January-December 2013



Earnings for the BBVA banking business in Spain in 2013 have been influenced by four exceptional factors. First, the elimination in May 9 of the so-called “floor clauses” from mortgage loans signed by consumers. Second, the temporary increase in loan-loss provisions as a result of the classification of refinanced loans in the third quarter. Third, the exceptional payment to the Deposit Guarantee Fund (DGF) booked in the fourth quarter, in order to comply with Royal Decree-Law 6/2013. Lastly, the capital gains generated in the first quarter by the reinsurance operation on the individual life and accident insurance portfolio.

The area’s gross income totaled €6,095m in 2013 (down 8.5% year-on-year). At €3,830m, net interest income declined 19.3% year-on-year due to the elimination of mortgage floors clauses, weaker lending activity and the current setting of low interest rates, and thus narrow spreads. However, there has been improvement over the quarter (up 7.4%) thanks to adequate price management in new lending operations and, above all, in renewals of liabilities, which will lay the foundations for recovery of net interest income in the coming years. Income from fees and commissions is up 2.5% during the same period to €1,376m, thanks to the positive performance of fees from fund management and wholesale banking transactions with clients. Lastly, the positive performance of the Markets unit and good management of structural risks on the balance sheet against a background of low interest rates have had a positive impact on NTI generation in 2013, with strong performance offsetting the decline in the ‘Other income and expenses’ heading due to the one-off insurance operation done in early 2013 and the exceptional payment made to the Deposit Guarantee Fund in the fourth quarter.

Operating expenses remain under control and show a substantial slowdown in their year-on-year rate of change. For the year as a whole, this heading amounts to €3,014m, up 4.4% on 2012, the year Unnim was incorporated (late July). Consequently, operating income for the year totals €3,081m, compared to €3,778m in 2012.

Impairment losses on financial assets in the quarter have the lowest figure for the year, markedly lower than in the previous quarter, which included an additional charge due to the classification of refinanced loans. For the year as a whole, this heading amounts to €2,577m, up 39.1% year-on-year due to the aforementioned additional charge.

Lastly, the ‘Results from corporate operations’ heading includes the capital gain from the reinsurance operation carried out in the first quarter of the year. All considered, banking activity in Spain generated a net attributable profit of €583m in 2013.

Spain. Banking activity. Operating income

(Million euros)

Spain. Banking activity. Net attributable profit

(Million euros)