BBVA in 2012

Refinancing and restructuring operations

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BBVA’s business model is to forge and maintain lasting relationships with its customers. Because of this, the basic goal of a refinanced or restructured operation is to provide the customer with a lasting financial viability over time to face temporary difficulties, and to adapt debt repayments to the Bank to the customer’s new situation of fund generation. In other words, this tool is used to resolve problems of temporary liquidity, and not of solvency, that Bank customers may have with the Bank at any given time. Refinancing and restructuring are therefore a management tool; its use for other purposes, such as delaying loss recognition, is against the BBVA Group’s policy. It should be noted that BBVA has always had each of the refinancing/restructuring operations it has carried out duly identified and classified. A detailed follow-up is conducted and, depending on their evolution, the Group’s philosophy on this matter is to classify refinancing risks as non-performing, substandard or performing loans, according to the following features:

  • Although the customers may be up to date with payments, these operations are classified as impaired for reasons other than default, when there are significant doubts regarding whether the terms of the refinancing will be met.
  • They are classified as substandardloans when there is some material uncertainty regarding a possible non-compliance.
  • Finally, the others are considered performing risk. However, it should be noted that even if they are considered performing risk, they are classified as performing risk with special monitoring.