Balance sheet and business activity

BBVA closed the fourth quarter of 2011 with a balance sheet that continues to reflect great stability, prudent risk management, great soundness, low leverage and reduced funding needs.

In terms of stability, the Group’s total assets as of 31-Dec-2011 were €598 billion, 2.3% above the figure for the previous quarter.

As in previous quarters, the loan book continues with its twofold performance by geographical area, and the reduction in the most problematic real-estate portfolios in Spain and the United States. In Spain, gross lending to customers fell as a result of the deleveraging process in the country’s economy. Despite this, BBVA gained market share in the residential mortgage portfolio and further reduced its exposure to the developer sector. In Europe, lending remains stable and focused on high added value customers, mainly corporate clients. Lending in Garanti continues to grow, above all in consumer loans. The United States is still making progress in shifting its portfolio mix by increasing the weight of target portfolios (residential and commercial real estate). Finally in Latin America, a region where lending is clearly buoyant, there was a notable increase in lending in practically all the portfolios and categories. Moreover, these rises were of greater quality as a consequence of the significant proportion of bundled customers.

The more stable lower-cost on-balance sheet customer funds (current and saving accounts) performed particularly well. As a result, their weight on the liabilities side of the balance sheet has increased, thus allowing the Group to continue to improve its funding structure.

In off-balance-sheet funds, there has been a reduction of assets under management due to the market turmoil combined with customer preference for other liability products, such as time deposits and promissory notes. Nevertheless, BBVA maintains its leading position in Spain in mutual funds, with a fall that is below the average for the system, thanks to the greater weight of guaranteed funds. Additionally, the Group has clear leadership positions in pension funds, both in Spain and Latin America, where it is considered a model.

Consolidated balance sheet

(Million euros)

	31-12-11	Δ%	31-12-10	30-09-11
Cash and balances with central banks	30,939	54.8	19,981	24,637
Financial assets held for trading	70,602	11.6	63,283	74,860
Other financial assets designated at fair value through profit or loss	2,977	7.3	2,774	2,825
Available-for-sale financial assets	58,143	3.0	56,457	58,768
Loans and receivables	381,077	4.5	364,707	369,919
Loans and advances to credit institutions	26,107	10.5	23,636	23,756
Loans and advances to customers	351,900	3.8	338,857	343,416
Other	3,069	38.7	2,213	2,747
Held-to-maturity investments	10,955	10.1	9,946	11,049
Investments in entities accounted for using the equity method	5,843	28.5	4,547	5,352
Tangible assets	7,330	9.4	6,701	7,026
Intangible assets	8,677	8.4	8,007	10,068
Other assets	21,145	29.4	16,336	19,935
Total assets	597,688	8.1	552,738	584,438
Financial liabilities held for trading	51,303	37.9	37,212	50,616
Other financial liabilities at fair value through profit or loss	1,825	13.6	1,607	1,716
Financial liabilities at amortized cost	479,904	5.9	453,164	468,494
Deposits from central banks and credit institutions	92,503	35.7	68,180	80,072
Deposits from customers	282,173	2.3	275,789	282,050
Debt certificates	81,930	(3.8)	85,180	83,107
Mortgage bonds and covered bonds	42,096	4.6	40,246	44,263
Other debt certificates	39,834	(11.3)	44,933	38,844
Subordinated liabilities	15,419	(11.5)	17,420	16,067
Other financial liabilities	7,879	19.4	6,596	7,198
Liabilities under insurance contracts	7,737	(3.7)	8,033	7,478
Other liabilities	16,861	10.6	15,246	16,265
Total liabilities	557,630	8.2	515,262	544,569
Non-controlling interests	1,893	21.7	1,556	1,730
Valuation adjustments	(2,787)	262.0	(770)	(3,414)
Shareholders’ funds	40,952	11.6	36,689	41,552
Total equity	40,058	6.9	37,475	39,868
Total equity and liabilities	597,688	8.1	552,738	584,438
Memorandum item:
Contingent liabilities	39,904	9.5	36,441	38,530