The SpainandPortugal had their best year of recent times. Despite the uncertain context from the second half of the year on, this area has effectively handled a deceleration in activity with an innovative and selective offer. Year-on-year growth in lending stood at 11.5%, with funds growing by 1.6%. It was also a year of excellent price management, with a growing customer spread over the year pushing net interest income up to €4,295m, 14.6% higher than in 2006.

In addition, application of the Transformation Plan has resulted in a major containment of expenses, which rose by only 2.8%, bringing a 3.4 percentage-point improvement in the efficiency ratio down to 37.6%. Finally, but no less importantly, good risk management was maintained, with an NPL ratio of 0.73% and a coverage of 231%. All this led to a net attributable profit of €2,397m, 24.9% up on 2006.

      Concerning Global Businesses, 2007 was an excellent year for the area, which has demonstrated its capacity to generate recurring income, even in a complicated environment, with a business model based especially on customer operations.Ordinary revenuescame to €1,673m, an increase of 20.8% on 2006. This has been passed on to the operating profit, which rose 18.8% to €1,271m. Strong earnings in 2006 resulting from the disposal of holdings, left little room for any major increase in 2007 in netattributable profit,which nonetheless rose 5.4% to €909m in 2007. The year saw a further improvement in the NPL ratio, which fell to minimum levels of 0.02%.

        These results are due to excellent performance by the individual units. In Global Customers and Investment Banking, a firm upward trend in business volumes, with year-on-year growth of 21.5% in lending and 7.3% in funds, was passed on to earnings. Moreover, in a more complex environment, Global Markets and Distribution enjoyed optimal earnings thanks to a well diversified business model based on customer franchising.

        In Mexico, the strong increase in activity continued in 2007, both in the banking business and in pensions and insurance. At constant exchange rates, lending grew 28.7%, with alterations to the portfolio mix as growth was recorded in mortgages and SMEs rather than in consumer finance and cards. Funds went up 12.1%. Net interest income stood at €3,533m, with a year-on-year increase of 18.8% and, with higher net fee income and net trading income, ordinary revenues came to €5,374m (+17.2%). The increase in costs was lower, despite strong marketing dynamism and an expansion in the distribution network, leading to an operating profit for the year of €3,414m, a 20.4% increase on the previous year. Net attributable profit came to €1,880m, with a year-on-year growth of 20.2% at constant rates. 

·       At the close of 2007, BBVAUSA took a further step in its business integration plan. As a result, it ended the year with over 2.5 million customers, loans worth €26,085m, deposits of €25,411m and off-balance-sheet funds of €6,683m, distributed in Texas, Alabama, Arizona, Florida, Colorado, New Mexico, California and Puerto Rico. The operating profit stood at €383m, up from €118m in the previous year (using like-for-like exchange rates), with a net attributable profit of €203m, as compared to €59m in 2006.

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          The acquisition of Compass Bank marked a decisive step in BBVA’s strategy of expanding on the US market, tying in with its goal of becoming a financial services company with a strong presence on growth markets. Since 7 September, BBVA has owned 100% of Compass Bancshares as a result of the largest investment the Group has ever undertaken, to the value of €6,672m ($9,115m).

Compass is one of the largest banks in the Sunbelt, a strip running across the southern United States, which is the country’s most attractive area in terms of economic and demographic growth, and which the Group considers to be strategically important for further expansion.

Compass's activities fit within BBVA's strategy, with a focus on retail banking, where it has a high-quality loan portfolio with no positions in the subprime business. Compass offers a wide range of products and services through its five lines of business: Retail Banking, Corporate Banking, Community Banking, Asset Banking and Consumer Finance Banking.

Compass is the latest in a line of BBVA acquisitions in the US that include Laredo National Bank, Texas State Bank and State National Bank, which all operate in Texas and New Mexico. This combination of the four banks places BBVA in a prime position in the Sunbelt, especially in Texas, where it has a strong presence in metropolitan areas and heads the field along the border with Mexico. Texas, considered to be the world's tenth largest economy, enjoys strong economic and demographic growth, above the US average.

Altogether, at the end of 2007, BBVA was among the 25 largest banks in the US in terms of volume of assets, with a franchise of over 650 branches and 14,000 employees. It is the regional leader in Texas, Alabama, Arizona and New Mexico, and also has a significant presence in Florida and Colorado, with a potential market of 100 million people.

With a favourable economic environment in 2007, SouthAmerica saw excellent business performance (lending rose 33.5% year on year in local currencies, while funds grew 18.8%). These figures were passed on to earnings. At constant exchange rates, there was strong growth in net interest income (up 33.2% to €1,657) and in operating profit, which rose 33.3% to €1,454m, thanks to a significant improvement in the efficiency ratio, which stood at 46.0% at year-end.