12. Available-for-sale financial assets
12.1 Breakdown of the balance
The breakdown of the balance by the main financial instruments in the accompanying consolidated balance sheets is as follows:
| Available-for-Sale Financial Assets | Millions of Euros | ||
|---|---|---|---|
| 2011 | 2010 | 2009 | |
| Debt securities | 53,050 | 51,064 | 57,293 |
| Impairment losses | (136) | (189) | (222) |
| Subtotal | 52,914 | 50,875 | 57,071 |
| Equity instruments | 5,663 | 6,010 | 6,676 |
| Impairment losses | (433) | (429) | (226) |
| Subtotal | 5,230 | 5,581 | 6,450 |
| Total | 58,144 | 56,456 | 63,521 |
12. 2 Debt securities
The breakdown of the balance under the heading “Debt securities”, broken down by the nature of the financial instruments, is as follows:
| Debt Securities Available-for-Sale 2011 |
Millions of Euros | |||
|---|---|---|---|---|
| Amortized Cost | Unrealized Gains |
Unrealized Losses |
Fair Value |
|
| Domestic Debt Securities |
|
|
|
|
| Spanish Government and other government agency debt securities | 20,597 | 58 | (1,384) | 19,271 |
| Other debt securities | 4,426 | 125 | (300) | 4,251 |
| Issue by Central Banks | - | - | - | - |
| Issue by credit institutions | 3,307 | 80 | (247) | 3,140 |
| Issue by other issuers | 1,119 | 45 | (53) | 1,111 |
| Subtotal | 25,023 | 183 | (1,684) | 23,522 |
| Foreign Debt Securities |
|
|
|
|
| Mexico | 4,815 | 176 | - | 4,991 |
| Mexican Government and other government agency debt securities | 4,742 | 164 | - | 4,906 |
| Other debt securities | 73 | 12 | - | 85 |
| Issue by Central Banks | - | - | - | - |
| Issue by credit institutions | 59 | 11 | - | 70 |
| Issue by other issuers | 14 | 1 | - | 15 |
| The United States | 7,355 | 243 | (235) | 7,363 |
| Government securities | 996 | 36 | (12) | 1,020 |
| US Treasury and other US Government agencies | 487 | 8 | (12) | 483 |
| States and political subdivisions | 509 | 28 | - | 537 |
| Other debt securities | 6,359 | 207 | (223) | 6,343 |
| Issue by Central Banks | - | - | - | - |
| Issue by credit institutions | 631 | 22 | (36) | 617 |
| Issue by other issuers | 5,728 | 185 | (187) | 5,726 |
| Other countries | 17,403 | 619 | (984) | 17,038 |
| Other foreign governments and other government agency debt securities | 11,617 | 345 | (666) | 11,296 |
| Other debt securities | 5,786 | 274 | (318) | 5,742 |
| Issue by Central Banks | 849 | 6 | - | 855 |
| Issue by credit institutions | 3,080 | 184 | (266) | 2,998 |
| Issue by other issuers | 1,857 | 84 | (52) | 1,889 |
| Subtotal | 29,573 | 1,038 | (1,219) | 29,392 |
| Total | 54,596 | 1,221 | (2,903) | 52,914 |
A significant part of the increase in “Other countries” is due primarily to the incorporation of the Garanti group into the consolidated BBVA Group.
| Debt Securities Available-for-Sale 2010 |
Millions of Euros | |||
|---|---|---|---|---|
| Amortized Cost | Unrealized Gains |
Unrealized Losses |
Fair Value |
|
| Domestic Debt Securities |
|
|
|
|
| Spanish Government and other government agency debt securities | 16,543 | 58 | (1,264) | 15,337 |
| Other debt securities | 5,386 | 49 | (206) | 5,229 |
| Issue by Central Banks | - | - | - | - |
| Issue by credit institutions | 4,222 | 24 | (156) | 4,090 |
| Issue by other issuers | 1,164 | 25 | (50) | 1,139 |
| Subtotal | 21,929 | 107 | (1,470) | 20,566 |
| Foreign Debt Securities |
|
|
|
|
| Mexico | 9,653 | 470 | (17) | 10,106 |
| Mexican Government and other government agency debt securities | 8,990 | 441 | (14) | 9,417 |
| Other debt securities | 663 | 29 | (3) | 689 |
| Issue by Central Banks | - | - | - | - |
| Issue by credit institutions | 553 | 28 | (2) | 579 |
| Issue by other issuers | 110 | 1 | (1) | 110 |
| The United States | 6,850 | 216 | (234) | 6,832 |
| Government securities | 767 | 13 | (9) | 771 |
| US Treasury and other US Government agencies | 580 | 6 | (8) | 578 |
| States and political subdivisions | 187 | 7 | (1) | 193 |
| Other debt securities | 6,083 | 203 | (225) | 6,061 |
| Issue by Central Banks | - | - | - | - |
| Issue by credit institutions | 2,981 | 83 | (191) | 2,873 |
| Issue by other issuers | 3,102 | 120 | (34) | 3,188 |
| Other countries | 13,606 | 394 | (629) | 13,371 |
| Other foreign governments and other government agency debt securities | 6,743 | 169 | (371) | 6,541 |
| Other debt securities | 6,863 | 225 | (258) | 6,830 |
| Issue by Central Banks | 944 | 1 | - | 945 |
| Issue by credit institutions | 4,431 | 177 | (188) | 4,420 |
| Issue by other issuers | 1,488 | 47 | (70) | 1,465 |
| Subtotal | 30,109 | 1,080 | (880) | 30,309 |
| Total | 52,038 | 1,187 | (2,350) | 50,875 |
The decrease in the balance under the heading “Debt securities” in 2010 is mainly due to the sale of securities and changes in the valuations of these portfolios.
| Debt Securities Available-for-Sale 2009 |
Millions of Euros | |||
|---|---|---|---|---|
| Amortized Cost | Unrealized Gains |
Unrealized Losses |
Fair Value |
|
| Domestic Debt Securities |
|
|
|
|
| Spanish Government and other government agency debt securities | 18,312 | 309 | (70) | 18,551 |
| Other debt securities | 6,265 | 178 | (125) | 6,318 |
| Subtotal | 24,577 | 487 | (195) | 24,869 |
| Foreign Debt Securities |
|
|
|
|
| The United States | 6,804 | 174 | (173) | 6,805 |
| Government securities | 628 | 11 | (2) | 637 |
| US Treasury and other US Government agencies | 414 | 4 | (2) | 416 |
| States and political subdivisions | 214 | 7 | - | 221 |
| Other debt securities | 6,176 | 163 | (171) | 6,168 |
| Other countries | 25,064 | 893 | (560) | 25,397 |
| Other foreign governments and other government agency debt securities | 17,058 | 697 | (392) | 17,363 |
| Other debt securities | 8,006 | 196 | (168) | 8,034 |
| Subtotal | 31,868 | 1,067 | (733) | 32,202 |
| Total | 56,445 | 1,554 | (928) | 57,071 |
As of December 31, 2011, the credit ratings of the issuers of debt securities in the available-for-sale portfolio are as follows:
| Avalaible for Sale financial assets Debt Secutities by Rating |
Fair Value (Millions of Euros) |
% |
|---|---|---|
| AAA | 3,022 | 5.7% |
| AA+ | 5,742 | 10.9% |
| AA | 1,242 | 2.3% |
| AA- | 18,711 | 35.4% |
| A+ | 735 | 1.4% |
| A | 2,320 | 4.4% |
| A- | 949 | 1.8% |
| With rating BBB+ or below | 14,212 | 26.9% |
| Without rating | 5,981 | 11.3% |
| Total | 52,914 | 100.0% |
12.3 Equity instruments
The breakdown of the balance under the heading "Equity instruments" as of December 31, 2011, 2010 and 2009 is as follows:
| Equity Instruments Available-for-Sale 2011 | Millions of Euros | |||
|---|---|---|---|---|
| Amortized Cost | Unrealized Gains |
Unrealized Losses |
Fair Value |
|
| Equity instruments listed |
|
|
|
|
| Listed Spanish company shares | 3,802 | 468 | (2) | 4,268 |
| Credit institutions | 2 | - | - | 2 |
| Other entities | 3,800 | 468 | (2) | 4,266 |
| Listed foreign company shares | 361 | 5 | (91) | 275 |
| United States | 41 | - | (12) | 29 |
| Mexico | - | - | - | - |
| Other countries | 320 | 5 | (79) | 246 |
| Subtotal | 4,163 | 473 | (93) | 4,543 |
| Unlisted equity instruments | - | - | - | - |
| Unlisted Spanish company shares | 36 | - | - | 36 |
| Credit institutions | 1 | - | - | 1 |
| Other entities | 35 | - | - | 35 |
| Unlisted foreign companies shares | 638 | 13 | - | 651 |
| United States | 560 | 2 | - | 562 |
| Mexico | 1 | - | - | 1 |
| Other countries | 77 | 11 | - | 88 |
| Subtotal | 674 | 13 | - | 687 |
| Total | 4,837 | 486 | (93) | 5,230 |
| Equity Instruments Available-for-Sale 2010 | Millions of Euros | |||
|---|---|---|---|---|
| Amortized Cost | Unrealized Gains |
Unrealized Losses |
Fair Value |
|
| Equity instruments listed |
|
|
|
|
| Listed Spanish company shares | 3,378 | 1,212 | (7) | 4,583 |
| Credit institutions | 3 | - | - | 3 |
| Other entities | 3,375 | 1,212 | (7) | 4,580 |
| Listed foreign company shares | 270 | 8 | (25) | 253 |
| United States | 12 | 1 | - | 13 |
| Other countries | 258 | 7 | (25) | 240 |
| Subtotal | 3,648 | 1,220 | (32) | 4,836 |
| Unlisted equity instruments | ||||
| Unlisted Spanish company shares | 25 | - | - | 25 |
| Credit institutions | 1 | - | - | 1 |
| Other entities | 24 | - | - | 24 |
| Unlisted foreign companies shares | 657 | 63 | - | 720 |
| United States | 594 | 55 | - | 649 |
| Other countries | 63 | 8 | - | 71 |
| Subtotal | 682 | 63 | - | 745 |
| Total | 4,330 | 1,283 | (32) | 5,581 |
| Equity Instruments Available-for-Sale 2009 | Millions of Euros | |||
|---|---|---|---|---|
| Amortized Cost | Unrealized Gains |
Unrealized Losses |
Fair Value |
|
| Equity instruments listed |
|
|
|
|
| Listed Spanish company shares | 3,657 | 1,738 | (12) | 5,383 |
| Credit institutions | - | - | - | - |
| Other entities | 3,657 | 1,738 | (12) | 5,383 |
| Listed foreign company shares | 266 | 12 | (28) | 250 |
| United States | 16 | - | (8) | 8 |
| Other countries | 250 | 12 | (20) | 242 |
| Subtotal | 3,923 | 1,750 | (40) | 5,633 |
| Unlisted equity instruments |
|
|
|
|
| Unlisted Spanish company shares | 26 | - | - | 26 |
| Credit institutions | 1 | - | - | 1 |
| Other entities | 25 | - | - | 25 |
| Unlisted foreign companies shares | 682 | 109 | - | 791 |
| United States | 625 | 104 | - | 729 |
| Other countries | 57 | 5 | - | 62 |
| Subtotal | 708 | 109 | - | 817 |
| Total | 4,631 | 1,859 | (40) | 6,450 |
12.4 Gains/losses
The changes in the gains/losses, net of taxes, recognized under the equity heading “Valuation adjustments – Available-for-sale financial assets” in the accompanying consolidated balance sheets are as follows:
| Changes in Valuation Adjustments - Available-for-Sale Financial Assets | Millions of Euros | ||
|---|---|---|---|
| 2011 | 2010 | 2009 | |
| Balance at the beginning | 333 | 1,951 | 931 |
| Valuation gains and losses | (1,349) | (1,952) | 1,520 |
| Income tax | 264 | 540 | (483) |
| Amounts transferred to income | 70 | (206) | (18) |
| Balance at the end | (682) | 333 | 1,951 |
| Of which: | |||
| Debt securities | (1,027) | (746) | 456 |
| Equity instruments | 345 | 1,079 | 1,495 |
The losses recognized under the heading “Valuation adjustments – Available-for-sale financial assets” in the consolidated income statement for 2011 correspond mainly to Spanish government debt securities.
Of the losses recognized under the heading "Valuation adjustments – Available-for-sale financial assets” and originating in debt securities, some 38.9% were generated over more than twelve months. However, no impairment has been estimated, as following an analysis of these unrealized losses it can be concluded that they were temporary, because: the interest payment dates of all the fixed-income securities have been satisfied; and because there is no evidence that the issuer will not continue to comply with his payment obligations, nor that future payments of both principal and interests will not be sufficient to recover the cost of the debt securities.
The losses recognized under the heading “Impairment losses on financial assets (net) – Available-for-sale financial assets” in the accompanying consolidated income statement amounted to €25, €155 and €277 million for the years 2011, 2010 and 2009, respectively (see Note 49).