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January-June 2013

Relevant events

The highlights of the BBVA Group’s results for the second quarter of 2013 are summarized below:

1. In the income statement, key aspects are the resilience of revenue and the performance of operating expenses and provisioning, in line with the previous quarter:

  • Generation of gross income over the quarter of €5,493m, up €23m from April to June 2013. Strong net interest income, a favorable trend in fees and commissions, and the major contribution from net trading income (NTI) explain this performance. This managed to offset the lower revenue resulting from the elimination of the floor clauses in residential mortgage loans since May 9, 2013. Thus, gross income for the first half of the year stands at €10,964m, compared with €11,071m reported in the same period last year. Last year’s figure also included the Telefónica dividend, which has been suspended temporarily.
  • Expenses in line with previous quarters. The investment plans in emerging economies are still being implemented, while a cost control policy continues to be applied in developed countries. Thus, operating income for the first half of 2013 stands at €5,392m (down 8.8% year-on-year).
  • Impairment losses on financial assets and provisions from April to June amounted to €1,466m, i.e. €76m less than in the first quarter of 2013. They continue to be focused on the commercial loans portfolio in Spain, as expected.
  • Lastly, generation of €471m, after taxes, in capital gains from the closing of the sale of the pension business in Colombia and Peru.
  • Overall, the quarterly net attributable profit for the quarter was €1,147m, which results in a total of €2,882m year to date.

2. As for solvency, the Bank has improved its core capital ratio under Basel II at the close of the first quarter of 2013 from 11.2% to 11.3%. BBVA is the first European bank to strengthen its Tier I capital position with the issue during the second quarter of 2013 of USD 1,500m of a new type of contingent convertible securities into ordinary shares of BBVA.

3. More positive news for liquidity, which was positively influenced by the good trend of customer deposits in Spain in the quarter.

4. The loan portfolio asset quality has also performed as expected: slight uptick in the NPA ratio in Spain and decrease in the United States. In the rest of geographical regions, risk indicators were practically stable.

5. In business activity, lending in emerging countries was once again strong, with a positive performance of the target portfolios in the United States and lending weakness in Spain, as a result of the deleveraging process still underway. By segments, BBVA’s main growth is still in the retail business.

6. Negative impact of the depreciation against the euro of those currencies with a significant weighting in the Group’s financial statements, both in the quarter and over the last twelve months.

7. Lastly, with respect to shareholder remuneration, an interim dividend of €0.10 per share against 2013 earnings was paid out on July 10.


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