40.8
Gains or losses on financial assets and liabilities held for trading, net		106			161			(33.7	)
Gains or losses from hedge accounting, net		(171	)		—			n.m.	(1)
Net gains (losses) on financial assets and liabilities		642			827			(22.2	)

(1) Not meaningful.

Net exchange differences decreased 14.0% from €620 million for the six months ended June 30, 2015 to €533 million for the six months ended June 30, 2016 due primarily to the evolution of foreign currencies and exchange rate management, including hedging arrangements.

Other operating income and expenses

Other operating income amounted to €715 million for the six months ended June 30, 2016, a 31.0% increase compared to €546 million for the six months ended June 30, 2015, due mainly to the change in the consolidation method of Garanti and dividends received from CNCB.

Other operating expenses for the six months ended June 30, 2016 amounted to €1,186 million, a 30.2% increase compared to the €911 million recorded for the six months ended June 30, 2015, due primarily to the change in the consolidation method of Garanti and adverse effects of high inflation in Turkey and Argentina, and the contribution to the new SRF (the aggregate of the national resolution funds), compared with the contribution made in 2015 to the FROB, which was recorded in the fourth quarter of the year. These factors were partially offset by lower contributions to deposit guarantee funds in other countries in which the BBVA Group operates.

41

Income and expenses on insurance and reinsurance contracts

Income on insurance and reinsurance contracts for the six months ended June 30, 2016 was €1,958 million, a 13.5% increase compared with the €1,725 million gain recorded for the six months ended June 30, 2015, mainly as a result of the performance of BBVA Seguros in Spain and the change in the consolidation method of Garanti.

Expenses on insurance and reinsurance contracts for the six months ended June 30, 2016 were €1,446 million, a 17.3% increase compared with the €1,233 million gain recorded for the six months ended June 30, 2015 mainly as a result of the impact of the depreciation of the Mexican peso and other currencies in South America against the Euro, increased claims in Spain as a result of greater activity and the change in the consolidation method of Garanti.

Administration costs

Administration costs for the six months ended June 30, 2016 amounted to €5,644 million, a 14.6% increase compared with the €4,927 million recorded for the six months ended June 30, 2015, mainly due to the change in the consolidation method of Garanti and the higher contribution of Catalunya Banc, partially offset by the effect of exchange rates in Mexico and South America.

The table below provides a breakdown of personnel expenses for the six months ended June 30, 2016 and June 30, 2015. Beginning January 1, 2016, we have modified the sub-captions included in administration costs. As a result, the breakdown shown below is not directly comparable with the sub-captions included in the 2015 20-F under administration costs.

	For the Six Months Ended June 30,
	2016		2015		Change (In %)
	(In Millions of Euros)
Wages and salary		2,587		2,221		16.5
Social security costs		403		348		15.8
Defined contribution plan expense		45		44		2.3
Defined benefit plan expense		34		33		3.0
Other personnel expenses		255		242		5.4
Personnel expenses		3,324		2,888		15.1

Wages and salary expenses increased 16.5% from €2,221 million for the six months ended June 30, 2015 to €2,587 million for the six months ended June 30, 2016, mainly as a result of the change in the consolidation method of Garanti.

The table below provides a breakdown of general and administrative expenses for the six months ended June 30, 2016 and June 30, 2015:

	For the Six Months Ended June 30,
	2016		2015		Change (In %)
	(In Millions of Euros)
Technology and systems		333		293		13.6
Communications		151		122		24.2
Advertising		205		170		20.9
Property, fixtures and materials		547		468		16.9
Of which:
Rent expenses		313		271		15.5
Taxes other than income tax		228		203		12.1
Other expenses		855		783		9.2
General and administrative expenses		2,319		2,039		13.7

42

Technology and systems expenses increased 13.7% from €293 million for the six months ended June 30, 2015 to €333 million for the six months ended June 30, 2016, mainly due to the change in the consolidation method of Garanti and higher investments in technology. Property, fixtures and materials expenses increased from €468 million for the six months ended June 30, 2016 to €547 million mainly as a result of the change in the consolidation method of Garanti and the higher contribution of Catalunya Banc.

Depreciation

Depreciation for the six months ended June 30, 2016 was €689 million, a 20.5% increase compared with the €572 million recorded for the six months ended June 30, 2015, mainly due to the change in the consolidation method of Garanti and the higher contribution of Catalunya Banc, and to a lesser extent, the amortization of software and hardware.

Provisions (net)

Provisions (net) for the six months ended June 30, 2016 was €262 million, a 33.2% decrease compared with the €392 million recorded for the six months ended June 30, 2015, largely as a result of a decrease in the costs related to early retirements and contributions to pension funds.

Impairment losses on financial assets (net)

Impairment losses on financial assets (net) for the six months ended June 30, 2016 was a loss of €2,110 million, a 1.3% decrease compared with the €2,137 million loss recorded for the six months ended June 30, 2015 mainly as a result of lower additions to non-performing assets in Spain, higher recovery of written-off assets of the Real Estate Activity in Spain segment and the impact of the depreciation of the majority of our operating currencies against the euro. These effects were partially offset by the change in the consolidation method of Garanti, and to a lesser extent, increased losses in the United States following downgrades in the energy and metals and mining sectors and increased provisions in Garanti’s subsidiary in Romania. The Group’s non-performing asset ratio was 6.1% as of June 30, 2016, compared to 5.8% as of December 31, 2015.

Impairment losses on other assets (net)

Impairment losses on other assets (net) for the six months ended June 30, 2016 amounted to €99 million, a 22.7% decrease compared to the €128 million recorded for the six months ended June 30, 2015, due to lower impairments losses on real estate investment properties in Spain.

Gains (losses) on derecognized assets not classified as non-current assets held for sale

Gains (losses) on derecognized assets not classified as non-current assets held for sale for the six months ended June 30, 2016 amounted to a gain of €37 million, a 60.9% increase compared to a gain of €23 million recognized for the six months ended June 30, 2015, mainly as a result of disposal of investments in subsidiaries and, to a lesser extent, losses from the sale of certain assets of Unnim in 2015.

Negative goodwill

Negative goodwill for the six months ended June 30, 2016 was nil, compared to a negative goodwill of €22 million recognized for the six months ended June 30, 2015. Negative goodwill for the six months ended June 30, 2015 was attributable to the acquisition of Catalunya Banc in April 2015.

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Gains (losses) in non-current assets held for sale not classified as discontinued operations

Gains (losses) in non-current assets held for sale not classified as discontinued operations for the six months ended June 30, 2016 amounted to a loss of €75 million, compared to a gain of €791 million for the six months ended June 30, 2015. The gains in the first six months of 2015 were mainly attributable to the sale of a 6.4% stake in CNCB.

Operating profit before tax

As a result of the foregoing, operating profit before tax for the six months ended June 30, 2016 was €3,391 million, a 13.0% decrease from the €3,899 million recorded for the six months ended June 30, 2015.

Tax expense (income) related to profit or loss from continuing operations

Tax expense (income) related to profit or loss from continuing operations for the six months ended June 30, 2016 was an expense of €920 million, compared with an expense of €941 million recorded for the six months ended June 30, 2015, due mainly to the lower operating profit before tax.

Profit from continuing operations

As a result of the foregoing, profit from continuing operations for the six months ended June 30, 2016 was €2,471 million, a 16.5% decrease from the €2,958 million recorded for the six months ended June 30, 2015.

Profit from discontinued operations (net)

There was no profit from discontinued operations for the six months ended June 30, 2016 or June 30, 2015.

Profit

As a result of the foregoing, profit for the six months ended June 30, 2016 was €2,471 million, a 16.5% decrease from the €2,958 million recorded for the six months ended June 30, 2015.

Profit attributable to parent company

Profit attributable to parent company for the six months ended June 30, 2016 was €1,832 million, a 33.6% decrease from the €2,759 million recorded for the six months ended June 30, 2015.

Profit attributable to non-controlling interests

Profit attributable to non-controlling interests for the six months ended June 30, 2016 was €639 million, a 219.5% increase compared with the €200 million registered for the six months ended June 30, 2015, mainly as a result of the change in the consolidation method of Garanti and, to a lesser extent, stronger performance of our Peruvian and Argentinian operations where there are minority shareholders, partially offset by the depreciation of the Venezuelan bolivar.

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Results of Operations by Operating Segment

The information contained in this section is presented under management criteria.

The tables set forth below reconcile the income statement of our operating segments presented in this section to the consolidated income statement of the Group. The “Adjustments” column reflects the differences between the Group income statement and the income statement calculated in accordance with management operating segment reporting criteria, which are the following:

• The treatment of Garanti: Since July 2015, we hold 39.90% of Garanti’s share capital, and we have fully consolidated Garanti’s results in our consolidated financial statements. Information from January 1 through June 30, 2015 has been calculated and is presented under management criteria according to which the assets, liabilities and income statement of Garanti are included in every line item of the balance sheet and the income statement based on our 25.01% interest in Garanti during such period. For purposes of the Group financial statements the participation in Garanti was accounted under “Share of profit or loss of entities accounted for using the equity method” during such period.

• The creation of a line item on the income statement called “Profit from corporate operations” which is in place of “Profit from discontinued operations” that includes the gains from the sale of our 6.43% participation in CNCB during the six months ended June 30, 2015.

45

	For the Six Months Ended June 30, 2016
	Banking Activity in Spain			Real Estate Activity in Spain			Turkey			Rest of Eurasia			Mexico			South America			United States			Corporate Center			Total			Adjustments		Group Income
	(In Millions of Euros)
Net interest income		1,943			42			1,606			86			2,556			1,441			938			(247	)		8,365			—		8,365
Net fees and commissions		771			2			392			92			556			299			306			(68	)		2,350			—		2,350
Net gains (losses) on financial assets and liabilities and net exchange differences		390			—			128			60			97			319			93			88			1,175			—		1,175
Other operating income and expenses (net) (1)		189			(33	)		28			42			101			(59	)		(8	)		82			343			—		343
Gross income		3,293			11			2,154			281			3,309			1,999			1,330			(144	)		12,233			—		12,233
Administration costs		(1,642	)		(53	)		(745	)		(164	)		(1,077	)		(874	)		(811	)		(278	)		(5,644	)		—		(5,644	)
Depreciation		(158	)		(14	)		(88	)		(6	)		(121	)		(47	)		(94	)		(161	)		(689	)		—		(689	)
Net margin before provisions		1,493			(56	)		1,321			111			2,112			1,078			424			(583	)		5,900			—		5,900
Impairment losses on financial assets (net)		(509	)		(85	)		(301	)		(9	)		(788	)		(245	)		(149	)		(26	)		(2,110	)		—		(2,110	)
Provisions (net) and other gains (losses)		(87	)		(148	)		1			2			(24	)		(29	)		(35	)		(78	)		(399	)		—		(399	)
Operating profit/ (loss) before tax		897			(289	)		1,022			104			1,300			804			240			(686	)		3,391			—		3,391
Tax expense (income) related to profit or loss from continuing operations		(276	)		80			(203	)		(28	)		(331	)		(271	)		(62	)		172			(920	)		—		(920	)
Profit from continuing operations		621			(209	)		819			74			968			533			178			(515	)		2,471			—		2,471
Profit from discontinued operations /Profit from corporate operations (net) (2)		—			—			—			—			—			—			—			—			—			—		—
Profit		621			(209	)		819			74			968			533			178			(515	)		2,471			—		2,471