Family Remittances USA to LATAM

BBVA USA Family Remittances USA to LATAM BBVA Bancomer Transfer Services Inc. Washington DC June 28, 2005

Bancomer Transfer Services (BTS) Subsidiary of BBVA Bancomer Financial Holdings BTS mission is to provide high quality payment services for family remittances in LATAM High quality payment services are supported with a propietary technology platform Technology platform incorporates one of the most stringent compliance programs and a state-of-the art AML monitoring system BTS acts as a money transfer engine, allowing MT s to provide their consumer with a reliable and secure alternative to wire money at affordable prices Claims ratio: 0.02%

BTS has been promoting switching to formal payment channels, which provides benefits to all the participants of the remittances market Source: Banxico In Mexico, family remittances started to switch to formal payment channels back in the year 2000 Many new participants joined the industry, due to formal access to formal payment networks With access to formal payment networks, new participants were able to offer: High quality service at payment to beneficiaries Competitive prices Strengthen compliance programs This provides the consumer with more reliable and secure alternatives to wire money at affordable prices

90% of the family remittances to Mexico are transferred electronically and mainly through formal payment channels Family Remittances to Mexico $20,000 Market Dominated by Western Union & MoneyGram Market with Diverse Participants $15,000 $10,000 $5,000 Informal Activity BTS Source: Banxico $0 Rest of the Electronic Transfers Market 1996 1997 1998 1999 2000 2001 2002 2003 2004 Total 4,224 4,865 5,627 5,909 6,279 8,896 9,815 13,266 16,613 Others (USD $ mill) 2,002 2,227 2,377 1,974 1,930 1,112 1,017 1,883 2,117 BTS 77 136 216 189 750 3,540 4,797 5,602 6,263 Electronic Transfers 2,145 2,502 3,034 3,746 3,599 4,244 4,001 5,779 8,233

and the remittances from the United States to Mexico could exceed $20 Billion in 2005 15% 10% 5% 0% 13.0% 6.3% $6.6B $9.3B $10.5B 5.0% 5.3% $20.8B $16.6B $13.3B 3.1% 3.1% 2000 2001 2002 2003 2004 2005 e 25000 20000 15000 10000 5000 0 Average cost per wire Remittances US$ Billion Source: Pew Hispanic Center Report, The Remittance Marketplace, June 2004

BBVA Bancomer through its BTS solution, has played a key role in lowering consumer costs Transactions (000 s) 12,657 15,042 17,376 9,633 37 192 415 714 657 2,174 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Funds $23 $77 $136 $216 $189 $750 $3,540 $4,797 $5,603 $6,556 (USD $ mill) $50 $22 $28 $45 $18 $27 $14 $26 Consumer cost of wiring $360 (USD) Market with a Few Participants $40 $35 $13 $22 $31 $11 $20 $10 $13 Market with New Participants $23 $18 $7 $11 $11 $10 $10 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 $5 $6 $4 $6 $4 $6

Mexican Banks have participated in 2/3 of family remittance payments 1.8 1.6 1.4 2003 2004 2005 Non electronic USD $ Billions 1.2 1.0 0.8 0.6 0.4 0.2 Other electronic payments Other banks BBVA Bancomer USD $ billones 0.0 E F M A M J J A S O N D E F M A M J J A S O N D E F BBVA Bancomer 0.37 0.36 0.43 0.44 0.51 0.51 0.50 0.55 0.51 0.53 0.46 0.43 0.39 0.42 0.51 0.52 0.60 0.56 0.56 0.60 0.55 0.58 0.50 0.48 0.46 0.46 Otros Bancos 0.15 0.19 0.17 0.22 0.19 0.22 0.25 0.19 0.31 0.15 0.05 0.31 0.18 0.20 0.33 0.32 0.36 0.39 0.34 0.39 0.36 0.29 0.39 0.38 0.31 0.36 Otros electrónicos 0.28 0.20 0.23 0.27 0.32 0.32 0.30 0.33 0.31 0.33 0.34 0.29 0.26 0.29 0.33 0.35 0.44 0.41 0.41 0.43 0.35 0.38 0.32 0.33 0.31 0.32 No electrónicos 0.13 0.12 0.13 0.14 0.19 0.17 0.18 0.17 0.17 0.15 0.13 0.21 0.14 0.15 0.18 0.18 0.20 0.18 0.18 0.18 0.16 0.17 0.16 0.24 0.16 0.15 Total 0.93 0.87 0.96 1.07 1.21 1.22 1.23 1.25 1.29 1.16 0.97 1.24 0.97 1.05 1.35 1.37 1.60 1.53 1.49 1.60 1.42 1.41 1.37 1.43 1.25 1.29 2003 2004 2005 More than 61% of the payments processed through Banks were paid by BBVA Bancomer during 2004 Fuente: Banco de México, 2005

IN 2004, BBVA Bancomer paid almost half of the remittances that were transferred electronically Payment of family remittances transferred through electronic wires (USD $ Mill) 2004: $14,496 BBVA Bancomer $6,263 43% Other $8,233 57% Source: Banxico

In 2005, BTS s volume continues to grow at two digit rates Transactions Funds (USD 000) 3,202,190 3,698,527 3,950,592 4,562,437 4,042,293 4,594,386 3,852,114 4,520,748 3,698,527 4,205,373 3,064,893 3,419,193 1,167,313 1,346,941 1,456,982 1,733,450 1,555,354 1,789,770 1,423,804 1,685,974 1,346,941 1,599,626 1,158,364 1,308,815 1Q 03-1Q 04 15.5% 3Q 03-3Q 04 17.4% 1Q 04-1Q 05 12.0% 1Q 03-1Q 04 19.0% 3Q 03-3Q 04 18.4% 1Q 04-1Q 05 13.0% 15.5% 2Q 03-2Q 04 13.7% 4Q 03-4Q 04 13.7% AM 04-AM 05 15.4% 2Q 03-2Q 04 15.1% 4Q 03-4Q 04 18.8% AM 04-AM05 This confirms that BBVA Bancomer s leading service is the consumer s top choice to wire money back to Mexico

Based on Mexico s success, we are extending BTS s international network... Banks MT s Retail: BFS 22 Locations: Texas California México Wholesale: Merchants Harris Wells Fargo,etc. Agents USPS BTS Banco Agrícola + 35,000 third party POS Central America & Caribean Guatemala Banco de Desarrollo Rural. Banco Uno Banco Industrial El Salvador Banco Agrícola, S.A. Banco Salvadoreño Banco Uno Nicaragua Banco Uno Banco de la Producción Honduras Banco Mercantil Banco Uno Dominican Rep. Banco del Progreso Banco BHD South America Perú Colombia Venezuela Ecuador BBVA Banco Continental BBVA Colombia Banco Davivienda Interbank Banco GranAhorrar Argentina Banco Colmena BBVA Banco Frances BBVA Banco Provincial Chile BBVA Banco BHIF Brazil Paraguay Bolivia BBVA Paraguay 10 10 locations: locations: Madrid Madrid Barcelona Barcelona Valencia Valencia Lorca Lorca 11 Agent: Agent: 22 Offices Offices Madrid and Madrid and Málaga Málaga Africa In progress Banco de Guayaquil Banco del Austro Banco Internacional Uruguay BBVA Uruguay Dinero Dinero Express Express Bradesco Banco Mercantil Banco Bisa Asia In progress

And into new market segments with ad-hoc products USA Banked Account - Account Intercuenta Express MEX Banked Unbanked Cash Account Envíos de Dinero Card Banked Unbanked Cash - Cash Unbanked

CONCLUSIONS With formal channels the sender enjoys better and more alternatives to wire money back home BTS s solutions provide the following advantages: Point of sale has less claims and can provide better service to their customers (0.02%) The transmitter has better control of activities and can reach many destinations through the same pipeline Payment entities can rely that the most stringent compliance and monitoring applictions screen every transaction Beneficiary can always count that the money will be ready for payment Due dilligence is performed to network participants in order to join the program

CONCLUSIONS And the most important benefit of formal payment channels: Consumers are wiring 31% more money back home: 1999 average face value per transaction: $287 USD 2005 average face value per transaction: $377 USD At lower prices: 300% price reduction!!!