The BBVA Group’s income statement for the fourth quarter of 2011 has a significantly high level of revenue, which has allowed for a higher effort in loan-loss provisions. The most significant aspects of the statement are detailed below:
- The continuing upward trend in the most recurring revenue, i.e. gross income excluding NTI and dividends:
- Net interest income has risen for the fourth quarter in a row thanks to the increased business activity in emerging countries and appropriate price management carried out in all geographical areas.
- Income from fees and commissions were stable, despite the regulatory limitations in force in some areas, lower activity in Spain and greater efforts to maintain customer loyalty.
- Equity-accounted income was up considerably boosted by the contribution from CNBC.
- There was also a significant contribution from NTI after a particularly low third quarter, and from dividends, which include the payment from the stake in Telefónica.
- Impairment losses on financial assets were up over the quarter, basically due to the increase of the Group’s loan-loss provisions, which took advantage of the higher revenue. Nonetheless, the figure for the year as a whole is 10.4% down on 2010.
- There was an adjustment to the value of goodwill in the United States of €1,011m after tax. Despite the positive performance of the franchise in 2011, the slower-than-expected economic recovery and low interest rates outlook, combined with growing regulatory pressure, all imply a slowdown in forecast earnings growth in this area. This adjustment is of an accounting nature only and does not have any negative consequence on the Group’s liquidity or capital adequacy.
- The net attributable profit before applying the goodwill impairment was €872m in the fourth quarter and €4,015m for the year as a whole. Including the adjustment, the Group’s net attributable profit for 2011 came to €3,004m.
