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BBVA in 2013

Credit risk in 2013

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At the end of 2013, the Group’s main asset quality indicators have evolved as forecast:

  • Uptick in the NPA ratio in Spain to 10.3% (6.4% excluding real-estate activity) due, on the one hand, to the classification of refinanced loans in the third quarter of 2013 and, on the other, to the decline in the loan book. The coverage ratio stands at 50% (41% without taking into account real-estate activity).
  • In the rest of the geographical areas, improvement in the asset quality indicators in the United States and Mexico, slight deterioration in Eurasia (due to the deleveraging process in Europe and the exchange-rate effect in Turkey) and stability in South America.

As a result, the Group ended 2013 with its main risk indicators as expected and comparing positively with those of most of its peers. As of 31-Dec-2013, the NPA ratio stood at 6.8% (4.6 % excluding the real-estate activity in Spain), the coverage ratio at 60% (59% excluding the real-estate activity in Spain) and the cumulative risk premium at 1.59% (1.50% excluding the real-estate activity in Spain).

BBVA’s exposure to credit risk stood at €627,273m at the close of December 2013, with a year-on-year decrease of 3.2%. Customer credit risks (including contingent liabilities), which account for 61.6% of total credit risk, decreased by 5.1% over the same time period. This decrease was due to the aforementioned decline in the loan book in Spain and in the wholesale portfolios in Europe, which has been partly offset by the growth in lending activity in the emerging economies and in the United States. Potential exposure to credit risk in market activities (23.9% overall), including potential exposure to derivatives (once netting and collateral agreements are considered), declined by 3.1%, while undrawn facilities (14.5% of the total) increased by 5.5%.

BBVA Group. Exposure to credit risk

(Million euros)

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31-12-13 31-12-12 31-12-11

Banking
activity
in Spain
Real-estate
activity in
Spain
The
United
States
Eurasia(1) Mexico South
America
Corporate
Center
Total
Group
Total
Group
Total
Group
Gross credit risk
(drawn)
194,099 16,684 41,166 39,529 40,963 53,493 467     386,401     407,126     400,709
Customer lending (gross) 178,335 16,085 38,173 28,117 40,610 48,466 431 350,218 367,719 361,310
Contingent liabilities 15,764 599 2,992 11,412 353 5,027 36 36,183 39,407 39,398
Market activity 91,837 234 8,762 5,795 27,275 14,576 1,457 149,935 154,689 134,937
Credit entities 14,376 232 1,179 1,763 2,407 2,229 2,016 24,203 26,522 26,107
Fixed income 64,870 2 7,282 4,031 24,094 10,193 (559) 109,913 110,505 88,621
Derivatives 12,591 0 301 0 774 2,153 0 15,820 17,662 20,209
Undrawn facilities 31,043 4,746 24,568 15,272 15,933 6,290 (6,915) 90,937 86,223 88,978
Maximum exposure to credit risk 316,978 21,664 74,496 60,595 84,172 74,359 (4,991) 627,273 648,039 624,624
(1) Data with Garanti Group accounted for by the proportional consolidation method.
BBVA Group. Exposure to credit risk. Breakdown by type of risk

(31-12-2013. Percentage)
BBVA Group. Exposure to credit risk. Breakdown by business area

(31-12-2013. Percentage)
BBVA Group. Loan book exposure. Breakdown by portfolio

(31-12-2013. Percentage)

The exposure breakdown by rating of the parent company and subsidiaries in Spain (including real-estate activity), which comprises corporations, financial institutions, and sovereign institutions and customers, shows 52.6% of A or better ratings. Also shown is the breakdown by rating of the business and developer segments in Spain, and of the loan book with corporates and financial institutions in Mexico.

Breakdown by rating in Spain(1)

(Exposure as of 31-12-2013)

(1) Include companies, financial institutions, public institutions and sovereign risks.
Breakdown by rating. Corporate and developers in Spain(1)

(Exposure as of 31-12-2013)

(1) Includes only the banking book.
Breakdown by rating in Mexico

(Exposure as of 31-12-2013)

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