January-June 2013

Economic capital

Economic risk capital (ERC) consumption at the close of June 2013 amounted to €34,687m, a 1.3% decline over the quarter.

As is to be expected from BBVA’s profile, the largest allocation to ERC (55.0%) relates to credit risk on portfolios originated in the Group’s branch network from its own customer base. There was another decline of 3.6% in the quarter, once more concentrated in Spain.

Equity risk, in other words the portfolio of holdings in industrial and financial companies, the stake in CNCB, and consumption of economic capital from goodwill, has maintained its proportion stable in relation to total risks (19.9%).

Structural balance-sheet risk, originated from the management of structural interest-rate risk and exchange-rate risk, accounts for 8.0% of ERC, and has increased 8.2% over the quarter.

Operational risk remained practically at the same level as the previous quarter with a relative weight of 6.3%, while fixed-asset risk declined by 8.8% and accounts for 7.0% of total ERC consumption.

Lastly, market risk, which is of less importance given the nature of the business and BBVA’s policy of minimal proprietary trading, increased its relative weight slightly over the quarter to 2.8%.