financial statements 2013

Corporate Center

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The Corporate Center aggregate contains all the items not allocated to the business areas, as they basically correspond to the Group's holding function. Basically, this includes: the costs of the central units with a corporate function; the management of structural exchange-rate positions carried out by the Financial Management unit; specific issues of equity instruments designed to ensure adequate management of the Group's global solvency position; portfolios and their corresponding results, whose management is not linked to customer relationships, such as industrial holdings; some tax assets and liabilities; funds due to commitments with employees; goodwill and other intangibles.

In addition, as already mentioned, it includes the result of certain corporate operations completed by the Group over the year, such as the earnings from the pension business in Latin America. In the analysis of the income statement, and in order to ensure that the accounts are comparable, the effects resulting from the aforementioned corporate operations have been transferred to a new heading, “Income from corporate activities".

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Corporate Center Millions of Euros
2013 2012 % Change
NET INTEREST INCOME (719) (473) 51.9
Net fees and commissions (61) (25) ns.
Net gains (losses) on financial assets and liabilities and net exchange differences 347 594 (41.6)
Other operating income and expenses 119 192 (38.2)
GROSS INCOME (314) 288 n.m.
Operating expenses (1,105) (1,029) 7.4
OPERATING INCOME (1,419) (741) 91.5
Impairment losses on financial assets (net) (8) (15) (48.5)
Provisions (net) and other gains (losses) (80) (70) 14.6
Income tax 241 418 (42.4)
Profit from discontinued transactions (net) 383 1,303 n.m.
PROFIT (883) 895 n.m.
Profit attributable to non-controlling interests (116) (72) 60.8

The changes in the main headings of the income statement of this business area are:

“Net interest income” is more negative than in the previous year, €719 million in 2013 compared with €473 million in 2012.

The total balance under the headings "Net gains (losses) on financial assets and liabilities" and "Exchange differences (net)" as of December 31, 2013 totaled €347 million, down 38.2% on the €594 million registered as of December 31, 2012, mainly as a result of the structural exchange-rate risk management.

"Other operating income and expenses" at the close of 2013 is €119 million, compared with €192 million in 2012, due mainly to the lower revenue from dividends.

The balance of “Operating expenses” as of December 31, 2013 amounted to €1,105 million, up 7.4% on the €1,029 million registered in 2012. They continue to reflect the Group's investment effort in technology and infrastructure.

“Operating income” in 2013 is a €1,419 million loss, compared with losses of €741 million in 2012.

The balance under the headings “Provisions expense (net)” and “Other gains (losses)” in 2013 amounted to a loss of €80 million, compared with a loss of €70 million posted the previous year.

As a result of the above, “Income before tax" totaled €1,507 million in losses in 2013, compared with a negative €826 million in 2012.

“Income tax” stood at €241 million in income as of December 31, 2013, compared with €418 million in 2012.

“Income from corporate activities” in 2013 registered a positive €383 million, compared with gains of €1,303 million in 2012. As noted above, this heading includes the earnings from corporate operations completed by the Group. The effects of the following items are registered in 2013:

  • The earnings from the sale of the pension businesses in Mexico, Colombia, Peru and Chile.
  • The capital gain from the sale of BBVA Panama.
  • The impact of the signing of the new agreement with the CITIC group (the repricing at market value of BBVA's stake in CNCB, as well as the equity-adjusted earnings from CNCB, excluding dividends).

The following items had been included in 2012:

  • The badwill generated by the Unnim operation
  • The earnings from the sale of BBVA Puerto Rico
  • The figures from the pension business
  • The equity-adjusted earnings from CNCB (excluding dividends)

As a result, “Net income attributed to parent company” as of December 31, 2013 amounted to a negative €999 million, compared with a positive €823 million in 2012.