UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of October, 2014
Commission file number: 1-10110
BANCO BILBAO
VIZCAYA ARGENTARIA, S.A.
(Exact name of Registrant as specified in its charter)
BANK BILBAO VIZCAYA ARGENTARIA, S.A.
(Translation of Registrants name into English)
Paseo de la
Castellana, 81
28046 Madrid
Spain
(Address of
principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form
20-F x Form 40-F ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Yes ¨ No
x
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by
Regulation S-T Rule 101(b)(7):
Yes ¨ No
x
Quarterly report
January-September 2014
Contents
BBVA Group Highlights
BBVA Group Highlights
(Consolidated figures)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30-09-14 |
|
|
D% |
|
|
30-09-13 |
|
|
31-12-13 |
|
Balance sheet (million euros) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
|
637,699 |
|
|
|
5.0 |
|
|
|
607,200 |
|
|
|
599,517 |
|
Loans and advances to customers (gross) |
|
|
361,084 |
|
|
|
1.1 |
|
|
|
356,986 |
|
|
|
350,110 |
|
Deposits from customers |
|
|
329,610 |
|
|
|
8.5 |
|
|
|
303,656 |
|
|
|
310,176 |
|
Other customer funds |
|
|
114,630 |
|
|
|
20.5 |
|
|
|
95,161 |
|
|
|
99,213 |
|
Total customer funds |
|
|
444,240 |
|
|
|
11.4 |
|
|
|
398,817 |
|
|
|
409,389 |
|
Total equity |
|
|
48,389 |
|
|
|
2.1 |
|
|
|
47,378 |
|
|
|
44,850 |
|
Income statement (million euros) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
10,868 |
|
|
|
0.1 |
|
|
|
10,853 |
|
|
|
14,613 |
|
Gross income |
|
|
15,592 |
|
|
|
(3.0 |
) |
|
|
16,075 |
|
|
|
21,397 |
|
Operating income |
|
|
7,546 |
|
|
|
(2.3 |
) |
|
|
7,726 |
|
|
|
10,196 |
|
Income before tax |
|
|
3,085 |
|
|
|
49.1 |
|
|
|
2,069 |
|
|
|
2,750 |
|
Net attributable profit |
|
|
1,929 |
|
|
|
(37.3 |
) |
|
|
3,077 |
|
|
|
2,228 |
|
Data per share and share performance ratios |
|
|
|
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|
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|
|
|
|
|
Share price (euros) |
|
|
9.55 |
|
|
|
15.6 |
|
|
|
8.26 |
|
|
|
8.95 |
|
Market capitalization (million euros) |
|
|
56,228 |
|
|
|
18.9 |
|
|
|
47,283 |
|
|
|
51,773 |
|
Net attributable profit per share (euros) |
|
|
0.33 |
|
|
|
(38.6 |
) |
|
|
0.54 |
|
|
|
0.39 |
|
Book value per share (euros) |
|
|
7.99 |
|
|
|
(5.6 |
) |
|
|
8.46 |
|
|
|
8.00 |
|
P/BV (Price/book value; times) |
|
|
1.2 |
|
|
|
|
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|
1.0 |
|
|
|
1.1 |
|
Significant ratios (%) |
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|
|
|
|
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|
ROE (Net attributable profit/average equity) |
|
|
5.6 |
|
|
|
|
|
|
|
9.2 |
|
|
|
5.0 |
|
ROTE (Net attributable profit/average tangible equity) |
|
|
6.5 |
|
|
|
|
|
|
|
11.4 |
|
|
|
6.0 |
|
ROA (Net income/average total assets) |
|
|
0.50 |
|
|
|
|
|
|
|
0.79 |
|
|
|
0.48 |
|
RORWA (Net income/average risk-weighted assets) |
|
|
0.90 |
|
|
|
|
|
|
|
1.49 |
|
|
|
0.91 |
|
Efficiency ratio |
|
|
51.6 |
|
|
|
|
|
|
|
51.9 |
|
|
|
52.3 |
|
Risk premium |
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|
1.25 |
|
|
|
|
|
|
|
1.67 |
|
|
|
1.59 |
|
NPA ratio |
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6.1 |
|
|
|
|
|
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6.7 |
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|
|
6.8 |
|
NPA coverage ratio |
|
|
63 |
|
|
|
|
|
|
|
60 |
|
|
|
60 |
|
Capital adequacy ratios (%) (1) |
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|
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|
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|
Core capital |
|
|
11.7 |
|
|
|
|
|
|
|
11.4 |
|
|
|
11.6 |
|
Tier I |
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|
11.7 |
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|
|
|
|
|
|
11.5 |
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|
12.2 |
|
BIS II Ratio |
|
|
14.9 |
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|
|
|
|
|
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13.6 |
|
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|
14.9 |
|
Other information |
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Number of shares (millions) |
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5,887 |
|
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|
2.8 |
|
|
|
5,724 |
|
|
|
5,786 |
|
Number of shareholders |
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|
947,901 |
|
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|
(3.3 |
) |
|
|
980,481 |
|
|
|
974,395 |
|
Number of employees (2) |
|
|
108,920 |
|
|
|
(3.9 |
) |
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|
113,293 |
|
|
|
109,305 |
|
Number of branches (2) |
|
|
7,362 |
|
|
|
(3.0 |
) |
|
|
7,588 |
|
|
|
7,420 |
|
Number of ATMs (2) |
|
|
21,566 |
|
|
|
6.3 |
|
|
|
20,282 |
|
|
|
20,415 |
|
Memorandum item: this quarterly information has not been audited. The consolidated accounts of the BBVA Group have been
drawn up according to the International Financial Reporting Standards (IFRS) adopted by the European Union and in accordance with Bank of Spain Circular 4/2004 and with its subsequent amendments. As regards the stake in the Garanti Group, the
information is presented as in previous periods and consolidated in proportion to the percentage of the Groups stake. See pages 47 and 48 for the reconciliation of the BBVA Groups financial statements.
(1) |
The capital ratios in 2014 have been calculated under the Basel III phased-in regulations. For previous periods, the calculation was done in accordance with the Basel II regulations in force at the time.
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Information about the net attributable profit (excluding results from
corporate operations) (1) |
|
30-09-14 |
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|
D% |
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|
30-09-13 |
|
|
31-12-13 |
|
Net attributable profit |
|
|
1,929 |
|
|
|
91.2 |
|
|
|
1,009 |
|
|
|
1,405 |
|
Net attributable profit per share (euros) |
|
|
0.33 |
|
|
|
87.3 |
|
|
|
0.18 |
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|
|
0.25 |
|
ROE |
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|
5.6 |
|
|
|
|
|
|
|
3.0 |
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|
|
3.1 |
|
ROTE |
|
|
6.5 |
|
|
|
|
|
|
|
3.7 |
|
|
|
3.8 |
|
ROA |
|
|
0.50 |
|
|
|
|
|
|
|
0.34 |
|
|
|
0.35 |
|
RORWA |
|
|
0.90 |
|
|
|
|
|
|
|
0.65 |
|
|
|
0.66 |
|
(1) |
In 2013 it includes the results from the pension business in Latin America, including the capital gains from their sale; the capital gains from the sale of BBVA Panama; the capital gains generated by the reinsurance
operation on the individual life and accident insurance portfolio in Spain; the equity-accounted earnings from CNCB (excluding dividends), together with the effect of the mark-to-market valuation of BBVAs stake in CNCB following the new
agreement concluded with the CITIC Group, which included the sale of 5.1% of CNCB. |
Group information
Relevant events
The outstanding features of the BBVA Groups earnings in the third quarter of 2014 are in line with
the previous quarter:
1. |
The recovery in exchange rates of most currencies against the euro continues, easing the cumulative negative effect over the last 12 months. |
2. |
The most relevant aspect as regards earnings is once more the positive performance of the more recurring revenue. Net trading income (NTI) is slightly higher than in the previous quarter, while the negative
impact of hyperinflation in Venezuela is very similar. Meanwhile, operating expenses and loan-loss provisions were up slightly, though their year-on-year growth is limited. As a result, the quarterly net profit after tax for ongoing operations was
733m. There was no significant revenue from dividends, as those from Telefónica and China Citic Bank (CNCB) were registered in the previous quarter. The net attributable profit for the first nine months of the year stands at
1,929m. |
3. |
With respect to business activity, the loan book in South America, Mexico and the United States has maintained its positive growth rate. In Eurasia, lending in Garanti continues to increase notably, while in
Spain the recovery of new lending from some business segments is making progress, although at moderate levels. The trend in customer funds remains favorable in all geographical areas. |
4. |
The Groups liquidity position and funding structure continue to improve, due to a number of factors: the current positive situation of the wholesale funding markets; the new targeted longer-term refinancing
operations (TLTRO) program announced by the European Central Bank (ECB); continued access to the market by BBVA and its franchises; and the increased weighting in the volume of retail deposits. BBVA borrowed 2.6 billion at the TLTRO auction
held in September. |
5. |
In solvency, BBVA maintains its capital ratios well above the minimum levels required by the new regulations. It closed September 2014 with core capital and Tier I at 11.7%, Tier II at 3.2% and a BIS III ratio of
14.7% (all phased-in). The Groups leverage ratio (fully-loaded) stands at 5.7%, which compares favorably with its peer group. As a result, it has been confident about the outcome of the comprehensive assessment process. Its results, published
on October 26, show that BBVA has surpassed the stress test easily, both the base and the adverse scenarios.
|
6. |
The main risk indicators continue their positive trend, with a 28 basis-point reduction in the Groups NPA ratio over the last three months to 6.1%, thanks to the continued decline in the non-performing
portfolio. The Groups coverage ratio has also improved to 63% and the accumulated cost of risk through September fell to 1.25%. |
7. |
Other highlights in the period include: |
|
|
|
With respect to shareholder remuneration, a bonus share issue was carried out at the start of October to implement the dividend option. The holders of 85.1% of the free allocation rights chose to
receive new shares, which once more confirms the success of this remuneration system. |
|
|
|
BBVA continues to make progress in its digital transformation, designed to develop new distribution channels and increase the Groups profitability by reducing costs and raising productivity ratios
per customer. |
|
|
|
The number of active customers using mobile devices stands at 3.6 million, according to the latest available data at the close of August. The figure rises to 8.4 million taking into account customers active on
digital platforms. |
|
|
|
In South America, the bank already has more than 3 million digital customers, a year-on-year increase of 30%. Meanwhile, customers using cell phones for making payments number a million, three times the figure 12
months previously. |
|
|
|
The mobile payment application BBVA Wallet has incorporated additional features and now registers 280,000 downloads in Spain. BBVA is also the first financial group in the world to launch a NFC mobile payment solution
that uses the cloud-based Visa specification. The new system allows BBVA customers with Android NFC-equipped terminals to make contactless purchases by simply downloading the updated application. |
|
|
|
Lastly, it is worth highlighting that the Group currently has one of the best technological platforms in the banking industry, allowing 260 million transactions to be processed every day (compared with
90 million in 2006). |
Earnings
Earnings in the third quarter of 2014 for the BBVA Group are marked in general by the same elements
present in previous quarters, in addition to the recovery of the exchange rates of most currencies against the euro in recent months, which has offset some of its negative effect early in the year. These key factors are:
1. |
Positive performance of more recurring revenue, particularly net interest income in all the geographical areas, although the improvement in income from fees and commissions has also been significant.
|
2. |
NTI slightly higher than in the second quarter. |
3. |
No significant revenue from dividends. |
4. |
Negative impact of the adjustment for hyperinflation in Venezuela, very similar to the preceding quarter. |
5. |
Operating expenses and loan-loss provisions were somewhat higher than those registered between April and June, although with a limited year-on-year growth rate.
|
Consolidated income statement:
quarterly evolution (1)
(Million euros)
|
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|
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|
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|
|
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|
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|
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|
2014 |
|
|
2013 |
|
|
|
3Q |
|
|
2Q |
|
|
1Q |
|
|
4Q |
|
|
3Q |
|
|
2Q |
|
|
1Q |
|
Net interest income |
|
|
3,830 |
|
|
|
3,647 |
|
|
|
3,391 |
|
|
|
3,760 |
|
|
|
3,551 |
|
|
|
3,679 |
|
|
|
3,623 |
|
Net fees and commissions |
|
|
1,111 |
|
|
|
1,101 |
|
|
|
985 |
|
|
|
1,139 |
|
|
|
1,114 |
|
|
|
1,126 |
|
|
|
1,052 |
|
Net trading income |
|
|
444 |
|
|
|
426 |
|
|
|
751 |
|
|
|
609 |
|
|
|
569 |
|
|
|
630 |
|
|
|
719 |
|
Dividend income |
|
|
42 |
|
|
|
342 |
|
|
|
29 |
|
|
|
114 |
|
|
|
56 |
|
|
|
176 |
|
|
|
19 |
|
Income by the equity method |
|
|
31 |
|
|
|
16 |
|
|
|
(14 |
) |
|
|
53 |
|
|
|
9 |
|
|
|
11 |
|
|
|
(1 |
) |
Other operating income and expenses |
|
|
(234 |
) |
|
|
(215 |
) |
|
|
(90 |
) |
|
|
(353 |
) |
|
|
(113 |
) |
|
|
(153 |
) |
|
|
7 |
|
Gross income |
|
|
5,223 |
|
|
|
5,317 |
|
|
|
5,051 |
|
|
|
5,321 |
|
|
|
5,186 |
|
|
|
5,470 |
|
|
|
5,419 |
|
Operating expenses |
|
|
(2,770 |
) |
|
|
(2,662 |
) |
|
|
(2,613 |
) |
|
|
(2,852 |
) |
|
|
(2,777 |
) |
|
|
(2,814 |
) |
|
|
(2,758 |
) |
Personnel expenses |
|
|
(1,438 |
) |
|
|
(1,359 |
) |
|
|
(1,375 |
) |
|
|
(1,423 |
) |
|
|
(1,452 |
) |
|
|
(1,454 |
) |
|
|
(1,458 |
) |
General and administrative expenses |
|
|
(1,037 |
) |
|
|
(1,017 |
) |
|
|
(959 |
) |
|
|
(1,134 |
) |
|
|
(1,042 |
) |
|
|
(1,080 |
) |
|
|
(1,025 |
) |
Depreciation and amortization |
|
|
(296 |
) |
|
|
(286 |
) |
|
|
(279 |
) |
|
|
(295 |
) |
|
|
(283 |
) |
|
|
(279 |
) |
|
|
(276 |
) |
Operating income |
|
|
2,453 |
|
|
|
2,655 |
|
|
|
2,438 |
|
|
|
2,469 |
|
|
|
2,410 |
|
|
|
2,656 |
|
|
|
2,661 |
|
Impairment on financial assets (net) |
|
|
(1,142 |
) |
|
|
(1,073 |
) |
|
|
(1,103 |
) |
|
|
(1,210 |
) |
|
|
(1,854 |
) |
|
|
(1,336 |
) |
|
|
(1,376 |
) |
Provisions (net) |
|
|
(199 |
) |
|
|
(298 |
) |
|
|
(144 |
) |
|
|
(196 |
) |
|
|
(137 |
) |
|
|
(130 |
) |
|
|
(167 |
) |
Other gains (losses) |
|
|
(136 |
) |
|
|
(191 |
) |
|
|
(173 |
) |
|
|
(382 |
) |
|
|
(198 |
) |
|
|
(172 |
) |
|
|
(287 |
) |
Income before tax |
|
|
976 |
|
|
|
1,092 |
|
|
|
1,017 |
|
|
|
682 |
|
|
|
221 |
|
|
|
1,017 |
|
|
|
831 |
|
Income tax |
|
|
(243 |
) |
|
|
(292 |
) |
|
|
(273 |
) |
|
|
(114 |
) |
|
|
(13 |
) |
|
|
(261 |
) |
|
|
(205 |
) |
Net income from ongoing operations |
|
|
733 |
|
|
|
800 |
|
|
|
744 |
|
|
|
568 |
|
|
|
208 |
|
|
|
756 |
|
|
|
626 |
|
Results from corporate operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,245 |
) |
|
|
160 |
|
|
|
593 |
|
|
|
1,315 |
|
Net income |
|
|
733 |
|
|
|
800 |
|
|
|
744 |
|
|
|
(677 |
) |
|
|
368 |
|
|
|
1,349 |
|
|
|
1,941 |
|
Non-controlling interests |
|
|
(132 |
) |
|
|
(95 |
) |
|
|
(120 |
) |
|
|
(172 |
) |
|
|
(172 |
) |
|
|
(202 |
) |
|
|
(206 |
) |
Net attributable profit |
|
|
601 |
|
|
|
704 |
|
|
|
624 |
|
|
|
(849 |
) |
|
|
195 |
|
|
|
1,147 |
|
|
|
1,734 |
|
Net attributable profit (excluding results from corporate operations)
(2) |
|
|
601 |
|
|
|
704 |
|
|
|
624 |
|
|
|
396 |
|
|
|
35 |
|
|
|
554 |
|
|
|
420 |
|
Basic earnings per share (euros) |
|
|
0.10 |
|
|
|
0.12 |
|
|
|
0.11 |
|
|
|
(0.14 |
) |
|
|
0.03 |
|
|
|
0.20 |
|
|
|
0.30 |
|
Basic earnings per share (excluding results from corporate operations) (euros)
(2) |
|
|
0.10 |
|
|
|
0.12 |
|
|
|
0.11 |
|
|
|
0.07 |
|
|
|
0.01 |
|
|
|
0.09 |
|
|
|
0.07 |
|
(1) |
Pro forma financial statements with the revenues and expenses of the Garanti Group consolidated in proportion to the percentage of the Groups stake. |
(2) |
In 2013 it includes the results from the pension business in Latin America, including the capital gains from their sale; the capital gains from the sale of BBVA Panama; the capital gains generated by the reinsurance
operation on the individual life and accident insurance portfolio in Spain; the equity-accounted earnings from CNCB (excluding dividends), together with the effect of the mark-to-market valuation of BBVAs stake in CNCB following the new
agreement concluded with the CITIC Group, which included the sale of 5.1% of CNCB. |
Consolidated income statement (1)
(Million euros)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jan.-Sep. 14 |
|
|
D% |
|
|
D% at constant exchange rates |
|
|
Jan.-Sep. 13 |
|
Net interest income |
|
|
10,868 |
|
|
|
0.1 |
|
|
|
13.1 |
|
|
|
10,853 |
|
Net fees and commissions |
|
|
3,198 |
|
|
|
(2.9 |
) |
|
|
5.8 |
|
|
|
3,292 |
|
Net trading income |
|
|
1,621 |
|
|
|
(15.5 |
) |
|
|
(7.6 |
) |
|
|
1,918 |
|
Dividend income |
|
|
412 |
|
|
|
64.1 |
|
|
|
66.7 |
|
|
|
251 |
|
Income by the equity method |
|
|
32 |
|
|
|
63.2 |
|
|
|
114.2 |
|
|
|
20 |
|
Other operating income and expenses |
|
|
(539 |
) |
|
|
108.0 |
|
|
|
n.m. |
|
|
|
(259 |
) |
Gross income |
|
|
15,592 |
|
|
|
(3.0 |
) |
|
|
6.6 |
|
|
|
16,075 |
|
Operating expenses |
|
|
(8,046 |
) |
|
|
(3.6 |
) |
|
|
4.1 |
|
|
|
(8,349 |
) |
Personnel expenses |
|
|
(4,171 |
) |
|
|
(4.4 |
) |
|
|
2.6 |
|
|
|
(4,364 |
) |
General and administrative expenses |
|
|
(3,014 |
) |
|
|
(4.2 |
) |
|
|
5.0 |
|
|
|
(3,147 |
) |
Depreciation and amortization |
|
|
(860 |
) |
|
|
2.6 |
|
|
|
9.3 |
|
|
|
(838 |
) |
Operating income |
|
|
7,546 |
|
|
|
(2.3 |
) |
|
|
9.4 |
|
|
|
7,726 |
|
Impairment on financial assets (net) |
|
|
(3,318 |
) |
|
|
(27.3 |
) |
|
|
(24.3 |
) |
|
|
(4,566 |
) |
Provisions (net) |
|
|
(642 |
) |
|
|
47.7 |
|
|
|
67.2 |
|
|
|
(434 |
) |
Other gains (losses) |
|
|
(501 |
) |
|
|
(23.8 |
) |
|
|
(23.2 |
) |
|
|
(657 |
) |
Income before tax |
|
|
3,085 |
|
|
|
49.1 |
|
|
|
108.2 |
|
|
|
2,069 |
|
Income tax |
|
|
(808 |
) |
|
|
68.7 |
|
|
|
134.4 |
|
|
|
(479 |
) |
Net income from ongoing operations |
|
|
2,277 |
|
|
|
43.2 |
|
|
|
100.3 |
|
|
|
1,590 |
|
Results from corporate operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,068 |
|
Net income |
|
|
2,277 |
|
|
|
(37.7 |
) |
|
|
(28.6 |
) |
|
|
3,657 |
|
Non-controlling interests |
|
|
(348 |
) |
|
|
(40.1 |
) |
|
|
(23.4 |
) |
|
|
(580 |
) |
Net attributable profit |
|
|
1,929 |
|
|
|
(37.3 |
) |
|
|
(29.4 |
) |
|
|
3,077 |
|
Net attributable profit (excluding results from corporate operations)
(2) |
|
|
1,929 |
|
|
|
91.2 |
|
|
|
182.3 |
|
|
|
1,009 |
|
Basic earnings per share (euros) |
|
|
0.33 |
|
|
|
|
|
|
|
|
|
|
|
0.54 |
|
Basic earnings per share (excluding results from corporate operations) (euros)
(2) |
|
|
0.33 |
|
|
|
|
|
|
|
|
|
|
|
0.18 |
|
(1) |
Pro forma financial statements with the revenues and expenses of the Garanti Group consolidated in proportion to the percentage of the Groups stake. |
(2) |
In 2013 it includes the results from the pension business in Latin America, including the capital gains from their sale; the capital gains generated by the reinsurance operation on the individual life and accident
insurance portfolio in Spain; the equity-accounted earnings from CNCB (excluding dividends), together with the effect of the mark-to-market valuation of BBVAs stake in CNCB following the new agreement concluded with the CITIC Group, which
included the sale of 5.1% of CNCB. |
6. |
Provisions were as expected. |
7. |
Overall, net income from ongoing operations for the quarter amounted to 733m, less than the figure registered between April and June (which included revenue from Telefónica and CNCB dividends) and
far higher than the 208m in the same period last year (affected by the classification of the refinanced loans in Spain in the third quarter of 2013). |
Gross income
The Groups gross income in the
third quarter of 2014 totaled 5,223m, slightly below the figure registered in the second quarter, which included revenue from the dividends from Telefónica and CNCB. Net interest income
and income from fees and commissions are particularly positive.
The quarterly net interest income of 3,830m exceeds the amounts reported in recent quarters.
Compared with the figure for April-June 2014, this line grew by 5.0% (up 4.0% excluding the exchange-rate effect). In the first nine months of the year the cumulative total was 10,868m, with a rise of 0.1% on the same period last year at
current exchange rates, or 13.1% at constant exchange rates. This is despite the elimination in Spain of the floor clauses in residential mortgage loans, which were in force for much of the first half of 2013. By business areas, this
heading improved in Spain and Eurasia, basically due to the cheaper cost of deposits, while in Mexico, South America and the United States there was significant strength in activity and defense of customer spreads.
Income from fees and commissions totaled 1,111m between July and September and 3,198m in the
first nine months of 2014, a year-on-year rise of 5.8% at constant exchange rates (down 2.9% at current rates). There is a positive performance of this heading year to date in practically all the geographical areas.
NTI in the third quarter was slightly higher than in the previous quarter (444m compared with 426m), with a cumulative figure through
September of 1,621m, down 15.5% on the same period in 2013 (down 7.6% at constant exchange rates), when high capital gains were registered due to portfolio rotation.
Breakdown of yields and costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3Q14 |
|
|
2Q14 |
|
|
1Q14 |
|
|
4Q13 |
|
|
3Q13 |
|
|
|
% of ATA |
|
|
% yield/ Cost |
|
|
% of ATA |
|
|
% yield/ Cost |
|
|
% of ATA |
|
|
% yield/ Cost |
|
|
% of ATA |
|
|
% yield/ Cost |
|
|
% of ATA |
|
|
% yield/ Cost |
|
Cash and balances with central banks |
|
|
3.9 |
|
|
|
0.40 |
|
|
|
4.6 |
|
|
|
0.51 |
|
|
|
4.5 |
|
|
|
0.56 |
|
|
|
4.8 |
|
|
|
0.57 |
|
|
|
4.1 |
|
|
|
0.72 |
|
Financial assets and derivatives |
|
|
29.1 |
|
|
|
2.56 |
|
|
|
28.7 |
|
|
|
2.68 |
|
|
|
27.5 |
|
|
|
2.89 |
|
|
|
26.7 |
|
|
|
3.04 |
|
|
|
27.0 |
|
|
|
2.77 |
|
Loans and advances to credit institutions |
|
|
4.4 |
|
|
|
1.10 |
|
|
|
4.1 |
|
|
|
1.24 |
|
|
|
3.9 |
|
|
|
1.53 |
|
|
|
4.5 |
|
|
|
1.98 |
|
|
|
4.5 |
|
|
|
1.28 |
|
Loans and advances to customers |
|
|
54.8 |
|
|
|
5.51 |
|
|
|
54.9 |
|
|
|
5.54 |
|
|
|
56.2 |
|
|
|
5.34 |
|
|
|
56.2 |
|
|
|
5.63 |
|
|
|
56.5 |
|
|
|
5.50 |
|
Euros |
|
|
30.0 |
|
|
|
2.52 |
|
|
|
31.1 |
|
|
|
2.63 |
|
|
|
32.4 |
|
|
|
2.68 |
|
|
|
32.6 |
|
|
|
2.62 |
|
|
|
33.3 |
|
|
|
2.65 |
|
Foreign currencies |
|
|
24.7 |
|
|
|
9.15 |
|
|
|
23.8 |
|
|
|
9.33 |
|
|
|
23.8 |
|
|
|
8.95 |
|
|
|
23.6 |
|
|
|
9.80 |
|
|
|
23.3 |
|
|
|
9.58 |
|
Other assets |
|
|
7.9 |
|
|
|
0.50 |
|
|
|
7.7 |
|
|
|
0.40 |
|
|
|
7.8 |
|
|
|
0.48 |
|
|
|
7.9 |
|
|
|
0.29 |
|
|
|
7.9 |
|
|
|
0.27 |
|
Total assets |
|
|
100.0 |
|
|
|
3.87 |
|
|
|
100.0 |
|
|
|
3.91 |
|
|
|
100.0 |
|
|
|
3.92 |
|
|
|
100.0 |
|
|
|
4.11 |
|
|
|
100.0 |
|
|
|
3.97 |
|
Deposits from central banks and credit institutions |
|
|
12.9 |
|
|
|
1.74 |
|
|
|
13.9 |
|
|
|
1.89 |
|
|
|
14.2 |
|
|
|
1.80 |
|
|
|
14.5 |
|
|
|
1.82 |
|
|
|
14.3 |
|
|
|
1.90 |
|
Deposits from customers |
|
|
52.1 |
|
|
|
1.45 |
|
|
|
51.4 |
|
|
|
1.57 |
|
|
|
51.2 |
|
|
|
1.60 |
|
|
|
50.7 |
|
|
|
1.65 |
|
|
|
49.5 |
|
|
|
1.64 |
|
Euros |
|
|
26.7 |
|
|
|
0.98 |
|
|
|
26.7 |
|
|
|
1.14 |
|
|
|
26.8 |
|
|
|
1.28 |
|
|
|
26.3 |
|
|
|
1.20 |
|
|
|
25.9 |
|
|
|
1.21 |
|
Foreign currencies |
|
|
25.4 |
|
|
|
1.94 |
|
|
|
24.7 |
|
|
|
2.03 |
|
|
|
24.4 |
|
|
|
1.95 |
|
|
|
25.2 |
|
|
|
1.75 |
|
|
|
23.6 |
|
|
|
2.11 |
|
Debt certificates and subordinated liabilities |
|
|
13.2 |
|
|
|
2.24 |
|
|
|
13.7 |
|
|
|
2.36 |
|
|
|
13.9 |
|
|
|
2.40 |
|
|
|
14.0 |
|
|
|
2.63 |
|
|
|
15.4 |
|
|
|
2.83 |
|
Other liabilities |
|
|
14.1 |
|
|
|
1.10 |
|
|
|
13.5 |
|
|
|
1.00 |
|
|
|
13.1 |
|
|
|
1.33 |
|
|
|
13.1 |
|
|
|
1.28 |
|
|
|
13.0 |
|
|
|
1.04 |
|
Equity |
|
|
7.6 |
|
|
|
|
|
|
|
7.5 |
|
|
|
|
|
|
|
7.5 |
|
|
|
|
|
|
|
7.6 |
|
|
|
|
|
|
|
7.8 |
|
|
|
|
|
Total liabilities and equity |
|
|
100.0 |
|
|
|
1.43 |
|
|
|
100.0 |
|
|
|
1.53 |
|
|
|
100.0 |
|
|
|
1.59 |
|
|
|
100.0 |
|
|
|
1.64 |
|
|
|
100.0 |
|
|
|
1.66 |
|
Net interest income/average total assets (ATA) |
|
|
|
|
|
|
2.44 |
|
|
|
|
|
|
|
2.39 |
|
|
|
|
|
|
|
2.33 |
|
|
|
|
|
|
|
2.47 |
|
|
|
|
|
|
|
2.31 |
|
The following are worth highlighting out of the rest of the items making up gross income:
|
|
|
Dividends basically include those received in Global Markets. There was no significant revenue from dividends between July and September, in contrast with the posting of dividends from Telefónica and CNCB
in the previous quarter. |
|
|
|
Income by the equity method is mainly from the Groups stake in the Chinese company Citic International Financial Holdings (CIFH). |
|
|
|
The most relevant items in the other operating income and expenses heading are the adjustment for hyperinflation in Venezuela, which is at a very similar level to the previous quarter, and the contribution from
insurance activities. |
Overall, cumulative gross income through September totaled 15,592m, down 3.0% on the same period the
previous year, but 6.6% higher excluding the exchange-rate effect.
Operating income
Operating expenses in the quarter have been somewhat higher than those in the previous quarter, although the year-on-year change in the cumulative total
remains limited (down 3.6% at current exchange rates and up 4.1% at constant rates). This trend is the result of efficient management of resources tailored to the needs of each geographical area: applying rigorous policies of moderation in Eurasia,
Spain and the United States (where this item is influenced by the incorporation of Simple and costs stemming from compliance needs), and undertaking investment plans in South America and Mexico. It should be noted that the rate of change in expenses
is still lower than that of gross income; thus the efficiency ratio (51.6%) is slightly improving against the figure for the same period in 2013 (51.9%).
Breakdown of operating expenses and
efficiency calculation
(Million euros)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jan.-Sep. 14 |
|
|
D% |
|
|
Jan.-Sep. 13 |
|
|
2013 |
|
Personnel expenses |
|
|
4,171 |
|
|
|
(4.4 |
) |
|
|
4,364 |
|
|
|
5,788 |
|
Wages and salaries |
|
|
3,144 |
|
|
|
(4.8 |
) |
|
|
3,301 |
|
|
|
4,392 |
|
Employee welfare expenses |
|
|
651 |
|
|
|
(4.1 |
) |
|
|
679 |
|
|
|
866 |
|
Training expenses and other |
|
|
376 |
|
|
|
(2.0 |
) |
|
|
384 |
|
|
|
530 |
|
General and administrative expenses |
|
|
3,014 |
|
|
|
(4.2 |
) |
|
|
3,147 |
|
|
|
4,280 |
|
Premises |
|
|
702 |
|
|
|
(0.9 |
) |
|
|
709 |
|
|
|
966 |
|
IT |
|
|
595 |
|
|
|
(0.3 |
) |
|
|
597 |
|
|
|
801 |
|
Communications |
|
|
214 |
|
|
|
(6.2 |
) |
|
|
228 |
|
|
|
313 |
|
Advertising and publicity |
|
|
264 |
|
|
|
(8.3 |
) |
|
|
288 |
|
|
|
391 |
|
Corporate expenses |
|
|
71 |
|
|
|
(6.6 |
) |
|
|
76 |
|
|
|
106 |
|
Other expenses |
|
|
858 |
|
|
|
(7.2 |
) |
|
|
925 |
|
|
|
1,268 |
|
Levies and taxes |
|
|
310 |
|
|
|
(4.7 |
) |
|
|
325 |
|
|
|
437 |
|
Administration expenses |
|
|
7,185 |
|
|
|
(4.3 |
) |
|
|
7,511 |
|
|
|
10,068 |
|
Depreciation and amortization |
|
|
860 |
|
|
|
2.6 |
|
|
|
838 |
|
|
|
1,133 |
|
Operating expenses |
|
|
8,046 |
|
|
|
(3.6 |
) |
|
|
8,349 |
|
|
|
11,201 |
|
Gross income |
|
|
15,592 |
|
|
|
(3.0 |
) |
|
|
16,075 |
|
|
|
21,397 |
|
Efficiency ratio (Operating expenses/gross income, in %) |
|
|
51.6 |
|
|
|
|
|
|
|
51.9 |
|
|
|
52.3 |
|
With respect to the number of branches and ATMs, there has been a quarterly increase in the number of
ATMs in practically all the geographical areas, and stability in the number of branches, as a result of the boost to channels other than branches.
With
respect to the workforce, the number of employees in the Group totaled 108,920 people as of 30-Sep-2014. This represents a fall of 530 over the quarter, focused mainly in Spain and to a lesser extent in the United States, as in the rest of
the geographical areas there were new hirings. When comparing this with the figure at the close of September 2013, it
should be recalled that BBVA Panama and the pension business in Latin America have moved out of the Groups
scope. Lastly, it should be mentioned that BBVA continues to work on its process of digital transformation, as explained in the highlights for the quarter.
As a result of these revenue and expenses figures, the Groups operating income for the first nine months of 2014 amounted to 7,546m, a
year-on-year decline of 2.3%, or a growth of 9.4% excluding the exchange-rate effect.
Provisions and others
Impairment losses on financial assets for the quarter increased slightly against those of the previous quarter. This rise is mainly due to additions to
NPA of some specific customers over the quarter. However, in the cumulative total there was a year-on-year fall of 27.3% (down 24.3% at constant exchange rates), as the third quarter of 2013 included a greater amount due to the reclassification of
refinanced assets. Despite this, the cumulative cost of risk in the Group remains fairly stable, at 1.25% (1.24% at the close of the first half of 2014).
Provisions include items such as restructuring costs, provisions for contingent liabilities, and contributions to pension funds. It
|
|
|
|
|
|
should be recalled that between April and June this heading was higher due to the greater volume of
restructuring costs associated with the digitization and transformation process being undertaken by the Group.
The main component of other gains
(losses) is the impairment on real-estate and foreclosed or acquired assets in Spain, which have had less value deterioration over the quarter. Overall in the first nine months of the year, this heading fell year-on-year by 23.8% (down 23.2% at
constant exchange rates).
As a result of the above, net income from ongoing operations in the first nine months of the year has grown year-on-year
by 43.2% (up 100.3% at constant exchange rates).
Lastly, no transaction has been recorded again this quarter under the heading of results from corporate operations.
It should be noted that at the close of the third quarter of 2013 this heading included the following items: the reinsurance operation of the individual life-risk portfolio in Spain; the earnings of the Groups pension business in Latin America
(including the capital gains from the sale of the Afore pension manager in Mexico and the pension fund administrators in Colombia and Peru); and the equity-accounted income (excluding dividends) of CNCB.
Net attributable profit
BBVAs net
attributable profit in the first nine months of 2014 totaled 1,929m, down 37.3% on the same period in 2013 (down 29.4% at constant exchange rates), due to the corporate operations in 2013 mentioned in the previous paragraph. Excluding
these operations, the Groups net attributable profit posted a rise of 91.2% on the figure for the same period last year (up 182.3% at constant exchange rates).
By business areas, banking activity in Spain has contributed 836m, real-estate activity in Spain generated a loss of 598m, the United
States contributed 302m, Eurasia 471m, Mexico 1,349m and South America 755m.
Balance sheet and business activity
The Groups balance sheet and business activity in the third quarter of 2014 was marked by:
|
|
|
The gains registered by most currencies against the euro, which have had a positive impact on the Groups balance sheet and business activity figures. In fact, only the Chilean peso and Venezuelan bolivar
lost ground against the euro in the quarter. Worth noting in year-on-year terms is the performance of the Mexican peso and the U.S. dollar, which gained 5.0% and 7.3% against the euro, respectively.
|
|
|
|
The volume of gross lending to customers is similar to the figure as of 30-Sep-2013 (up 1.1%, or 1.6% excluding the exchange-rate effect), although performance varied across the different geographical areas. In
Spain and in the wholesale businesses in Eurasia, the deleveraging process continues, though at a slower pace than in previous quarters. In contrast, South America, Mexico, Turkey
|
Consolidated balance sheet (1)
(Million euros)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30-09-14 |
|
|
D% |
|
|
30-09-13 |
|
|
30-06-14 |
|
|
31-12-13 |
|
Cash and balances with central banks |
|
|
23,121 |
|
|
|
(17.2 |
) |
|
|
27,926 |
|
|
|
27,210 |
|
|
|
37,064 |
|
Financial assets held for trading |
|
|
88,023 |
|
|
|
23.3 |
|
|
|
71,409 |
|
|
|
79,589 |
|
|
|
72,301 |
|
Other financial assets designated at fair value |
|
|
3,227 |
|
|
|
16.3 |
|
|
|
2,774 |
|
|
|
2,990 |
|
|
|
2,734 |
|
Available-for-sale financial assets |
|
|
98,322 |
|
|
|
21.5 |
|
|
|
80,948 |
|
|
|
92,316 |
|
|
|
80,848 |
|
Loans and receivables |
|
|
379,715 |
|
|
|
1.6 |
|
|
|
373,919 |
|
|
|
372,180 |
|
|
|
363,575 |
|
Loans and advances to credit institutions |
|
|
27,561 |
|
|
|
(1.0 |
) |
|
|
27,845 |
|
|
|
27,874 |
|
|
|
24,203 |
|
Loans and advances to customers |
|
|
346,103 |
|
|
|
1.3 |
|
|
|
341,553 |
|
|
|
339,063 |
|
|
|
334,744 |
|
Debt securities |
|
|
6,051 |
|
|
|
33.8 |
|
|
|
4,521 |
|
|
|
5,243 |
|
|
|
4,628 |
|
Held-to-maturity investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in entities accounted for using the equity method |
|
|
1,443 |
|
|
|
(79.1 |
) |
|
|
6,920 |
|
|
|
1,339 |
|
|
|
1,497 |
|
Tangible assets |
|
|
7,762 |
|
|
|
2.5 |
|
|
|
7,574 |
|
|
|
7,466 |
|
|
|
7,723 |
|
Intangible assets |
|
|
8,621 |
|
|
|
4.4 |
|
|
|
8,255 |
|
|
|
8,219 |
|
|
|
8,165 |
|
Other assets |
|
|
27,465 |
|
|
|
(0.0 |
) |
|
|
27,475 |
|
|
|
25,822 |
|
|
|
25,611 |
|
Total assets |
|
|
637,699 |
|
|
|
5.0 |
|
|
|
607,200 |
|
|
|
617,131 |
|
|
|
599,517 |
|
Financial liabilities held for trading |
|
|
59,084 |
|
|
|
23.5 |
|
|
|
47,826 |
|
|
|
51,869 |
|
|
|
45,782 |
|
Other financial liabilities at fair value |
|
|
3,615 |
|
|
|
29.5 |
|
|
|
2,791 |
|
|
|
3,395 |
|
|
|
2,772 |
|
Financial liabilities at amortized cost |
|
|
497,179 |
|
|
|
3.4 |
|
|
|
480,708 |
|
|
|
486,889 |
|
|
|
480,307 |
|
Deposits from central banks and credit institutions |
|
|
84,199 |
|
|
|
(2.4 |
) |
|
|
86,262 |
|
|
|
81,772 |
|
|
|
87,746 |
|
Deposits from customers |
|
|
329,610 |
|
|
|
8.5 |
|
|
|
303,656 |
|
|
|
320,796 |
|
|
|
310,176 |
|
Debt certificates |
|
|
61,181 |
|
|
|
(16.9 |
) |
|
|
73,619 |
|
|
|
62,645 |
|
|
|
65,497 |
|
Subordinated liabilities |
|
|
14,265 |
|
|
|
44.0 |
|
|
|
9,909 |
|
|
|
13,821 |
|
|
|
10,579 |
|
Other financial liabilities |
|
|
7,923 |
|
|
|
9.1 |
|
|
|
7,262 |
|
|
|
7,854 |
|
|
|
6,309 |
|
Liabilities under insurance contracts |
|
|
10,624 |
|
|
|
7.7 |
|
|
|
9,869 |
|
|
|
10,266 |
|
|
|
9,844 |
|
Other liabilities |
|
|
18,808 |
|
|
|
1.0 |
|
|
|
18,629 |
|
|
|
17,846 |
|
|
|
15,962 |
|
Total liabilities |
|
|
589,310 |
|
|
|
5.3 |
|
|
|
559,821 |
|
|
|
570,264 |
|
|
|
554,667 |
|
Non-controlling interests |
|
|
2,253 |
|
|
|
(0.1 |
) |
|
|
2,254 |
|
|
|
2,048 |
|
|
|
2,371 |
|
Valuation adjustments |
|
|
(879 |
) |
|
|
(73.4 |
) |
|
|
(3,305 |
) |
|
|
(2,146 |
) |
|
|
(3,831 |
) |
Shareholders funds |
|
|
47,015 |
|
|
|
(2.9 |
) |
|
|
48,429 |
|
|
|
46,965 |
|
|
|
46,310 |
|
Total equity |
|
|
48,389 |
|
|
|
2.1 |
|
|
|
47,378 |
|
|
|
46,867 |
|
|
|
44,850 |
|
Total equity and liabilities |
|
|
637,699 |
|
|
|
5.0 |
|
|
|
607,200 |
|
|
|
617,131 |
|
|
|
599,517 |
|
Memorandum item: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contingent liabilities |
|
|
36,864 |
|
|
|
0.1 |
|
|
|
36,813 |
|
|
|
35,098 |
|
|
|
36,437 |
|
(1) |
Pro forma financial statements with the assets and liabilities of the Garanti Group consolidated in proportion to the percentage of the Groups stake. |
and the United States continue posting double-digit year-on-year growth rates. One positive aspect,
however, is the incipient increase in demand for loans in Spain, although this is still not enough to offset the decline in the back-book.
|
|
|
Non-performing loans continue to decline, falling by 2.3% at current exchange rates over the quarter. Compared with the figure at the close of September 2013, the balance of non-performing loans has declined by
8.1%. |
|
|
|
Customer deposits maintain the positive trend seen in previous periods. They increased by 2.7% over the quarter and 8.5% over the last 12 months (0.9% and 10.1%, respectively, at constant exchange rates) as a
result of the favorable performance of this heading across all the geographical regions in which BBVA operates, and particularly of lower-cost transactional items. |
|
|
|
Off-balance-sheet funds continue to perform very favorably, both in Spain |
Loans and advances to customers
(Million euros)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30-09-14 |
|
|
D% |
|
|
30-09-13 |
|
|
30-06-14 |
|
|
31-12-13 |
|
Domestic sector |
|
|
162,301 |
|
|
|
(8.0 |
) |
|
|
176,388 |
|
|
|
167,789 |
|
|
|
167,670 |
|
Public sector |
|
|
23,302 |
|
|
|
(7.8 |
) |
|
|
25,269 |
|
|
|
23,637 |
|
|
|
22,128 |
|
Other domestic sectors |
|
|
138,999 |
|
|
|
(8.0 |
) |
|
|
151,119 |
|
|
|
144,152 |
|
|
|
145,542 |
|
Secured loans |
|
|
88,880 |
|
|
|
(5.7 |
) |
|
|
94,245 |
|
|
|
90,270 |
|
|
|
93,446 |
|
Other loans |
|
|
50,119 |
|
|
|
(11.9 |
) |
|
|
56,874 |
|
|
|
53,881 |
|
|
|
52,095 |
|
Non-domestic sector |
|
|
174,800 |
|
|
|
13.1 |
|
|
|
154,489 |
|
|
|
161,858 |
|
|
|
156,615 |
|
Secured loans |
|
|
71,063 |
|
|
|
14.8 |
|
|
|
61,927 |
|
|
|
66,158 |
|
|
|
62,401 |
|
Other loans |
|
|
103,737 |
|
|
|
12.1 |
|
|
|
92,562 |
|
|
|
95,701 |
|
|
|
94,214 |
|
Non-performing loans |
|
|
23,983 |
|
|
|
(8.1 |
) |
|
|
26,109 |
|
|
|
24,554 |
|
|
|
25,826 |
|
Domestic sector |
|
|
19,243 |
|
|
|
(8.6 |
) |
|
|
21,056 |
|
|
|
19,769 |
|
|
|
20,985 |
|
Non-domestic sector |
|
|
4,740 |
|
|
|
(6.2 |
) |
|
|
5,053 |
|
|
|
4,785 |
|
|
|
4,841 |
|
Loans and advances to customers (gross) |
|
|
361,084 |
|
|
|
1.1 |
|
|
|
356,986 |
|
|
|
354,202 |
|
|
|
350,110 |
|
Loan-loss provisions |
|
|
(14,980 |
) |
|
|
(2.9 |
) |
|
|
(15,433 |
) |
|
|
(15,139 |
) |
|
|
(15,366 |
) |
Loans and advances to customers |
|
|
346,103 |
|
|
|
1.3 |
|
|
|
341,553 |
|
|
|
339,063 |
|
|
|
334,744 |
|
(up 3.8% over the quarter and 21.2% in
year-on-year terms) and in the rest of the
geographical regions (up 7.6% over the
quarter and 19.3% year-on-year).
Customer
funds
(Million euros)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30-09-14 |
|
|
D% |
|
|
30-09-13 |
|
|
30-06-14 |
|
|
31-12-13 |
|
Deposits from customers |
|
|
329,610 |
|
|
|
8.5 |
|
|
|
303,656 |
|
|
|
320,796 |
|
|
|
310,176 |
|
Domestic sector |
|
|
150,840 |
|
|
|
0.1 |
|
|
|
150,622 |
|
|
|
154,244 |
|
|
|
151,070 |
|
Public sector |
|
|
16,240 |
|
|
|
(15.8 |
) |
|
|
19,278 |
|
|
|
16,176 |
|
|
|
14,435 |
|
Other domestic sectors |
|
|
134,600 |
|
|
|
2.5 |
|
|
|
131,344 |
|
|
|
138,069 |
|
|
|
136,635 |
|
Current and savings accounts |
|
|
55,236 |
|
|
|
9.8 |
|
|
|
50,296 |
|
|
|
57,278 |
|
|
|
53,558 |
|
Time deposits |
|
|
65,636 |
|
|
|
(6.6 |
) |
|
|
70,246 |
|
|
|
66,744 |
|
|
|
69,977 |
|
Assets sold under repurchase agreement and other |
|
|
13,729 |
|
|
|
27.1 |
|
|
|
10,802 |
|
|
|
14,047 |
|
|
|
13,100 |
|
Non-domestic sector |
|
|
178,770 |
|
|
|
16.8 |
|
|
|
153,034 |
|
|
|
166,552 |
|
|
|
159,106 |
|
Current and savings accounts |
|
|
108,154 |
|
|
|
10.7 |
|
|
|
97,738 |
|
|
|
101,493 |
|
|
|
101,515 |
|
Time deposits |
|
|
60,580 |
|
|
|
26.7 |
|
|
|
47,819 |
|
|
|
54,504 |
|
|
|
49,266 |
|
Assets sold under repurchase agreement and other |
|
|
10,035 |
|
|
|
34.2 |
|
|
|
7,478 |
|
|
|
10,555 |
|
|
|
8,325 |
|
Other customer funds |
|
|
114,630 |
|
|
|
20.5 |
|
|
|
95,161 |
|
|
|
108,841 |
|
|
|
99,213 |
|
Spain |
|
|
68,301 |
|
|
|
21.2 |
|
|
|
56,340 |
|
|
|
65,799 |
|
|
|
59,490 |
|
Mutual funds |
|
|
27,552 |
|
|
|
34.5 |
|
|
|
20,492 |
|
|
|
25,752 |
|
|
|
22,298 |
|
Pension funds |
|
|
21,677 |
|
|
|
9.1 |
|
|
|
19,877 |
|
|
|
21,364 |
|
|
|
20,428 |
|
Customer portfolios |
|
|
19,073 |
|
|
|
19.4 |
|
|
|
15,971 |
|
|
|
18,683 |
|
|
|
16,763 |
|
Rest of the world |
|
|
46,329 |
|
|
|
19.3 |
|
|
|
38,821 |
|
|
|
43,042 |
|
|
|
39,723 |
|
Mutual funds and investment companies |
|
|
25,294 |
|
|
|
20.0 |
|
|
|
21,073 |
|
|
|
23,046 |
|
|
|
21,180 |
|
Pension funds |
|
|
5,079 |
|
|
|
27.3 |
|
|
|
3,989 |
|
|
|
4,580 |
|
|
|
4,234 |
|
Customer portfolios |
|
|
15,956 |
|
|
|
16.0 |
|
|
|
13,759 |
|
|
|
15,416 |
|
|
|
14,309 |
|
Total customer funds |
|
|
444,240 |
|
|
|
11.4 |
|
|
|
398,817 |
|
|
|
429,637 |
|
|
|
409,389 |
|
|
|
|
Balance sheet and business activity |
|
11 |
Capital base
The
most significant aspects in relation to the capital base in the third quarter of 2014 are as follows:
|
|
|
Increase of 3.7% in risk-weighted assets (RWA) in the quarter, due to the positive impact of exchange rates and the strong lending in emerging geographical areas and in the United States. |
|
|
|
Increase in the phased-in core capital ratio, which at the close of September stood at 11.7% (10.1% fully-loaded), compared with 11.6% (10.0% fully-loaded) at the close of the first half of 2014. Likewise, the
Tier I and Tier II ratios at the end of the third quarter were 11.7% and 3.2%, compared with 11.6% and 3.1%, respectively, in June 2014. |
Lastly, the results of the comprehensive assessment of European banks conducted by the ECB were published on October 26. This assessment mainly
involved an Asset Quality Review (AQR) and a stress test. The aim was to quantify any possible capital shortfall prior to the implementation of the Single Supervisory Mechanism (SSM), under which the main European banks will be supervised directly
by the ECB. As regards the Group, the results show that by December 2016 BBVA would reach a CET 1 capital level of 9.0% in the most adverse scenario and 10.6% in the base scenario, well above the minimum regulatory requirements (5.5% and 8.0%,
respectively). In addition, BBVA is one of the few banks in its
European peer group whose fully-loaded CET 1 level by 2016 under the adverse scenario stands above 8.0% (8.2%). Such results mean that the test was surpassed with an excess of 13,223m in
the said adverse scenario. In short, BBVA has once more demonstrates its high solvency. This also shows that the Bank is very well positioned to deal with the new financial environment in Europe.
Ratings
The main agencies have confirmed BBVAs
ratings following the announcement of the acquisition of Catalunya Banc. They all agree that risk is limited due to the volume of assets purchased, the high level of provisions in its loan portfolio and the guarantees agreed with the FROB (Fund for
Orderly Bank Restructuring). Thus, the upgrades in BBVAs ratings in the first half of 2014 have been maintained.
Ratings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long term |
|
|
Short term |
|
|
Outlook |
|
DBRS |
|
|
A |
|
|
|
R-1 (low |
) |
|
|
Negative |
|
Fitch |
|
|
A |
|
|
|
F-2 |
|
|
|
Stable |
|
Moodys |
|
|
Baa2 |
|
|
|
P-2 |
|
|
|
Positive |
|
Scope Ratings |
|
|
A |
|
|
|
S-1 |
|
|
|
Stable |
|
Standard & Poors |
|
|
BBB |
|
|
|
A-2 |
|
|
|
Stable |
|
Capital base
(Million euros)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BIS III phased-in |
|
|
BIS II |
|
|
|
30-09-14 |
|
|
30-06-14 |
|
|
31-03-14 |
|
|
31-12-13 |
|
|
30-09-13 |
|
Core capital |
|
|
40,422 |
|
|
|
38,978 |
|
|
|
38,700 |
|
|
|
37,492 |
|
|
|
37,102 |
|
Capital (Tier I) |
|
|
40,422 |
|
|
|
38,978 |
|
|
|
38,700 |
|
|
|
39,611 |
|
|
|
37,300 |
|
Other eligible capital (Tier II) |
|
|
10,893 |
|
|
|
10,421 |
|
|
|
9,170 |
|
|
|
8,695 |
|
|
|
7,019 |
|
Capital base |
|
|
51,316 |
|
|
|
49,399 |
|
|
|
47,870 |
|
|
|
48,306 |
|
|
|
44,319 |
|
Risk-weighted assets |
|
|
345,381 |
|
|
|
336,584 |
|
|
|
335,276 |
|
|
|
323,605 |
|
|
|
325,665 |
|
BIS ratio (%) |
|
|
14.9 |
|
|
|
14.7 |
|
|
|
14.3 |
|
|
|
14.9 |
|
|
|
13.6 |
|
Core capital (%) |
|
|
11.7 |
|
|
|
11.6 |
|
|
|
11.5 |
|
|
|
11.6 |
|
|
|
11.4 |
|
Tier I (%) |
|
|
11.7 |
|
|
|
11.6 |
|
|
|
11.5 |
|
|
|
12.2 |
|
|
|
11.5 |
|
Tier II (%) |
|
|
3.2 |
|
|
|
3.1 |
|
|
|
2.7 |
|
|
|
2.7 |
|
|
|
2.2 |
|
Risk management
Credit risk
There was no relevant change in the third quarter of 2014 in the Groups credit risk management, which in general lines has maintained the trend of
previous quarters:
|
|
|
The Groups NPA ratio has continued to decline, closing September at 6.1% (including real-estate activity), down from 6.4% in June 2014, thanks to another fall in non-performing assets. This positive
performance of the NPA ratio cuts across practically all geographical areas. |
|
|
|
The total coverage ratio has increased by 73 basis points over the quarter to 63%. By areas, is worth noting the increase in
|
Eurasia and basically stability in the rest of geographical regions.
Credit risk management (1)
(Million euros)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30-09-14 |
|
|
30-06-14 |
|
|
31-03-14 |
|
|
31-12-13 |
|
|
30-09-13 |
|
Non-performing assets |
|
|
24,405 |
|
|
|
24,980 |
|
|
|
25,445 |
|
|
|
26,243 |
|
|
|
26,508 |
|
Credit risks |
|
|
397,952 |
|
|
|
389,355 |
|
|
|
384,577 |
|
|
|
386,401 |
|
|
|
393,556 |
|
Provisions |
|
|
15,335 |
|
|
|
15,515 |
|
|
|
15,372 |
|
|
|
15,715 |
|
|
|
15,777 |
|
Specific |
|
|
12,436 |
|
|
|
12,750 |
|
|
|
12,752 |
|
|
|
13,030 |
|
|
|
12,439 |
|
Generic and country-risk |
|
|
2,899 |
|
|
|
2,765 |
|
|
|
2,620 |
|
|
|
2,684 |
|
|
|
3,338 |
|
NPA ratio (%) |
|
|
6.1 |
|
|
|
6.4 |
|
|
|
6.6 |
|
|
|
6.8 |
|
|
|
6.7 |
|
NPA coverage ratio (%) |
|
|
63 |
|
|
|
62 |
|
|
|
60 |
|
|
|
60 |
|
|
|
60 |
|
NPA ratio (%) (excluding real-estate activity in Spain) |
|
|
4.3 |
|
|
|
4.5 |
|
|
|
4.6 |
|
|
|
4.6 |
|
|
|
4.6 |
|
NPA coverage ratio (%) (excluding real-estate activity in Spain) |
|
|
64 |
|
|
|
63 |
|
|
|
59 |
|
|
|
59 |
|
|
|
58 |
|
(1) |
Including contingent liabilities. |
Non-performing assets evolution
(Million euros)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3Q14 |
|
|
2Q14 |
|
|
1Q14 |
|
|
4Q13 |
|
|
3Q13 |
|
Beginning balance |
|
|
24,980 |
|
|
|
25,445 |
|
|
|
26,243 |
|
|
|
26,508 |
|
|
|
22,226 |
|
Entries |
|
|
2,429 |
|
|
|
2,092 |
|
|
|
2,190 |
|
|
|
3,255 |
|
|
|
7,094 |
|
Recoveries |
|
|
(1,840 |
) |
|
|
(1,781 |
) |
|
|
(1,708 |
) |
|
|
(2,261 |
) |
|
|
(1,956 |
) |
Net variation |
|
|
589 |
|
|
|
311 |
|
|
|
482 |
|
|
|
993 |
|
|
|
5,138 |
|
Write-offs |
|
|
(1,297 |
) |
|
|
(961 |
) |
|
|
(1,248 |
) |
|
|
(1,102 |
) |
|
|
(817 |
) |
Exchange rate differences and other |
|
|
133 |
|
|
|
185 |
|
|
|
(32 |
) |
|
|
(155 |
) |
|
|
(39 |
) |
Period-end balance |
|
|
24,405 |
|
|
|
24,980 |
|
|
|
25,445 |
|
|
|
26,243 |
|
|
|
26,508 |
|
Memorandum item: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-performing loans |
|
|
23,983 |
|
|
|
24,554 |
|
|
|
25,032 |
|
|
|
25,826 |
|
|
|
26,109 |
|
Non-performing contingent liabilities |
|
|
422 |
|
|
|
426 |
|
|
|
413 |
|
|
|
418 |
|
|
|
399 |
|
As of 30-Sep-2014, the Groups credit risk has shown a slight upward movement over the quarter, with
an increase of 2.2% since the end of June; however, excluding the exchange-rate effect this amounted to a rise of 0.6%. As has become customary, this change combines the strength of lending in the Americas and Turkey with the deleveraging process in
Spain and the wholesale banking business in Eurasia, although this effect is slowing. In Spain, the increase in new production of some portfolios is not sufficient to offset the decline of the back-book.
Non-performing assets once again declined in the quarter. In terms of variations in NPA, net additions increased between July and September due to
one-off transactions, which brings the ratio of recoveries to gross additions to 75.8%.
The Groups NPA ratio closed September 2014 at 6.1%
(4.3% excluding real-estate activity in Spain), once again falling 28 basis points over the quarter. This was due to the aforementioned decline in the non-performing portfolio and the increase in the Groups total risks. By areas, the ratio in
the banking business in Spain stands at 6.2%, with a fall of 13 basis points since the end of the first half of 2014; in real-estate activity in Spain stands at 55.3% (54.8% as of 30-Jun-2014); in Mexico and Eurasia this ratio has improved to 3.2%
and to 3.4% respectively (3.4% for Mexico and 3.5% for Eurasia, with data as of the close of the previous quarter); in South America it stands at 2.1%, and in the United States at 0.9%.
Lastly, coverage provisions for customer risk amounted to 15,335m as of 30-Sep-2014, a decline of 1.2% over the quarter. Despite this, and given
the aforementioned reduction in
the non-performing balances, the Groups coverage ratio has increased by 73 basis points to 63%. By
business areas, there has been an increase in the coverage ratio in Eurasia from 89% to 91%; in the United States it closed the quarter at 164%; in South America it stood at 137%; and in Mexico and Spain it remains stable, 112% in the first case and
51% in the second (44% for the banking business and 61% for the real-estate activity).
Structural risks
The Assets and Liabilities Management unit in BBVAs Strategy and Finance area is responsible for managing the Groups overall liquidity and
structural interest-rate and foreign-exchange positions.
Liquidity management 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 finance. A core principle in the BBVA Groups liquidity management is the financial independence of its banking
subsidiaries abroad. This principle prevents the propagation of a liquidity crisis among the Groups different areas and guarantees correct transmission of the cost of liquidity to the price formation process.
In the third quarter of 2014, the long-term wholesale funding markets in Europe continued to be stable, as a result of the positive trend in sovereign risk
premiums, in an environment of increasing concerns regarding growth in the Eurozone, which have led to new initiatives by the ECB. The unconventional measures announced by the ECB at its meeting of June 5, 2014 are aimed at increasing inflation
and ensuring that credit and improved financial conditions are transferred to the whole of the European economy. They were launched with the TLTRO auction of September 2014, at which BBVA borrowed 2.6 billion.
Short-term funding in Europe has also continued to perform extremely well, in a context marked by a high level of market liquidity. This good performance has
been assisted by the negative rates set by the ECB for deposits received from the European financial sector. In addition to the above, BBVAs retail franchise in Spain performed well as a result of its customer-centric strategy and the
Banks financial soundness.
The situation outside Europe has also been very positive. BBVA has once again strengthened its liquidity
position in all the jurisdictions in which the Group operates. Of particular note is the senior debt issue by BBVA Compass, which after seven years out of the market has placed 1 billion dollars at 3 and 5-year maturities with an excellent uptake by
investors.
To sum up, BBVAs proactive policy in its liquidity management, the outstanding performance of customer funds in all geographical areas,
its proven ability to access the market, even in difficult environments, its retail business model, and the lower volume of maturities compared with its competitors, all give it a comparative advantage against its peers. Moreover, the increased
proportion of retail deposits continues to strengthen the Groups liquidity position and to improve its financing structure.
Foreign-exchange
risk management of BBVAs long-term investments, basically stemming from its franchises abroad, aims to preserve the Groups capital adequacy ratios and ensure the stability of its income statement.
The third quarter of this year saw reduced exchange-rate volatility in emerging currencies, in an environment marked by a return of flows to emerging markets,
stability in U.S. interest rates and gains by the dollar against the euro. In this context, BBVA has maintained a policy of actively hedging its investments in Mexico, Chile, Colombia, Turkey and the dollar area. In addition to this corporate-level
hedging, dollar positions are held at a local level by some of the subsidiary banks. The foreign-exchange risk of the earnings expected from abroad for 2014 is also managed. Accordingly, the impact of variations in exchange rates in the third
quarter of 2014, including the hedging positions held, has been positive on the Groups capital ratios and less negative on the income statement than in previous quarters.
The unit also actively manages the structural interest-rate exposure on the Groups balance sheet. This aims to maintain a steady growth in net
interest income in the short and medium term, regardless of interest-rate fluctuations.
In the third quarter of 2014, the results of this management have been very satisfactory, with strategies
limiting risk in Europe, the United States and Mexico. These strategies are managed both with hedging derivatives (caps, floors, swaps and FRAs) and with balance-sheet instruments (mainly government bonds with the highest credit ratings and
liquidity). The amount of NTI generated in Spain, Mexico and the United States is the result of prudent portfolio management strategies, particularly in terms of sovereign debt, in a context marked by low interest rates.
Economic capital
Attributable economic risk
capital (ERC) consumption at the close of September amounted to 30,511m, closely in line with the figure at the close of June 2014, with a quarterly rise of only 1.0%.
As is to be expected from BBVAs profile, the largest allocation to ERC (51.9%) relates to credit risk on portfolios originated in the
Groups branch network from its own customer base. This amount was basically unchanged over the period (down 0.1%). The reduction in the stock of credit in Spain and in the wholesale banking businesses in Eurasia offsets the increased volume of
loans in South America, Mexico, Turkey and the United States.
Equity risk, in other words from the portfolio of holdings in industrial and
financial companies, the stake in the CNCB group and consumption of economic capital from goodwill, has increased slightly as a proportion of total risks to 17.8%.
Structural balance-sheet risk, which originates from the management of both structural interest-rate risk and exchange-rate risk, accounts for 6.9% of
all ERC, and has increased by 13.7% during the period.
Operational risk remains stable, and accounts for 6.8% of the total, while
fixed-asset risk has reduced its share to 12.4%.
Lastly, trading risk, which is of less importance given the nature of the business and
BBVAs policy of minimal proprietary trading, stands at 2.9%.
The BBVA share
Global growth has slowed, according to the latest available figures for the first half of 2014. This slowdown is largely due to the reduction in U.S.
GDP in the first quarter of the year, and eases, but does not halt the growth which is expected in the world economy this and the following year. The latest cyclical confidence and financial volatility indicators are consistent with a gradual
improvement. However, uncertainty remains weighted to the downside due to the reappearance of geopolitical risks and doubts about the impact which the forthcoming interest rate hike in the United States will have on capital flows and on financial
asset prices.
Between July and September 2014, the main stock market indices have reported weaker performance than in the previous quarter. In
Europe, the general European Stoxx 50 index registered a slight 0.1% decline and the Ibex 35 was down 0.9%. However, the Eurozones banking sector index, Euro Stoxx Banks, was up 1.8% over the same period, largely because of the latest measures
applied by the ECB.
BBVAs earnings for the first half of 2014, published on July 30, 2014, confirm the positive performance in
recurring revenue and the fall in the Groups risk premium. More specifically, in Spain asset quality continues to improve, and in fact the balance of nonperforming assets was down again for the third quarter in a row.
The BBVA share and share performance ratios
|
|
|
|
|
|
|
|
|
|
|
30-09-14 |
|
|
30-06-14 |
|
Number of shareholders |
|
|
947,901 |
|
|
|
954,325 |
|
Number of shares issued |
|
|
5,887,168,710 |
|
|
|
5,887,168,710 |
|
Daily average number of shares traded |
|
|
60,252,342 |
|
|
|
33,063,279 |
|
Daily average trading (million euros) |
|
|
561 |
|
|
|
304 |
|
Maximum price (euros) |
|
|
9.91 |
|
|
|
9.99 |
|
Minimum price (euros) |
|
|
8.51 |
|
|
|
8.59 |
|
Closing price (euros) |
|
|
9.55 |
|
|
|
9.31 |
|
Book value per share (euros) |
|
|
7.99 |
|
|
|
7.98 |
|
Market capitalization (million euros) |
|
|
56,228 |
|
|
|
54,804 |
|
Price/book value (times) |
|
|
1.2 |
|
|
|
1.2 |
|
PER (Price/earnings; times) |
|
|
18.4 |
|
|
|
17.2 |
|
Yield (Dividend/price; %(1) |
|
|
3.8 |
|
|
|
3.8 |
|
(1) |
Calculated by dividing the median of the forecast dividend per share of a consensus of analysts by the BBVA share price at the end of each quarter.
|
As of September 30, 2014, the BBVA share stood at 9.55 euros, having risen 2.6% during the quarter
and 6.7% since the end of 2013. Hence, its quarterly performance has been significantly better than that of the Ibex 35, the Euro Stoxx 50 general index and the Eurozones banking sector index, Euro Stoxx Banks. As of 30-Sep-2014, the share has
a weighting of 11.49% on the Ibex 35 and of 2.76% on the Euro Stoxx 50. At the close of the third quarter, BBVA had a market capitalization of 56,228m, up 2.6% on the figure as of
30-Jun-2014.
With respect to shareholder remuneration, on September 24 the Board of Directors of BBVA agreed to perform a capital increase against reserves in
accordance with the terms approved by the Annual General Meeting held on March 14, 2014. This increase has been used as an instrument to implement the shareholder remuneration system called the dividend option. This offers BBVA
shareholders the chance to choose between receiving all or part of the corresponding amount in either new BBVA shares or in cash. Each shareholder has a free allocation right for each BBVA share held on September 26, with 120 rights entitling
the holder to one new BBVA share. Alternatively, shareholders who wish to receive their remuneration in cash are entitled to sell their free allocation rights to BBVA at a gross fixed price of 0.08 per right during the first ten calendar
days of their trading period, or on the market during the complete trading period. In this way, shareholders enjoy a greater degree of flexibility and efficiency, as they will be able to adapt their remuneration to their preferences and personal
circumstances. On this occasion, owners of 85.1% of these rights chose to receive new shares.
Environmental and Social Governance
The highlights in environmental and social governance (ESG) for the third quarter of 2014 demonstrate that BBVA believes in a different approach to
banking: a responsible model based on principles of integrity, prudence and transparency. BBVA repeats its listing on the Dow Jones Sustainability Index for the ninth year in a row and improves the overall score obtained in 2013, according to the
analysis conducted by the RobecoSAM agency. The Bank has also been selected by Triodos Investment Management, the Triodos Group subsidiary that manages socially responsible mutual funds, as part of its investor universe. It is the only Spanish Bank
on this list. Other highlights in the period are:
Transparent, Clear and Responsible (TCR) communication
BBVA has implemented the Digital TCR project to extend the TCR communication initiative to the digital world, as part of the Groups digitization
strategy. An analysis has been conducted with the aim of developing best practices in this area. At a later stage, the countries will choose the most suitable ones and the way of implementing them.
Education
Financial literacy is one of the priorities of
the Banks Responsible Business Plan. 2.4 million people, both customers and non-customers, have already benefited from the educational programs.
Since 2010, BBVA has contributed with the OECD to the funding of the PISA assessment, whose latest report on the financial skills of 15-year-old students in
OECD countries was presented in July 2014.
Products with a high social impact
The BBVA Microfinance Foundation has released its 2013 Performance Report, which shows that since its creation in 2007 it has provided $6,058m in loans
for productive activities to 4.4 million underprivileged people. It currently serves 1.5 million people and has an impact on the lives of 8 million.
In addition, a master agreement has been signed between the BBVA Microfinance Foundation and the Secretary General for International Development
Cooperation to work together and undertake joint actions aimed at the financial inclusion of the most underprivileged groups.
Yo Soy Empleo (I am
employment) has already helped over 4,500 businesses create 6,325 jobs in Spain. Starting in July, 1,000 of these aid packages were extended to the self-employed. Of these, 673 1,500 packages have already been granted.
Other lines
ESG Risks
BBVA has signed the 2014 Global Investor
Statement on Climate Change. This statement recognizes the role played by investors in the funding of clean energy projects. Signed by some 350 investors, with over $24 billion in assets, the statement is available on:
http://investorsonclimatechange.org/.
Science and culture
The BBVA Foundation has selected Asociación Trashumancia y Naturaleza (Transhumance and Nature Association) as the winner of the 9th BBVA Foundation
Award for Biodiversity Conservation Actions in Spain. Its aim is to promote transhumance, a very valuable age-old practice for the conservation of the natural, sociocultural and economic heritage of the Iberian Peninsula. In the Biodiversity
Conservation Actions in Latin America category, the award went to the Smithsonian Tropical Research Institute in Panama.
BBVA in the Sustainability
Indices
BBVA has a notable position on the main international sustainability indices, with a weight as of 30-Sep-2014 as follows:
Main sustainability indices in which BBVA participates
|
|
|
|
|
|
|
|
|
|
|
Weighting (%) |
|
|
|
DJSI World |
|
|
0.79 |
|
|
DJSI Europe |
|
|
1.80 |
|
|
DJSI Eurozone |
|
|
3.75 |
|
|
|
MSCI World ESG |
|
|
0.43 |
|
|
MSCI EX USA ESG |
|
|
0.99 |
|
|
MSCI AC Europe ESG |
|
|
1.67 |
|
|
|
FTSE4Good Global |
|
|
0.41 |
|
|
FTSE4Good Global 100 |
|
|
0.69 |
|
|
FTSE4Good Europe |
|
|
1.04 |
|
|
FTSE4Good Europe 50 |
|
|
1.80 |
|
|
|
Euronext-Vigeo Europe 120 |
|
|
0.82 |
|
|
Euronext-Vigeo Eurozone 120 |
|
|
0.87 |
|
|
|
STOXX Global ESG |
|
|
|
|
|
Environmental Leaders |
|
|
0.45 |
|
|
STOXX Global ESG Social Leaders |
|
|
0.45 |
|
|
|
EURO STOXX ESG Leaders 50 |
|
|
2.10 |
|
|
|
STOXX Europe ESG Leaders 50 |
|
|
2.10 |
|
|
|
STOXX Global ESG Leaders |
|
|
0.30 |
|
For more information and contact details, see the chapter on Business areas and www.bbvaresponsiblebanking.com
|
|
|
Environmental and Social Governance |
|
17 |
Business areas
This section presents and analyzes the most relevant aspects of the Groups different areas. Specifically, it shows the income statement, the balance
sheet, the business activity and the most significant ratios in each of them: loans under management, customer deposits under management, mutual funds and pension funds, efficiency ratio, NPA ratio, coverage ratio and risk premium.
In 2014, the reporting structure of the BBVA Groups business areas is basically the same as that reported in 2013:
|
|
|
Banking activity in Spain, which as in previous years includes: The Retail network, with the segments of individual customers, private banking and small businesses; Corporate and Business Banking (CBB), which
handles the SMEs, corporations and institutions in the country; Corporate & Investment Banking (CIB), which includes business with large corporations and multinational groups and the trading floor and distribution business in the same
geographical area; and other units, among them BBVA Seguros and Asset Management (management of mutual and pension funds in Spain). It also includes the portfolios, finance and structural interest-rate positions of the euro balance sheet.
|
|
|
|
Real-estate activity in Spain. This area basically covers lending to real-estate developers and foreclosed real-estate assets in the country. |
|
|
|
The United States encompasses the Groups businesses in the United States. |
|
|
|
Eurasia, which includes the business carried out in the rest of Europe and Asia, i.e. the Groups retail and wholesale businesses in the area. It also includes BBVAs stakes in the Turkish bank Garanti
and the Chinese banks CNCB and CIFH. However, the equity-accounted income of CNCB (excluding the dividends) from its acquisition until the conclusion of the new agreement with the CITIC Group in the fourth quarter of 2013 (which included the sale of
5.1% of the stake in CNCB) has been reclassified in the Corporate Center under the heading Results from corporate operations. |
|
|
|
Mexico includes the banking and insurance businesses in the country. |
|
|
|
South America includes the banking and insurance businesses that BBVA carries out in the region. In the first quarter of 2014, the historical series in this area has been reconstructed to exclude the business in
Panama, which was sold in the fourth quarter of 2013, and include it in the Corporate Center. |
In addition to the above, all the areas
include a remainder made up of other businesses and of 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 basically
corresponds to the Groups holding function. It groups together the costs of the head offices that have a corporate function; management of structural exchange-rate positions, carried out by BBVAs financial area; specific issues of
capital instruments to ensure adequate management of the Groups 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 pensioners; goodwill and other intangibles. It also comprises the result from certain corporate operations carried out in 2013, such as the earnings and capital gains from the pension business disposals in Latin America
during 2013; those from BBVA Panama taking into consideration the capital gain from its disposal (in the fourth quarter); and the effect of the repricing of the stake in CNCB to market value following the signing in the fourth quarter of 2013 of the
new agreement with the CITIC group, which includes the sale of 5.1% of the stake in CNCB. It also includes the equity-accounted earnings from CNCB (excluding the dividends).
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). This aggregate business is considered relevant to better understand the BBVA Group because of the characteristics of the customers served, the type of products offered and the risks assumed.
Lastly, as usual, in the case of the Americas and Eurasia (basically Garanti), the results of applying constant exchange rates are given in addition to the
year-on-year variations at current exchange rates.
The Group compiles information by areas based on units at the same level, and all the
accounting data related to the business they manage are recorded in full. These basic units are then aggregated in accordance with the organizational structure established by the Group for higher-level units and, finally, the business areas
themselves. Similarly, all the companies making up the Group are also assigned to the different units according to the geographical area of their activity.
Once the composition of each business area has been defined, certain management criteria are applied, of which the following are particularly
important:
|
|
|
Capital. Capital is allocated to each business according to economic risk capital (ERC) criteria. This is based on the concept of unexpected loss at a specific confidence level, depending on the Groups
capital adequacy targets. The calculation of the ERC combines credit risk, market risk, structural balance-sheet risk, equity positions, operational risk, fixed-asset risk and technical risks in the case of insurance companies. These calculations
are carried out using internal models that have been defined following the guidelines and requirements established under the Basel III capital accord, with economic criteria taking precedence over regulatory ones. |
ERC is risk-sensitive and thus linked to the management policies of the businesses themselves. It standardizes capital allocation between
them in accordance with the risks incurred. In other words, it is calculated in a way that is standard and integrated for all kinds of risks and for each operation, balance or risk position, allowing its risk-adjusted return to be assessed and an
aggregate to be calculated for profitability by client, product, segment, unit or business area.
|
|
|
Internal transfer prices. Within each geographical area, internal transfer rates are applied to calculate the net interest income of its businesses, under both the asset and liability headings. These rates are
composed of a market rate that depends on the operations revision period, and a liquidity premium that aims to reflect the conditions and outlook for the financial markets in each area. Earnings are distributed across revenue-generating and
distribution units (e.g., in asset management products) at market prices. |
|
|
|
Allocation of operating expenses. Both direct and indirect costs are allocated to the business areas, except where there is no clearly defined relationship with the businesses, i.e. when they are of a clearly
corporate or institutional nature for the Group as a whole. |
|
|
|
Cross-selling. In some cases, consolidation adjustments are required to eliminate shadow accounting entries in the earnings of two or more units as a result of cross-selling incentives.
|
Mayor income statement items by
business area
(Million euros)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business areas |
|
|
|
|
|
|
|
|
|
Banking |
|
|
Real-estate |
|
|
The |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
activity |
|
|
activity |
|
|
United |
|
|
|
|
|
|
|
|
South |
|
|
S Business |
|
|
Corporate |
|
|
|
BBVA Group (1) |
|
|
in Spain |
|
|
in Spain |
|
|
States |
|
|
Eurasia (1) |
|
|
Mexico |
|
|
America |
|
|
areas |
|
|
Center |
|
Jan.-Sep. 14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
10,868 |
|
|
|
2,835 |
|
|
|
(28 |
) |
|
|
1,054 |
|
|
|
655 |
|
|
|
3,587 |
|
|
|
3,264 |
|
|
|
11,368 |
|
|
|
(500 |
) |
Gross income |
|
|
15,592 |
|
|
|
4,881 |
|
|
|
(90 |
) |
|
|
1,565 |
|
|
|
1,289 |
|
|
|
4,781 |
|
|
|
3,716 |
|
|
|
16,142 |
|
|
|
(550 |
) |
Operating income |
|
|
7,546 |
|
|
|
2,743 |
|
|
|
(210 |
) |
|
|
471 |
|
|
|
749 |
|
|
|
3,009 |
|
|
|
2,086 |
|
|
|
8,847 |
|
|
|
(1,301 |
) |
Income before tax |
|
|
3,085 |
|
|
|
1,184 |
|
|
|
(881 |
) |
|
|
397 |
|
|
|
588 |
|
|
|
1,777 |
|
|
|
1,476 |
|
|
|
4,540 |
|
|
|
(1,455 |
) |
Net attributable profit |
|
|
1,929 |
|
|
|
836 |
|
|
|
(598 |
) |
|
|
302 |
|
|
|
471 |
|
|
|
1,349 |
|
|
|
755 |
|
|
|
3,115 |
|
|
|
(1,185 |
) |
Jan.-Sep. 13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
10,853 |
|
|
|
2,920 |
|
|
|
28 |
|
|
|
1,052 |
|
|
|
701 |
|
|
|
3,344 |
|
|
|
3,309 |
|
|
|
11,355 |
|
|
|
(502 |
) |
Gross income |
|
|
16,075 |
|
|
|
4,737 |
|
|
|
(13 |
) |
|
|
1,562 |
|
|
|
1,360 |
|
|
|
4,596 |
|
|
|
3,995 |
|
|
|
16,238 |
|
|
|
(163 |
) |
Operating income |
|
|
7,726 |
|
|
|
2,459 |
|
|
|
(121 |
) |
|
|
498 |
|
|
|
808 |
|
|
|
2,848 |
|
|
|
2,257 |
|
|
|
8,749 |
|
|
|
(1,022 |
) |
Income before tax |
|
|
2,069 |
|
|
|
100 |
|
|
|
(1,308 |
) |
|
|
438 |
|
|
|
538 |
|
|
|
1,696 |
|
|
|
1,685 |
|
|
|
3,148 |
|
|
|
(1,079 |
) |
Net attributable profit |
|
|
3,077 |
|
|
|
491 |
|
|
|
(844 |
) |
|
|
315 |
|
|
|
417 |
|
|
|
1,287 |
|
|
|
868 |
|
|
|
2,535 |
|
|
|
542 |
|
(1) |
Pro forma financial statements with the revenues and expenses of the Garanti Group consolidated in proportion to the percentage of the Groups stake. |
Breakdown of gross income, operating income and net attributable profit by geography (1)
(Jan.-Sep. 14)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Banking activity |
|
|
|
|
|
The United |
|
|
|
|
|
|
|
|
|
|
|
|
in Spain |
|
|
Spain (2) |
|
|
States |
|
|
Eurasia |
|
|
Mexico |
|
|
South America |
|
Gross income |
|
|
30.2 |
% |
|
|
29.7 |
% |
|
|
9.7 |
% |
|
|
8.0 |
% |
|
|
29.6 |
% |
|
|
23.0 |
% |
Operating income |
|
|
31.0 |
% |
|
|
28.6 |
% |
|
|
5.3 |
% |
|
|
8.5 |
% |
|
|
34.0 |
% |
|
|
23.6 |
% |
Net attributable profit |
|
|
26.8 |
% |
|
|
7.6 |
% |
|
|
9.7 |
% |
|
|
15.1 |
% |
|
|
43.3 |
% |
|
|
24.2 |
% |
(1) |
Excludes the Corporate Center. |
(2) |
Including real-estate activity in Spain. |
Banking activity in Spain
The most relevant
In the third quarter of 2014 the aspects worth highlighting in banking activity in Spain have been the incipient recovery in demand for loans (though
this is still insufficient to increase the stock of loans) and the falling trend in the cost of deposits.
Macro and industry trends
The Spanish economy has continued to make progress in the first half of 2014. The quarterly rate of growth of 0.5% is expected to be maintained in the
third quarter. This improved economic activity is supported by a reduction in financial tension, looser fiscal policy, increased foreign demand (the latter partly helped by the depreciation of the euro) and the positive impact of the reforms
undertaken in recent years.
The privatization of Catalunya Banc has marked a new milestone in the restructuring of the Spanish banking system,
where the deleveraging process continues, and thus the stock of loans is falling. According to information available as of August 2014, the fall in the volume of loans amounts to 6.7% year-on-year, although the flow of new lending to the retail
segment (loans to companies for less than a million euros and to individuals) continues to improve (up 4.0% year-on-year). The latest data on the interest rates charged by credit institutions show that remuneration of deposits is falling. According
to the latest provisional data for August published by the Bank of Spain on October 17, the total figure of non-performing loans has fallen slightly. However, the reduction in the overall balance of loans on the figure for July has led to an
increase in the NPA ratio in the industry of around one decimal point to 13.25%.
Activity
Despite the increase in new loan production, the volume of loans under management by the area continues to decline (down 2.4% over the quarter and down
6.0% over the last 12 months), although at a slower pace than in previous quarters. The increased demand for finance is basically driven by SMEs, corporates and consumer finance (in the case of consumer loans, the stock has grown by 2.5% over the
last three months).
With respect to asset quality, the positive trend in net additions to NPA has led to another improvement in the NPA ratio to
6.2%. The coverage ratio has remained stable in the quarter, at 44%.
Financial statements and relevant business indicators
(Million euros and percentage)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income statement |
|
Jan.-Sep. 14 |
|
|
D% |
|
|
Jan.-Sep. 13 |
|
Net interest income |
|
|
2,835 |
|
|
|
(2.9 |
) |
|
|
2,920 |
|
Net fees and commissions |
|
|
1,087 |
|
|
|
5.5 |
|
|
|
1,030 |
|
Net trading income |
|
|
793 |
|
|
|
26.0 |
|
|
|
630 |
|
Other income/expenses |
|
|
165 |
|
|
|
5.5 |
|
|
|
156 |
|
Gross income |
|
|
4,881 |
|
|
|
3.0 |
|
|
|
4,737 |
|
Operating expenses |
|
|
(2,137 |
) |
|
|
(6.2 |
) |
|
|
(2,278 |
) |
Personnel expenses |
|
|
(1,293 |
) |
|
|
(8.2 |
) |
|
|
(1,409 |
) |
General and administrative expenses |
|
|
(765 |
) |
|
|
(2.5 |
) |
|
|
(785 |
) |
Depreciation and amortization |
|
|
(79 |
) |
|
|
(6.2 |
) |
|
|
(84 |
) |
Operating income |
|
|
2,743 |
|
|
|
11.6 |
|
|
|
2,459 |
|
Impairment on financial assets (net) |
|
|
(1,245 |
) |
|
|
(42.4 |
) |
|
|
(2,161 |
) |
Provisions (net) and other gains (losses) |
|
|
(314 |
) |
|
|
58.7 |
|
|
|
(198 |
) |
Income before tax |
|
|
1,184 |
|
|
|
n.m. |
|
|
|
100 |
|
Income tax |
|
|
(346 |
) |
|
|
n.m. |
|
|
|
(29 |
) |
Net income from ongoing operations |
|
|
839 |
|
|
|
n.m. |
|
|
|
71 |
|
Results from corporate operations |
|
|
|
|
|
|
|
|
|
|
440 |
|
Net income |
|
|
839 |
|
|
|
64.2 |
|
|
|
511 |
|
Non-controlling interests |
|
|
(3 |
) |
|
|
(86.3 |
) |
|
|
(19 |
) |
Net attributable profit |
|
|
836 |
|
|
|
70.2 |
|
|
|
491 |
|
Net attributable profit (excluding results from corporate operations) |
|
|
836 |
|
|
|
n.m. |
|
|
|
51 |
|
|
|
|
|
Balance sheet |
|
30-09-14 |
|
|
D% |
|
|
30-09-13 |
|
Cash and balances with central banks |
|
|
830 |
|
|
|
(87.5 |
) |
|
|
6,660 |
|
Financial assets |
|
|
121,612 |
|
|
|
20.1 |
|
|
|
101,232 |
|
Loans and receivables |
|
|
190,637 |
|
|
|
(4.5 |
) |
|
|
199,644 |
|
Loans and advances to customers |
|
|
168,769 |
|
|
|
(7.0 |
) |
|
|
181,391 |
|
Loans and advances to credit institutions and other |
|
|
21,868 |
|
|
|
19.8 |
|
|
|
18,253 |
|
Inter-area positions |
|
|
4,839 |
|
|
|
(62.8 |
) |
|
|
13,014 |
|
Tangible assets |
|
|
725 |
|
|
|
(9.5 |
) |
|
|
801 |
|
Other assets |
|
|
1,917 |
|
|
|
58.1 |
|
|
|
1,212 |
|
Total assets/liabilities and equity |
|
|
320,559 |
|
|
|
(0.6 |
) |
|
|
322,563 |
|
Deposits from central banks and credit institutions |
|
|
53,133 |
|
|
|
(2.2 |
) |
|
|
54,316 |
|
Deposits from customers |
|
|
160,777 |
|
|
|
2.5 |
|
|
|
156,886 |
|
Debt certificates |
|
|
44,981 |
|
|
|
(20.3 |
) |
|
|
56,440 |
|
Subordinated liabilities |
|
|
2,084 |
|
|
|
(14.1 |
) |
|
|
2,426 |
|
Inter-area positions |
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities held for trading |
|
|
49,106 |
|
|
|
23.9 |
|
|
|
39,630 |
|
Other liabilities |
|
|
2,629 |
|
|
|
21.0 |
|
|
|
2,172 |
|
Economic capital allocated |
|
|
7,850 |
|
|
|
(26.6 |
) |
|
|
10,694 |
|
|
|
|
|
Relevant business indicators |
|
30-09-14 |
|
|
30-06-14 |
|
|
30-09-13 |
|
Loans under management (1) |
|
|
166,065 |
|
|
|
170,214 |
|
|
|
176,614 |
|
Customer deposits under management (2) |
|
|
139,838 |
|
|
|
141,773 |
|
|
|
133,838 |
|
Mutual funds |
|
|
27,552 |
|
|
|
25,752 |
|
|
|
20,492 |
|
Pension funds |
|
|
21,677 |
|
|
|
21,364 |
|
|
|
19,877 |
|
Efficiency ratio (%) |
|
|
43.8 |
|
|
|
41.9 |
|
|
|
48.1 |
|
NPA ratio (%) |
|
|
6.2 |
|
|
|
6.3 |
|
|
|
6.2 |
|
NPA coverage ratio (%) |
|
|
44 |
|
|
|
44 |
|
|
|
41 |
|
Risk premium (%) |
|
|
0.93 |
|
|
|
0.97 |
|
|
|
1.50 |
|
(1) |
Includes funding for segments managed by CBB through fixed-income. |
|
|
|
Banking activity in Spain |
|
21 |
On the liabilities side, customer deposits under management have performed particularly well. Their
balance as of 30-Sep-2014 is up by 4.5% over the year. There has also been a significant correction in the entry cost of on-balance-sheet funds, closely in line with the current situation on the financial markets. This has led to a shift of deposits
over the quarter toward off-balance-sheet funds (basically mutual funds). As a result of the above, there has been a significant improvement in the average cost, which is positively influencing net interest income in the area.
As mentioned, off-balance-sheet funds have grown over the quarter by 3.8%, largely due to the increase in mutual funds, whose balance as of 30-Sep-2014
was up by 7.0% since the end of the first half of 2014. As a result, the Group in Spain has maintained its clear leading position as a fund manager.
Earnings
The year-on-year comparison of earnings in the
area is strongly influenced by the following factors from last year:
|
|
|
Elimination of the floor clauses in residential mortgage loans in May 2013, which were in place throughout most of the first half of 2013 and had a positive effect on net interest income. |
|
|
|
The capital gains generated in March 2013 by the reinsurance operation on the individual life and accident insurance portfolio. |
In the first nine months of 2014, net interest income was 2.9% down on the figure for the same period the previous year, strongly influenced by the
elimination of the floor clauses explained above. Excluding this effect, this heading was positive, despite the reduction in the stock of loans and the environment of very low interest rates. It was boosted by the good management of
customer fund prices, which has helped improve the customer spread. It is worth highlighting in this respect that net interest income for the quarter is 3.6% higher than the previous quarter; in other words, it has maintained the quarterly growth
trend of the last five quarters (since the elimination of the floor clauses). In addition, there has been an improvement in cumulative income from fees and commissions through September (up 5.5% year-on-year) due to the positive trend in
fees from fund management, credit cards, securities and wholesale banking operations. As a result, the more recurring revenue has shown a high level of resilience, with the cumulative total through September barely 0.7% down on the
figure for the same period in 2013.
NTI for the quarter is significantly down on the high figures for the first and second quarters. However, the
cumulative figure for the year still shows a very positive trend (up 26.0% year-on-year) thanks to the good performance of Global Markets and the good management of structural risks on the balance sheet.
The other income/expenses heading rose 5.5% year-on-year between January and September 2014. Income from
insurance activities continues its positive trend, with a quarterly figure that is very similar to those in previous quarters, despite the negative seasonal factors for the period. Over the quarter, dividends received in the Global Markets unit are
significantly down on those between April and June 2014, when this item was exceptionally high.
Overall, accumulated gross income figures for
banking activity in Spain to September show a positive performance, with a year-on-year rise of 3.0%.
Cumulative operating expenses through September
remain in check and have fallen 6.2% over the last 12 months, due to the digitization and transformation process implemented by the Group.
As a result of
all the above, operating income totaled 2,743m in the first nine months of 2014, a double-digit year-on-year increase of 11.6%.
There has
been a significant reduction in impairment losses on financial assets. In the third quarter of 2014, 386m were set aside for this item, a similar figure to the previous quarter. The cumulative figure for the first nine months of the year
amounts to 1,245, a year-on-year decline of 42.4%. This is explained by two factors: first, the good performance of NPA flows; and second, the provisions made in 2013 due to the adoption of recommendations on the classification of refinanced
loans. The cumulative cost of risk continues to improve, falling to 0.93% (0.97% in the first half of 2014).
Lastly, provisions (net) and other
gains/losses have performed as expected in the quarter. However, the increase in the second quarter due to restructuring costs, derived from the digitization and transformation process underway in the Group (as mentioned above), explains the
year-on-year rise of 58.7%.
To sum up, and given the absence this year of one-off earnings, the net attributable profit generated in the first
nine months of 2014 from banking activity in Spain is 836m. This compares with the figure of 491m in the same period in 2013, which included the capital gains from the reinsurance operation mentioned earlier.
Main highlights
BBVA aims to continue to strengthen its
franchise in Spain by attracting customers and increasing their levels of satisfaction and loyalty. In 2014 it improved its market share by 40 basis points (according to the FRS Inmark study). It has also launched the Quiero
Campaign, which sums up the way it aims to achieve this goal: BBVA wants to offer each customer what they need and demand.
A number of lines of
action have been undertaken in commercial products and services for individual customers in order to support this goal:
|
|
|
In savings, and within a context of low interest rates, BBVA continues committed to the marketing of products whose aim is to achieve returns that are in line with customer risk profiles, making full use of the
Banks extensive mutual fund portfolio, and supported by the campaign offering bonuses for transferring funds from other institutions, and savings insurance. |
|
|
|
The area of pensions has gained importance following the Governments announcement of its Social Security reforms. BBVA has renewed its range of products, adapting them to each retirement time horizon and
risk profile. In addition, the bank acknowledges its responsibility in making people aware of the need to save for retirement. That is why it has launched a range of measures to inform the population and to make it easier to make decisions in
advance. This quarter it has launched a total pension estimate simulator (www.jubilaciondefuturo.es). |
|
|
|
In an environment of improving economic expectations, and following the reduction in the price of housing in recent years, BBVA has launched the new Quiero Mortgage, at a special rate for customers
who meet certain minimum requirements of solvency and loyalty. |
In addition, the aim is to boost finance and make it more available for
companies, and in particular for SMEs. Working together with the risks area in this segment has enabled 80,000 customers to be offered finance. The range of asset products is complemented with very competitive deposits and insurance.
The Bank also aims to strengthen its leading position in the SME and Corporate Banking segment. To this end, in 2014 it has adapted its business model:
it has extended the capacity of the sales force to deal with customers and boosted advice through product specialists. These are key elements against the current backdrop to respond to customer demands and growing competition.
In addition, technological innovations and changes in customer behavior demand the development of new
forms of relationship and digital channels. In the third quarter, the results of the 2014 FRS satisfaction survey show that customers consider that the BBVA website in Spain and its mobile app are the most highly valued among its main competitors.
This recognition from customers coincides with the process of improvement and incorporation of new services and commercial capabilities.
The world of
payment channels is undergoing a profound process of transformation. In addition to the appearance of new entrants from the technological industry, there is the pressure on margins resulting from the new regulations governing interchange
rates. To deal with these challenges the Bono TPV (credit card reader flat fee) has been adjusted, and now allows different fixed charges to be set according to the revenue. In addition, BBVA has added its weight to the development of
new digital payment channels. As an example, the BBVA Wallet application is the most commonly used and extended mobile payment banking app in Spain. Currently it has more than 280,000 users.
Lastly, initiatives have been taken within the responsible business area that once more demonstrate BBVAs commitment to customers and society.
Apart from the Yo Soy Empleo (I am Employment) initiative, which has been mentioned in the chapter on Environmental and Social Governance, it is worth mentioning BBVAs social housing policy in Spain. It is the result of the
Banks concern for customers who find it difficult to pay their mortgages. They are offered a free employment plan with the Adecco Foundation. The program is combined with a training and job search plan lasting nine months for either the
customer or one of the customers family members. Currently 619 customers benefit from the BBVA Adecco Foundation Plan and 31% of them have found a job at some point during the program.
|
|
|
Banking activity in Spain |
|
23 |
Real-estate activity in Spain
Coverage of real-estate exposure in Spain
(Million of euros as of 30-09-14)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk amount |
|
|
Provision |
|
|
% Coverage over risk |
|
NPL + Substandard |
|
|
8,956 |
|
|
|
4,712 |
|
|
|
53 |
|
NPL |
|
|
7,803 |
|
|
|
4,299 |
|
|
|
55 |
|
Substandard |
|
|
1,153 |
|
|
|
413 |
|
|
|
36 |
|
Foreclosed real estate and other assets |
|
|
13,116 |
|
|
|
6,870 |
|
|
|
52 |
|
From real-estate developers |
|
|
8,878 |
|
|
|
5,022 |
|
|
|
57 |
|
From dwellings |
|
|
3,148 |
|
|
|
1,342 |
|
|
|
43 |
|
Other |
|
|
1,090 |
|
|
|
506 |
|
|
|
46 |
|
Subtotal |
|
|
22,072 |
|
|
|
11,582 |
|
|
|
52 |
|
Performing |
|
|
2,776 |
|
|
|
|
|
|
|
|
|
With collateral |
|
|
2,560 |
|
|
|
|
|
|
|
|
|
Finished properties |
|
|
1,970 |
|
|
|
|
|
|
|
|
|
Construction in progress |
|
|
229 |
|
|
|
|
|
|
|
|
|
Land |
|
|
361 |
|
|
|
|
|
|
|
|
|
Without collateral and other |
|
|
216 |
|
|
|
|
|
|
|
|
|
Real-estate exposure |
|
|
24,848 |
|
|
|
11,582 |
|
|
|
47 |
|
Note: Transparency scope according to Bank of Spain Circular 5/2011 dated November 30.
The most relevant
In the third quarter of 2014, the Groups real-estate activity in Spain maintained the same trend seen in previous quarters: reduction of exposure
to developer risk and increase in the level of property sales, in a somewhat more positive environment.
Consequently, the areas results in
the first nine months are significantly less negative than in the same period in 2013, thanks both to a lesser impact of provisions for real-estate assets and to the repricing of foreclosed assets to market value.
Industry trends
So far this year there have been more
encouraging signs in the demand for residential housing. The latest available data of the General Council of Spanish Notaries show that in the first half of the year home sales have increased by 24.1% on the figure posted in the same period
in 2013. The incipient improvement in the labor market and more positive household expectations support this trend.
The boost from home sales is
resulting in an improvement in the confidence of developers, who are gradually returning to the land market. This is stimulating the demand for land, although its departing from very low levels. In the first half of 2014 it grew by 11%
year-on-year according to the Ministry of Public Works and Transport, while just a few months ago it was declining.
However, home building is
still at an all-time low and the number of completed homes is lower than the number of units sold, which is resulting in a decrease in the housing stock.
The price adjustment seems to be coming to an end. Some indicators already show slight increases in both
the residential and commercial segments. Despite this, current housing prices continue to show an adjustment of around 40% with respect to their peak.
Exposure
There are two very different realities for the
Group within the real-estate sector. Net exposure to the developer segment (lending to developers plus the developers foreclosed assets) has continued to decline over recent quarters. At the same time, the rate of new real-estate assets and
retail foreclosures, i.e. those from defaulting residential mortgage loans, has slowed down this quarter.
BBVAs net exposure to the
real-estate sector in Spain stood at the end of September at 13,266m, down 10.3% in year-on-year terms and 3.8% on the balance at the end of June 2014.
Of this figure, exposure to property securing mortgage loans to individuals has increased 2.3% since June 2014, a notably lower year-on-year growth
than in previous quarters.
Non-performing assets in the area continue to decline and are now 2.3% below the figure for the close of the previous
quarter. As of 30-Sep-2014, coverage of non-performing and substandard loans stood at 52%, and of real-estate exposure as a whole at 47%, an improvement of 92 basis points in the quarter.
Sales of real-estate assets in the quarter totaled 2,236 units, or 4,647 if third-party and developer sales are added to this figure. Thus, in the
first three quarters of 2014 the cumulative sales volume has grown by 10.2% year-on-year.
Results
The highlights of the areas quarterly results are the less negative impact of loan-loss provisions for developer loans and foreclosed real-estate assets,
as well as the negligible effect of the sale of properties, as they are being sold at a price close to their net book-value.
Financial statements
(Million euros)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income statement |
|
Jan.-Sep. 14 |
|
|
D% |
|
|
Jan.-Sep. 13 |
|
Net interest income |
|
|
(28 |
) |
|
|
n.m. |
|
|
|
28 |
|
Net fees and commissions |
|
|
3 |
|
|
|
(62.4 |
) |
|
|
8 |
|
Net trading income |
|
|
49 |
|
|
|
26.6 |
|
|
|
38 |
|
Other income/expenses |
|
|
(113 |
) |
|
|
30.3 |
|
|
|
(87 |
) |
Gross income |
|
|
(90 |
) |
|
|
n.m. |
|
|
|
(13 |
) |
Operating expenses |
|
|
(120 |
) |
|
|
10.2 |
|
|
|
(109 |
) |
Personnel expenses |
|
|
(65 |
) |
|
|
1.9 |
|
|
|
(63 |
) |
General and administrative expenses |
|
|
(37 |
) |
|
|
29.6 |
|
|
|
(29 |
) |
Depreciation and amortization |
|
|
(18 |
) |
|
|
8.0 |
|
|
|
(17 |
) |
Operating income |
|
|
(210 |
) |
|
|
73.0 |
|
|
|
(121 |
) |
Impairment on financial assets (net) |
|
|
(223 |
) |
|
|
(56.3 |
) |
|
|
(510 |
) |
Provisions (net) and other gains (losses) |
|
|
(448 |
) |
|
|
(33.8 |
) |
|
|
(677 |
) |
Income before tax |
|
|
(881 |
) |
|
|
(32.6 |
) |
|
|
(1,308 |
) |
Income tax |
|
|
285 |
|
|
|
(38.9 |
) |
|
|
467 |
|
Net income |
|
|
(596 |
) |
|
|
(29.2 |
) |
|
|
(841 |
) |
Non-controlling interests |
|
|
(3 |
) |
|
|
5.1 |
|
|
|
(2 |
) |
Net attributable profit |
|
|
(598 |
) |
|
|
(29.1 |
) |
|
|
(844 |
) |
|
|
|
|
Balance sheet |
|
30-09-14 |
|
|
D% |
|
|
30-09-13 |
|
Cash and balances with central banks |
|
|
6 |
|
|
|
19.6 |
|
|
|
5 |
|
Financial assets |
|
|
739 |
|
|
|
(31.1 |
) |
|
|
1,073 |
|
Loans and receivables |
|
|
9,369 |
|
|
|
(13.0 |
) |
|
|
10,768 |
|
Loans and advances to customers |
|
|
9,369 |
|
|
|
(13.0 |
) |
|
|
10,768 |
|
Loans and advances to credit institutions and other |
|
|
|
|
|
|
|
|
|
|
|
|
Inter-area positions |
|
|
|
|
|
|
|
|
|
|
|
|
Tangible assets |
|
|
1,430 |
|
|
|
(16.7 |
) |
|
|
1,717 |
|
Other assets |
|
|
7,513 |
|
|
|
1.8 |
|
|
|
7,380 |
|
Total assets/liabilities and equity |
|
|
19,056 |
|
|
|
(9.0 |
) |
|
|
20,942 |
|
Deposits from central banks and credit institutions |
|
|
|
|
|
|
|
|
|
|
|
|
Deposits from customers |
|
|
106 |
|
|
|
(44.1 |
) |
|
|
189 |
|
Debt certificates |
|
|
|
|
|
|
|
|
|
|
|
|
Subordinated liabilities |
|
|
961 |
|
|
|
69.6 |
|
|
|
567 |
|
Inter-area positions |
|
|
14,122 |
|
|
|
(21.2 |
) |
|
|
17,917 |
|
Financial liabilities held for trading |
|
|
|
|
|
|
|
|
|
|
|
|
Other liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Economic capital allocated |
|
|
3,868 |
|
|
|
70.4 |
|
|
|
2,269 |
|
In the first nine months of 2014, BBVAs real-estate business in Spain registered a loss of 598m, notably
less than the 844m loss posted in the same period the previous year, due basically to the reduced need for loan-loss provisions and less value deterioration in real-estate assets compared with the previous year.
|
|
|
Real-estate activity in Spain |
|
25 |
The United States
The most relevant
Activity in the area continues the positive trend of previous quarters thanks to the commercial efforts made and the launch of new digital products. The
above has a positive impact in the recurring revenue of the area.
Of particular note is the senior debt issue by BBVA Compass, which after
seven years out of the market has placed 1 billion dollars at 3 and 5 years with an excellent uptake by investors.
Macro and industry trends
The U.S. economy accelerated its growth rate in the second quarter of 2014, in line with forecasts and following the negative surprise of the first
quarter, thus supporting continued recovery for the rest of 2014 and in 2015. The Federal Reserve (Fed) has announced the start of the process of reducing its monetary expansion program, though this has not led to an increase in the financial
volatility indicators or significant rises in long-term interest rates. The Fed remains cautious and willing to modulate the rate of tapering its quantitative easing program if it is not supported by economic data.
With regards to the financial system, asset quality continues to improve. The overall NPA ratio in the sector at the close of the second quarter was
around 3%. With respect to the trend in activity, lending maintains rates of growth above those of 2013 (up 6.8% year-on-year using August figures). Although deposits appear to have flattened in August, they are still rising at rates of around 7%
according to data from previous months. This performance is achieved despite the environment of all-time low interest rates.
With respect to exchange
rates, the U.S. dollar is gaining ground against the euro, as markets are discounting the changing relative tone of monetary policies by the ECB (toward greater expansion) and the Fed (toward a withdrawal of stimuli). All this has eased the
negative effect in the year-on-year change of the currency, both on the income statement and the balance sheet and activity in the area. All the comments below on rates of change will be expressed at constant exchange rates, unless expressly stated
otherwise.
Activity
Loans under management
continue the upward trend seen in previous quarters. At the
Financial statements and relevant business indicators
(Million euros and percentage)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income statement |
|
Jan.-Sep. 14 |
|
|
D% |
|
|
D%(1) |
|
|
Jan.-Sep. 13 |
|
Net interest income |
|
|
1,054 |
|
|
|
0.2 |
|
|
|
2.9 |
|
|
|
1,052 |
|
Net fees and commissions |
|
|
404 |
|
|
|
5.4 |
|
|
|
8.0 |
|
|
|
383 |
|
Net trading income |
|
|
107 |
|
|
|
(11.3 |
) |
|
|
(9.8 |
) |
|
|
121 |
|
Other income/expenses |
|
|
(1 |
) |
|
|
n.m. |
|
|
|
n.m. |
|
|
|
6 |
|
Gross income |
|
|
1,565 |
|
|
|
0.2 |
|
|
|
2.7 |
|
|
|
1,562 |
|
Operating expenses |
|
|
(1,094 |
) |
|
|
2.8 |
|
|
|
5.5 |
|
|
|
(1,064 |
) |
Personnel expenses |
|
|
(630 |
) |
|
|
2.4 |
|
|
|
5.0 |
|
|
|
(615 |
) |
General and administrative expenses |
|
|
(333 |
) |
|
|
5.9 |
|
|
|
8.7 |
|
|
|
(314 |
) |
Depreciation and amortization |
|
|
(131 |
) |
|
|
(2.3 |
) |
|
|
0.4 |
|
|
|
(135 |
) |
Operating income |
|
|
471 |
|
|
|
(5.5 |
) |
|
|
(3.1 |
) |
|
|
498 |
|
Impairment on financial assets (net) |
|
|
(53 |
) |
|
|
(17.0 |
) |
|
|
(14.7 |
) |
|
|
(64 |
) |
Provisions (net) and other gains (losses) |
|
|
(21 |
) |
|
|
n.m. |
|
|
|
n.m. |
|
|
|
3 |
|
Income before tax |
|
|
397 |
|
|
|
(9.3 |
) |
|
|
(7.1 |
) |
|
|
438 |
|
Income tax |
|
|
(95 |
) |
|
|
(22.1 |
) |
|
|
(19.8 |
) |
|
|
(122 |
) |
Net incomes |
|
|
302 |
|
|
|
(4.4 |
) |
|
|
(2.3 |
) |
|
|
315 |
|
Non-controlling interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net attributable profit |
|
|
302 |
|
|
|
(4.4 |
) |
|
|
(2.3 |
) |
|
|
315 |
|
|
|
|
|
|
Balance sheet |
|
30-09-14 |
|
|
D% |
|
|
D%(1) |
|
|
30-09-13 |
|
Cash and balances with central banks |
|
|
4,233 |
|
|
|
61.6 |
|
|
|
50.6 |
|
|
|
2,619 |
|
Financial assets |
|
|
8,907 |
|
|
|
20.4 |
|
|
|
12.2 |
|
|
|
7,395 |
|
Loans and receivables |
|
|
46,908 |
|
|
|
18.0 |
|
|
|
10.0 |
|
|
|
39,748 |
|
Loans and advances to customers |
|
|
45,184 |
|
|
|
21.2 |
|
|
|
12.9 |
|
|
|
37,294 |
|
Loans and advances to credit institutions and other |
|
|
1,724 |
|
|
|
(29.7 |
) |
|
|
(34.5 |
) |
|
|
2,453 |
|
Inter-area positions |
|
|
724 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible assets |
|
|
705 |
|
|
|
(2.3 |
) |
|
|
(8.9 |
) |
|
|
721 |
|
Other assets |
|
|
2,543 |
|
|
|
16.2 |
|
|
|
8.3 |
|
|
|
2,188 |
|
Total assets/liabilities and equity |
|
|
64,020 |
|
|
|
21.5 |
|
|
|
13.2 |
|
|
|
52,671 |
|
Deposits from central banks and credit institutions |
|
|
5,082 |
|
|
|
(1.4 |
) |
|
|
(8.1 |
) |
|
|
5,153 |
|
Deposits from customers |
|
|
48,821 |
|
|
|
27.9 |
|
|
|
19.2 |
|
|
|
38,170 |
|
Debt certificates |
|
|
790 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Subordinated liabilities |
|
|
712 |
|
|
|
4.4 |
|
|
|
(2.7 |
) |
|
|
681 |
|
Inter-area positions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,334 |
|
Financial liabilities held for trading |
|
|
367 |
|
|
|
58.8 |
|
|
|
48.0 |
|
|
|
231 |
|
Other liabilities |
|
|
5,780 |
|
|
|
23.7 |
|
|
|
15.3 |
|
|
|
4,671 |
|
Economic capital allocated |
|
|
2,469 |
|
|
|
1.6 |
|
|
|
(5.4 |
) |
|
|
2,431 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Relevant business indicators |
|
30-09-14 |
|
|
30-06-14 |
|
|
30-09-13 |
|
Loans under management (1) |
|
|
46,500 |
|
|
|
45,685 |
|
|
|
42,087 |
|
Customer deposits under management (1-2) |
|
|
47,691 |
|
|
|
46,060 |
|
|
|
40,383 |
|
Mutual funds |
|
|
|
|
|
|
|
|
|
|
|
|
Pension funds |
|
|
|
|
|
|
|
|
|
|
|
|
Efficiency ratio (%) |
|
|
69.9 |
|
|
|
68.8 |
|
|
|
68.1 |
|
NPA ratio (%) |
|
|
0.9 |
|
|
|
0.9 |
|
|
|
1.5 |
|
NPA coverage ratio (%) |
|
|
164 |
|
|
|
168 |
|
|
|
120 |
|
Risk premium (%) |
|
|
0.17 |
|
|
|
0.21 |
|
|
|
0.22 |
|
(1) |
Figures at constant exchange rate. |
close of September 2014 the rise was of 1.8% quarter-on-quarter and 10.5% year-on-year. By portfolios, the
biggest progress overall were in commercial, and in residential real estate, with an increase of 11.4% and 9.2% respectively on the figure for 30-Sep-2013. Consumer finance has also performed well, with an increase in the last 12 months of 12.5%.
This performance is taking place while the areas asset quality indicators continue to improve. The NPA ratio was 0.9% as of 30-Sep-2014, 3
basis points below the figure at the close of June 2014. The coverage ratio remains high, at 164% (168% as of 30-Jun-2014).
Customer deposits
under management have risen by 18.1% on the figure for the same date in 2013 and 3.5% since the end of June 2014. This increase was positively influenced by the BBVA Compass fund gathering campaigns run over this year. In addition, the Federal
Deposit Insurance Corporation (FDIC) recently released its annual deposit and market share report. The report revealed that BBVA Compass ranked as the 21st, moving up one spot from a year ago. The report also showed that BBVA Compass grew its
year-on-year deposits by 11.3 percent versus the national average of 6.3 percent. BBVA Compass experienced deposit market share growth statewide in Alabama, Arizona, Colorado and Florida.
Earnings
The income statement for the first nine
months of the year has been influenced basically by the following factors:
|
|
|
An increase in quarterly net interest income, which in the last quarter has risen by 0.4% to a cumulative figure through September of 1,054m (up 2.9% year-on-year). This is basically the result of strong
activity, in an environment of low interest rates and very flat curves that has put significant pressure on customer spreads. |
|
|
|
A positive performance also of fees and commissions, whose quarterly figure is higher than that registered between April and June 2014, with an accumulated total of 404m through September and a rise in the
last 12 months of 8.0%. Within this heading, primarily fees from asset management, credit cards, insurance and investment banking services have had an outstanding positive performance. |
|
|
|
The recent incorporation of Simple, higher costs stemming from compliance needs, and the launch of new products and advertising campaigns, have contributed to a rise in cumulative operating expenses through
September of 5.5%. |
|
|
|
Lastly, impairment losses on financial assets between January and September amounted to 53m, 14.7% lower than the figure for the same period in 2013. Thus, cost of risk improves, with a cumulative rate of
0.17% as of 30-Sep-2014. |
|
|
|
In summary, the United States has generated cumulative earnings of 302m, down 2.3% on the figure for the period January-September 2013.
|
Main highlights
For the first time in seven years, the U.S. franchise has issued senior debt for USD 1 billion in two tranches, one for USD 400 million at 3 years
and the other for USD 600 million at 5 years. This issue has been well received by the market, with a total demand at its peak of USD 2.5 billion. The issue aims to diversify the sources of finance.
In September, the results of the Dodd-Frank Act mid-year company-run stress test were published. The test was carried out in the second quarter, and
with the figures as of the close of March 2014, the BBVA franchise in the United States has shown sound levels of capital, far higher than those required, even in a hypothetically extremely adverse scenario.
BBVA Ventures, the Groups project that invests in disruptive startups in the financial industry, headquartered in Silicon Valley, has invested in
Taulia, a company that digitizes traditional processes for financing suppliers from a cloud-based platform, thus shortening the payment cycles to one day and allowing suppliers to access the liquidity they need.
In brand recognition, BBVA Compass has achieved the second-highest score in a report by WalletHub on the level of transparency in banking information
for customers, called the 2014 Checking Account Fee Transparency Report. This achievement is largely the result of the implementation of the Global Plan for Transparent, Clear and Responsible Communication (TCR Communication) in the
country.
With respect to new products and services, Compass e-Access Mobile, the new application launched for cash management for
commercial, small companies and SMEs, is part of the goal to offer the best possible digital experience for customers. The application simplifies some tasks such as management of accounts and transfers.
Lastly, the following events have taken place in the area of ESG:
|
|
|
One Week Challenge: Build a Better Community has been a success among BBVA employees in the United States, with participating volunteers putting in more than 4,000 hours. Over the week, over 1,000 employees
gave financial literacy classes or provided local community support for organizations. |
|
|
|
BBVA Compass and NBA Cares have successfully completed a year of financial literacy classes for 25,000 students in 400 schools. This training has been closely based on the EverFis program, whose classes include a
complete range of financial solutions for todays generation, which is much more digitally minded. |
|
|
|
For the third time, BBVA Compass was among the 23 financial institutions recognized by the Financial Services Roundtable at the Corporate Social Responsibility Leadership Awards ceremony. This major
recognition is a result of the banks firm and proven commitment to the local communities in which it operates.
|
Eurasia
Financial statements and relevant business indicators
(Million euros and percentage)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income statement (1) |
|
Jan.-Sep. 14 |
|
|
D% |
|
|
D%(2) |
|
|
Jan.-Sep. 13 |
|
Net interest income |
|
|
655 |
|
|
|
(6.5 |
) |
|
|
7.4 |
|
|
|
701 |
|
Net fees and commissions |
|
|
283 |
|
|
|
(6.0 |
) |
|
|
1.4 |
|
|
|
302 |
|
Net trading income |
|
|
143 |
|
|
|
(18.6 |
) |
|
|
(16.7 |
) |
|
|
176 |
|
Other income/expenses |
|
|
207 |
|
|
|
13.9 |
|
|
|
15.6 |
|
|
|
182 |
|
Gross income |
|
|
1,289 |
|
|
|
(5.2 |
) |
|
|
3.9 |
|
|
|
1,360 |
|
Operating expenses |
|
|
(541 |
) |
|
|
(2.1 |
) |
|
|
7.4 |
|
|
|
(553 |
) |
Personnel expenses |
|
|
(289 |
) |
|
|
(1.3 |
) |
|
|
7.8 |
|
|
|
(293 |
) |
General and administrative expenses |
|
|
(218 |
) |
|
|
(1.3 |
) |
|
|
8.3 |
|
|
|
(220 |
) |
Depreciation and amortization |
|
|
(34 |
) |
|
|
(13.3 |
) |
|
|
(1.2 |
) |
|
|
(39 |
) |
Operating income |
|
|
749 |
|
|
|
(7.3 |
) |
|
|
1.5 |
|
|
|
808 |
|
Impairment on financial assets (net) |
|
|
(157 |
) |
|
|
(33.9 |
) |
|
|
(28.6 |
) |
|
|
(238 |
) |
Provisions (net) and other gains (losses) |
|
|
(4 |
) |
|
|
(88.4 |
) |
|
|
(87.0 |
) |
|
|
(33 |
) |
Income before tax |
|
|
588 |
|
|
|
9.3 |
|
|
|
20.3 |
|
|
|
538 |
|
Income tax |
|
|
(116 |
) |
|
|
(3.7 |
) |
|
|
6.0 |
|
|
|
(121 |
) |
Net income |
|
|
471 |
|
|
|
13.1 |
|
|
|
24.5 |
|
|
|
417 |
|
Non-controlling interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net attributable profit |
|
|
471 |
|
|
|
13.1 |
|
|
|
24.5 |
|
|
|
417 |
|
|
|
|
|
|
Balance sheet (1) |
|
30-09-14 |
|
|
D% |
|
|
D%(2) |
|
|
30-09-13 |
|
Cash and balances with central banks |
|
|
2,430 |
|
|
|
(5.9 |
) |
|
|
(2.0 |
) |
|
|
2,582 |
|
Financial assets |
|
|
8,923 |
|
|
|
(20.2 |
) |
|
|
(19.0 |
) |
|
|
11,178 |
|
Loans and receivables |
|
|
31,616 |
|
|
|
2.1 |
|
|
|
4.0 |
|
|
|
30,965 |
|
Loans and advances to customers |
|
|
28,652 |
|
|
|
0.0 |
|
|
|
1.8 |
|
|
|
28,645 |
|
Loans and advances to credit institutions and other |
|
|
2,964 |
|
|
|
27.8 |
|
|
|
31.2 |
|
|
|
2,320 |
|
Inter-area positions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible assets |
|
|
258 |
|
|
|
(3.8 |
) |
|
|
(0.8 |
) |
|
|
268 |
|
Other assets |
|
|
957 |
|
|
|
(27.1 |
) |
|
|
(24.9 |
) |
|
|
1,312 |
|
Total assets/liabilities and equity |
|
|
44,184 |
|
|
|
(4.6 |
) |
|
|
(2.8 |
) |
|
|
46,306 |
|
Deposits from central banks and credit institutions |
|
|
9,395 |
|
|
|
(24.5 |
) |
|
|
(23.3 |
) |
|
|
12,438 |
|
Deposits from customers |
|
|
19,476 |
|
|
|
6.1 |
|
|
|
8.8 |
|
|
|
18,353 |
|
Debt certificates |
|
|
1,292 |
|
|
|
8.0 |
|
|
|
12.9 |
|
|
|
1,196 |
|
Subordinated liabilities |
|
|
564 |
|
|
|
(40.0 |
) |
|
|
(39.9 |
) |
|
|
939 |
|
Inter-area positions |
|
|
5,922 |
|
|
|
39.8 |
|
|
|
39.6 |
|
|
|
4,236 |
|
Financial liabilities held for trading |
|
|
380 |
|
|
|
18.6 |
|
|
|
20.3 |
|
|
|
321 |
|
Other liabilities |
|
|
4,132 |
|
|
|
(3.0 |
) |
|
|
0.2 |
|
|
|
4,261 |
|
Economic capital allocated |
|
|
3,023 |
|
|
|
(33.7 |
) |
|
|
(33.2 |
) |
|
|
4,563 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Relevant business indicators |
|
30-09-14 |
|
|
30-06-14 |
|
|
30-09-13 |
|
Loans under management (2) |
|
|
28,924 |
|
|
|
27,888 |
|
|
|
28,480 |
|
Customer deposits under management (2-3) |
|
|
18,035 |
|
|
|
16,587 |
|
|
|
16,825 |
|
Mutual funds |
|
|
1,531 |
|
|
|
1,513 |
|
|
|
1,362 |
|
Pension funds |
|
|
794 |
|
|
|
751 |
|
|
|
636 |
|
Efficiency ratio (%) |
|
|
41.9 |
|
|
|
38.9 |
|
|
|
40.6 |
|
NPA ratio (%) |
|
|
3.4 |
|
|
|
3.5 |
|
|
|
2.9 |
|
NPA coverage ratio (%) |
|
|
91 |
|
|
|
89 |
|
|
|
91 |
|
Risk premium (%) |
|
|
0.71 |
|
|
|
0.62 |
|
|
|
1.06 |
|
(1) |
Pro forma financial statements with Garanti Group consolidated in proportion to the percentage of the Groups stake. |
(2) |
Figures at constant exchange rates. |
The most relevant
Two main trends can be distinguished within activity in this business area. On the one hand, there is the positive growth in loans in Garanti and
customer deposits under management in the wholesale banking segments in the rest of Europe and Asia; on the other, the deleveraging process in the loan portfolios in the rest of Europe and Asia, although at a more moderate pace than in previous
quarters.
The most notable aspect with respect to earnings is the positive performance of recurring revenue, moderation in the rate of
year-on-year growth in expenses and the containment of loan-loss provisions.
Macro and industry trends
Economic activity in the euro area has recovered slightly versus the second half of 2013, although this recovery is weaker than expected.
Against this backdrop, on September 4 the ECB decided to complement and strengthen the package of monetary easing measures it had adopted in June (when
it announced the long-term financing operations known as TLTROs), by cutting its benchmark refinancing rate by 10 basis points to 0.05% and the deposit facility rate to 0.2%. In addition, with the aim of making the granting of loans to the
non-financial private sector easier, the ECB agreed to start in October a program of purchasing covered bonds and asset-backed securities (ABS) whose underlying assets would be loans for the non-financial private sector. On September 18 the
amounts requested in the first auction were published. This is the first of eight auctions planned through June 2016, to help in the transmission of monetary policy and promote lending to the private sector.
In Turkey the result of the presidential elections was in line with expectations, leading to a reduction in political uncertainty and increasing
financial stability. At the global level there have been mixed signals with respect to the recovery in the United States, renewing doubts about the rate at which the Fed would increase interest rates. This has led to the Turkish lira and most other
emerging currencies losing some of the gains they made against the dollar in the second quarter. The weaker Turkish lira, together with persistent inflationary pressure, is having an impact on the monetary-policy stance of the Turkish Central Bank
(CBRT). After cutting the reference rate by 175 basis points between May and July, it has now become more restrictive.
In the Turkish financial sector the rate of growth of loans continues to moderate, though it is still at
double-digit year-on-year rates, according to the latest figures from July 2014. The NPA ratio in the sector is 2.8% according to the latest available data published on the 3rd of October. Fund
gathering in the private sector has also slowed, although year-on-year growth is still in double digits. Lastly, it is important to highlight that the Turkish financial sector has high levels of solvency and profitability.
In China activity continues to show signs of a slowdown, although the estimate for growth in 2014 as a whole remains at 7.2%. The Government is
expected to implement measures to support finance, particularly for small and medium-sized enterprises and investment in infrastructure. It will also take action to reduce the vulnerability of the unregulated financial sector (shadow banking).
To better understand the changes in the business figures, the percentages given below refer to constant exchange rates, unless otherwise indicated.
Activity
The rate of growth of loans under
management has accelerated with respect to the previous quarter (up 3.7% over the last three months and up 1.6% in year-on-year terms), although behavior by segment was not uniform, as mentioned at the start of this chapter.
|
|
|
The deleveraging process of customers in the rest of Europe and Asia continues, mostly in the wholesale banking segment, although at a slower pace than in previous quarters. In the third quarter of the year there was an
increase in the balance of these portfolios (up 1.8% since the end of June), but a year-on-year decline of 7.9%. |
|
|
|
Garanti continues to show strength, although growth is slower than in 2013. Turkish lira loans have increased at 15.6% year-on-year (6.3% quarter-on-quarter and 12.0% YTD through September 2014). They have been strongly
supported by the commercial and consumer finance portfolios, while foreign-currency loans have risen by 2.7% in the last 12 months (down 1.2% over the quarter and up 1.0% since the start of 2014). As a result, Garantis lending in BBVAs
accounts rose overall by 16.9% in the year and 6.2% over the quarter. |
The asset quality indicators have been very positive since
June. The NPA ratio has fallen to 3.4% from 3.5% at the end of the first half of the year, and the coverage ratio has risen by 230 basis points in the same period to 91% as of 30-Sep-2014.
Customer deposits under management in the area have increased both over the quarter (up 8.7%) and in the last 12 months (up 7.2%) following a very
specific fall between April
and June. In the case of Garanti, gathering of foreign-currency deposits have performed better (up 7.8%
year-on-year, 3.5% quarter-on-quarter, and 12.5% YTD), than local-currency deposits (down 9.4% year-on-year, 3.4% over the quarter and 4.6% YTD). This is due to Garantis policy of focusing on lower-cost foreign-currency deposits rather than
more expensive Turkish lira deposits as a way of maintaining customer spreads. At the same time, funding in wholesale markets has been boosted, helping to improve the diversification of the banks funding.
Earnings
Cumulative earnings through September in
Eurasia stand at 471m, a year-on-year rise of 24.5%, based on:
|
|
|
Net interest income increased 7.4% to 655m, the highest figure for the last two years. Garantis active management to reprice the loan portfolio, the relaxation in the cost of finance in Turkish lira
in the third quarter, and the use of alternative sources of lower-cost finance, have all led to continuing improvement quarter by quarter in this heading. |
|
|
|
Good performance in income from fees and commissions, which have risen by 1.4% year-on-year, despite the strong rate of growth in previous years. In any event, Garanti maintains a diversified revenue base from
fees, with a growing contribution from the payment channels and the insurance and pension divisions. In addition, it stands out among its direct competitors in fee generation, and is the bank that generates most revenue from this item relative to
its operating expenses. |
|
|
|
NTI fell in the third quarter, and the cumulative total for the first nine months of the year stood at 143m, down 16.7% on the same period the previous year, mainly due to the comparison with an
extraordinarily high first half of 2013. |
|
|
|
Operating expenses continue to slow their year-on-year growth, from 9.1% in the first half of 2014 to a cumulative rate of 7.4% through September. As was mentioned in the previous quarter, this is due to the
measures designed to |
keep costs in check in Europe, and the stability of structures and networks in Turkey,
following the expansion plan carried out in 2013. This trend in operating expenses is very positive given the upturn in inflation in Turkey to around 9%, and the negative impact in the previous quarter derived from regulatory issues. However,
Garantis commercial network is still the most efficient among its peers, with the best ratios in terms of loans, deposits and recurring revenue per branch.
|
|
|
Lastly, impairment losses on financial assets rose in the quarter due to higher growth in lending and the exceptional default of one of Garantis wholesale banking customers. Even so, the cumulative figure
through September stood at 157m, down 28.6% on the same figure the previous year. |
Main highlights
Under the heading of prizes and awards Garanti Banks Investor Relations team has received a number of awards, including the ones for its annual
report (Bronze Stevie Award, Gold at the Vision Awards Annual Report Competition and Silver at the ARC Awards) and its website (Gold Stevie Winner for Best Investor Relations Site).
BBVA has opened a representative branch in Jakarta (Indonesia), through which it will help Spanish companies to
enter what is a market with exceptional potential. The new branch, which has been in operation since the end of
August, also aims to be a strategic platform for prospecting business opportunities in the country. BBVA is the only Spanish financial entity with a presence in Indonesia, where it has extensive experience in customer guidance. It has also been for
a number of years a leader in export credit finance.
Garanti. Significant data 30-09-14 (1)
|
|
|
|
|
|
|
30-09-14 |
|
Financial statements (million euros) |
|
|
|
|
Attributable profit |
|
|
826 |
|
Total assets |
|
|
74,670 |
|
Loans and advances to customers |
|
|
45,434 |
|
Deposits from customers |
|
|
37,230 |
|
Relevant ratios (%) |
|
|
|
|
Efficiency ratio (2) |
|
|
49.0 |
|
NPA ratio |
|
|
2.2 |
|
Other information |
|
|
|
|
Number of employees |
|
|
19,201 |
|
Number of branches |
|
|
998 |
|
Number of ATMs |
|
|
4,025 |
|
(1) |
BRSA data for the Garanti Bank. |
(2) |
Normalized figure excluding the effect of non-recurrent items. |
Mexico
Financial statements and relevant business indicators
(Million euros and percentage)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income statement |
|
Jan.-Sep. 14 |
|
|
D% |
|
|
D% (1) |
|
|
Jan.-Sep. 13 |
|
Net interest income |
|
|
3,587 |
|
|
|
7.3 |
|
|
|
14.2 |
|
|
|
3,344 |
|
Net fees and commissions |
|
|
862 |
|
|
|
(2.3 |
) |
|
|
4.0 |
|
|
|
882 |
|
Net trading income |
|
|
164 |
|
|
|
27.9 |
|
|
|
36.1 |
|
|
|
128 |
|
Other income/expenses |
|
|
168 |
|
|
|
(30.6 |
) |
|
|
(26.1 |
) |
|
|
242 |
|
Gross income |
|
|
4,781 |
|
|
|
4.0 |
|
|
|
10.7 |
|
|
|
4,596 |
|
Operating expenses |
|
|
(1,772 |
) |
|
|
1.3 |
|
|
|
7.8 |
|
|
|
(1,748 |
) |
Personnel expenses |
|
|
(764 |
) |
|
|
1.7 |
|
|
|
8.3 |
|
|
|
(751 |
) |
General and administrative expenses |
|
|
(873 |
) |
|
|
(0.4 |
) |
|
|
5.9 |
|
|
|
(876 |
) |
Depreciation and amortization |
|
|
(135 |
) |
|
|
11.8 |
|
|
|
19.0 |
|
|
|
(121 |
) |
Operating income |
|
|
3,009 |
|
|
|
5.7 |
|
|
|
12.4 |
|
|
|
2,848 |
|
Impairment on financial assets (net) |
|
|
(1,147 |
) |
|
|
3.8 |
|
|
|
10.4 |
|
|
|
(1,105 |
) |
Provisions (net) and other gains (losses) |
|
|
(85 |
) |
|
|
84.1 |
|
|
|
95.9 |
|
|
|
(46 |
) |
Income before tax |
|
|
1,777 |
|
|
|
4.8 |
|
|
|
11.5 |
|
|
|
1,696 |
|
Income tax |
|
|
(428 |
) |
|
|
4.8 |
|
|
|
11.5 |
|
|
|
(408 |
) |
Net income |
|
|
1,349 |
|
|
|
4.8 |
|
|
|
11.5 |
|
|
|
1,288 |
|
Non-controlling interests |
|
|
|
|
|
|
n.m. |
|
|
|
n.m. |
|
|
|
(1 |
) |
Net attributable profit |
|
|
1,349 |
|
|
|
4.8 |
|
|
|
11.5 |
|
|
|
1,287 |
|
|
|
|
|
|
Balance sheet |
|
30-09-14 |
|
|
D% |
|
|
D%(1) |
|
|
30-09-13 |
|
Cash and balances with central banks |
|
|
4,889 |
|
|
|
(2.1 |
) |
|
|
(6.8 |
) |
|
|
4,994 |
|
Financial assets |
|
|
37,888 |
|
|
|
34.1 |
|
|
|
27.7 |
|
|
|
28,262 |
|
Loans and receivables |
|
|
46,078 |
|
|
|
9.1 |
|
|
|
3.9 |
|
|
|
42,234 |
|
Loans and advances to customers |
|
|
44,869 |
|
|
|
18.8 |
|
|
|
13.1 |
|
|
|
37,772 |
|
Loans and advances to credit institutions and other |
|
|
1,209 |
|
|
|
(72.9 |
) |
|
|
(74.2 |
) |
|
|
4,462 |
|
Tangible assets |
|
|
1,566 |
|
|
|
32.4 |
|
|
|
26.1 |
|
|
|
1,183 |
|
Other assets |
|
|
3,392 |
|
|
|
9.9 |
|
|
|
4.7 |
|
|
|
3,086 |
|
Total assets/liabilities and equity |
|
|
93,814 |
|
|
|
17.6 |
|
|
|
12.0 |
|
|
|
79,759 |
|
Deposits from central banks and credit institutions |
|
|
11,412 |
|
|
|
34.7 |
|
|
|
28.3 |
|
|
|
8,474 |
|
Deposits from customers |
|
|
48,334 |
|
|
|
20.2 |
|
|
|
14.5 |
|
|
|
40,223 |
|
Debt certificates |
|
|
4,587 |
|
|
|
17.1 |
|
|
|
11.5 |
|
|
|
3,918 |
|
Subordinated liabilities |
|
|
3,713 |
|
|
|
(3.9 |
) |
|
|
(8.5 |
) |
|
|
3,863 |
|
Financial liabilities held for trading |
|
|
6,825 |
|
|
|
2.2 |
|
|
|
(2.7 |
) |
|
|
6,679 |
|
Other liabilities |
|
|
14,037 |
|
|
|
14.2 |
|
|
|
8.8 |
|
|
|
12,293 |
|
Economic capital allocated |
|
|
4,906 |
|
|
|
13.9 |
|
|
|
8.4 |
|
|
|
4,309 |
|
|
|
|
|
Relevant business indicators |
|
30-09-14 |
|
|
30-06-14 |
|
|
30-09-13 |
|
Loans under management (1) |
|
|
43,498 |
|
|
|
|
|
|
|
42,005 |
|
|
|
39,079 |
|
Customer deposits under management (1-2) |
|
|
46,226 |
|
|
|
|
|
|
|
45,754 |
|
|
|
42,523 |
|
Mutual funds |
|
|
20,027 |
|
|
|
|
|
|
|
18,362 |
|
|
|
16,765 |
|
Pension funds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Efficiency ratio (%) |
|
|
37.1 |
|
|
|
|
|
|
|
36.8 |
|
|
|
38.0 |
|
NPA ratio (%) |
|
|
3.2 |
|
|
|
|
|
|
|
3.4 |
|
|
|
4.1 |
|
NPA coverage ratio (%) |
|
|
112 |
|
|
|
|
|
|
|
113 |
|
|
|
105 |
|
Risk premium (%) |
|
|
3.56 |
|
|
|
|
|
|
|
3.61 |
|
|
|
3.64 |
|
(1) |
Figures at constant exchange rate. |
(2) |
Including all the repos.
|
The most relevant
In the third quarter, business activity continued the positive trend of previous quarters both in terms of lending and customer funds.
Earnings in the area continue to be boosted by the rise in net interest income, due to increased activity, with expenses in line with forecast levels
and a moderate increase in loan-loss provisions. As a result, the net attributable profit is 1,349m, equivalent to an increase of 11.5% on the same period in 2013.
Macro and industry trends
From the second quarter of
2014, economic activity in Mexico has shown signs of acceleration thanks to strong exports, consumption and private investment. The most recent economic indicators point for this recovery to continue during the rest of the year. Moreover, the
monetary policy rate is at an all-time low and expenditure on infrastructure appears to grow more decisively. All these provide additional support for growth at the end of the year. Inflation is expected to be below 4.0% at the end of 2014.
In the countrys financial system, lending to the private sector has grown year-on-year by 8.0%, according to data from the National Banking and
Securities Commission (CNBV) at the close of August 2014. Bank deposits (demand and time) have risen over the same period by 10.2%, boosted mainly by demand deposits, although time deposits have maintained the trend begun in previous quarters.
Levels of liquidity and solvency are good, with a loan to deposit ratio of 99.3% at the close of August 2014 and a capital ratio of 15.9% at the close of July 2014.
Lastly, the exchange rate of the Mexican peso against the euro has gained 4.2% (end of period rates) in the last three months. This has eased the
negative impact of the currency on the year-on-year changes in headings on the income statement (the cumulative depreciation of the average peso exchange rate against the euro has fallen from 7.1% in the first half of 2014 to 6.0% in the first nine
months of the year). The currency has a positive effect on the balance sheet and activity, both over the year and in the quarter. All the comments below on rates of change will be expressed at constant exchange rates, unless expressly stated
otherwise.
Activity
Loans under management in the area have performed well, with a rise of 3.6% in the quarter, and a balance of 43,498m as of September 2014,
equivalent to a year-on-year growth of 11.3%, higher than the industry as a whole. Growth has been boosted chiefly by corporate lending and the positive trend in consumer finance.
The wholesale portfolio has risen in the quarter by 5.2% to 19,957m (up 16.9% year-on-year). Lending to the commercial segment has been very
strong, growing at double-digit rates year-on-year (23.4% and 18.3% respectively). Also notable is the strong upturn in public sector lending, which has increased by 11.3% over the last 12 months, thanks to the boost from public spending in the
country.
The retail portfolio has risen by 2.2% over the quarter and 7.0% over the last 12 months. Higher customer bundling has increased the
volume of consumer loans (payroll and personal), while maintaining the quality of the portfolio. Credit cards have remained stable on the close of September 2013, despite the end of the agreement with Walmart at the close of last year. Finance to
small businesses has also continued its positive trend (up 27.8% year-on-year) and new production in the residential mortgage portfolio has been strong, with growth rates of 16.0% over the last 12 months.
With respect to risk management, the main indicators were stable versus the previous quarter, achieving superior figures compared to its main
competitors. The NPA ratio at 30-Sep-2014 stood at 3.2% and the coverage ratio 112%.
The balance of on-balance-sheet customer funds, which include
current and savings accounts, time deposits and repos, closed September at 46,226m, a year-on-year increase of 8.7%. Fund gathering maintained its positive trend (+1.0% over the quarter). Demand deposits have continued to perform well (up
11.5% year-on-year) and time deposits are still improving their year-on-year growth (up 8.4%). The customer deposit mix is still very profitable, with a high relative proportion of lower-cost funds, which at the close of the third quarter of 2014
accounted for 79.9% of deposits. Lastly, mutual funds recorded a significant upturn in the quarter and have posted a year-on-year growth of 13.8%.
Earnings
In the first nine months of the year, BBVA in
Mexico has maintained a sound income statement, strongly supported by improved recurring revenue, expenses in line with expectations and good risk management.
Within recurring revenue, net interest income amounts to 3,587m, up 14.2% on the same period the previous year. This growth is due to increased
activity and active price management, which has allowed BBVA in Mexico to maintain a level of profitability (measured as net interest income over ATA) of 5.7%. This compares very favorably with the figure of 5.1% in the industry as a whole (under
local criteria, and according to the latest information available from CNBV at the close of August 2014). Income from fees and commissions totaled 862m in the first nine months of 2014, an increase of 4.0% on the same period last year.
NTI has also made a positive contribution of 164m, with a rise of 36.1% year-on-year leveraged on the
positive performance of the Global Markets and the Asset and Liabilities Management units. The other income/expenses heading continues to decline year-on-year (down 26.1%), largely due to the lower contribution from income from insurance activities.
In the first nine months of 2014, gross income has maintained double-digit growth rates, with a rise of 10.7% year-on-year to 4,781m.
Operating expenses have increased year-on-year by 7.8%, due to the on-going investment plan being implemented in Mexico since 2013. A total of 501 branch
offices have been remodeled under the plan, and a new customer service model implemented in 100% of the branch network. Overall, operating income has risen by 12.4% and the efficiency ratio remains stable at 37.1%, one of the best in the
Mexican banking system.
Impairment losses on financial assets have increased year-on-year by 10.4%, closely in line with lending activity. As a result,
the cumulative cost of risk remains practically stable at 3.56%, compared with 3.64% in the same period in 2013 and 3.61% in the first half of 2014.
As a
result, BBVA in Mexico has generated 1,349m year-to-date in net attributable profit through September, 11.5% more than in the same period last year.
Main highlights
In prizes and awards, the BBVA
Bancomer investment banking division has been recognized by Euromoney magazine as the Best Investment Bank in Mexico 2014 for its outstanding participation in debt and capital issuances for corporate clients.
In new products and services, BBVA Bancomer has set up a new Ultra High Net Worth (UHN) business unit. The aim is to provide a tailored service through
a specialized network to deal with the financial needs of the top tier customer segment.
Lastly, in ESG the BBVA Bancomer Foundation has launched
Por Una Generación Adelante (For a Forward Generation), a campaign for employees and customers which has the aim to increase by 3,000 the number of scholarships for young people with an outstanding academic performance and extend
the coverage of the program from 20 to 26 states in the country by 2015. In addition, implementation has begun of the programs Por Los Que Se Quedan (For Those Left Behind) and Becas Adelante (Adelante Scholarships). In the
2014/15 academic year they will benefit 10,000 new scholarship recipients at high-school level. In terms of the social impact of these programs, 60% of those receiving scholarships are female and 40% male. Of the total beneficiaries, 71% have a
family member who has migrated and the scholarship accounts for an average of 25% of the households income. The support received helps reduce child labor and the school dropout rate, while helping 97% of the students to continue with their
high-school studies. Lastly, it should be noted that the BBVA Bancomer Foundation has activated its support program for the population affected by disasters. Provisions have been distributed to families affected by hurricane Odile and an account for
donations has been opened. The bank is pledged to match the amount deposited by customers in the account.
South America
The most relevant
Business activity in South America continues to be very favorable, both in lending and customer funds, having kept high (double-digit) year-on-year
growth rates.
This buoyant activity is reflected in the areas earnings figures, where recurring revenue has increased notably. This has made
it possible to consolidate the expansion plans implemented in the region and absorb a greater volume of loan-loss provisions, in line with increased activity.
Macro and industry trends
The first half of the
financial year in South America was somewhat more moderate than expected (except for Colombia), due basically to the lower expectations of households and companies, which impacted the domestic demand indicators. However, more buoyant activity
in recent months suggests that growth in the region will improve in the last two quarters of 2014, driven by improved global growth and foreign demand, as well as the recovery of investment, especially in the public sector (mainly in Chile, Peru and
Colombia).
South Americas financial system remains sound, with good levels of capitalization, high profitability and NPA ratios in check.
Several countries, notably Chile, Colombia and Peru, are making continued progress toward legal frameworks that encourage transparency, legal certainty, the promotion of competition and the adoption of international standards. In business activity
there has been a slight moderation in the growth of deposits and that of lending, which nevertheless continues to grow at high rates (double-digit) in most countries.
Lastly, the areas exchange rates have appreciated in general terms against the euro in the third quarter (except for the Venezuelan bolivar and
the Chilean peso). The result has mitigated the negative impact of these currencies on the year-on-year changes in the headings of the income statement, balance sheet and activity.
Financial statements and relevant business indicators
(Million euros and percentage)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income statement |
|
Jan.-Sep. 14 |
|
|
D% |
|
|
D%(1) |
|
|
Jan.-Sep. 13 |
|
Net interest income |
|
|
3,264 |
|
|
|
(1.4 |
) |
|
|
37.0 |
|
|
|
3,309 |
|
Net fees and commissions |
|
|
630 |
|
|
|
(8.7 |
) |
|
|
24.5 |
|
|
|
690 |
|
Net trading income |
|
|
379 |
|
|
|
(25.0 |
) |
|
|
7.3 |
|
|
|
505 |
|
Other income/expenses |
|
|
(556 |
) |
|
|
9.3 |
|
|
|
120.6 |
|
|
|
(509 |
) |
Gross income |
|
|
3,716 |
|
|
|
(7.0 |
) |
|
|
24.3 |
|
|
|
3,995 |
|
Operating expenses |
|
|
(1,631 |
) |
|
|
(6.2 |
) |
|
|
25.1 |
|
|
|
(1,738 |
) |
Personnel expenses |
|
|
(790 |
) |
|
|
(9.1 |
) |
|
|
19.8 |
|
|
|
(870 |
) |
General and administrative expenses |
|
|
(724 |
) |
|
|
(2.9 |
) |
|
|
30.3 |
|
|
|
(746 |
) |
Depreciation and amortization |
|
|
(116 |
) |
|
|
(4.6 |
) |
|
|
32.3 |
|
|
|
(122 |
) |
Operating income |
|
|
2,086 |
|
|
|
(7.6 |
) |
|
|
23.7 |
|
|
|
2,257 |
|
Impairment on financial assets (net) |
|
|
(505 |
) |
|
|
4.4 |
|
|
|
31.0 |
|
|
|
(484 |
) |
Provisions (net) and other gains (losses) |
|
|
(105 |
) |
|
|
18.3 |
|
|
|
170.2 |
|
|
|
(89 |
) |
Income before tax |
|
|
1,476 |
|
|
|
(12.4 |
) |
|
|
17.0 |
|
|
|
1,685 |
|
Income tax |
|
|
(377 |
) |
|
|
(5.5 |
) |
|
|
23.9 |
|
|
|
(398 |
) |
Net income |
|
|
1,099 |
|
|
|
(14.6 |
) |
|
|
14.8 |
|
|
|
1,287 |
|
Non-controlling interests |
|
|
(344 |
) |
|
|
(17.9 |
) |
|
|
15.5 |
|
|
|
(419 |
) |
Net attributable profit |
|
|
755 |
|
|
|
(12.9 |
) |
|
|
14.5 |
|
|
|
868 |
|
|
|
|
|
|
Balance sheet |
|
30-09-14 |
|
|
D% |
|
|
D%(1) |
|
|
30-09-13 |
|
Cash and balances with central banks |
|
|
10,718 |
|
|
|
(2.8 |
) |
|
|
22.8 |
|
|
|
11,024 |
|
Financial assets |
|
|
9,905 |
|
|
|
(1.6 |
) |
|
|
15.1 |
|
|
|
10,069 |
|
Loans and receivables |
|
|
55,068 |
|
|
|
10.6 |
|
|
|
28.0 |
|
|
|
49,801 |
|
Loans and advances to customers |
|
|
49,221 |
|
|
|
9.6 |
|
|
|
25.1 |
|
|
|
44,923 |
|
Loans and advances to credit institutions and other |
|
|
5,847 |
|
|
|
19.9 |
|
|
|
59.0 |
|
|
|
4,878 |
|
Tangible assets |
|
|
918 |
|
|
|
5.8 |
|
|
|
29.8 |
|
|
|
868 |
|
Other assets |
|
|
2,012 |
|
|
|
9.9 |
|
|
|
24.1 |
|
|
|
1,831 |
|
Total assets/liabilities and equity |
|
|
78,620 |
|
|
|
6.8 |
|
|
|
25.4 |
|
|
|
73,592 |
|
Deposits from central banks and credit institutions |
|
|
5,178 |
|
|
|
9.2 |
|
|
|
15.2 |
|
|
|
4,744 |
|
Deposits from customers |
|
|
52,096 |
|
|
|
2.2 |
|
|
|
22.9 |
|
|
|
50,972 |
|
Debt certificates |
|
|
4,657 |
|
|
|
28.2 |
|
|
|
33.2 |
|
|
|
3,632 |
|
Subordinated liabilities |
|
|
1,541 |
|
|
|
20.7 |
|
|
|
25.6 |
|
|
|
1,277 |
|
Financial liabilities held for trading |
|
|
2,405 |
|
|
|
149.4 |
|
|
|
169.7 |
|
|
|
964 |
|
Other liabilities |
|
|
9,549 |
|
|
|
7.1 |
|
|
|
27.0 |
|
|
|
8,920 |
|
Economic capital allocated |
|
|
3,194 |
|
|
|
3.6 |
|
|
|
20.3 |
|
|
|
3,084 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Relevant business indicators |
|
30-09-14 |
|
|
30-06-14 |
|
|
30-09-13 |
|
Loans under management (1) |
|
|
49,893 |
|
|
|
47,190 |
|
|
|
40,093 |
|
Customer deposits under management (1-2) |
|
|
57,376 |
|
|
|
54,958 |
|
|
|
46,248 |
|
Mutual funds |
|
|
3,735 |
|
|
|
3,171 |
|
|
|
2,947 |
|
Pension funds |
|
|
4,285 |
|
|
|
3,828 |
|
|
|
3,352 |
|
Efficiency ratio (%) |
|
|
43.9 |
|
|
|
44.1 |
|
|
|
43.5 |
|
NPA ratio (%) |
|
|
2.1 |
|
|
|
2.1 |
|
|
|
2.2 |
|
NPA coverage ratio (%) |
|
|
137 |
|
|
|
138 |
|
|
|
137 |
|
Risk premium (%) |
|
|
1.44 |
|
|
|
1.35 |
|
|
|
1.41 |
|
(1) |
Figures at constant exchange rates. |
(2) |
Excluding repos and including specific marketable debt securities. |
Activity
At the close of September activity continued strong in all the countries in which BBVA operates. As of 30-Sep-2014, loans under management stood at
49,893m, a year-on-year increase of 24.4%, thanks particularly to the positive performance of credit cards (up 49.4%), corporate and small business activity (up 26.2%) and consumer finance (up 19.4%). This significant growth, above the figure
for the industry as a whole, has resulted in a market share gain of 47 basis points over the last 12 months, according to August 2014 data, the latest information available for all market share references shown below.
The strict risk screening policies applied by the Group in the region have continued in parallel with the mentioned business activity improvement. As a
result, NPA and coverage ratios have been stable, at 2.1% and 137%, respectively, as of 30-Sep-2014.
Customer deposits under management have grown
in line with lending (up 24.1% year-on-year), with transactional customer funds driving this improvement (up 25.5%). Meanwhile, time deposits have also performed well (up 13.6%), gaining 48 basis points in market share during the last year.
By countries, the highlights of banking activity are as follows:
|
|
Argentina: Positive trend in loans, which are up 25.7% on the figure at the close of September 2013, driven mainly by credit cards (up 55.9%), which posted a significant year-on-year market share gain (up 94
basis points). This performance was strongly influenced by the commercial campaigns conducted during the year, with the launch of new cards such as Tarjeta Xeneize Visa Lanpass and Tarjeta River Visa Lanpass. Total customer funds (both on and
off-balance-sheet) increased by 32.1% over the same period. This heading performed positively across all product lines, particularly mutual funds (up 159.3%), which gained 36 basis points in market share over the last 12 months. |
|
|
In Chile, lending activity continued to grow above the figure for the banking system as a whole (up 11.1% year-on-year), gaining 21 basis points in market share in the last 12 months. The mortgage and
commercial portfolios performed particularly well, with a year-on-year gain of 7 and 40 basis points in market share, respectively. On-balance-sheet funds outperformed lending (up 14.6%). |
|
|
Colombia registered market share gains in all asset and liability products, thanks to strong customer activity. Lending increased year-on-year by 19.2%, with a market share gain of 66 basis points, while
on-balance-sheet funds grew by 8.9%, with a significant market share gain in time deposits (up 222 basis points). |
|
|
In Peru there was sustained growth in lending and deposits, with year-on-year market share gains of 8 and 147 basis points, respectively. The improvement in lending was driven by finance to the commercial
segment (up 23.1% and 42 basis points in market share in year-on-year terms), while deposits were boosted by demand deposits (up 11.2% and 50 basis points in market share over the same period).
|
|
|
Venezuela has posted a high rate of growth in both lending and deposits (up 82.5% and 66.4% year-on-year, respectively). Although the trend in all lines of business is positive, the commercial portfolio performed
particularly well, with a market share gain of 111 basis points over the last 12 months. |
Earnings
Earnings for the year were adversely influenced by the steady depreciation of the Argentinean peso over the year and the application in Venezuela of the
exchange rate resulting from the new SICAD I foreign-exchange system, which complements the official market.
The most significant aspects of earnings
through September 2014 are as follows:
|
|
Excellent performance of gross income, which is up 24.3% year-on-year thanks to the high capacity to generate recurring revenue, leveraged on strong activity and good management of customer spreads.
|
|
|
Growth in expenses is the result of the technological expansion and transformation plans being implemented in the region, combined with the high inflation in some countries. Over the last 18 months, BBVA has
invested USD 800m in South America as part of the USD 2.5 billion investment plan announced by the Bank last year. |
|
|
Through September, impairment losses on financial assets increased year-on-year by 31.0%, bringing the cost of risk for the first nine months of the year to 1.44%. |
|
|
Overall, South America generated a net attributable profit through September 2014 of 755m, a year-on-year rise of 14.5%. |
This can be broken down by country as follows:
|
|
Argentina posted a net attributable profit of 148m (up 54.2% year-on-year), driven mainly by net interest income and the repricing of dollar positions as a result of the devaluation of the peso. This has
offset the negative effect of increased expenses (due to the expansion plans and the high level of inflation). |
|
|
Chile has posted a significant increase in net interest income (up 26.6% year-on-year) thanks to strong business activity and improved spreads. Expenses and loan-loss provisions were also notably moderate.
Cumulative net attributable profit through September totals 127m, up 75.3% year-on-year. |
|
|
Colombia recorded a net attributable profit of 199m (down 2.1% year-on-year). The most positive aspect of the income statement is the rise in net interest income as a result of the significant increase in
business activity in 2014. This upturn was driven by the expansion plans carried out by the bank, which also explain the increase in expenses over the year. |
|
|
In Peru, the increase in net interest income and income from fees and commissions resulted in a net attributable profit of 121m (up 6.4% year-on-year) in the first nine months of 2014. The
expansion plans underway also had an effect on this performance. |
|
|
In Venezuela recurring revenue remains strong, in a complex macroeconomic environment and with a very high level of inflation that exerts upward pressure on operating expenses. Cumulative earnings through
September stand at 123m (down 5.9% year-on-year). |
Main highlights
In Colombia, Fitch Ratings has upgraded BBVA Colombias foreign-currency rating from BBB to BBB+ as a result of the quality of its assets, its
sustained profitability, good levels of reserves and its strict risk policies.
Various ESG initiatives have been implemented throughout the third
quarter, most of them related to financial literacy, which is a core element of the BBVA Groups Responsible Business Plan. The most significant initiatives are:
|
|
In Argentina, the Financial Literacy Program for SMEs was launched at the Business School of the Department of Economic Sciences of Universidad Católica Argentina. |
|
|
BBVA Chile has launched the fourth edition of the Young Social Entrepreneurs program, which was attended by 50 participants and 25 BBVA mentors. The young entrepreneurs take part in 9-month training workshops
organized by Fundación Vertical, where they acquire the technical expertise and social skills needed to devise, plan and execute entrepreneurship and innovation projects. |
|
|
A program aimed at SMEs has also been implemented in Colombia through an alliance between BBVA and Uniandes. It seeks to provide training for the countrys SMEs in business administration and new trends for
developing sustainable businesses. The partnership between the two organizations will offer a 54-hour training program to 150 entrepreneurs. BBVA has also established an alliance with the Ministry of Defense of Colombia and launched the Tarjeta
Héroes card in the country. This alliance comprises a welfare project for members of the armed forces, including training in the use of financial products, support for the education of their children, and a range of products and services at
no cost for this group. |
|
|
In Peru, the Bank has organized the second training conference and the second round of support for teachers at schools in the nine regions of the country taking part in the Leer es Estar Adelante
(Reading Means Keeping Ahead) program. Momentum Project Peru has completed its first edition with an event at which the four social ventures selected had a chance to set out their growth plans to the audience, after months of training and work.
|
|
|
In Venezuela Fundación BBVA Provincial has announced the winners of the 16th Papagayo Program 2014 contest. This initiative is tasked with providing education in values, through the promotion of creative
reading and writing, to children in public and charter schools throughout Venezuela. A total of 438 teachers from around the country were nominated this year, of whom 212 completed the process. The program has benefited more than 6,000 students in
primary education. Also in Venezuela, and for the third year in a row, the bank has organized the BBVA Provincial Foundation Entrepreneurship Chair, which aims to educate and train young people, professionals and communities using a perspective that
seeks to encourage and promote entrepreneurship among those interested in setting up micro-enterprises or organized businesses through training in skills. |
Worth mentioning in brand and image recognition is the El Celler de Can Roca tour. The Roca brothers, who are the owners of the best
restaurant in the world, visited Colombia and Peru, where they offered dinners for BBVA customers, businesspeople and leading personalities of these countries. In Colombia they selected two young cooking students out of ten from the SENA (National
Learning Service) to study for four months at their restaurant, and three agricultural producers as suppliers for the Celler de Can Roca seal. In Peru, a restaurant was set up at the banks headquarters and a number of conferences and events
were organized, along with a bio-fair and an exhibition of gastronomic photographs.
Lastly, in prizes and awards, BBVA Chile was recognized as one
of the countrys most socially responsible companies, according to the national Corporate Social Responsibility ranking drawn up by Fundación Prohumana.
South America. Data per country
(Million euros)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
Net attributable profit |
|
|
|
|
|
|
|
|
|
D% at constant |
|
|
|
|
|
|
|
|
|
|
|
D% at constant |
|
|
|
|
Country |
|
Jan.-Sep. 14 |
|
|
D% |
|
|
exchange rates |
|
|
Jan.-Sep. 13 |
|
|
Jan.-Sep. 14 |
|
|
D% |
|
|
exchange rates |
|
|
Jan.-Sep. 13 |
|
Argentina |
|
|
369 |
|
|
|
6.4 |
|
|
|
65.4 |
|
|
|
347 |
|
|
|
148 |
|
|
|
(0.8 |
) |
|
|
54.2 |
|
|
|
150 |
|
Chile |
|
|
261 |
|
|
|
8.9 |
|
|
|
28.7 |
|
|
|
240 |
|
|
|
127 |
|
|
|
48.4 |
|
|
|
75.3 |
|
|
|
86 |
|
Colombia |
|
|
416 |
|
|
|
5.5 |
|
|
|
13.6 |
|
|
|
394 |
|
|
|
199 |
|
|
|
(9.1 |
) |
|
|
(2.1 |
) |
|
|
219 |
|
Peru |
|
|
463 |
|
|
|
(4.2 |
) |
|
|
3.4 |
|
|
|
483 |
|
|
|
121 |
|
|
|
(1.4 |
) |
|
|
6.4 |
|
|
|
123 |
|
Venezuela |
|
|
521 |
|
|
|
(29.3 |
) |
|
|
32.2 |
|
|
|
737 |
|
|
|
123 |
|
|
|
(49.7 |
) |
|
|
(5.9 |
) |
|
|
244 |
|
Other countries (1) |
|
|
55 |
|
|
|
(1.2 |
) |
|
|
7.8 |
|
|
|
56 |
|
|
|
37 |
|
|
|
(21.2 |
) |
|
|
(14.3 |
) |
|
|
47 |
|
Total |
|
|
2,086 |
|
|
|
(7.6 |
) |
|
|
23.7 |
|
|
|
2,257 |
|
|
|
755 |
|
|
|
(12.9 |
) |
|
|
14.5 |
|
|
|
868 |
|
(1) |
Paraguay, Uruguay and Bolivia. Additionally, it includes eliminations and other charges. |
Corporate Center
Financial statements
(Million euros)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income statement |
|
Jan.-Sep. 14 |
|
|
D% |
|
|
Jan.-Sep. 13 |
|
Net interest income |
|
|
(500 |
) |
|
|
(0.3 |
) |
|
|
(502 |
) |
Net fees and commissions |
|
|
(72 |
) |
|
|
n.m. |
|
|
|
(3 |
) |
Net trading income |
|
|
(14 |
) |
|
|
n.m. |
|
|
|
321 |
|
Other income/expenses |
|
|
36 |
|
|
|
67.7 |
|
|
|
21 |
|
Gross income |
|
|
(550 |
) |
|
|
238.5 |
|
|
|
(163 |
) |
Operating expenses |
|
|
(751 |
) |
|
|
(12.6 |
) |
|
|
(860 |
) |
Personnel expenses |
|
|
(341 |
) |
|
|
(6.2 |
) |
|
|
(364 |
) |
General and administrative expenses |
|
|
(64 |
) |
|
|
(63.7 |
) |
|
|
(175 |
) |
Depreciation and amortization |
|
|
(346 |
) |
|
|
8.0 |
|
|
|
(321 |
) |
Operating income |
|
|
(1,301 |
) |
|
|
27.3 |
|
|
|
(1,022 |
) |
Impairment on financial assets (net) |
|
|
11 |
|
|
|
n.m. |
|
|
|
(4 |
) |
Provisions (net) and other gains (losses) |
|
|
(165 |
) |
|
|
213.3 |
|
|
|
(53 |
) |
Income before tax |
|
|
(1,455 |
) |
|
|
34.8 |
|
|
|
(1,079 |
) |
Income tax |
|
|
268 |
|
|
|
101.5 |
|
|
|
133 |
|
Net income from ongoing operations |
|
|
(1,187 |
) |
|
|
25.5 |
|
|
|
(946 |
) |
Results from corporate operations |
|
|
|
|
|
|
|
|
|
|
1,628 |
|
Net income |
|
|
(1,187 |
) |
|
|
n.m. |
|
|
|
681 |
|
Non-controlling interests |
|
|
2 |
|
|
|
n.m. |
|
|
|
(139 |
) |
Net attributable profit |
|
|
(1,185 |
) |
|
|
n.m. |
|
|
|
542 |
|
Net attributable profit (excluding results from corporate operations) |
|
|
(1,185 |
) |
|
|
9.2 |
|
|
|
(1,086 |
) |
|
|
|
|
Balance sheet |
|
30-09-14 |
|
|
D% |
|
|
30-09-13 |
|
Cash and balances with central banks |
|
|
16 |
|
|
|
(63.5 |
) |
|
|
43 |
|
Financial assets |
|
|
3,041 |
|
|
|
7.0 |
|
|
|
2,842 |
|
Loans and receivables |
|
|
39 |
|
|
|
(94.9 |
) |
|
|
760 |
|
Loans and advances to customers |
|
|
39 |
|
|
|
(94.9 |
) |
|
|
760 |
|
Loans and advances to credit institutions and other |
|
|
|
|
|
|
|
|
|
|
|
|
Inter-area positions |
|
|
|
|
|
|
|
|
|
|
|
|
Tangible assets |
|
|
2,160 |
|
|
|
7.2 |
|
|
|
2,015 |
|
Other assets |
|
|
17,752 |
|
|
|
(5.2 |
) |
|
|
18,720 |
|
Total assets/liabilities and equity |
|
|
23,008 |
|
|
|
(5.6 |
) |
|
|
24,379 |
|
Deposits from central banks and credit institutions |
|
|
|
|
|
|
|
|
|
|
1,137 |
|
Deposits from customers |
|
|
|
|
|
|
|
|
|
|
(1,137 |
) |
Debt certificates |
|
|
4,875 |
|
|
|
(42.2 |
) |
|
|
8,433 |
|
Subordinated liabilities |
|
|
4,691 |
|
|
|
n.m. |
|
|
|
156 |
|
Inter-area positions |
|
|
(14,481 |
) |
|
|
38.3 |
|
|
|
(10,473 |
) |
Financial liabilities held for trading |
|
|
|
|
|
|
|
|
|
|
|
|
Other liabilities |
|
|
7,011 |
|
|
|
(7.5 |
) |
|
|
7,579 |
|
Shareholders funds |
|
|
46,221 |
|
|
|
0.4 |
|
|
|
46,034 |
|
Economic capital allocated |
|
|
(25,310 |
) |
|
|
(7.5 |
) |
|
|
(27,349 |
) |
The Corporate Center results in the third quarter of 2014 are defined for their lack of significant
revenue from dividends. Those from Telefónica and CNCB were booked in the previous quarter. Apart from this, there were no significant elements different from the previous quarters:
|
|
A year-on-year decline in cumulative gross income through September 2014. The dividend payment in the previous quarter from the Groups holding in Telefónica did not offset the high generation of NTI in the
same period in 2013, due to capital gains from the sale of some of the units holdings in industrial and financial companies, as well as good management of structural exchange-rate risk. |
|
|
Decline in operating expenses (down 12.6% year-on-year) due to the measures to keep costs in check applied to the Groups holding units. |
|
|
There were no results from corporate operations, which were very high in the same period in 2013 due to the income from the pension business in Latin America (including capital gains from the sale of Afore Bancomer in
Mexico and the pension fund managers in Colombia and Peru) and equity-accounted income (excluding dividends) from BBVAs stake in CNCB. |
|
|
The 2013 figures also include BBVA Panama earnings until its sale, which was closed in December 2013. |
As a
result of all the above, the Corporate Center reported a net attributable loss of 1,185m through September 2014.
Asset/Liability
Management
The Assets and Liabilities Management unit is responsible for managing structural interest-rate and foreign-exchange positions, the
Groups overall liquidity as well as shareholders funds.
Earnings from the management of liquidity and the structural interest-rate
positions in each balance sheet are registered in the corresponding areas.
With respect to the management of exchange-rate risk of the BBVA Groups long-term corporate
investments, the results are included in the Corporate Center and explained in detail in the Risk Management section, under the sub-section Structural Risks.
The banks capital management has a twofold aim: to maintain levels of capitalization appropriate to the business targets in all the countries in
which it operates and, at the same time, to maximize return on shareholders funds through the efficient allocation of capital to the various units, good management of the balance sheet and proportionate use of the various instruments that
comprise the Groups equity: common stock, preferred securities, conditional convertible bonds and subordinate debt.
In the third quarter of
2014 the following capital management actions were carried out:
|
|
BBVA Continental in Peru issued USD 300m in subordinated debt, with a coupon of 5.25%.
|
|
|
The Group has reported to the market its intention of redeeming two subordinated debt issues at their next call date on October 20. The outstanding balances of these issues amount to 633m and 26m,
respectively. |
|
|
In addition, in October the system of flexible remuneration called the dividend option was implemented for a gross 0.08 per share, offering shareholders the possibility of receiving their
remuneration in new BBVA shares, or in cash, as they choose. The percentage of shareholders choosing to receive new BBVA shares was 85.1%. This high percentage again confirms the confidence of shareholders in the future evolution of the share. The
number of ordinary BBVA shares issued under the bonus issue was 41,746,041, representing a saving in the Groups capital base of 12 basis points. |
These measures mean that the current levels of the Groups capitalization easily meet the legal limits and enable appropriate compliance with all the
capital targets, as has been reflected in the Capital Base chapter.
Other information: Corporate & Investment Banking
The most relevant
Activity in the quarter is characterized by stability in the loan book compared with the figure at the close of June (with growth in the Americas and
deleveraging in Europe, although more steady than in previous quarters) and the good performance of customer funds in practically all the geographical areas.
Earnings for the third quarter of 2014 have maintained the strength of previous quarters, thanks to positive revenue figures. This is the result of
good geographical diversification, a customer-centric business and prioritization of profitability over volume.
Macro and industry trends
The most relevant macroeconomic and industry trends affecting the wholesale markets in the third quarter of 2014 have been:
|
|
Low activity in July and August, given the negative seasonal nature of the period, with levels of volatility at all-time lows. |
|
|
Upturn in activity and improvement in the environment in September, as a result of the new measures taken by various central banks. |
|
|
Positive trend in exchange rates over the quarter, which has eased the cumulative negative effect of the early part of the year. Unless indicated otherwise, all comments below on percentage changes refer to constant
exchange rates, with the aim of providing a better understanding of the performance of BBVAs wholesale banking business. |
Activity
The main elements explaining the trend in wholesale activity in the third quarter of 2014 are:
|
|
Stability in loans under management over the quarter (down 0.2%), with a year-on-year growth rate of 5.0%. By geographical areas the same trends are in place as at the close of June 2014: growth in emerging
countries and the United States contrasting with a further decline in Europe, although again less notably than in previous quarters.
|
Financial statements and relevant business indicators
(Million euros and percentage)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income statement |
|
Jan.-Sep. 14 |
|
|
D% |
|
|
D%(1) |
|
|
Jan.-Sep. 13 |
|
Net interest income |
|
|
1,137 |
|
|
|
0.1 |
|
|
|
10.1 |
|
|
|
1,136 |
|
Net fees and commissions |
|
|
558 |
|
|
|
0.6 |
|
|
|
5.7 |
|
|
|
554 |
|
Net trading income |
|
|
385 |
|
|
|
(21.6 |
) |
|
|
(9.4 |
) |
|
|
492 |
|
Other income/expenses |
|
|
48 |
|
|
|
n.m. |
|
|
|
91.1 |
|
|
|
6 |
|
Gross income |
|
|
2,127 |
|
|
|
(2.8 |
) |
|
|
5.8 |
|
|
|
2,188 |
|
Operating expenses |
|
|
(680 |
) |
|
|
2.1 |
|
|
|
6.9 |
|
|
|
(666 |
) |
Personnel expenses |
|
|
(358 |
) |
|
|
0.0 |
|
|
|
2.4 |
|
|
|
(357 |
) |
General and administrative expenses |
|
|
(309 |
) |
|
|
5.1 |
|
|
|
13.1 |
|
|
|
(294 |
) |
Depreciation and amortization |
|
|
(14 |
) |
|
|
(5.1 |
) |
|
|
(2.0 |
) |
|
|
(15 |
) |
Operating income |
|
|
1,447 |
|
|
|
(4.9 |
) |
|
|
5.3 |
|
|
|
1,522 |
|
Impairment on financial assets (net) |
|
|
(150 |
) |
|
|
34.0 |
|
|
|
31.8 |
|
|
|
(112 |
) |
Provisions (net) and other gains (losses) |
|
|
(10 |
) |
|
|
(37.8 |
) |
|
|
(13.5 |
) |
|
|
(16 |
) |
Income before tax |
|
|
1,287 |
|
|
|
(7.7 |
) |
|
|
3.1 |
|
|
|
1,395 |
|
Income tax |
|
|
(359 |
) |
|
|
(10.6 |
) |
|
|
(0.7 |
) |
|
|
(402 |
) |
Net income |
|
|
928 |
|
|
|
(6.5 |
) |
|
|
4.6 |
|
|
|
993 |
|
Non-controlling interests |
|
|
(106 |
) |
|
|
(8.3 |
) |
|
|
30.6 |
|
|
|
(116 |
) |
Net attributable profit |
|
|
822 |
|
|
|
(6.3 |
) |
|
|
2.0 |
|
|
|
877 |
|
|
|
|
|
|
Balance sheet |
|
30-09-14 |
|
|
D% |
|
|
D%(1) |
|
|
30-09-13 |
|
Cash and balances with central banks |
|
|
4,202 |
|
|
|
31.4 |
|
|
|
37.4 |
|
|
|
3,199 |
|
Financial assets |
|
|
97,759 |
|
|
|
26.6 |
|
|
|
25.8 |
|
|
|
77,238 |
|
Loans and receivables |
|
|
73,730 |
|
|
|
6.6 |
|
|
|
6.2 |
|
|
|
69,183 |
|
Loans and advances to customers |
|
|
50,912 |
|
|
|
4.6 |
|
|
|
4.3 |
|
|
|
48,688 |
|
Loans and advances to credit institutions and other |
|
|
22,818 |
|
|
|
11.3 |
|
|
|
10.9 |
|
|
|
20,495 |
|
Inter-area positions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,568 |
|
Tangible assets |
|
|
24 |
|
|
|
(18.7 |
) |
|
|
(21.4 |
) |
|
|
30 |
|
Other assets |
|
|
4,910 |
|
|
|
54.5 |
|
|
|
58.3 |
|
|
|
3,178 |
|
Total assets/liabilities and equity |
|
|
180,626 |
|
|
|
14.0 |
|
|
|
15.5 |
|
|
|
158,396 |
|
Deposits from central banks and credit institutions |
|
|
48,304 |
|
|
|
(13.6 |
) |
|
|
(13.9 |
) |
|
|
55,909 |
|
Deposits from customers |
|
|
49,663 |
|
|
|
11.6 |
|
|
|
17.4 |
|
|
|
44,504 |
|
Debt certificates |
|
|
(64 |
) |
|
|
(41.1 |
) |
|
|
(41.1 |
) |
|
|
(108 |
) |
Subordinated liabilities |
|
|
1,274 |
|
|
|
6.2 |
|
|
|
3.5 |
|
|
|
1,200 |
|
Inter-area positions |
|
|
12,902 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities held for trading |
|
|
59,212 |
|
|
|
23.9 |
|
|
|
23.7 |
|
|
|
47,807 |
|
Other liabilities |
|
|
5,080 |
|
|
|
2.4 |
|
|
|
3.0 |
|
|
|
4,961 |
|
Economic capital allocated |
|
|
4,254 |
|
|
|
3.1 |
|
|
|
3.0 |
|
|
|
4,125 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Relevant business indicators |
|
30-09-14 |
|
|
30-06-14 |
|
|
30-09-13 |
|
Loans under management (1) |
|
|
51,020 |
|
|
|
51,121 |
|
|
|
48,574 |
|
Customer deposits under management (1-2) |
|
|
36,308 |
|
|
|
32,919 |
|
|
|
28,705 |
|
Mutual funds |
|
|
1,050 |
|
|
|
766 |
|
|
|
701 |
|
Pension funds |
|
|
|
|
|
|
|
|
|
|
|
|
Efficiency ratio (%) |
|
|
32.0 |
|
|
|
30.4 |
|
|
|
30.4 |
|
NPA ratio (%) |
|
|
0.9 |
|
|
|
1.5 |
|
|
|
1.6 |
|
NPA coverage ratio (%) |
|
|
149 |
|
|
|
84 |
|
|
|
84 |
|
Risk premium (%) |
|
|
0.40 |
|
|
|
0.47 |
|
|
|
0.29 |
|
(1) |
Figures at constant exchange rates. |
(2) |
Including areas repos in Mexico. |
|
|
|
Other information: Corporate & Investment Banking |
|
43 |
|
|
|
Significant improvement in asset quality. The NPA and coverage ratios stand at 0.9% and 149%, respectively, compared with 1.5% and 84% at the close of the first half of the year. |
|
|
|
Very positive performance in customer deposits under management, which have posted year-on-year growth rates of 26.5% and quarterly rates of 10.3%. The good figures cut across all the geographical areas in which
the Group operates. |
|
|
|
As a result of the above, there has been a further improvement in the commercial and liquidity gap of the Groups wholesale banking businesses in the area. |
Earnings
The cumulative net attributable profit
of CIB through September 2014 has grown 2.0% to 822m. This is a result of the following:
|
|
|
Good revenue figures, with cumulative gross income through September 2014 rising year-on-year by 5.8%. |
|
|
|
Operating expenses have increased by 6.9% on the same period in 2013. This has been the result of both the inflation levels of some of the geographical areas where BBVA operates, and the costs resulting from investment
in technology over recent quarters. |
|
|
|
Impairment losses on financial assets are higher than in January-September 2013, due to increased lending activity and a reduced comparison base in the previous year. |
Main highlights
The Mergers &
Acquisitions Corporate Finance unit continues to be the Spanish leader in financial advice for M&A operations, with a total of 83 deals advised since 2009, according to Thomson Reuters. Among the deals completed in the third quarter of 2014
are operations involving advice for:
|
|
|
Osborne, on the incorporation of Fosun as a new strategic partner and minority shareholder, with a 20% holding. |
|
|
|
KKR, on the investment in Grupo Alfonso Gallardo, one of the biggest industrial conglomerates in Spain.
|
It is also worth noting the leading position achieved by the Corporate Finance franchise in Mexico, where it has
advised Fibra Shop on the purchase of three shopping malls owned by Kimco; and Grupo Oprimax on the purchase of the remaining 51% of Grupo OfficeMax from Office Depot.
In Equity Capital Markets the positive trend in the primary European equity market has continued into the third quarter of the year. However, despite
the high level of liquidity, investors have also been selective and price-sensitive. In Spain, the BBVA team has participated as co-lead manager in the IPO of Logistica, and as co-manager in the capital increase of Gamesa through an accelerated
bookbuilt offering. In Europe, BBVA has participated as a co-manager in the capital increases with rights of Telefónica Deutschland (Germany) and Millenium (Portugal).
In Corporate Lending the bank was involved in various operations. On the Iberian Peninsula it has closed more than 20 syndicated loans, most of them as
bookrunner and coordinator (including Elecnor, Maxam, Asproocio, Osborne and Mango). In Eurasia it has financed acquisitions for Imperial Tobacco, COFCO and China Mining & Metals. In the United States it has signed syndicated credit
facilities for Torchmark Corp, Sealed Air Corp, Synchrony Financial and Caterpillar. In Latin America nine operations were carried out in Mexico, Colombia, Peru and Chile. Outstanding among these as joint bookrunner were: Acquisition Finance for
EEB, RCF for Mexichem, Term Loans for Grupo Gigante, Cinepolis and Pemex, and guarantees for the purchase of Alsea/Zena (Mexico/Spain).
In Project
Finance in Spain, there was the finance of the project for the Encampus student residence halls, the expansion of Portet de Denia, the acquisition of Creuers de Port de Barcelona and the renewal of finance for Barcelona Sagrera Alta Velocidad
and Logroño Integración del Ferrocarril. In Eurasia the financing of Budapest Airport has been renewed and the acquisition of a portfolio of Bord Gais wind farms in Ireland has been financed. In Latin America of note are: in Chile, the
Javiera Fotovoltaica operation by SunEdison; in Colombia, the advice to Ecopetrol for the PIEEL project; in Mexico, the Mexico-Toluca highway, the Monterrey beltway and the project bond for drilling equipment for Grupo R; and in Peru, the bridge
loan for Gasoducto Sur Peruano. Lastly, in the United States it has participated in the Cameron LNG deal, sponsored by the global clients Sempra, GDF Suez, Mitsubishi, Mitsui and NYK.
Outstanding in Leveraged Finance are the financing of the acquisition of Grupo Quirón by IDC
Salud, the financing of the takeover bid by Invest Industrial for Club Med, the refinancing of the participatory loan for Advent in TINSA and the financing of the acquisition of Industrias Doltz by Realza.
Global Transaction Banking (GTB) has continued to develop solutions covering the transaction needs of customers, launching new products and services
through online and mobile banking:
|
|
The security token integrated into cell phones for access to and signing of BBVA net cash transactions in Europe; and the launch of the mobile access app for iOS and Android in the United States. |
|
|
New functionalities in online banking, BBVA net cash: in Spain, the new range of foreign trade and currency services; in Chile, foreign payment orders and the dollar purchase service; in Colombia, payment management
from contributory master accounts, online consultation of leasing operations and greater security in access; in Venezuela, downloading of account and card activity; in Peru, management of signatures, consultations and downloading of financial
statements, as well as daily payment reports. |
In addition, it is worth highlighting the participation of GTB in the following operations:
as guarantor for the Xacbal Delta Hydroelectric project in Guatemala and the expansion and renewal of a hospital on the Caribbean island of Aruba by a Spanish construction company. In addition, BBVA has headed up the financing of the STAR project
(the biggest project finance operation closed in the history of Turkey) and finance for the construction of a system of gas pipelines that connect Tucson and Sasabe in Arizona (United States).
Thanks to its customer-centric business model, gross income remains positive for Global Markets: in the first nine months of 2014 it amounted to
895m (up 6.9% year-on-year). This figure is supported by good business with the institutional segment (up 16% year-on-year) and in the equity and interest rate businesses.
By geographical areas there was outstanding performance of customer revenue in Europe (up 5% year-on-year) as well as the positive performance of gross income
in the United States (up 25% year-on-year), Mexico (up 28% y-o-y) and South America (up 13% y-o-y).
In the debt markets, the Bank has once more received
the award from Euromoney for the Best Debt House in Spain, demonstrating BBVAs position as a benchmark in the market. This quarter it has acted as global coordinator in operations such as the Almirall bond issue with the
lowest coupon ever (4.62%) for a high-yield entity, and the placement of hybrid subordinated debt for Telefónica. In the public sector, BBVA has consolidated its leading position thanks to issues such as ADIF.
In Spain, BBVA once more leads equity brokerage activity on the Spanish stock market, increasing its market share to 13.2% at the close of the third quarter
of 2014.
Lastly, BBVAs excellent work has led it to receive awards from the magazine Structured Retail Products in the area of structured
products in the Americas and as the best Foreign Exchange house on the continent, best institutional product and best ETF-Linked product in Mexico.
|
|
|
Other information: Corporate & Investment Banking |
|
45 |
Annex
Interest rates
(Quarterly averages)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 |
|
|
2013 |
|
|
|
3Q |
|
|
2Q |
|
|
1Q |
|
|
4Q |
|
|
3Q |
|
|
2Q |
|
|
1Q |
|
Official ECB rate |
|
|
0.05 |
|
|
|
0.15 |
|
|
|
0.25 |
|
|
|
0.25 |
|
|
|
0.50 |
|
|
|
0.50 |
|
|
|
0.75 |
|
Euribor 3 months |
|
|
0.16 |
|
|
|
0.30 |
|
|
|
0.30 |
|
|
|
0.24 |
|
|
|
0.22 |
|
|
|
0.21 |
|
|
|
0.21 |
|
Euribor 1 year |
|
|
0.44 |
|
|
|
0.57 |
|
|
|
0.56 |
|
|
|
0.53 |
|
|
|
0.54 |
|
|
|
0.51 |
|
|
|
0.57 |
|
USA Federal rates |
|
|
0.25 |
|
|
|
0.25 |
|
|
|
0.25 |
|
|
|
0.25 |
|
|
|
0.25 |
|
|
|
0.25 |
|
|
|
0.25 |
|
TIIE (Mexico) |
|
|
3.29 |
|
|
|
3.67 |
|
|
|
3.79 |
|
|
|
3.85 |
|
|
|
4.24 |
|
|
|
4.32 |
|
|
|
4.72 |
|
Exchange rates
(Expressed in currency/euro)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-end exchange rates |
|
|
Average exchange rates |
|
|
|
30-09-14 |
|
|
D%
on 30-09-13 |
|
|
D%
on 30-06-14 |
|
|
D% on 31-12-13 |
|
|
Jan.-Sep. 14 |
|
|
D% on Jan.-Sep. 13 |
|
Mexican peso |
|
|
16.9978 |
|
|
|
5.0 |
|
|
|
4.2 |
|
|
|
6.3 |
|
|
|
17.7737 |
|
|
|
(6.0 |
) |
U.S. dollar |
|
|
1.2583 |
|
|
|
7.3 |
|
|
|
8.5 |
|
|
|
9.6 |
|
|
|
1.3550 |
|
|
|
(2.8 |
) |
Argentinean peso |
|
|
10.6452 |
|
|
|
(26.5 |
) |
|
|
4.3 |
|
|
|
(15.6 |
) |
|
|
10.8128 |
|
|
|
(35.7 |
) |
Chilean peso |
|
|
757.00 |
|
|
|
(10.3 |
) |
|
|
(0.7 |
) |
|
|
(4.6 |
) |
|
|
759.88 |
|
|
|
(15.4 |
) |
Colombian peso |
|
|
2,551.02 |
|
|
|
1.3 |
|
|
|
0.8 |
|
|
|
4.3 |
|
|
|
2,631.58 |
|
|
|
(7.1 |
) |
Peruvian new sol |
|
|
3.6384 |
|
|
|
3.2 |
|
|
|
4.8 |
|
|
|
5.9 |
|
|
|
3.8031 |
|
|
|
(7.4 |
) |
Venezuelan bolivar fuerte |
|
|
15.0996 |
|
|
|
(43.7 |
) |
|
|
(4.1 |
) |
|
|
(42.5 |
) |
|
|
14.7072 |
|
|
|
(46.5 |
) |
Turkish lira |
|
|
2.8779 |
|
|
|
(4.4 |
) |
|
|
0.7 |
|
|
|
2.9 |
|
|
|
2.9332 |
|
|
|
(16.2 |
) |
Recurrent economic profit by business area
(January-September 2014. Million euros)
|
|
|
|
|
|
|
|
|
|
|
Adjusted net attributable profit |
|
|
Economic profit (EP) |
|
Banking activity in Spain |
|
|
877 |
|
|
|
281 |
|
Real-estate activity in Spain |
|
|
8 |
|
|
|
(54 |
) |
The United States |
|
|
201 |
|
|
|
38 |
|
Eurasia |
|
|
432 |
|
|
|
111 |
|
Mexico |
|
|
1,520 |
|
|
|
1,104 |
|
South America |
|
|
555 |
|
|
|
234 |
|
Corporate Center |
|
|
(803 |
) |
|
|
(844 |
) |
BBVA Group |
|
|
2,789 |
|
|
|
870 |
|
Conciliation of the BBVA Groups financial statements
Below is presented the conciliation of the Groups financial statements with the Garanti Group using the
equity method versus consolidation in proportion to the percentage of the BBVA Groups stake in the Turkish entity. In terms of reporting to the market, this consolidation method is deemed better for evaluating the nature and financial effects
of the Garanti Groups business activities, consistent with the information from previous periods, and more coherent in its effects on capital adequacy.
Moreover, in 2013 the corporate operations heading includes the results from the Groups pension business
in Latin America and the capital gains from the sale of the various companies, the capital gain from the disposal of BBVA Panama, the capital gain generated by the reinsurance operation on the individual life and accident insurance portfolio in
Spain and the effects of the conclusion of the agreement with the CITIC group.
Consolidated income statement BBVA
Group
(Million euros)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Garanti Group consolidated in proportion to the percentage of the Groups stake and
with the heading Results from corporate operations |
|
|
Garanti Group consolidated using the equity method |
|
|
|
Jan.-Sep. 14 |
|
|
Jan.-Sep. 13 |
|
|
Jan.-Sep. 14 |
|
|
Jan.-Sep. 13 |
|
Net interest income |
|
|
10,868 |
|
|
|
10,853 |
|
|
|
10,358 |
|
|
|
10,294 |
|
Net fees and commissions |
|
|
3,198 |
|
|
|
3,292 |
|
|
|
3,055 |
|
|
|
3,153 |
|
Net trading income |
|
|
1,621 |
|
|
|
1,918 |
|
|
|
1,597 |
|
|
|
1,893 |
|
Dividend income |
|
|
412 |
|
|
|
251 |
|
|
|
412 |
|
|
|
121 |
|
Income by the equity method |
|
|
32 |
|
|
|
20 |
|
|
|
265 |
|
|
|
612 |
|
Other operating income and expenses |
|
|
(539 |
) |
|
|
(259 |
) |
|
|
(547 |
) |
|
|
(275 |
) |
Gross income |
|
|
15,592 |
|
|
|
16,075 |
|
|
|
15,141 |
|
|
|
15,798 |
|
Operating expenses |
|
|
(8,046 |
) |
|
|
(8,349 |
) |
|
|
(7,759 |
) |
|
|
(8,045 |
) |
Personnel expenses |
|
|
(4,171 |
) |
|
|
(4,364 |
) |
|
|
(4,023 |
) |
|
|
(4,211 |
) |
General and administrative expenses |
|
|
(3,014 |
) |
|
|
(3,147 |
) |
|
|
(2,902 |
) |
|
|
(3,026 |
) |
Depreciation and amortization |
|
|
(860 |
) |
|
|
(838 |
) |
|
|
(834 |
) |
|
|
(808 |
) |
Operating income |
|
|
7,546 |
|
|
|
7,726 |
|
|
|
7,381 |
|
|
|
7,754 |
|
Impairment on financial assets (net) |
|
|
(3,318 |
) |
|
|
(4,566 |
) |
|
|
(3,218 |
) |
|
|
(4,456 |
) |
Provisions (net) |
|
|
(642 |
) |
|
|
(434 |
) |
|
|
(638 |
) |
|
|
(413 |
) |
Other gains (losses) |
|
|
(501 |
) |
|
|
(657 |
) |
|
|
(503 |
) |
|
|
(28 |
) |
Income before tax |
|
|
3,085 |
|
|
|
2,069 |
|
|
|
3,023 |
|
|
|
2,857 |
|
Income tax |
|
|
(808 |
) |
|
|
(479 |
) |
|
|
(746 |
) |
|
|
(600 |
) |
Net income from ongoing operations |
|
|
2,277 |
|
|
|
1,590 |
|
|
|
2,277 |
|
|
|
2,257 |
|
Net income from discontinued operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,400 |
|
Results from corporate operations |
|
|
|
|
|
|
2,068 |
|
|
|
|
|
|
|
|
|
Net income |
|
|
2,277 |
|
|
|
3,657 |
|
|
|
2,277 |
|
|
|
3,657 |
|
Non-controlling interests |
|
|
(348 |
) |
|
|
(580 |
) |
|
|
(348 |
) |
|
|
(580 |
) |
Net attributable profit |
|
|
1,929 |
|
|
|
3,077 |
|
|
|
1,929 |
|
|
|
3,077 |
|
|
|
|
Conciliation of the BBVA Groups financial statements |
|
47 |
Consolidated balance sheet BBVA Group
(Million euros)
|
|
|
|
|
|
|
|
|
|
|
Garanti Group consolidated in proportion to the percentage of the Groups stake |
|
|
Garanti Group consolidated using the equity method |
|
|
|
30-09-14 |
|
|
30-09-14 |
|
Cash and balances with central banks |
|
|
23,121 |
|
|
|
20,894 |
|
Financial assets held for trading |
|
|
88,023 |
|
|
|
87,861 |
|
Other financial assets designated at fair value |
|
|
3,227 |
|
|
|
2,810 |
|
Available-for-sale financial assets |
|
|
98,322 |
|
|
|
94,623 |
|
Loans and receivables |
|
|
379,715 |
|
|
|
365,718 |
|
Loans and advances to credit institutions |
|
|
27,561 |
|
|
|
26,357 |
|
Loans and advances to customers |
|
|
346,103 |
|
|
|
333,470 |
|
Debt securities |
|
|
6,051 |
|
|
|
5,890 |
|
Held-to-maturity investments |
|
|
|
|
|
|
|
|
Investments in entities accounted for using the equity method |
|
|
1,443 |
|
|
|
5,081 |
|
Tangible assets |
|
|
7,762 |
|
|
|
7,581 |
|
Intangible assets |
|
|
8,621 |
|
|
|
7,173 |
|
Other assets |
|
|
27,465 |
|
|
|
27,183 |
|
Total assets |
|
|
637,699 |
|
|
|
618,922 |
|
Financial liabilities held for trading |
|
|
59,084 |
|
|
|
58,916 |
|
Other financial liabilities at fair value |
|
|
3,615 |
|
|
|
2,805 |
|
Financial liabilities at amortized cost |
|
|
497,179 |
|
|
|
479,769 |
|
Deposits from central banks and credit institutions |
|
|
84,199 |
|
|
|
79,580 |
|
Deposits from customers |
|
|
329,610 |
|
|
|
318,900 |
|
Debt certificates |
|
|
61,181 |
|
|
|
59,890 |
|
Subordinated liabilities |
|
|
14,265 |
|
|
|
14,242 |
|
Other financial liabilities |
|
|
7,923 |
|
|
|
7,157 |
|
Liabilities under insurance contracts |
|
|
10,624 |
|
|
|
10,613 |
|
Other liabilities |
|
|
18,808 |
|
|
|
18,429 |
|
Total liabilities |
|
|
589,310 |
|
|
|
570,533 |
|
Non-controlling interests |
|
|
2,253 |
|
|
|
2,253 |
|
Valuation adjustments |
|
|
(879 |
) |
|
|
(879 |
) |
Shareholders funds |
|
|
47,015 |
|
|
|
47,015 |
|
Total equity |
|
|
48,389 |
|
|
|
48,389 |
|
Total equity and liabilities |
|
|
637,699 |
|
|
|
618,922 |
|
Memorandum item: |
|
|
|
|
|
|
|
|
Contingent liabilities |
|
|
36,864 |
|
|
|
33,737 |
|
BBVA INVESTOR RELATIONS
Headquarters
Paseo de la Castellana, 81 17th floor
28046 Madrid
SPAIN
Telephone: +34 91 374 65 26
E-mail:
[email protected]
New York Office
1345
Avenue of the Americas, 44th floor
10105 New York, NY
Telephones: +1 212 728 24 16 / +1 212 728 16 60
London
Office
One Canada Square, 44th floor
Canary Wharf,
London E14 5AA
Telephone: +44 207 648 7671
Hong Kong
Office
Level 95, International Commerce Centre
One
Austin Road West, Kowloon,
Hong Kong
Telephone: +852 2582
3229
More information at:
http://shareholdersandinvestors.bbva.com
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
|
|
|
|
|
|
|
|
|
|
|
Banco Bilbao Vizcaya Argentaria, S.A. |
|
|
|
|
Date: October 29, 2014 |
|
|
|
By: |
|
/s/ María Angeles Peláez Morón |
|
|
|
|
|
|
|
|
|
|
|
Name: |
|
María Angeles Peláez Morón |
|
|
|
|
Title: |
|
Chief Accounting Officer |