January-December 2013



The Group faces two very different realities within the real-estate sector: the first is its net exposure to the developer segment (lending to developers plus the foreclosed assets resulting from this lending), which is still falling and will continue to do so in the future; the other is the retail foreclosures, i.e. the assets from the mortgage loans to private individuals. Their increase is linked to the rise in gross additions to NPA in this portfolio in 2008 and 2009.

After complying with the requirements imposed by Royal Decree-Laws 2/2012 and 18/2012 in 2012, BBVA’s net exposure to the real-estate sector in Spain is declining. As of 31-Dec-2013, the balance stood at €14,570m, 1.5% down on the close of the previous quarter and 6.5% below the figure at the close of 2012.

In 2013 there was an increase in the balance of non-performing developer loans, basically due to the application of the classification of refinanced loans in the third quarter. In fact, a significant percentage of the volume of loans reclassified as non-performing as a result of this classification corresponds to customers who are currently up-to-date with their payments.

Within the exposure to the Spanish real-estate sector, property securing mortgage loans to private individuals has increased year-on-year by 14.6%. As has been noted, this rise is closely linked to the increase in gross additions to NPA in this mortgage portfolio during 2008 and 2009.

At the close of 2013, the Group’s coverage of non-performing and substandard loans (51%) and of assets from foreclosures and purchases (51%) remained stable compared with the levels of the previous quarter. Overall coverage of real-estate exposure closed the year at 45%, the same level as that reported at the end of September.

In the latter part of 2013, sales of owned real-estate assets picked up pace, at 4,643 units over the quarter, a rise of 48.3% on the previous quarter. If third party sales are added, the total units sold amount to 8.485. In the year as a whole, cumulative sales totaled 21,383 units, of which 6,993 correspond to third parties.

Spain. Real-estate. Net exposure to real-estate (1)

(Million euros)

(1) Transparency on like-for-like basis: the figures include Unnim but exclude the investment in Metrovacesa. (2) Other foreclosed assets includes foreclosed assets that do not stem from financing family home buying.
Coverage of real estate exposure in Spain

(Million of euros as of 31-12-13)

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Risk amount Provision % Coverage over risk
NPL + Substandard 10,283 5,237 51
NPL 8,838 4,735 54
Substandard 1,445 502 35
Foreclosed real estate and other assets 12,965 6,663 51
From real estate developers 9,173 5,088 55
From dwellings 2,874 1,164 41
Other 918 411 45
Subtotal 23,248 11,900 51
Performing 3,222 - -
With collateral 2,851

Finished properties 2,058

Construction in progress 401

Land 392

Without collateral and other 371

Real estate exposure 26,470 11,900 45
Note: Transparency scope according to Bank of Spain Circular 5/2011 dated November 30.