Results (pages 6-13)

Balance sheet and business activity (pages 14-15)

Hyperinflation in Argentina

Solvency (pages 16-17)

Capital and leverage ratios (Percentage as of 30-09-18)

Risk management (pages 18-21)

NPL and NPL coverage ratios (Percentage)

Transformation

Digital and mobile customers (Millions)

Other matters of interest

Impact of the initial implementation of IFRS 9

BBVA generated a net attributable profit of €4,323m in the first nine months of 2018, which represents a year-on-year increase of 25.3% (+43.0% at constant exchange rates). This increase includes the results from corporate operations originated by the capital gains net of taxes from the sale of BBVA Chile. Moreover, at constant exchange rates, it is worth

mentioning the good performance of recurring revenue, containment of operating expenses and lower loan-loss impairments and provisions, which offset the lower contribution from net trading income (NTI) compared to the same period the previous year.

Unless expressly indicated otherwise, to better understand the changes in the main headings of the Group’s income statement, the year-on-year percentage changes given below refer to constant exchange rates.

Gross income

Gross income accumulated in the period grew by 4.3% year-on-year, strongly supported by the positive performance of the more recurring items.

Gross income (Millions of Euros) (1) At constant exchange rates: 4.3%.

Net interest income grew by 10.2% year-on-year with a general increase in all business areas, mainly in the United States, Mexico, Turkey and South America. In the third quarter, net interest income grew by 6.0% in comparison with the previous quarter.

Net interest income/ATAs (Percentage)

On the other hand, cumulative net fees and commissions (up 9.4% year-on-year) also registered a favorable evolution in all business areas of the Group, highly driven by their diversification. The quarterly figure moderated slightly (down 1.1% in the third quarter).

As a result, the more recurring revenue items (net interest income plus net fees and commissions) increased by 10.1% year-on-year (up 4.4% over the third quarter).

Net interest income plus fees and commissions (Millions of Euros) (1) At constant exchange rates: 10.1%.

NTI between January and September of 2018 moderated in comparison with the same period of 2017, when it was exceptionally high, largely due to the registration of the capital gains of €228m before taxes, from market sales of the stake in China Citic Bank (CNCB): €-204 million in the first quarter, from the sale of 1.7% stake, and 24 million in the third quarter from the sale of the remaining 0.34%. There have also been lower sales of ALCO portfolios in Spain in the first nine months of 2018 compared to the same period of the previous year. By business areas, NTI had a good performance in Mexico, South America and Turkey.

Other operating income and expenses contributed €30m; 89.3% less in year-on-year terms, mainly due to negative impact of the hyperinflation in Argentina which meant a negative impact of €190m. The change is also explained by the higher contribution to the Single Resolution Fund -SRF- (€124m in Spain, compared to €98m the same period of 2017). The net contribution of the insurance business grew by 2.4% in accumulated terms (-0.7 % in the third quarter).

Operating expenses for the first nine months of 2018 registered an increase of 2.7%, year-on-year, affected by the exchange rates (down 7.1.% at current exchange rates). Cost discipline has been maintained in all the Group’s areas through various efficiency plans. By business area the biggest reductions were in Spain and the Rest of Eurasia, year-on-year. In the other geographies, the growth of expenses was lower than the growth of gross income (in South America, excluding BBVA Chile).

Operating expenses (Millions of Euros) (1) At constant exchange rates: 2.7%.

As a consequence of this evolution of expenses, the efficiency ratio improved to 49.6%, the same as the period the previous year while the operating income, year-on-year growth of 5.8% (+0.5% in the third quarter).

Provisions and other

Impairment on financial assets for the period January-September 2018 decreased 1.2% in comparison with the figure for the same period in 2017. By business area, they continued to fall in Spain, due to lower loan-loss provisioning requirements for large customers. They also fell in the United States, due to the lower provisioning requirements in the portfolios affected by the 2017 hurricanes. They also decreased in Mexico and, to a lesser extent, in South America. In contrast, they increased in Turkey and the Rest of Eurasia concentrated in wholesale customer portfolios.

Impairment on financial assets (net) (Millions of Euros) (1) At constant exchange rates: -1.2%.

The heading provisions or reversal of provisions (hereinafter, provisions) were 43.1% lower than the figure for the same period of 2017 (which included a charge of €177m for restructuring costs). The line other gains (losses) showed a positive balance compared to the negative one the previous year. This is due to the incorporated capital gains from the sale of certain portfolios in Mexico and Non Core Real Estate, while the previous year resulted in a negative balance due to certain operations with an unfavorable effect from the Non Core Real Estate area.

The heading of corporate operations amounted to €633m and registered the capital gains (net of taxes) originated by the sale of approximately 68.2% of the BBVA’S equity stake in BBVA Chile.

Results

As a result of the above, the Group’s net attributable profit for the first nine months of 2018 reached an amount of €4,323m and continued to show a very positive evolution (up 43.0% year-on-year at constant exchange rates, up 25.3% at current exchange rates).

Net attributable profit, excluding results from corporate operations, stood at 3,689 million euros, or 7.0% higher than

the amount recorded for the same period in 2017 (up 22.0% year-on-year at constant exchange rates).

By business area, Banking activity in Spain generated a profit of €1,167m, Non Core Real Estate a loss of only €60m, the United States contributed a profit of €541m, Mexico registered €1,851m, Turkey contributed a profit of €488m, South America €467m and the Rest of Eurasia €57m.

The year-on-year comparison of the Group’s balance sheet and business activity has been affected by the sale of BBVA Chile, which as of September 30, 2018, was not included within the BBVA perimeter.

The evolution of the Group’s balance sheet and activity are presented below, from the opening balance sheet after the first implementation of IFRS 9 until the end of September 2018. These figures include the new categories included in the aforementioned standard.

Regarding the Group’s activity, the most significant aspects during this period are summarized below:

Loans and advances to customers (gross) (Billions of Euros) (1) At constant exchange rates: -0.2%.

Loans and advances to customers

(Millions of Euros)

Customer funds (Billions of Euros) (1) At constant exchange rates: -0.3%.

Customer funds

(Millions of Euros)

Solvency

Capital base

Fully-loaded CET1 ratio stood at 11.3% for the period ended September 30, 2018, above the Group’s target ratio of 11%. In the third quarter of 2018, the sale of the stake in BBVA Chile generated a positive impact on the fully-loaded CET1 ratio of 50 basis points (pbs), in line with expectations. Additionally, transfer of the real estate business of BBVA in Spain to Cerberus is estimated to have no material impact on the ratios. Also note that the measures activated at the local level by the Turkish regulator and supervisor (BRSA) in the quarter have no impact on the Group at a consolidated level.

Risk weighted assets (RWA) have decreased in the year, excluding the effect of the sale of BBVA Chile, due to a large extent to the depreciation of currencies against the euro. The Group carried out two securitizations in the year, a standard one in June related to a portfolio of consumer finance car loans for an amount of €800 million and a synthetic one in March, on which the European Investment Fund (FEI, subsidiary of the European Investment Bank) granted a financial guarantee on an intermediate tranche of a total portfolio of €1,950 million of loans to SMEs. The positive impact on capital of both securitizations via the release of RWAs was €767 million. In addition, during the first semester BBVA received authorization from the European Central Bank (ECB) to update the RWA calculation for structural exchange rate risk under the standard model.

Evolution of fully-loaded capital ratios (Percentage)

The Group has continued with its program to meet the MREL requirements by closing two public issuances of non-preferred senior debt, for a total of €2,500 million.

In relation to shareholder remuneration, on October 10, BBVA paid the first cash dividend charged to the 2018 earnings, with an amount of €0.10 gross per share. The total amount disbursed by the Group was €667 million, with no impact on solvency since the capital ratios include the accrual of dividends in line with the published dividend pay-out policy of around 35-40% of the recurring profit. In addition, BBVA paid in cash, on April 10, 2018, the complementary dividend for 2017 for an amount of €0.15 gross per share.

As of 30-September-2018, the phased-in CET1 ratio stood at 11.6%, taking into account the impact of the initial implementation of IFRS 9. In this context the European Commission and Parliament have established temporary arrangements that are voluntary for the institutions, adapting the impact of IFRS 9 on capital ratios. BBVA has informed the supervisory body of its adherence to these arrangements. Tier 1 capital stood at 13.3% and Tier 2 at 2.6% resulting in a total capital ratio of 15.9%. These levels are above the requirements established by the regulator in its SREP letter and the systemic buffers applicable in 2018 for BBVA Group. Since January 1, 2018, the requirement has been established at 8.438% for the phased-in CET1 ratio and 11.938% for the total capital ratio. The change with respect to 2017 is due to the steady implementation of the capital conservation buffers and the capital buffer applicable to other systemically important banks. The regulatory requirement for 2018 in fully-loaded terms remains unchanged (CET1 of 9.25% and total ratio of 12.75%) compared with the previous year.

In terms of MREL, the requirement that BBVA resolution group (BBVA S.A. and its subsidiaries) must reach as of January 1, 2020 will be 15.08% of total liabilities and own funds. With data as of December 31, 2016 (28.04% expressed in terms of RWAs). The Group estimates that it is currently in line with this MREL requirement.

Finally, the Group’s leverage ratio maintained a solid position, with 6.6% fully-loaded (6.7% phased-in), which is still the largest of its peer group.

Ratings

During the first nine months of the year. S&P and DBRS and Moody’s upgraded BBVA’s rating to A3, A- and A (high), respectively. Throughout the third quarter of 2018, Moody’s, Fitch and S&P reaffirmed the rating given to BBVA (A3, A-and A-, respectively), being S&P the only one that placed BBVA’s outlook in negative due to the recent trend of the Turkish economy.

Following these upgrades, all the agencies assign BBVA a category “A” rating, which did not occur since mid-2012, thus recognizing the strength and robustness of BBVA’s business model.

Ratings

Credit risk

As of the end of September 2018, BBVA Group’s risk metrics continued to perform well:

Non-performing loans and provisions (Millions of Euros)

Structural risks

Liquidity and funding

Management of liquidity and funding in BBVA aims to finance the recurring growth of the banking business at suitable maturities and costs, using a wide range of instruments that provide access to a large number of alternative sources of financing, always in compliance with current regulatory requirements.

A core principle in BBVA’s management of the Group’s liquidity and funding is the financial independence of its banking subsidiaries abroad. This principle limits the spread of a liquidity crisis among the Group’s different areas and ensures that the cost of liquidity and funding is correctly reflected in the price formation process.

The financial soundness of the Group’s banks continues to be based on the funding of lending activity, fundamentally through the use of stable customer funds. During the first nine months of 2018, liquidity conditions remained comfortable across BBVA Group’s global footprint:

On the funding side, the long-term wholesale funding markets in the geographic areas where the Group operates continued to be stable, with the exception of Turkey where the volatility increased during the third quarter, having stabilized at the end of the latter with the renewal of the maturities of syndicated loans of different entities.

During the first nine months of 2018, the companies that form part of BBVA Group carried out the following operations:

The liquidity coverage ratio (LCR) in BBVA Group remained comfortably above 100% in the period, without including any transfers between subsidiaries; in other words, no kind of excess liquidity levels in the subsidiaries abroad are considered in the calculation of the consolidated ratio. As of September 30, 2018, the LCR stood at 127%. Although this requirement is only established at Group level, the minimum level is widely exceeded in all the subsidiaries (Eurozone, 152%; Mexico, 134%; Turkey, 119%; and the United States, 145%).

Foreign exchange

Foreign-exchange risk management of BBVA’s long-term investments, basically stemming from its franchises abroad, aims to preserve the Group’s capital adequacy ratios and ensure the stability of its income statement.

The first nine months of 2018 were notable for the depreciation against the euro of the Turkish lira (down 34.7%) and the Argentine peso (down 50.6%), while the Mexican peso (+8.6%) and the U.S Dollar (+3.6%) appreciated. BBVA has maintained its policy of actively hedging its main investments in emerging countries, covering on average between 30% and 50% of the earnings for the year and around 70% of the excess of CET1 capital ratio (which is not naturally covered by the ratio itself). In accordance with this policy, the sensitivity of the CET1 ratio to a depreciation of 10% of the main emerging currencies (Mexican peso or Turkish lira) against the euro remains at around a negative two basis points for each of these currencies. In the case of the dollar, the sensitivity is approximately a

positive eleven basis points to a depreciation of 10% of the dollar against the euro, as a result of RWAs denominated in U.S. Dollar. Given the context of the emerging markets, the coverage level of the expected earnings in Turkey at the beginning of 2018 is maintained at around 50% and, in the case of Mexico, it has been increased to approximately 100% for 2018 and 50% for 2019.

Interest rates

The aim of managing interest-rate risk is to maintain a sustained growth of net interest income in the short and medium-term, irrespective of interest-rate fluctuations, while controlling the impact on capital through the valuation of the portfolio of financial assets at fair value with changes reflected in other accumulated comprehensive income.

The Group’s banks have fixed-income portfolios to manage their balance-sheet structure. In the first nine months of 2018, the results of this management were satisfactory, with limited risk strategies in all the Group’s banks. Their capacity of resilience to market events has allowed them to face the cases of Italy and Turkey without any relevant impact.

After the formation of the new government in Italy, the reaction of the market to the first proposals on public spending has contributed to the sustained pressure on the Italian debt, however without significant impact on the capital ratio during the quarter.

In Turkey, the high growth rates of recent quarters have given rise to inflationary tensions that, together with the level of current account deficits, have weakened the Turkish Lira. In this context, the Central Bank of Turkey (CBRT) has raised rates to contain the depreciation of the currency. Risk management, and bond portfolio with a high component of inflation-linked bonds, has had a limited impact on the capital ratio.

Finally, it is worth noting the following monetary policies pursued by the different central banks in the main geographical areas where BBVA operates:

The BBVA share

Global economic growth may have slowed slightly in the third quarter of 2018 to rates somewhat below 1% quarterly. Although the pace of expansion remains robust, it is geographically less synchronized, with the strength of the United States economy that contrasts with the moderation seen in China, Europe and some emerging economies. The fact that both the Federal Reserve (Fed) and the ECB have taken steps toward the normalization of their monetary policy and, although they continue to support activity, this process has led to an increase in financial tensions in the emerging economies due to the appreciation of the dollar and the reduction of liquidity However, the rebound in financial tensions has been especially concentrated in the more vulnerable emerging countries, with a clear difference between them . The main risk continues to be protectionism, despite the fact that the direct effect on global growth of the measures taken could be limited, the indirect impact of lower confidence and financial volatility could be felt in the coming quarters and increase uncertainty.

Most stock-market indices showed a downward trend during the first nine months of the year 2018. Thus, the Stoxx 50 and the Euro Stoxx 50 fell by 3.5% and 3.0%, respectively, year-to-date; while in Spain, the Ibex 35 lost 6.5% over the same period. In contrast, in the United States the S&P 500 index gained 9.0% in the last nine months (up 7.2% in the third quarter).

In Europe, the banking sector indices were notably more negative during the first nine months of 2018 than these general indices. The European Stoxx Banks index, which includes British banks, lost 14.8%, and the Eurozone bank index, the Euro Stoxx Banks, was down 18.3%. In contrast, in the United States the S&P Regional Banks index gained with a slight increase a 0.9% on the close of 2017.

The BBVA share closed September at €5.49, a fall of 22.8% for this year.

The BBVA share and share performance ratios

Regarding shareholder remuneration, on October 10, BBVA paid in cash a gross amount of €0.10 per share on account of the 2018 fiscal year. This payment is consistent with the shareholder remuneration policy announced by Relevant Event of February 1, 2017, that envisages, subject to the pertinent approvals by the corresponding corporate bodies, the payment of two dividends in cash, foreseeably on October and April of each year.

Shareholder remuneration (Euros gross/share)

As of September 30, 2018, the number of BBVA shares remained at 6,668 million, and the number of shareholders was 895,809. By type of investor, residents in Spain held 44.73% of the share capital, while the remaining 55.27% was owned by non-resident shareholders.

Shareholder structure 3Q18

BBVA shares are included on the main stock-market indices, including the Ibex 35, Euro Stoxx 50 and Stoxx 50, with a weighting of 7.6%, 1.5% and 1.0% respectively. They also form part of several sector indices, including the Euro Stoxx Banks, with a weighting of 8.1%, and the Stoxx Banks, with a weighting of 3.8%.

Finally, BBVA maintains a significant presence on a number of international sustainability indices or ESG (environmental, social and governance) indices, which evaluate the performance of companies in this area. In September 2018, BBVA joined the Dow Jones Sustainability Index (DJSI), benchmark in the market, which measures the performance of nearly 3,400 listed companies in environmental, social and corporate governance matters. Among the aspects most valued in BBVA’s analysis are the fiscal strategy, the information security and cybersecurity policies, the management of environmental risks and opportunities, financial inclusion and, above all, Pledge 2025 announced this year (see responsible banking section).

Sustainability indices on which BBVA is listed as of 30-09-2018 Listed on the DJSI World and DJSI Europe indices Listed on the MSCI ESG Leaders Indexes AAA Rating Listed on the FTSE4Good Global Index Series Listed on the Euronext Vigeo Eurozone 120 and Europe 120 Listed on the Ethibel Excellence Investment Register In 2017, BBVA obtained a "C" rating (1) The inclusion of BBVA in any MSCI index, and the use of MSCI logos, trademarks, service marks or index names herein, do not constitute a sponsorship, endorsement or promotion of BBVA by MSCI or any of its affiliates. The MSCI indices are the exclusive property of MSCI. MSCI and the MSCI index names and logos are trademarks or service marks of MSCI or its affiliates.

BBVA has a differential banking model that we refer to as responsible banking, based on seeking out a return adjusted to principles, strict legal compliance, best practices and the creation of long-term value for all stakeholders.

The four pillars of BBVA´s responsible banking model are as follows:

In recognition of its responsible banking model and of BBVA´s efforts to advance sustainability issues, in September 2018 BBVA joined the Dow Jones Sustainability Index (DJSI), as mentioned in the section of the share.

In line with the European Commission Action Plan on sustainable finance, BBVA announced in this 2018 its Pledge 2025, the Bank’s climate change and sustainable development strategy to meet the United Nations Sustainable Development Goals and the Paris Agreement on Climate Change. It is a pledge to eight years (2018-2025) based on financing, managing and involving. BBVA is pledging to mobilize €100 billion in green and sustainable finance, infrastructures and agribusiness, social entrepreneurship and financial inclusion. In its pledge to manage environmental and social resources and minimize the potential direct and indirect negative impacts, BBVA has pledged that by 2025, 70% of energy bought by the Group will be renewable, thus reducing its CO₂ emissions by 68% compared to 2015. In addition, BBVA is pledged to engage all its stakeholders to boost the contribution of the financial sector to sustainable development.

To foster this contribution, BBVA presented in April the SDG-linked bond framework, under which it may issue what are called green bonds, social bonds or sustainable bonds. The existence of this framework is one of the characteristic elements of sustainable issues. In May, BBVA issued a green bond for €1 billion, the largest amount ever by a financial institution in

the Eurozone, as well as being at the moment the first Spanish bank to carry out this type of issue. In this respect, in September, BBVA Bancomer carried out an issuance of this type of bonds amounting to 3.5 billion Mexican pesos, making it the first private bank in Mexico to successfully issue a bond with such characteristics.

Additionally, in the third quarter, BBVA Asset Management launched a global asset allocation fund managed under a Socially Responsible Investment (SRI) criteria. BBVA Futuro Sostenible, has a defensive risk profile, and completes the range of investment solutions with socially responsible criteria offered by BBVA Group fund manager. BBVA Futuro Sostenible is the first fund in Spain with a complete approach to SRI.

Regarding responsible practices, BBVA published at the beginning of 2018 its Human Rights Commitment, an action plan that covers all the areas of the Group and its ecosystem. For BBVA, respect for the dignity of people and their rights is an essential condition for action and is very closely linked to the challenge that it has assumed of fostering and preserving the well-being of the communities in which it operates. This commitment is based on the UN Guiding Principles on Business and Human Rights.

In September, BBVA celebrated the Global Volunteer Week. More than 7,000 BBVA employees carried out around 325 volunteer and solidarity activities, organized by the bank, by employees and by other non-governmental organizations in more than 15 countries, to contribute to the Agenda of the Sustainable Development Goals established by the United Nations for 2030.

This section presents and analyzes the most relevant aspects of the Group’s different business areas. Specifically, it shows a summary of the income statement and balance sheet, the business activity figures and the most significant ratios in each of them.

At the closing of the third quarter of 2018 the reporting structure of BBVA Group’s business areas remained basically the same even if its composition differs from the one presented during the same period in 2017 due to the sale of BBVA Chile announced last year and which has been closed on July 6. This operation, which has affected the composition of the business area of South America, will be detailed in the following sections as well as the rest of the Group’s business areas:

In addition to the above, all the areas include a remainder made up basically of other businesses and a supplement that includes deletions and allocations not assigned to the units making up the above areas.

Lastly, the Corporate Center is an aggregate that contains the rest of the items that have not been allocated to the business areas, as it corresponds to the Group’s holding function. It includes: the costs of the head offices that have a corporate function; management of structural exchange-rate positions; specific issues of equity instruments to ensure adequate management of the Group’s global solvency; portfolios and their corresponding results, whose management is not linked to customer relations, such as industrial holdings; certain tax assets and liabilities; funds due to commitments with employees; goodwill and other intangibles.

In addition to this geographical breakdown, supplementary information is provided for all the wholesale businesses carried out by BBVA, i.e. Corporate & Investment Banking (CIB), in the geographical areas where it operates. This aggregate business is considered relevant to better understand the Group because of the characteristics of the customers served, the type of products offered and the risks assumed.

Finally, as usual, in the case of the Americas, Turkey and CIB areas, the results of applying constant exchange rates are given in addition to the year-on-year variations at current exchange rates.

The information by areas is based on units at the lowest level and/or companies making up the Group, which are assigned to the different areas according to the main geographical area in which they carry out their activity.