Balance sheet and business activity

BBVA closed 2011 with a balance sheet that continues to reflect great stability, prudent risk management, high solidity, low leverage and reduced funding needs.

In terms of stability, the Group’s total assets as of 31-Dec-2011 were €598 billion, representing a year-on-year increase of 8.1%, mainly explained by the incorporation of Garanti.

The loan book continues with its twofold performance by geographical area, with a reduction in the most problematic real-estate portfolios in Spain and the United States. In Spain, gross lending to customers fell as a result of the deleveraging process in the country’s economy. Despite this, BBVA gained market share in the residential mortgage portfolio and further reduced its exposure to the developer sector. In Europe, lending remains stable and focused on high added value customers, mainly corporate clients. However, in Garanti, lending continues to grow, above all in consumer loans. The United States is still making progress in shifting its portfolio mix by increasing the weight of target portfolios (residential and commercial real estate). Finally, in Latin America, a region where lending is clearly buoyant, there was a notable increase in practically all the portfolios and categories. Moreover, these rises were of greater quality thanks to the significant proportion of bundled customers.

The more stable lower-cost on-balance sheet customer funds (current and savings accounts) performed particularly well. As a result, their weight on the liabilities side of the balance sheet has increased, thus allowing the Group to continue to improve its funding structure.

With respect to off-balance-sheet funds, market turmoil combined with customer preference for other liability products, such as time deposits and promissory notes, explain the reduction in the amount of assets under management. Nevertheless, BBVA maintains its leading position in Spain in mutual and pension funds, with a fall that is below the system average, thanks to the greater weight of guaranteed funds. Additionally, the Group has a strong leadership position in Latin America, where it is considered a model.

Loans and advances to customers is the main item on the asset side of the balance sheet, representing 58.9% of total assets as of December 31, 2011. On the liabilities side, deposits from customers stood at 47.2% of the total balance sheet at the end of 2011, and thus, the deposit-to-loan ratio closed the year at 80.2%.

The Group’s business volume, the sum of gross customer lending plus total customer funds, came to €788 billion as of December 31, 2011, and showed a year-on-year increase of 2.3% compared to the €770 billion as of the same date last year. Of this figure, €361 billion corresponded to gross lending and €426 billion to total customer funds, which incorporate both on-balance sheet and mutual and pension funds, as well as customer portfolios. These amounts include neither debt certificates, the heading under which the Spanish retail network has been selling promissory notes since the month of September, nor subordinated liabilities.

Consolidated balance sheet

(Million euros)

31-12-11 Δ% 31-12-10 31-12-09
Cash and balances with central banks 30,939 54.8 19,981 16,344
Financial assets held for trading 70,602 11.6 63,283 69,733
Other financial assets designated at fair value through profit or loss 2,977 7.3 2,774 2,337
Available-for-sale financial assets 58,143 3.0 56,457 63,520
Loans and receivables 381,077 4.5 364,707 346,117
Loans and advances to credit institutions 26,107 10.5 23,636 22,239
Loans and advances to customers 351,900 3.8 338,857 323,442
Other 3,069 38.7 2,213 436
Held-to-maturity investments 10,955 10.1 9,946 5,437
Investments in entities accounted for using the equity method 5,843 28.5 4,547 2,922
Tangible assets 7,330 9.4 6,701 6,507
Intangible assets 8,677 8.4 8,007 7,248
Other assets 21,145 29.4 16,336 14,900
Total assets 597,688 8.1 552,738 535,065
Financial liabilities held for trading 51,303 37.9 37,212 32,830
Other financial liabilities at fair value through profit or loss 1,825 13.6 1,607 1,367
Financial liabilities at amortized cost 479,904 5.9 453,164 447,936
Deposits from central banks and credit institutions 92,503 35.7 68,180 70,312
Deposits from customers 282,173 2.3 275,789 254,183
Debt certificates 81,930 (3.8) 85,180 99,939
Subordinated liabilities 15,419 (11.5) 17,420 17,878
Other financial liabilities 7,879 19.4 6,596 5,624
Liabilities under insurance contracts 7,737 (3.7) 8,033 7,186
Other liabilities 16,861 10.6 15,246 14,983
Total liabilities 557,630 8.2 515,262 504,302
Non-controlling interests 1,893 21.7 1,556 1,463
Valuation adjustments (2,787) 262.0 (770) (62)
Shareholders' funds 40,952 11.6 36,689 29,362
Total equity 40,058 6.9 37,475 30,763
Total equity and liabilities 597,688 8.1 552,738 535,065
Memorandum item:
Contingent liabilities 39,904 9.5 36,441 32,614
17. Total assets

(Billion euros)

(1) At constant exchange rate: +8.9%.
18. Business volume (1)

(Billion euros)

(1) Total gross lending plus total customer funds. (2) At constant exchange rate: +3.2%