After the slowdown seen in the first half of the year, the global economy picked up again in the second half of 2013. This has had a positive impact on financial markets in late 2013, once uncertainty, particularly regarding the expansive monetary policy applied by the Fed, was dispelled. Overall, there was an improvement in funding costs and a reduction in liquidity tensions during the year. The deleveraging process and implementation of regulatory reforms in the European Union also continued.
Wholesale banking activity continued with the structural change to its business model, including the withdrawal (or reduction) of those geographical areas and products that are not critical for banking activity, particularly in the case of European banks; a greater use of flow products such as foreign currency or transactional banking; containment of credit; and general reduction in costs.
The breakdown of the activity and earnings of the BBVA wholesale business is shown below. Unless otherwise indicated, all the comments on changes below refer to constant exchange rates. Due to the widespread depreciation against the euro of currencies with an impact on the Group’s financial statements, the effect of exchange rates is negative in both earnings and in the balance sheet and activity.
