23. Financial liabilities at amortized cost

The breakdown of the balance of these headings in the accompanying consolidated balance sheets is as follows:

Financial Liabilities at Amortized Cost	Notes	Millions of Euros
		2011	2010	2009
Deposits from central banks	9	33,147	11,010	21,166
Deposits from credit institutions	23.1	59,356	57,170	49,146
Customer deposits	23.2	282,173	275,789	254,183
Debt certificates	23.3	81,930	85,179	99,939
Subordinated liabilities	23.4	15,419	17,420	17,878
Other financial liabilities	23.5	7,879	6,596	5,624
Total		479,904	453,164	447,936

23.1 Deposits from credit institutions

The breakdown of the balance under this heading in the consolidated balance sheets, according to the nature of the financial instruments, is as follows:

Deposits from Credit Institutions	Notes	Millions of Euros
		2011	2010	2009
Reciprocal accounts		298	140	68
Deposits with agreed maturity		32,859	38,265	30,608
Demand deposits		2,095	1,530	1,273
Other accounts		343	696	733
Repurchase agreements	37	23,452	16,314	16,263
Subtotal		59,047	56,945	48,945
Accrued interest until expiration		309	225	201
Total	23	59,356	57,170	49,146

The breakdown by geographical area and the nature of the related instruments of this heading in the accompanying consolidated balance sheets, disregarding interest accrued pending maturity, is as follows:

Deposits from Credit Institutions 2011	Millions of Euros
	Demand Deposits	Deposits with Agreed Maturity	Repos	Total
Spain	472	8,364	394	9,230
Rest of Europe	399	14,652	12,496	27,547
Mexico	359	1,430	9,531	11,320
South Amércia	251	2,863	478	3,593
The United States	799	4,965	553	6,318
Rest of the world	112	928	-	1,040
Total	2,393	33,202	23,453	59,047

Deposits from Credit Institutions 2010	Millions of Euros
	Demand Deposits	Deposits with Agreed Maturity	Repos	Total
Spain	961	7,566	340	8,867
Rest of Europe	151	16,160	6,315	22,626
Mexico	161	3,060	8,645	11,866
South Amércia	195	2,349	349	2,892
The United States	147	6,028	665	6,840
Rest of the world	56	3,799	-	3,855
Total	1,671	38,961	16,314	56,945

Deposits from Credit Institutions 2009	Millions of Euros
	Demand Deposits	Deposits with Agreed Maturity	Repos	Total
Spain	456	6,414	822	7,692
Rest of Europe	382	15,404	4,686	20,472
Mexico	158	854	9,581	10,593
South Amércia	179	722	364	1,265
The United States	150	5,611	811	6,572
Rest of the world	16	2,336	-	2,352
Total	1,341	31,341	16,263	48,945

23.2 Customer deposits

The breakdown of this heading of the accompanying consolidated balance sheets, by type of financial instruments, is as follows:

Customer Deposits	Notes	Millions of Euros
		2011	2010	2009
Government and other government agencies		40,602	30,983	15,297
Spanish		4,269	4,484	3,904
Foreign		12,289	13,563	10,995
Repurchase agreements	37	24,016	12,920	389
Accrued interests		28	16	9
Other resident sectors		108,217	116,218	93,190
Current accounts		28,212	18,705	20,243
Savings accounts		16,003	24,521	27,137
Fixed-term deposits		49,105	49,160	35,135
Repurchase agreements	37	14,154	23,197	10,186
Other accounts		35	46	31
Accrued interests		708	589	458
Non-resident sectors		133,355	128,590	145,696
Current accounts		45,742	39,567	33,697
Savings accounts		30,860	26,435	23,394
Fixed-term deposits		49,770	56,752	83,754
Repurchase agreements	37	6,317	5,370	4,415
Other accounts		210	122	103
Accrued interests		456	344	333
Total	23	282,173	275,789	254,183
Of which:
In euros		152,375	151,806	114,066
In foreign currency		129,799	123,983	140,117
Of which:
Deposits from other creditors without valuation adjustment		281,364	275,055	253,566
Accrued interests		809	734	617

The breakdown by geographical area of this heading in the accompanying consolidated balance sheets, by type of instrument and geographical area, disregarding valuation adjustments, is as follows:

Customer Deposits 2011	Millions of Euros
	Demand Deposits	Savings Deposits	Deposits with Agreed Maturity	Repos	Total
Spain	31,249	16,160	51,012	26,509	124,929
Rest of Europe	4,600	1,310	29,571	1,656	37,136
Mexico	16,987	6,804	8,123	4,479	36,393
South Amercia	16,118	11,429	15,670	182	43,399
The United States	14,791	12,768	9,640	-	37,199
Rest of the world	245	234	1,446	-	1,925
Total	83,990	48,705	115,462	32,826	280,981

Customer Deposits 2010	Millions of Euros
	Demand Deposits	Savings Deposits	Deposits with Agreed Maturity	Repos	Total
Spain	21,848	24,707	67,838	18,639	133,032
Rest of Europe	3,784	482	18,245	1,609	24,120
Mexico	16,646	7,079	9,582	3,630	36,937
South Amercia	12,039	8,765	14,142	132	35,078
The United States	13,985	11,363	17,147	-	42,495
Rest of the world	357	201	2,621	-	3,179
Total	68,659	52,597	129,575	24,009	274,840

Customer Deposits 2009	Millions of Euros
	Demand Deposits	Savings Deposits	Deposits with Agreed Maturity	Repos	Total
Spain	23,835	27,245	38,370	7,572	97,022
Rest of Europe	2,975	457	18,764	3	22,199
Mexico	12,697	5,809	9,224	4,205	31,935
South Amercia	11,693	7,784	11,407	209	31,093
The United States	11,548	10,146	46,292	-	67,986
Rest of the world	440	181	2,527	-	3,148
Total	63,188	51,622	126,584	11,988	253,382

23.3 Debt certificates (including bonds)

The breakdown of the balance under this heading in the accompanying consolidated balance sheets is as follows:

Debt Certificates	Millions of Euros
	2011	2010	2009
Promissory notes and bills	7,501	13,215	29,582
Bonds and debentures	74,429	71,964	70,357
Total	81,930	85,180	99,939

The breakdown of the most significant outstanding issuances, repurchases or refunds of debt instruments issued by the consolidated companies as of December 31, 2011, 2010 and 2009 is shown on Appendix VIII.

The changes in the balances under this heading, together with the Subordinated Liabilities for 2011, 2010 and 2009 are included in Note 58.4.

23.3.1 Promissory notes and bills

The breakdown of the balance under this heading, by currency, is as follows:

Promissory notes and bills	Millions of Euros
	2011	2010	2009
In euros	6,672	7,672	11,024
In other currencies	829	5,543	18,558
Total	7,501	13,215	29,582

These promissory notes were issued mainly by BBVA, S.A. and BBVA Banco de Financiación, S.A.

23.3.2 Bonds and debentures issued

The breakdown of the balance under this heading, by financial instrument and currency, is as follows:

Bonds and debentures issued	Millions of Euros
	2011	2010	2009
In Euros -	64,181	62,811	60,760
Non-convertible bonds and debentures at floating interest rates	4,648	6,776	8,593
Non-convertible bonds and debentures at fixed interest rates	9,381	7,493	5,932
Covered bonds	33,842	30,864	30,369
Hybrid financial instruments	288	373	389
Securitization bonds realized by the Group	6,755	8,047	8,407
Other securities (**)	5,709	6,306	4,339
Accrued interest and others (*)	3,557	2,952	2,731
In Foreign Currency -	10,248	9,153	9,597
Non-convertible bonds and debentures at floating interest rates	2,225	3,767	4,808
Non-convertible bonds and debentures at fixed interest rates	5,058	2,681	2,089
Covered bonds	289	316	306
Hybrid financial instruments	1,397	1,119	1,342
Securitization bonds realized by the Group	755	799	605
Other securities (**)	473	456	425
Accrued interest and others (*)	51	15	22
Total	74,428	71,964	70,357

(*) Hedging operations and issuance costs. (**) Mainly territorial covered bonds.

The following table shows the weighted average interest rates of fixed and floating rate bonds and debentures issued in euros and foreign currencies in effect as of December 31, 2011, 2010 and 2009:

Interests Rates of Promissory Notes and Bills Issued	2011		2010		2009
	Euros	Foreign Currency	Euros	Foreign Currency	Euros	Foreign Currency
Fixed rate	3.81%	5.13%	3.75%	5.31%	3.86%	5.00%
Floating rate	2.38%	4.88%	1.30%	3.00%	0.90%	2.56%

Most of the foreign-currency issuances are denominated in U.S. dollars.

23.4 Subordinated liabilities

The breakdown of this heading of the accompanying consolidated balance sheets, by type of financial instruments, is as follows:

Subordinated Liabilities	Notes	Millions of Euros
		2011	2010	2009
Subordinated debt		12,781	11,569	12,117
Preferred securities		1,760	5,202	5,188
Subtotal		14,541	16,771	17,305
Valuation adjustments		878	649	573
Total	23	15,419	17,420	17,878

Of the above, the issuances of BBVA International, Ltd., BBVA Capital Finance, S.A.U. and BBVA International Preferred, S.A.U, BBVA Subordinated Capital, S.A.U. and BBVA Global Finance, Ltd, are subordinately guaranteed by the Bank.

Subordinated debt

These issuances are non-convertible subordinated debt and, accordingly, for debt seniority purposes, they rank behind ordinary debt. The breakdown of this heading in the accompanying consolidated balance sheets, disregarding valuation adjustments, by currency of issuance and interest rate, is disclosed in Appendix VIII. The variations of the balance in 2011 are mainly the result of the following transactions:

• Conversion of subordinated bond issues

As of December 31, 2010 and 2009, subordinated debt included an issue of convertible subordinated obligations into Bank shares amounting to €2,000 million, carried out by BBVA in September 2009 (hereinafter, “Convertible bonds”). These obligations have a 5% annual coupon, payable quarterly, and can be converted into Bank shares after the first year, at the Bank’s discretion, at each of the coupon payment dates, and by obligation on the date of their final maturity date (October 15, 2014). These obligations were recognized as financial liabilities since the number of Bank shares to be delivered can vary.

The Board of Directors of BBVA, at its meeting on June 22, 2011, agreed to the mandatory conversion of all convertible bonds. The conversion took place on July 15, 2011, an interest payment date, according to the procedure established to that effect under the terms and conditions of the issue. As a result, an increase of the Bank’s common stock was carried out (approved by the Board of Directors at its meeting on July 27, 2009, in using the power delegated by the Annual General Meeting held on March 14, 2008 in Point Six of the Agenda) through the issue of ordinary BBVA shares needed to address the conversion of the Convertible Bonds (see Note 27).

• Mandatory convertible subordinated bond issue

The BBVA Board of Directors, at its meeting on November 22, 2011, agreed, in virtue of the authorization conferred by the AGM of March 14, 2008, to proceed to the issue of mandatory convertible subordinated obligations into new ordinary BBVA shares (hereinafter, the “Issue” or “Mandatory Convertible Subordinated Obligations” or “Bonds”) for a maximum amount of €3,475 million.

This issue excluded the right to preemptive subscription since it was exclusively designed for holders of preferred securities held by BBVA Capital Finance, S.A. Unipersonal (series A, B, C and D) and BBVA International Limited (series F), all secured by BBVA, S.A., who accept the purchase offer for those preferred securities on behalf of BBVA.

Thus, those who accepted the purchase offer would subscribe a nominal amount of “Mandatory Convertible Subordinated Obligations” equivalent to 100% of the nominal amount or cash for the preferred securities they owned and that would be acquired by BBVA.

As of December 30, 2011, the purchase offer for preferred securities and the subscription of “Bonds” amounted to €3,430 million, which represented 98.71% of the total preferred securities to be repurchased. The “Issue” was carried out at 100% of the nominal value of the “Convertible Bonds”, which was €100. Thus, the Bank issued 34,300,002 “Bonds” for a total amount of €3,430 million. These “Bonds” were recognized as financial liabilities since the number of Bank shares to be delivered can vary. The remuneration of the “Bonds” was 6.5% annual over nominal, payable on a quarterly basis.

Without prejudice to the issuer’s authority to convert the “Bonds” at any date of remuneration, on June 30, 2012, it is expected that 50% of the nominal value of the “Bonds” in circulation at said date shall be mandatorily converted into new ordinary BBVA, S.A. shares, and that the total conversion of the “Issue” take place on June 30, 2013. The conversion will be in terms of the market price of the BBVA share, according to the terms and conditions established in the “Issue” brochure.

Preferred securities

The breakdown by issuer of the balance under this heading in the accompanying consolidated balance sheets is as follows:

Preferred Securities by Issuer	Millions of Euros
	2011	2010	2009
BBVA International, Ltd. (1) (2)	9	500	500
BBVA Capital Finance, S.A.U. (1) (2)	36	2,975	2,975
Banco Provincial, S.A	-	37	67
BBVA International Preferred, S.A.U. (3)	1,696	1,671	1,628
Phoenix Loan Holdings, Inc.	19	19	18
Total	1,760	5,202	5,188

(1) Traded on the Spanish AIAF market, (2) The increase is due to the purchase offer and redemption of the preferred shares mentioned above (3) Traded on the London Stock Exchange and New York Stock Exchange

These issues were fully subscribed by third parties outside the Group and are wholly or partially redeemable at the issuer company’s option after five or ten years from the issue date, depending on the terms of each issue.

The variation in the balance under this heading in 2011 is due primarily to the purchase transaction and early amortization of preferred securities of €3,430 million indicated in the section above.

The breakdown of the issues of preferred securities in the accompanying consolidated balance sheets, disregarding valuation adjustments, by currency of issuance and interest rate of the issues, is disclosed in Appendix VIII.

23.5 Other financial liabilities

The breakdown of the balance under this heading in the accompanying consolidated balance sheets is as follows:

Other financial liabilities	Millions of Euros
	2011	2010	2009
Creditors for other financial liabilities	2,223	2,295	1,776
Collection accounts	2,239	2,068	2,049
Creditors for other payment obligations	2,927	1,829	1,799
Dividend payable but pending payment (Note 4)	490	404	-
Total	7,879	6,596	5,624

As of December 31, 2011 and 2010, the “Dividend payable but pending payment” corresponds to the third interim dividend against the 2011 and 2010 results, paid in January of the following years, (see Note 4). As of December 31, 2009, this heading did not include the third interim dividend, as it was paid in December 2009.