86KM Sg Issuer 26

RNS No 3033c
BANCO BILBAO VIZCAYA SA
19 October 1999


BBV AND ARGENTARIA AGREE ON THEIR MERGER

This morning both the Boards of Directors of BBV and Argentaria have recommended
a merger project between the two institutions which will result in the creation
of "Banco Bilbao Vizcaya Argentaria, S.A (BBVA)" the leading financial
institution in Spain and Latin America.

CREATION OF THE #1 SPANISH BANKING GROUP IN TERMS OF MARKET CAPITALISATION AND
EARNINGS AND ONE WITH THE HIGHEST MARKET CAPITALISATION IN THE EUROZONE

The new financial group ranks first in Spain in terms of market capitalisation
and earnings

An extract of the relevant pro forma financial indicators of Banco Bilbao
Vizcaya Argentaria is as follows:

                                        Billions of Ptas.
Market value                             6,183
Assets                                  37,657
Customer deposits                       16,979
Loans                                   17,961
Mutal funds                              7,978
Pension funds                            4,362
Capital base                             2,406
Equity                                   1,479
# of shareholders (000's)                1,310
                              %
ROE                                      20.2
NPls ratio                                2.0
Loan loss coverage ratio                  126
Efficiency ratio                         54.3

BBVA will benefit from an excellent level of diversification both geographically
and in terms of business mix and from a strong market  position, in the
geographical areas where it is represented.

In Spain, the new group will have a market share of 17% in deposits, 20% in
loans, 20% in funds under management and 20% in pension funds.  However, BBVA
will have only 4,357 in Spain, representing 12% of the total number of branches.

The new group will also have a more extensive and better balanced presence in
Latin America as it owns:

a)  A substantial banking network, of more than 2,200 branches, with leading
market shares (Appendix 2)

b)  A comfortable leadership position in the pension funds business, where it
has 10 million customers and manages assets of more than Ptas 3.1 billion
(Appendix 3)

BALANCE, INTEGRATION AND UNITY OF COMMAND, AS PRINCIPLES OF THE BBV ARGENTARIA
MERGER

The merger project approved today targets expansion and is driven by:

Balance,
Integration and
Unity of Management

STRUCTURE OF THE TRANSACTION

*  Company name:  The new entity will be named Banco Bilbao Vizcaya Argentaria,
S.A. (BBVA)
*  Form:  "merger of equals"
*  Exchange ratio:  The transaction will be implemented through the exchange of
5 newly issued BBV shares for each 3 Argentaria shares, based on the respective
market capitalisations on the day of announcement
* Structure:  In order to benefit from the most efficient formula from a legal
and tax stand-point, the merger is being structured in such way that Argentaria
will be incorporated into BBV
*  Headquarters:  The new entity will be legally based in Bilbao with operating
headquarters both in Madrid and Bilbao
*  Earnings impact:  The shareholders of both institutions will benefit form
earnings accretion from day one, and from further significant and sustained
improvement over the next 3 years, which could reach 94%.

CAPITAL TRANSACTIONS AND OUTSTANDING FIANCIAL STRENGTH

The Boards of Directors of BBV and Argentaria have agreed to pay in advance the
dividends related to the 1999 income, so that the shares receive equal economic
rights from January 1st 2000.

The merger will be implemented through a BBV capital increase on the basis of
the exchange of 5 BBV shares for each 3 Argentaria shares.  The number of newly 
issued shares will be 817.3 million, which, added to the 2,113.2 million current
outstanding shares as of September 30th 1999, will make a total of 2,930.5
million BBV shares.

The initial capital base of Ptas 2.4 billion provides the new BBVA Group with
remarkable financial strength that will allow it to implement significant
expansion projects.  The capital surplus of the new group amounts to Ptas 655
billion.

Moreover, Banco Bilbao Vizcaya Argentaria will have Ptas 685.2 billion of
unrealised capital gains in its industrial portfolio (excluding gains from other
assets).

A DEMANDING TIMETABLE

Today's approval of the transaction by the Board of Directors of each comapny
will be followed by a General Shareholders' meeting scheduled for late 1999.
The merger will have economic effect from January 1,2000.  This operation will
also encompass US investors.

It is anticipated that the shares of the new Banco Bilbao Vizcaya Argentaria,
S.A (BBVA) will commence trading in January 2000, although this timetable is
subject to approval by the competent authorities, including the US SEC
(Securities Exchange Commission).

EIGHT STRATEGIC OBJECTIVES FOR BBVA

The Boards of Directors of Banco Bilbao Vizcaya and Argentaria have established
eight strategic objectives to reinforce the new entity's capacity to create
value:

1)  High return
2)  High solvency
3)  Better efficiency
4)  Adequate size
5)  Technology, as an opportunity
6)  Leading competitive position
7)  Diversification
8)  Low risk profile

These eight objectives form a corporate project, and, with clear leadership, are
the expression of the new entity's commitment to value creation and demanding
management criteria.

Given the position and global orientation of Banco Bilbao Vizcaya Argentaria
S.A., the Boards of Directors of both merging groups express their intention to
open this project to other European institutions.

CORPORATE GOVERNANCE

The governing bodies of the new entity will be formed as follows, in the initial
period:

Executive Chairmen:  Emilio Ybarra and Francisco Gonzalez
Vice-Chairman and CEO:  Pedro Luis Uriarte
Board of Directors:  Composed of the Boards of BBV (19 members) and Argentaria
(14 members).  The first vacancy will be cancelled.

The basic distribution of responsibilities between the two chairmen during the
transition period will be the following:

*  Emilio Ybarra will chair the General Meeting and the Board of Directors
*  Francisco Gonzalez will chair the Executive Committee
*  Emilio Ybarra and Francisco Ganzalez will co-chair the Management Committee,
   under the direction of the Vice-Chairman and CEO.

The Board of Directors, in order to optimise its role, will be assisted by an
Executive Committee composed of 13 members, 8 of which will come from BBV and 5
from Argentaria.  The first vacancy will be cancelled.  In addition to the vice
chairmanship held by the CEO, the Board will have 3 Vice Chairmen: Gervasio
Collar, Jose Domingo Ampuero and Jesus Maria Carnzos.

Chairman Emilio Ybarra will remain a member of the Board of Directors and of its
Executive Committee after he reaches the statutory age (expected to be at the
General Meeting to be held in the early 2002).  At that time Chairman Francisco
Gonzalez will take on the sole Chairmanship of Banco Bilbao Vizcaya Argentaria, 
S.A.

In conclusion, the newly created Banco Bilbao Vizcaya Argentaria, S.A. will be
the leading bank in Spain and Latin America which will take the best features of
the two merged partners with the ambition to develop into one of the most
important banking institutions in Europe.

END


MSCNFPENFADNFFN

Sg Issuer 26 (LSE:86KM)
Historical Stock Chart
From May 2024 to Jun 2024

Sg Issuer 26 (LSE:86KM)
Historical Stock Chart
From Jun 2023 to Jun 2024