The BBVA Group’s activity is geographically diversified in Spain, Mexico, South America and the United States, with an active presence in Europe and Asia, especially Turkey and China. As mentioned in Note 6 of the accompanying consolidated financial statements, the BBVA Group has modified the business areas used by the BBVA Group as a basic management tool. In 2013 they are as follows: Spain (banking activity), Real-estate business in Spain, Eurasia, Mexico, South America and United States.
The Corporate Center, as stated in Note 6 above, is an aggregate which contains all the assets and liabilities not allocated to the business areas, as they basically correspond to the Group's holding function.
In drawing up the Income Statement in this Management Report, two effects have to be taken into account:
- Garanti Group has been accounted for under the proportionate consolidation method.
- Earnings from certain corporate activities mentioned below are now classified under a new heading, “Income from corporate activities", and the historical series for 2012 have been reconstructed. These corporate operations are:
- The sale of the pension business in Mexico, Colombia, Peru and Chile.
- The sale of BBVA Panama.
- The pricing at market value of the stake in CNCB after the signing of a new agreement with the CITIC group, which includes the sale of 5.1% of CNCB.
- Operation on the individual life and accident insurance portfolio in Spain.
- Negative goodwill resulting from the acquisition of Unnim.
- Sale of the Puerto Rico business.
- Tax impact of corporate operations.
The reconciliation between the Group's summarized consolidated income statements for 2013 and 2012 and the management account is as follows:
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| BBVA Group Consolidated Income Statements | Millions of Euros | |||||
|---|---|---|---|---|---|---|
| 2013 | 2012 | |||||
| Consolidated Financial Statements | Reconciliation | Management account | Consolidated Financial Statements | Reconciliation | Management account | |
| NET INTEREST INCOME | 13,900 | 713 | 14,613 | 14,474 | 648 | 15,122 |
| Dividend income | 235 | 130 | 365 | 390 | 136 | 526 |
| Share of profit or loss of entities accounted for using the equity method | 694 | (622) | 72 | 1,039 | (997) | 42 |
| Net fees and commissions | 4,250 | 182 | 4,432 | 4,156 | 197 | 4,353 |
| Net gains (losses) on financial assets and liabilities and net exchange differences | 2,511 | 16 | 2,527 | 1,705 | 62 | 1,767 |
| Other operating income and expenses | (632) | 19 | -613 | 60 | 22 | 82 |
| GROSS INCOME | 20,958 | 438 | 21,396 | 21,824 | 68 | 21,892 |
| Operating expenses | (10,796) | (405) | (11,201) | (10,374) | (412) | (10,786) |
| Administration costs | (9,701) | (366) | (10,067) | (9,396) | (372) | (9,768) |
| Depreciation and amortization | (1,095) | (38) | (1,133) | (978) | (40) | (1,018) |
| OPERATING INCOME | 10,162 | 33 | 10,195 | 11,450 | (344) | 11,106 |
| Impairment losses on financial assets (net) | (5,612) | (163) | (5,775) | (7,859) | (121) | (7,980) |
| Provisions (net) | (609) | (21) | (630) | (641) | (10) | (651) |
| NET OPERATING INCOME | 3,941 | (151) | 3,790 | 2,950 | (476) | 2,474 |
| Other gains (losses) | (2,781) | 1,741 | (1,040) | (1,368) | (358) | (1,726) |
| INCOME BEFORE TAX | 1,160 | 1,590 | 2,750 | 1,582 | (834) | 748 |
| Income tax | (46) | (547) | (593) | 352 | (77) | 275 |
| INCOME FROM CONTINUING TRANSACTIONS | 1,114 | 1,043 | 2,157 | 1,934 | (911) | 1,023 |
| Income from discontinued transactions (net) | 1,866 | (1,866) | - | 393 | (393) | - |
| Results from corporate operations | - | 823 | 823 |
|
1,304 | 1,304 |
| NET INCOME | 2,981 | - | 2,981 | 2,327 | - | 2,328 |
| Net income attributed to non-controlling interests | 753 | - | 753 | 651 | - | 651 |
| NET INCOME ATTRIBUTED TO PARENT COMPANY | 2,228 | - | 2,228 | 1,676 | - | 1,677 |
The contribution of the different business areas to the Group's management income statement in 2013 is as follows:
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| BBVA Group Consolidated Income Statements 2013 | Millions of Euros | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| BBVA Group | Operating Segments | Corporate center | |||||||
| Spain | Real Estate | Eurasia | Mexico | South America | The United States | Total operating segments |
|
||
| NET INTEREST INCOME | 14,613 | 3,830 | (3) | 911 | 4,484 | 4,703 | 1,407 | 15,332 | (719) |
| Net fees and commissions | 4,432 | 1,376 | 8 | 391 | 1,184 | 976 | 557 | 4,492 | (61) |
| Net gains (losses) on financial assets and liabilities and net exchange differences | 2,527 | 807 | 67 | 194 | 208 | 764 | 139 | 2,180 | 347 |
| Other operating income and expenses (*) | (176) | 82 | (111) | 225 | 325 | (812) | (3) | (294) | 119 |
| GROSS INCOME | 21,396 | 6,095 | (38) | 1,721 | 6,201 | 5,630 | 2,101 | 21,711 | (314) |
| Operating expenses | (11,201) | (3,014) | (152) | (733) | (2,335) | (2,386) | (1,475) | (10,096) | (1,105) |
| Administration costs | (10,067) | (2,903) | (130) | (683) | (2,173) | (2,213) | (1,296) | (9,397) | (671) |
| Depreciation and amortization | (1,133) | (111) | (23) | (51) | (163) | (173) | (179) | (699) | (434) |
| OPERATING INCOME | 10,195 | 3,081 | (190) | 987 | 3,865 | 3,244 | 627 | 11,614 | (1,419) |
| Impairment losses on financial assets (net) | (5,775) | (2,577) | (643) | (330) | (1,439) | (701) | (78) | (5,768) | (8) |
| Provisions (net) | (630) | (315) | (20) | (39) | (39) | (150) | (5) | (568) | (62) |
| NET OPERATING INCOME | 3,790 | 189 | (853) | 619 | 2,388 | 2,393 | 543 | 5,279 | (1,489) |
| Other gains (losses) | (1,040) | 34 | (988) | (26) | (26) | (7) | (9) | (1,022) | (18) |
| INCOME BEFORE TAX | 2,750 | 222 | (1,840) | 593 | 2,362 | 2,387 | 534 | 4,257 | (1,507) |
| Income tax | (593) | (60) | 595 | (139) | (557) | (530) | (144) | (834) | 241 |
| INCOME FROM CONTINUING TRANSACTIONS | 2,157 | 163 | (1,245) | 454 | 1,805 | 1,856 | 390 | 3,423 | (1,266) |
| Results from corporate operations | 823 | 440 | - | - | - | - | - | 440 | 383 |
| NET INCOME | 2,981 | 603 | (1,245) | 454 | 1,805 | 1,856 | 390 | 3,863 | (883) |
| Net income attributed to non-controlling interests | 753 | 20 | 9 | - | 1 | 608 | - | 637 | 116 |
| NET INCOME ATTRIBUTED TO PARENT COMPANY | 2,228 | 583 | (1,254) | 454 | 1,805 | 1,249 | 390 | 3,227 | (999) |
The breakdown by business area of “Net income attributed to parent company” in 2013 and 2012 in the Group is as follows:
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| Profit by Bussiness Areas | Millions of Euros | ||
|---|---|---|---|
| 2013 | 2012 | % Variación | |
| Spain | 583 | 1,162 | (49.8) |
| Real Estate | (1,254) | (4,044) | (69.0) |
| Eurasia | 454 | 404 | 12.4 |
| Mexico | 1,805 | 1,689 | 6.8 |
| The United States | 390 | 443 | (11.8) |
| South America | 1,249 | 1,199 | 4.1 |
| Corporate Activities | (999) | 823 | n.m. |
| Total | 2,228 | 1,676 | 32.9 |
The explanations for the changes in the income statement and the main figures on the balance sheet for each of the business areas are given below.