3q11 quarterly report eng2 tcm240-273407

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  • 8/3/2019 3Q11 Quarterly Report Eng2 Tcm240-273407

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    January-September2011

    QUARTERLY REPORT

    Q

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    Contents

    2 BBVAGrouphighlights 3 Groupinformation Relevantevents...........................................................................................................................................................................................................................................................3 Earnings................................................................................................................................................................................................................................................................................6

    Balancesheetandbusinessactivity.................................................................................................................................................................................................13

    Capitalbase.....................................................................................................................................................................................................................................................................17

    Riskmanagement...................................................................................................................................................................................................................................................19 TheBBVAshare......................................................................................................................................................................................................................................................... 21

    Corporateresponsibility.................................................................................................................................................................................................................................22

    23 Businessareas Spain......................................................................................................................................................................................................................................................................................25 Eurasia.................................................................................................................................................................................................................................................................................. 31

    Mexico..................................................................................................................................................................................................................................................................................34

    SouthAmerica...........................................................................................................................................................................................................................................................38

    TheUnitedStates...................................................................................................................................................................................................................................................42

    CorporateActivities.............................................................................................................................................................................................................................................46

    Otherinformation:WholesaleBanking&AssetManagement.......................................................................................................................49

    January-September2011

    QUARTERLYREPORT

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    2 BBVAGrouphighlights

    BBVAGrouphighlights

    BBVA Group highlights

    (Consolidatedigures)

    30-09-11 % 30-09-10 31-12-10

    Balance sheet (million euros)

    Totalassets 584,438 4.8 557,761 552,738

    Customerlending(gross) 352,633 2.8 343,084 348,253

    Customerfundsonbalancesheet 282,050 10.3 255,798 275,789

    Othercustomerfunds 136,588 (4.4) 142,902 146,188

    Totalcustomerfunds 418,638 5.0 398,700 421,977

    Totalequity 39,868 21.1 32,909 37,475

    Shareholdersfunds 41,552 31.5 31,610 36,689

    Income statement (million euros)

    Netinterestincome 9,676 (5.0) 10,182 13,320

    Grossincome 15,052 (5.7) 15,964 20,910

    Operatingincome 7,753 (16.8) 9,322 11,942

    Incomebeforetax 4,145 (21.2) 5,260 6,422

    Netattributableproit 3,143 (14.3) 3,668 4,606

    Data per share and share performance ratios

    Shareprice(euros) 6.18 (37.6) 9.91 7.56

    Marketcapitalization(millioneuros) 29,817 (19.7) 37,124 33,951

    Netattributableproitpershare(euros) 0.66 (26.9) 0.90 1.16

    Bookvaluepershare(euros) 8.61 2.1 8.43 8.17

    P/BV(Price/Bookvalue;times) 0.7 1.2 0.9

    Signiicant ratios (%)

    ROE(Netattributableproit/Averageequity) 11.3 17.2 15.8

    ROA(Netincome/Averagetotalassets) 0.83 0.95 0.89

    RORWA(Netincome/Averagerisk-weightedassets) 1.46 1.75 1.64

    Eiciencyratio 48.5 41.6 42.9

    Riskpremium 1.10 1.38 1.33

    NPAratio 4.1 4.1 4.1

    NPAcoverageratio 60 62 62

    Capital adequacy ratios (%)

    BISRatio 12.6 12.8 13.7

    Corecapital 9.1 8.2 9.6

    TierI 9.8 9.2 10.5

    Other information

    Numberofshares(millions) 4,825 28.7 3,748 4,491

    Numberofshareholders 981,348 10.4 889,104 952,618

    Numberofemployees(1) 110,625 5.1 105,265 106,976

    Numberofbranches(1) 7,436 1.0 7,362 7,361

    NumberofATMs(1)

    18,192 9.5 16,619 17,055

    General note: These quarterly statements have 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 conformity with Bank of Spain Circular 4/2004, together with the changes introduced therein.

    (1)ExcludingGaranti.

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    3Relevantevents

    Stresslevelsinliquidityandsovereignriskreachedahighinthe

    third quarter of 2011,particularlyintheeuroarea.Asaresult,

    mostoftheEuropeanbankingsectorhasseensomemajor

    sourcesoffundingreduced.Thisinturnhasincreasedtheuse

    oftheliquidityfacilitiesprovidedbythecentralbanks.This

    situationhasgivenrisetodoubtsinthemarketsaboutcertain

    businessmodelswithahighlevelofleverage.Otherfactorsworth

    highlightinghavebeenthelossofvalueinnumerousassetsasa

    resultofincreasedfundingcostsandtheprevailinguncertainty.Inparticular,thereweresigniicantfallsintheequityandpublicand

    privatedebtmarketsandalowlevelofbusinessactivity,above

    allthatmostcloselyrelatedtothewholesalebusiness.Against

    thisbackgroundoflossofconidence,theGrouphasoncemore

    demonstratedoverthequarterthatitsbusinessmodelissound,

    particularlyintermsofitsliquidity position andgeneration of

    earnings.

    Intermsof liquidity,BBVAhasaprivilegedpositionwithrespect

    tomostofitscompetitors,inthefollowingaspects:

    Thesmallestbalancesheetwithinitspeergroup,at584

    billion.

    Ahighlycustomer-centricretailmodel,withaverysolid

    depositbase,asshownbythefactthatBBVAisthebankwith

    thebiggestcustomerdeposit/totalassetratiowithinthepeer

    group,at48.3%atthecloseofSeptember2011.

    Awholesalebankingbusinessbasedonastrongrelationship

    withitscustomersandcharacterizedbylowleveragelevels.

    BBVAisrecoveringcompetitivenessinanenvironmentin

    whichotherbankshaveannouncedsigniicantdeleveraging

    plans.

    Inaddition,theGrouphasalwaysbeenproactiveinits

    managementoflong-termwholesaleinance,andused

    conservativelythewindowsofopportunityoferedbythe

    markets.Infact,inJuneBBVAalreadyhaditsinancingneeds

    fullycoveredfor2011;andthecomingyearsithasthelowest

    leveloflong-termfundingmaturitiesofanybankinitspeer

    group.Itshouldalsobepointedoutthatthesematuritiesare

    notconcentratedinanyspeciicperiod.

    ItisworthnotingthatundertheBBVAmanagementmodel

    eachbankingsubsidiaryorgroupmustbeself-suicientinits

    sourcesoffundingwithinitsrespectivegeographicalarea.

    Finally,itmustbepointedoutthatBBVAdoesnotdependon

    theUSmarketforshort-termmarketfunding(oneofthekey

    subjectsthisquarter),andithasonlyuseditinthepastwhen

    appropriateasacheapsource.

    Themostimportantpointwithrespectto generation of earnings

    overtheperiodisthecontinuedgrowthofthemostrecurring

    income,i.e.grossincomeexcludingdividendsorNTI:

    Therewasnocontributionfromnet trading income (NTI)over

    thequarter,whichcharacterizestheproileoftheaccount.TheslightlynegativeNTI(25m)canbeexplainedbythelowlevel

    ofactivityinWholesaleBankingandthefallinassetpricesover

    theperiod.

    Gross incomeforthequarterwas4,627m.Thefallcompared

    with5,162minthepreviousquarteristheresultofthe

    performanceofNTImentionedaboveandthedividendpaidin

    MayfromthestakeinTelefnica.ExcludingdividendsandNTI,

    thegrossrecurringincomegeneratedbyBBVAbetweenJuly

    andSeptemberwas4,602m,up0.8%quarter-on-quarter.This

    givesaigureof15,052myeartodateand13,656m(about

    91%)excludingNTIordividends.

    Operatingexpensesamountedto2,461mforthequarter,