The BBVA Group’s activity is geographically diversified in Spain, Mexico, South America and the United States, with an active presence in Europe and Asia, especially Turkey and China. As mentioned in Note 6 of the accompanying consolidated financial statements, the BBVA Group has maintained the business areas used by the BBVA Group in 2013.
In drawing up the Income Statement in this Management Report, three effects have to be taken into account:
- Garanti’s assets and liabilities have been proportionally integrated based on our 25.01% interest in Garanti.
- The restatement of the consolidated Income Statement in 2013 mentioned in the heading 2.2, has been allocated in the Corporate Center.
- Earnings from certain corporate activities made throughout the year 2013, discussed below, are classified under the heading, “Income from corporate activities” to facilitate the comparability of the other lines of the income statement for 2014, in which they have not made significant corporate transactions.
The heading, “Income from corporate activities” included:
- Banking activity in Spain: Earnings from the operation on the individual life and accident insurance portfolio in Spain, made in the three months ended March 31, 2013.
- In Corporate activity :
- Earnings from sales of the pension business in Mexico, Colombia, Peru and Chile, and the results generated by each of those businesses until the sale.
- A change in the accounting criteria in the investment in CNCB from “Investments in entities accounted for using the equity method” to “Available-for-sale financial assets” after reaching a new agreement with Citic Group in October 2013 that included among other aspect the sale of its 5.1%stake in CNCB to Citic Limited (see Note 3 to the accompanying consolidated financial statements).
- Tax impact of corporate operations.
The reconciliation between the Group's summarized consolidated income statements for 2014 and 2013 and the management account is as follows:
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Millions of Euros | |||||
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2014 | 2013 | ||||
| BBVA Group Income Statement | Consolidated Income Statement | Reconciliation | Management Income Statement | Consolidated Income Statement | Reconciliation | Management Income Statement |
| NET INTEREST INCOME | 14,382 | 734 | 15,116 | 13,900 | 713 | 14,613 |
| Net fees and commissions | 4,174 | 191 | 4,365 | 4,250 | 181 | 4,431 |
| Net gains (losses) on financial assets and liabilities and net exchange differences | 2,134 | 1 | 2,135 | 2,511 | 16 | 2,527 |
| Other operating income and expenses | 35 | (295) | (260) | 91 | (266) | (175) |
| GROSS INCOME | 20,725 | 632 | 21,357 | 20,752 | 645 | 21,397 |
| Operating expenses | (10,559) | (392) | (10,951) | (10,796) | (405) | (11,201) |
| Administration costs | (9,414) | (357) | (9,771) | (9,701) | (367) | (10,068) |
| Personnel expenses | (5,410) | (199) | (5,609) | (5,588) | (200) | (5,788) |
| General and administrative expenses | (4,004) | (157) | (4,161) | (4,113) | (167) | (4,280) |
| Depreciation and amortization | (1,145) | (35) | (1,180) | (1,095) | (38) | (1,133) |
| OPERATING INCOME | 10,166 | 240 | 10,406 | 9,956 | 240 | 10,196 |
| Impairment losses on financial assets (net) | (4,340) | (146) | (4,486) | (5,612) | (164) | (5,776) |
| Provisions (net) and other gains (losses) | (1,846) | (11) | (1,857) | (3,390) | 1,720 | (1,670) |
| Provisions (net) | (1,142) | (13) | (1,155) | (609) | (21) | (630) |
| Other gains (losses) | (704) | 3 | (701) | (2,781) | 1,741 | (1,040) |
| OPERATING PROFIT/ (LOSS) BEFORE TAX | 3,980 | 83 | 4,063 | 954 | 1,796 | 2,750 |
| Income tax | (898) | (83) | (981) | 16 | (609) | (593) |
| PROFIT FROM CONTINUING TRANSACTIONS | 3,082 | - | 3,082 | 970 | 1,188 | 2,158 |
| Profit from discontinued/corporate operations (net) | - | - | - | 1,866 | (1,043) | 823 |
| PROFIT | 3,082 | - | 3,082 | 2,836 | 144 | 2,981 |
| Profit attributable to non-controlling interests | 464 | - | 464 | 753 | - | 753 |
| PROFIT ATTRIBUTABLE TO PARENT COMPANY | 2,618 | - | 2,618 | 2,084 | 144 | 2,228 |
The contribution of the different business areas to the Group's management income statement in 2014 is as follows:
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Operating segments |
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| Management Income Statement 2014 | BBVA Group | Banking activity in Spain | Real Estate | Eurasia | Mexico | The United States | South America | Total Operating Segments | Corporate Center |
| NET INTEREST INCOME | 15,116 | 3,830 | (38) | 924 | 4,910 | 1,443 | 4,699 | 15,767 | (651) |
| Net fees and commissions | 4,365 | 1,454 | 4 | 378 | 1,166 | 553 | 901 | 4,457 | (92) |
| Net gains (losses) on financial assets and liabilities and net exchange differences | 2,135 | 1,149 | 72 | 151 | 195 | 145 | 482 | 2,195 | (60) |
| Other operating income and expenses | (260) | 189 | (170) | 227 | 250 | (4) | (890) | (398) | 139 |
| GROSS INCOME | 21,357 | 6,622 | (132) | 1,680 | 6,522 | 2,137 | 5,191 | 22,020 | (664) |
| Operating expenses | (10,951) | (2,845) | (159) | (738) | (2,406) | (1,497) | (2,316) | (9,962) | (989) |
| Administration costs | (9,771) | (2,740) | (136) | (691) | (2,219) | (1,318) | (2,137) | (9,241) | (530) |
| Personnel expenses | (5,609) | (1,707) | (86) | (387) | (1,020) | (861) | (1,099) | (5,160) | (450) |
| General and administrative expenses | (4,161) | (1,034) | (50) | (304) | (1,199) | (457) | (1,038) | (4,081) | (80) |
| Depreciation and amortization | (1,180) | (105) | (23) | (47) | (187) | (179) | (179) | (721) | (459) |
| OPERATING INCOME | 10,406 | 3,777 | (291) | 942 | 4,115 | 640 | 2,875 | 12,058 | (1,653) |
| Impairment losses on financial assets (net) | (4,486) | (1,690) | (305) | (203) | (1,517) | (68) | (706) | (4,489) | 3 |
| Provisions (net) and other gains (losses) | (1,857) | (623) | (629) | (27) | (79) | (10) | (219) | (1,587) | (270) |
| Provisions (net) | (1,155) | (623) | (14) | (13) | (62) | (9) | (213) | (934) | (222) |
| Other gains (losses) | (701) | - | (615) | (15) | (17) | (2) | (6) | (653) | (48) |
| OPERATING PROFIT/ (LOSS) BEFORE TAX | 4,063 | 1,463 | (1,225) | 713 | 2,519 | 561 | 1,951 | 5,983 | (1,920) |
| Income tax | (981) | (432) | 351 | (147) | (604) | (133) | (490) | (1,454) | 472 |
| PROFIT FROM CONTINUING TRANSACTIONS | 3,082 | 1,032 | (873) | 565 | 1,916 | 428 | 1,461 | 4,529 | (1,447) |
| Profit from corporate operations (net) | - | - | - | - | - | - | - | - | - |
| PROFIT | 3,082 | 1,032 | (873) | 565 | 1,916 | 428 | 1,461 | 4,529 | (1,447) |
| Profit attributable to non-controlling interests | 464 | 4 | 3 | - | 1 | - | 460 | 467 | (3) |
| PROFIT ATTRIBUTABLE TO PARENT COMPANY | 2,618 | 1,028 | (876) | 565 | 1,915 | 428 | 1,001 | 4,062 | (1,444) |
The breakdown by business area of “Net income attributed to parent company” in 2014 and 2013 in the Group is as follows:
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Millions of Euros | ||
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| Profit by Operating Segments | 2014 | 2013 | % Change |
| Banking activity in Spain | 1,028 | 589 | 74.7 |
| Real Estate activity in Spain | (876) | (1,252) | (30.0) |
| Eurasia | 565 | 449 | 25.9 |
| Mexico | 1,915 | 1,802 | 6.3 |
| The United States | 428 | 390 | 10.0 |
| South America | 1,001 | 1,224 | (18.2) |
| Subtotal by business areas | 4,062 | 3,201 | 69 |
| Corporate Activities | (1,444) | (1,117) | 29.3 |
| Total | 2,618 | 2,084 | 25.6 |
The explanations for the changes in the income statement and the main figures on the balance sheet for each of the business areas are given below.
2.4.1. Banking activity in Spain
Earnings and Activity
Earnings in this area during 2014 with respect to 2013 have been affected mainly by the lower impairment losses on financial assets; and to a lesser extent, by the elimination of the “floor clauses” in residential mortgage loans (from May 9, 2013); operating expenses restraint and higher provisions for the costs related to transformation process of the Group.
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Millions of Euros | ||
|---|---|---|---|
| Banking activity in Spain | 2014 | 2013 | % Change |
| NET INTEREST INCOME | 3,830 | 3,838 | (0.2) |
| Net fees and commissions | 1,454 | 1,376 | 5.7 |
| Net gains (losses) on financial assets and liabilities and net exchange differences | 1,149 | 807 | 42.4 |
| Other operating income and expenses | 189 | 82 | 129.6 |
| GROSS INCOME | 6,622 | 6,103 | 8.5 |
| Operating expenses | (2,845) | (3,014) | (5.6) |
| Administration costs | (2,740) | (2,903) | (5.6) |
| Personnel expenses | (1,707) | (1,851) | (7.8) |
| General and administrative expenses | (1,034) | (1,052) | (1.8) |
| Depreciation and amortization | (105) | (111) | (5.3) |
| OPERATING INCOME | 3,777 | 3,088 | 22.3 |
| Impairment losses on financial assets (net) | (1,690) | (2,577) | (34.4) |
| Provisions (net) and other gains (losses) | (623) | (282) | 121.3 |
| Provisions (net) | (623) | (315) | 97.7 |
| Other gains (losses) | - | 34 | n.m. |
| OPERATING PROFIT/ (LOSS) BEFORE TAX | 1,463 | 230 | n.m. |
| Income tax | (432) | (62) | n.m. |
| PROFIT FROM CONTINUING TRANSACTIONS | 1,032 | 168 | n.m. |
| Profit from corporate operations (net) | - | 440 | n.m. |
| PROFIT | 1,032 | 608 | 69.7 |
| Profit attributable to non-controlling interests | (4) | (20) | (81.8) |
| PROFIT ATTRIBUTABLE TO PARENT COMPANY | 1,028 | 589 | 74.7 |
The changes in the principal headings of the income statement of this business area are:
"Net Interest Income'' of this operating segment for the year ended December 31, 2014 amounted to €3,830 million, a 0.2% decrease compared with the €3,838 million recorded for the year ended December 31, 2013. The negative impact of the elimination of "floor clauses” in residential mortgage loans (during the 2013 impact was lower because the clauses were removed beginning May 9, 2013), is practically offset by positive effect of the decrease of deposit costs and the moderate improvement of customer spread in the prevailing low interest rates environment.
''Net Fees and Commissions'' of this operating segment for the year ended December 31, 2014 amounted to €1,454 million, a 5.7% increase compared with the €1,376 million recorded for the year ended December 31, 2013, mainly due to the increase of fees and commissions charged by mutual funds and pension, as well as by placement of securities. It is worth highlight, in the second half of 2014, certain regulatory constraints came into force affecting cards and funs management fees charged.
''Net Gains (Losses) On Financial Assets and Liabilities and Net Exchange Differences'' of this operating segment for the year ended December 31, 2014 amounted to €1,149 million, a 42.4% increase compared with the €807 million recorded for the year ended December 31, 2013, as a result of gains on the sale of available-for-sale securities including sovereign bonds managed by ALCO, which were positively affected by the improved market perception on sovereign debt as a result of the lower sovereign risk premiums paid in recent issuances.
''Other Operating Income And Expenses'' of this operating segment for the year ended December 31, 2014 amounted to €189 million, a 129.6% increase compared with the €82 million recorded for the year ended December 31, 2013, mainly due to a good performance of the insurance activity and a lower contribution to the Deposit Guarantee Fund. As mentioned before, in order to guarantee the year-on-year evolution of the Income Statement, the retrospective application of the aforementioned CINIIF-21 to the second tranche of the exceptional contribution to the Deposit Guarantee Fund has been allocated to the Corporate Center in the 2013 financial year.
“Gross Income” for the year ended December 31, 2014 amounted to €6,622 million, an 8.5% decrease compared with the €6,103 million recorded for the 2013.
''Administration Costs'' of this operating segment for the year ended December 31, 2014 was a loss of €2,740 million, a 5,6% decrease compared with the €2,903 million recorded for the year ended December 31, 2013, primarily due to the transformation and digitalization process launched by the BBVA Group. In this line, this process means, amongst others, cost contention measures, branches closure and staff resizing.
"Operating Income” for the year ended December 31, 2014 amounted to €3,777 million, a 22.3% increase compared with the €3,088 million recorded for the 2013.
''Impairment Losses On Financial Assets (Net)'' of this operating segment for the year ended December 31, 2014 was a loss of €1,690 million, a 34.4% decrease compared with the €2,577 million recorded for the year ended December 31, 2013, due to the improve of credit quality by decreasing of non-performing loans and the fact that the collateral value of the loans in this portfolio deteriorated more in 2013 than in 2014.
''Provisions (Net) And Other Gains (Losses)'' of this operating segment for the year ended December 31, 2014 was a loss of €623 million, compared with the €282 million recorded for the year ended December 31, 2013. ''Provisions (Net)'' of this operating segment was a loss of €623 million, a 97.7% increase compared with the €315 million recorded 2013, mainly due to costs restructuring arising from the transformation and digitalization process launched by the Group.
''Operating Profit/ (Loss) Before Tax'' of this operating segment for the year ended December 31, 2014 amounted to €1,463 million, compared with the €230 million recorded for the year ended December 31, 2013.
''Income Tax'' of this operating segment for the year ended December 31, 2014 showed a loss of €432 million, compared with the €62 million recorded for the year ended December 31, 2013. The balance under the heading "Earnings from corporate operations" includes the capital gain from the operation on the insurance portfolio completed in 2013.
''Profit Attributable To Parent Company'' of this operating segment for the year ended December 31, 2014 amounted to €1,028 million, a 74.7% increase compared with the €589 million recorded for the year ended December 31, 2013. This increase was mainly as a result of the already mentioned lower impairment losses on financial assets.
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Millions of Euros | ||
|---|---|---|---|
| Banking activity in Spain | 2014 | 2013 | % Change |
| Total Assets | 318,353 | 314,902 | 1.1 |
| Loans and advances to customers | 174,197 | 178,283 | (2.3) |
| Customer deposits under management (*) | 154,261 | 157,124 | (1.8) |
| Mutual funds | 28,695 | 22,298 | 28.7 |
| Pension funds | 21,880 | 20,428 | 7.1 |
| Other placements | 19,368 | 16,547 | 17.0 |
| Efficiency ratio (%) | 43.0 | 49.4 |
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| NPA Ratio (%) | 6.0 | 6.4 |
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| NPA Coverage Ratio (%) | 45 | 41 |
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The changes in the main headings of activity in this business area are as follows:
''Loans and advances to customers'' of this operating segment as of December 31,2014 amounted to €174,197 million, a 2.3% decrease compared with the €178,283 million recorded as of December 31, 2013, as a result of the fact that the granting of new loans ( especially consumer lending) do not offset previous loans. With respect to asset quality, there is a positive trend in net additions. Consequently the ''NPA ratio'' of this operating segment as of December 31, 2014 was 6% compared with 6.4% as of December 31, 2013. ''NPA coverage ratio'' of this operating segment as of December 31, 2014 was 45% compared with 41% as of December 31, 2013.
''Customer deposits under management'' of this operating segment as of December 31, 2014 amounted to €154,261 million, a 1.8% decrease compared with the €157,124 million recorded as of December 31, 2013. There has been a shift toward off-balance sheet funds, with an improvement in the average cost and consequently positively influencing the net interest income.
''Mutual funds'' of this operating segment as of December 31, 2014 amounted to €28,695 million, a 28.7% increase compared with the €22,298 million recorded as of December 31, 2013. ''Pension funds'' of this operating segment as of December 31, 2014 amounted to €21,880 million, a 7.1% increase compared with the €20,428 million recorded as of December 31, 2013. These increases, in the very low rate environment aforementioned, are mainly the result of the active marketing of a diversified portfolio of mutual and pension funds to certain customer segments.
2.4.2 Real-estate business in Spain
Earnings and Activity
A significant aspect of the area's income statement is a volume of loan-loss provisions clearly lower than in the first half of 2013.
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Millions of Euros | ||
|---|---|---|---|
| Real Estate | 2014 | 2013 | % Change |
| NET INTEREST INCOME | (38) | (3) | n.m. |
| Net fees and commissions | 4 | 9 | (56.8) |
| Net gains (losses) on financial assets and liabilities and net exchange differences | 72 | 67 | 7.4 |
| Other operating income and expenses | (170) | (111) | 52.9 |
| GROSS INCOME | (132) | (38) | 248.3 |
| Operating expenses | (159) | (150) | 6.3 |
| Administration costs | (136) | (127) | 7.1 |
| Personnel expenses | (86) | (84) | 2.2 |
| General and administrative expenses | (50) | (43) | 16.6 |
| Depreciation and amortization | (23) | (23) | 1.8 |
| OPERATING INCOME | (291) | (188) | 55.2 |
| Impairment losses on financial assets (net) | (305) | (643) | (52.6) |
| Provisions (net) and other gains (losses) | (629) | (1,008) | (37.6) |
| Provisions (net) | (14) | (20) | (29.6) |
| Other gains (losses) | (615) | (988) | (37.8) |
| OPERATING PROFIT/ (LOSS) BEFORE TAX | (1,225) | (1,838) | (33.4) |
| Income tax | 351 | 595 | (40.9) |
| PROFIT FROM CONTINUING TRANSACTIONS | (873) | (1,243) | (29.8) |
| Profit from discontinued transactions (net) | - | - | n.m. |
| PROFIT | (873) | (1,243) | (29.8) |
| Profit attributable to non-controlling interests | (3) | (9) | (65.8) |
| PROFIT ATTRIBUTABLE TO PARENT COMPANY | (876) | (1,252) | (30.0) |
The changes in the principal headings of the income statement of this business area are:
''Net Fees and Commissions'' of this operating segment for the year ended December 31, 2014 amounted to €4 million, a 56.8% decrease compared with the €9 million recorded for the year ended December 31, 2013, due to the decreased activity in construction real estate.
''Net Gains (Losses) On Financial Assets and Liabilities and Net Exchange Differences'' of this operating segment for the year ended December 31, 2014 amounted to €72 million, a 7.4% increase compared with the €67 million recorded for the year ended December 31, 2013, mainly as a result of higher results relating to sales.
''Other Operating Income And Expenses'' of this operating segment for the year ended December 31, 2014 was a loss of €170 million, compared with the €111 million loss recorded for the year ended December 31, 2013, mainly due to the increase in costs relating to the administration and the sale of properties.
“Gross Income” for the year ended December 31, 2014 was a loss of €132 million, compared with the €38 million of loss recorded for the 2013.
''Administration Costs'' of this operating segment for the year ended December 31, 2014 was a loss of €136 million, a 7.1% increase compared with the €127 million recorded for the year ended December 31, 2013, as a result of the increase in general and administrative expenses due to the expansion of this area.
"Operating Income” for the year ended December 31, 2014 was a loss of €291 million, compared with the €188 million of loss recorded for the 2013.
''Impairment Losses On Financial Assets (Net)'' of this operating segment for the year ended December 31, 2014 was €305 million, a 52.6% decrease compared with the €643 million recorded for the year ended December 31, 2013, as a result of lower deterioration in real-estate assets.
''Provisions (Net) And Other Gains (Losses)'' of this operating segment for the year ended December 31, 2014 was a loss of €629 million, compared with the €1,008 million recorded for the year ended December 31, 2013. ''Provisions (Net)'' of this operating segment was a loss of €14 million, a 29.6% decrease compared with the €20 million recorded 2013. Likewise, ''Other Gains (Losses)'' of this operating segment was a loss of €615 million, compared with the €988 million loss recorded 2013, as a result of the fact that property appraisals and the collateral of loans in this portfolio deteriorated less in 2014 than in 2013.
''Operating Profit/ (Loss) Before Tax'' of this operating segment for the year ended December 31, 2014 was a loss of €1,225 million, compared with the €1,838 million loss recorded for the year ended December 31, 2013.
''Income Tax'' of this operating segment for the year ended December 31, 2014 amounted to €351 million, compared with the €595 million gain recorded for the year ended December 31, 2013.
''Profit Attributable To Parent Company'' of this operating segment for the year ended December 31, 2014 was a loss of €876 million, compared with the €1,252 million loss recorded for the year ended December 31, 2013.
2.4.3 Eurasia
Earnings and Activity
The period-on-period comparison of this area's financial statements is affected by the change in the exchange rates of the Turkish Lira against the euro. For the year ended December 31, 2014, the average exchange rate decreased with respect to the year ended December 31, 2013 resulting in a negative impact on the results of operations. On the contrary period-end exchange rate increased with respect to December 2013, resulting in a positive impact on activity. Therefore, the analysis of the changes in certain figures includes a reference to the percentage change at constant exchange rates.
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Millions of Euros | ||
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| Eurasia | 2014 | 2013 | % Change |
| NET INTEREST INCOME | 924 | 909 | 1.7 |
| Net fees and commissions | 378 | 390 | (3.0) |
| Net gains (losses) on financial assets and liabilities and net exchange differences | 151 | 195 | (22.4) |
| Other operating income and expenses | 227 | 224 | 1.5 |
| GROSS INCOME | 1,680 | 1,717 | (2.1) |
| Operating expenses | (738) | (736) | 0.2 |
| Administration costs | (691) | (685) | 0.8 |
| Personnel expenses | (387) | (384) | 0.9 |
| General and administrative expenses | (304) | (301) | 0.8 |
| Depreciation and amortization | (47) | (51) | (7.7) |
| OPERATING INCOME | 942 | 981 | (3.9) |
| Impairment losses on financial assets (net) | (203) | (330) | (38.5) |
| Provisions (net) and other gains (losses) | (27) | (65) | (57.9) |
| Provisions (net) | (13) | (39) | (67.2) |
| Other gains (losses) | (15) | (26) | (43.9) |
| OPERATING PROFIT/ (LOSS) BEFORE TAX | 713 | 586 | 21.5 |
| Income tax | (147) | (137) | 7.0 |
| PROFIT FROM CONTINUING TRANSACTIONS | 565 | 449 | 25.9 |
| Profit from discontinued transactions (net) | - | - | n.m. |
| PROFIT | 565 | 449 | 25.9 |
| Profit attributable to non-controlling interests | - | - | - |
| PROFIT ATTRIBUTABLE TO PARENT COMPANY | 565 | 449 | 25.9 |
The changes in the main headings of the income statement of this business area are:
"Net Interest Income'' of this operating segment for the year ended December 31, 2014 amounted to €924 million, a 1.7% increase compared with the €909 million recorded for the year ended December 31, 2013, as a result of lower cost of funding due to the gradual recovery of the customer spread. However, this variation is affected by the effect of the depreciation of the Turkish lira against the euro. Excluding this impact, at constant exchange rates, annual growth would amount to 13.0%
''Net Fees and Commissions'' of this operating segment for the year ended December 31, 2014 amounted to €378 million, a 3% decrease compared with the €390 million recorded for the year ended December 31, 2013, as a result of the depreciation of the Turkish lira. At constant exchange rates, fees and commissions would have increased at 3.1% as a result of the increase of fees and commissions from methods of payment, transferences and insurance in Turkey.
''Net Gains (Losses) On Financial Assets and Liabilities and Net Exchange Differences'' of this operating segment for the year ended December 31, 2014 amounted to €151 million, a 22.4% decrease compared with the €195 million recorded for the year ended December 31, 2013, as a result of the lower contribution from trading income and the year-on-year decrease in portfolio sales operations by Garanti.
''Other Operating Income And Expenses'' of this operating segment for the year ended December 31, 2014 amounted to €227 million, a 1.5% increase compared with the €224 million recorded for the year ended December 31, 2013.
“Gross Income” for the year ended December 31, 2014 amounted to €1,680 million, an increase of 2.1% compared with the €1,717 million of loss recorded for the 2013.
''Administration Costs'' of this operating segment for the year ended December 31, 2014 was a loss of €691 million, a 0,8% increase compared with the €685 million recorded for the year ended December 31, 2013. At constant exchange rates, the inter-annual variation would have increased of 8.3%, as a result of the increase in the structure of Garanti throughout 2013, which resulted in higher administration costs in 2014.
"Operating Income” for the year ended December 31, 2014 amounted to €942 million, a 3.9% increase compared with the €981 million recorded for the 2013.
''Impairment Losses On Financial Assets (Net)'' of this operating segment for the year ended December 31, 2014 was a loss of €203 million, a 38.5% decrease compared with the €330 million recorded for the year ended December 31, 2013, as a result of lower impairments in Turkey an in the wholesale segment (CIB Europe).
''Provisions (Net) And Other Gains (Losses)'' of this operating segment for the year ended December 31, 2014 was a loss of €27 million, compared with the €65 million recorded for the year ended December 31, 2013. ''Provisions (Net)'' of this operating segment was a loss of €13 million, a 67.2% decrease compared with the €39 million recorded 2013, mainly as a result of lower provisions for contingencies. Likewise, ''Other Gains (Losses)'' of this operating segment was a loss of €15 million, compared with the €26 million loss recorded 2013.
''Operating Profit/ (Loss) Before Tax'' of this operating segment for the year ended December 31, 2014 amounted to €713 million, a 21.5% increase compared with the €586 million recorded for the year ended December 31, 2013.
''Income Tax'' of this operating segment for the year ended December 31, 2014 amounted to €147 million, a 7% increase of compared with the €137 million gain recorded for the year ended December 31, 2013.
''Profit Attributable To Parent Company'' of this operating segment for the year ended December 31, 2014 amounted to €565 million, a 25.9% increase compared with the €449 million recorded for the year ended December 31, 2013. At constant exchange rates, the "Profit Attributable To Parent Company" would increase to 36.3%.
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Millions of Euros | ||
|---|---|---|---|
| Eurasia | 2014 | 2013 | % Change |
| Total Assets | 44,667 | 41,223 | 8.4 |
| Loans and advances to customers | 29,430 | 28,397 | 3.6 |
| Customer deposits under management (*) | 22,671 | 17,634 | 28.6 |
| Off-balance sheet funds | 2,401 | 1,966 | 22.1 |
| Efficiency ratio (%) | 43.9 | 42.9 |
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| NPA Ratio (%) | 3.3 | 3.4 |
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| NPA Coverage Ratio (%) | 92 | 87 |
|
The changes in the main headings of activity in this business area are as follows:
''Loans And Advances To Customers'' of this operating segment as of December 31,2014 amounted to €29,430 million, a 3.6% increase compared with the €28,397 million recorded as of December 31,2013, as a result of the evolution of the Garanti portfolios, particularly loans denominated in Turkish Lira, with a positive trend of commercial and consumer and portfolios. The asset quality indicators maintain their positive performance. ''NPA ratio'' of this operating segment as of December 31, 2014 was 3.3% compared with 3.4% as of December 31, 2013. ''NPA coverage ratio'' of this operating segment as of December 31, 2014 was 96% compared with 87% as of December 31, 2013.
''Customer deposits under management'' of this operating segment as of December 31, 2014 amounted to €22,671 million, a 28.6% increase compared with the €17,634 million recorded as of December 31, 2013, as a result of increased volume in foreign-currency deposits of Garanti.
2.4.4. Mexico
Activity and Earnings
The period-on-period comparison of this area's financial statements is affected by the change in the exchange rates of the Mexican Peso against the euro. For the nine months ended September 30, 2014, the average exchange rate decreased with respect to the nine months ended September 30, 2013 resulting in a negative impact on the results of operations. On the contrary period-end exchange rate increased with respect to December 2013, resulting in a positive impact on activity. Therefore, the analysis of the changes in certain figures includes a reference to the percentage change at constant exchange rates.
During 2013 the sale of the pension fund manager in Mexico was closed. Results from this activity, as mentioned before, are classified as a result of corporate transactions in the Corporate Center.
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Millions of Euros | ||
|---|---|---|---|
| Mexico | 2014 | 2013 | % Change |
| NET INTEREST INCOME | 4,910 | 4,478 | 9.6 |
| Net fees and commissions | 1,166 | 1,183 | (1.4) |
| Net gains (losses) on financial assets and liabilities and net exchange differences | 195 | 208 | (6.3) |
| Other operating income and expenses | 250 | 325 | (22.9) |
| GROSS INCOME | 6,522 | 6,194 | 5.3 |
| Operating expenses | (2,406) | (2,329) | 3.3 |
| Administration costs | (2,219) | (2,166) | 2.5 |
| Personnel expenses | (1,020) | (996) | 2.4 |
| General and administrative expenses | (1,199) | (1,170) | 2.5 |
| Depreciation and amortization | (187) | (163) | 15.0 |
| OPERATING INCOME | 4,115 | 3,865 | 6.5 |
| Impairment losses on financial assets (net) | (1,517) | (1,443) | 5.1 |
| Provisions (net) and other gains (losses) | (79) | (64) | 22.2 |
| Provisions (net) | (62) | (39) | 60.3 |
| Other gains (losses) | (17) | (26) | (34.7) |
| OPERATING PROFIT/ (LOSS) BEFORE TAX | 2,519 | 2,358 | 6.9 |
| Income tax | (604) | (555) | 8.7 |
| PROFIT FROM CONTINUING TRANSACTIONS | 1,916 | 1,802 | 6.3 |
| Profit from discontinued transactions (net) | - | - | - |
| PROFIT | 1,916 | 1,802 | 6.3 |
| Profit attributable to non-controlling interests | (1) | (1) | n.m. |
| PROFIT ATTRIBUTABLE TO PARENT COMPANY | 1,915 | 1,802 | 6.3 |
The changes in the main headings of the income statement of this business area are:
"Net Interest Income'' of this operating segment for the year ended December 31, 2014 amounted to €4,910 million, a 9.6% increase compared with the €4,478 million recorded for the year ended December 31, 2013, due to increased activity volume while customer spreads remained stable year-on-year, despite the fall of interest rates in Mexico. At constant exchange rates, the inter-annual variation would have meant an increase of 14.1%.
''Net Fees and Commissions'' of this operating segment for the year ended December 31, 2014 amounted to €1,166 million, a 1.4% decrease compared with the €1,183 million recorded for the year ended December 31, 2013, due to the devaluation of the Mexican peso. At constant exchange rates, the inter-annual variation would have meant an increase of 2.6%.
''Net Gains (Losses) On Financial Assets and Liabilities and Net Exchange Differences'' of this operating segment for the year ended December 31, 2014 amounted to €195 million, a 6.3% decrease compared with the €208 million recorded for the year ended December 31, 2013, as a result of the devaluation of the Mexican Peso and decreased trading transactions, portfolio sales and exchange rate operations.
''Other Operating Income And Expenses'' of this operating segment for the year ended December 31, 2014 amounted to €250 million, a 22.9% decrease compared with the €325 million recorded for the year ended December 31, 2013, mainly as a result of increased claims on insurance activity caused by natural disasters like hurricanes, which was partially offset by the increase in insurance premiums. Higher contributions to the deposit guarantee fund.
''Gross Income'' of this operating segment for the year ended December 31, 2014 amounted to €6,522 million, a 5.3% increase compared with the €6,194 million recorded for the year ended December 31, 2013. At constant exchange rates, the inter-annual variation has meant an increase of 9.6%.
''Administration Costs'' of this operating segment for the year ended December 31, 2014 was a loss of €2,219 million, a 2.5% increase compared with the €2,166 million recorded for the year ended December 31, 2013, mainly as a result of the construction of the new headquarters and the implementation of expansion projects and branches improvement. The number of branches has been increased by 37 and the number of ATM by 1,247.
''Operating Income'' of this operating segment for the year ended December 31, 2014 amounted to €4,115 million, a 6.5% increase compared with the €3,865 million recorded for the year ended December 31, 2013. At constant exchange rates, the inter-annual variation has meant an increase of 10.8%.
''Impairment Losses On Financial Assets (Net)'' of this operating segment for the year ended December 31, 2014 was a loss of €1,517 million, a 5.1% increase compared with the €1,443 million recorded for the year ended December 31, 2013 due to the increase of the activity.
''Provisions (Net) And Other Gains (Losses)'' of this operating segment for the year ended December 31, 2014 was a loss of €79 million, compared with the €64 million recorded for the year ended December 31, 2013. ''Provisions (Net)'' of this operating segment was a loss of €62 million, a 60.3% increase compared with the €39 million recorded 2013 due to transformation costs. ''Other Gains (Losses)'' of this operating segment was a loss of €17 million, compared with the €26 million loss recorded 2013.
''Operating Profit/ (Loss) Before Tax'' of this operating segment for the year ended December 31, 2014 amounted to €2,519 million, a 6.9% increase compared with the €2,358 million recorded for the year ended December 31, 2013. At constant exchange rates, the inter-annual variation has meant an increase of 11.2%.
''Income Tax'' of this operating segment for the year ended December 31, 2014 showed a loss of €604 million, a 8.7% increase compared with the €555 million recorded for the year ended December 31, 2013.
''Profit Attributable To Parent Company'' of this operating segment for the year ended December 31, 2014 amounted to €1,916 million, a 6.3% increase compared with the €1,802 million recorded for the year ended December 31, 2013. At constant exchange rates, the inter-annual variation has meant an increase of 10.7%.
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Millions of Euros | ||
|---|---|---|---|
| Mexico | 2014 | 2013 | % Change |
| Total Assets | 93,731 | 81,801 | 14.6 |
| Loans and advances to customers | 46,798 | 40,668 | 15.1 |
| Customer deposits under management (*) | 45,937 | 42,452 | 8.2 |
| Off-balance-sheet funds | 18,691 | 16,896 | 10.6 |
| Efficiency ratio (%) | 36.9 | 37.6 |
|
| NPA Ratio (%) | 2.9 | 3.6 |
|
| NPA Coverage Ratio (%) | 114 | 110 |
|
“Loans And Advances To Customers'' of this operating segment as of December 31, 2014 amounted to €46,798 million, a 15,1% increase compared with the €40,668 million recorded as of December 31, 2013, mainly as a result of the increase in corporate lending and consumer finance. The asset quality indicators improved with respect to December 31, 2013. ''NPA ratio'' of this operating segment as of December 31, 2014 was 2.9% compared with 3.6% as of December 31, 2013. ''NPA coverage ratio'' of this operating segment as of December 31, 2014 was 114% compared with 110% as of December 31, 2013.
''Customer deposits under management'' of this operating segment as of December 31,2014 amounted to €45,937 million, a 8.2% increase compared with the €42,452 million recorded as of December 31, 2013, mainly as a result of the positive trend in current and saving accounts (+13.5%) and time deposits (+15.2%).
''Mutual Funds'' of this operating segment as of December 31, 2014 amounted to €18,691 million, a 10.6% increase compared with the €16,896 million recorded as of December 31, 2013.
2.4.5. South America
Activity and Earnings
The year-on-year comparison of this area's financial statements is affected by the change in the exchange rates of the region’s currencies against the euro, which as indicated above have depreciated, particularly in the case of the Venezuelan bolivar (by the application in Venezuela the exchange rate resulting from the system for buying and selling currencies called SICAD I, complementary to the official market) and the Argentine peso. As well as the hyperinflation adjustment of Venezuela which has been particularly high during 2014. This has generated a negative impact on both activity and the income statement. For this reason, the most important figures include a reference to changes at constant exchange rates.
The sale of the pension fund administrators in Colombia, Peru and Chile was closed in 2013. As noted above, the earnings from this activity are classified under earnings from corporate operations in the Corporate Center.
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Millions of Euros | ||
|---|---|---|---|
| South America | 2014 | 2013 | % Change |
| NET INTEREST INCOME | 4,699 | 4,660 | 0.8 |
| Net fees and commissions | 901 | 970 | (7.1) |
| Net gains (losses) on financial assets and liabilities and net exchange differences | 482 | 763 | (36.8) |
| Other operating income and expenses | (890) | (810) | 9.9 |
| GROSS INCOME | 5,191 | 5,583 | (7.0) |
| Operating expenses | (2,316) | (2,375) | (2.5) |
| Administration costs | (2,137) | (2,204) | (3.0) |
| Personnel expenses | (1,099) | (1,174) | (6.4) |
| General and administrative expenses | (1,038) | (1,030) | 0.8 |
| Depreciation and amortization | (179) | (171) | 4.7 |
| OPERATING INCOME | 2,875 | 3,208 | (10.4) |
| Impairment losses on financial assets (net) | (706) | (698) | 1.2 |
| Provisions (net) and other gains (losses) | (219) | (156) | 40.2 |
| Provisions (net) | (213) | (149) | 42.8 |
| Other gains (losses) | (6) | (7) | (17.4) |
| OPERATING PROFIT/ (LOSS) BEFORE TAX | 1,951 | 2,354 | (17.1) |
| Income tax | (490) | (523) | (6.3) |
| PROFIT FROM CONTINUING TRANSACTIONS | 1,461 | 1,831 | (20.2) |
| Profit from discontinued transactions (net) | - | - | - |
| PROFIT | 1,461 | 1,831 | (20.2) |
| Profit attributable to non-controlling interests | (460) | (607) | (24.3) |
| PROFIT ATTRIBUTABLE TO PARENT COMPANY | 1,001 | 1,224 | (18.2) |
The changes in the main headings of the income statement of this business area are:
"Net Interest Income'' of this operating segment for the year ended December 31, 2014 amounted to €4,699 million, a 0.8% increase compared with the €4,660 million recorded for the year ended December 31, 2013, mainly as a result of increased activity practically in almost all countries and, to a lesser extent, hyperinflation in Venezuela.
''Net Fees and Commissions'' of this operating segment for the year ended December 31, 2014 amounted to €901 million, a 7.1% decrease compared with the €970 million recorded for the year ended December 31, 2013, as a result of the year-on-year average depreciation of South American currencies against the euro. At constant exchange rates, net fees and commissions would have increased by 24.9% as a result of their growth in Venezuela, Peru and Argentina, which more than offset their year-on-year decrease in Chile.
''Net Gains (Losses) On Financial Assets and Liabilities and Net Exchange Differences'' of this operating segment for the year ended December 31, 2014 amounted to €482 million, a 36.8% decrease compared with the €763 million recorded for the year ended December 31, 2013, as a result of the year-on-year depreciation of South American currencies against the euro. At constant exchange rates of South American currencies, net gains (losses) on financial assets and liabilities and net exchange differences would have increased by 10.8% as a result of the capital gains originated by the U.S. dollar positions maintained at Banco Provincial in Venezuela and Banco Francés in Argentina.
''Other Operating Income And Expenses'' of this operating segment for the year ended December 31, 2014 was a loss of €890 million, compared with the €810 million loss recorded for the year ended December 31, 2013, as a result of higher contributions to the deposit guarantee funds as a result of the increased volume of deposit in several countries and, to a lesser extent, the negative effect of the adjustment for hyperinflation in Venezuela (which was partially offset by the effect of the depreciation of the Venezuelan bolivar fuerte).
''Gross Income'' of this operating segment for the year ended December 31, 2014 amounted to €5,191 million, a 7% decrease compared with the €5,583 million recorded for the year ended December 31, 2013. At constant exchange rates, this heading is up 22.5%.
''Administration Costs'' of this operating segment for the year ended December 31, 2014 was a loss of €2,137 million, a 3% decrease compared with the €2,204 million recorded for the year ended December 31, 2013, as a result of the year-on-year depreciation of currencies against the Euro and the effect of the hyperinflation of Venezuela and the inflation of the other countries. Without this negative exchange rate effect, ''Administration costs'' increased by 26.6% as a result of expansion plans and transformation being implemented in the region. The number of branches has been increased by 86 and the number of ATM by 411.
''Operating Income'' of this operating segment for the year ended December 31, 2014 amounted to €2,875 million, a 10.4% decrease compared with the €3,208 million recorded for the year ended December 31, 2013. At constant exchange rates, the figure is 18.6%.
''Impairment Losses On Financial Assets (Net)'' of this operating segment for the year ended December 31, 2014 was a loss of €706 million, a 1.2% increase compared with the €698 million recorded for the year ended December 31, 2013, mainly as a result of activity growth partially offset by the period-on-period depreciation of South American currencies against the euro. At constant exchange rates, impairment losses on financial assets would have increased by 27.4% in line with volume growth.
''Provisions (Net) And Other Gains (Losses)'' of this operating segment for the year ended December 31, 2014 was a loss of €219 million, compared with the €156 million recorded for the year ended December 31, 2013. ''Provisions (Net)'' of this operating segment was a loss of €213 million, a 42.8% increase compared with the €149 million recorded 2013 due to a legal proceeding of €52 million of euros in Chile.
''Operating Profit/ (Loss) Before Tax'' of this operating segment for the year ended December 31, 2014 amounted to €1,951 million, a 17.1% decrease compared with the €2,354 million recorded for the year ended December 31, 2013. At constant exchange rates, the increase is 8.9%.
''Income Tax'' of this operating segment for the year ended December 31, 2014 showed a loss of €490 million, a 6.3% decrease compared with the €523 million recorded for the year ended December 31, 2013.
''Profit Attributable To Parent Company'' of this operating segment for the year ended December 31, 2014 amounted to €1,001 million, a 18.2% decrease compared with the €1,224 million recorded for the year ended December 31, 2013.Without the negative exchange rate effect "profit attributable to parent company" the increase is 6,3%.
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Millions of Euros | ||
|---|---|---|---|
| South America | 2014 | 2013 | % Change |
| Total Assets | 84,364 | 77,874 | 8.3 |
| Loans and advances to customers | 52,920 | 48,466 | 9.2 |
| Total customer deposits | 56,370 | 55,167 | 2.2 |
| Off-balance-sheet funds | 8,480 | 6,552 | 29.4 |
| Efficiency ratio (%) | 44.6 | 42.5 |
|
| NPA Ratio (%) | 2.1 | 2.1 |
|
| NPA Coverage Ratio (%) | 138 | 141 |
|
The changes in the main headings of activity in this business area are as follows:
"'Loans And Advances To Customers'' of this operating segment as of December 31, 2014 amounted to €52,920 million, a 9.2% increase compared with the €48,466 million recorded as of December 31, 2013, mainly as a result of the positive trend in: an increase of 28% in consumer finance and credit cards (especially in Chile and Colombia); an increase of 16% in mortgages (mainly in Chile and Colombia) and an increase of 25% in companies (all countries, except Argentina and Uruguay). Concerning the asset quality indicators, ''NPA ratio'' of this operating segment as of December 31, 2014 was 2.1% remained unchanged as of December 31, 2013. ''NPA coverage ratio'' of this operating segment as of December 31, 2014 was 138% compared with 141% as of December 31, 2013.
''Total customer deposits'' of this operating segment as of December 31, 2014 amounted to €56,370 million, a 2.2% increase compared with the €55,167 million recorded as of December 31, 2013.mainly due to the positive developments in current accounts, especially in Venezuela, and moderate growth in deposits in Chile and Colombia.
''Mutual Funds'' of this operating segment as of December 31, 2014 amounted to €3,848 million, a 30.3% increase compared with the €2,952 million recorded as of December 31, 2013.
''Pension Funds'' of this operating segment as of December 31, 2014 amounted to €4,632 million, a 28.7% increase compared with the €3,600 million recorded as of December 31, 2013.
2.4.6. United States
Activity and Earnings
The period-on-period comparison of this area's financial statements is affected by the change in the exchange rates of the U.S. Dollar against the euro. Period-end exchange rate increased with respect to December 2013, resulting in a positive impact on activity. Therefore, the analysis of the changes in certain figures includes a reference to the percentage change at constant exchange rates.
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Millions of Euros | ||
|---|---|---|---|
| The United States | 2014 | 2013 | % Change |
| NET INTEREST INCOME | 1,443 | 1,402 | 2.9 |
| Net fees and commissions | 553 | 507 | 9.2 |
| Net gains (losses) on financial assets and liabilities and net exchange differences | 145 | 139 | 3.8 |
| Other operating income and expenses | (4) | (1) | n.m. |
| GROSS INCOME | 2,137 | 2,047 | 4.4 |
| Operating expenses | (1,497) | (1,429) | 4.8 |
| Administration costs | (1,318) | (1,250) | 5.5 |
| Personnel expenses | (861) | (820) | 5.0 |
| General and administrative expenses | (457) | (430) | 6.3 |
| Depreciation and amortization | (179) | (179) | 0.1 |
| OPERATING INCOME | 640 | 618 | 3.5 |
| Impairment losses on financial assets (net) | (68) | (74) | (8.2) |
| Provisions (net) and other gains (losses) | (10) | (10) | 6.2 |
| Provisions (net) | (9) | (1) | n.m. |
| Other gains (losses) | (2) | (9) | n.m. |
| OPERATING PROFIT/ (LOSS) BEFORE TAX | 561 | 534 | 5.1 |
| Income tax | (133) | (145) | (8.0) |
| PROFIT FROM CONTINUING TRANSACTIONS | 428 | 390 | 10.0 |
| Profit from discontinued transactions (net) | - | - | - |
| PROFIT | 428 | 390 | 10.0 |
| Profit attributable to non-controlling interests | - | - | - |
| PROFIT ATTRIBUTABLE TO PARENT COMPANY | 428 | 390 | 10.0 |
The changes in the main headings of the income statement of this business area are:
"Net Interest Income'' of this operating segment for the year ended December 31, 2014 amounted to €1,443 million, a 2.9% increase compared with the €1,402 million recorded for the year ended December 31, 2013, as a result of the increased activity, which offset narrowing customer spreads in the prevailing low interest rates environment.
''Net Fees and Commissions'' of this operating segment for the year ended December 31, 2014 amounted to €553 million, a 9.2% increase compared with the €507 million recorded for the year ended December 31, 2013, as a result of the positive trend of commissions from trading operations.
''Net Gains (Losses) On Financial Assets and Liabilities and Net Exchange Differences'' of this operating segment for the year ended December 31, 2014 amounted to €145 million, a 3.8% increase compared with the €139 million recorded for the year ended December 31, 2013, mainly as a result of increased trading transactions during 2014.
''Gross Income'' of this operating segment for the year ended December 31, 2014 amounted to €2,137 million, a 4.4% decrease compared with the €2,047 million recorded for the year ended December 31, 2013.
''Administration Costs'' of this operating segment for the year ended December 31, 2014 was a loss of €1,318 million, a 5.5% increase compared with the €1,250 million recorded for the year ended December 31, 2013, mainly as a result of the purchase of Simple in 2014 as well as the construction of the new headquarters, the implementation of different advertising campaigns and plans to remodel the branch network.
''Operating Income'' of this operating segment for the year ended December 31, 2014 amounted to €640 million, a 3.5% decrease compared with the €618 million recorded for the year ended December 31, 2013.
''Impairment Losses On Financial Assets (Net)'' of this operating segment for the year ended December 31, 2014 was a loss of €68 million, a 8.2% decrease compared with the €74 million recorded for the year ended December 31, 2013, mainly as a result of the decrease in non-performing assets.
''Operating Profit/ (Loss) Before Tax'' of this operating segment for the year ended December 31, 2014 amounted to €561 million, a 5.1% increase compared with the €534 million recorded for the year ended December 31, 2013.
''Income Tax'' of this operating segment for the year ended December 31, 2014 showed a loss of €133 million, a 8% decrease compared with the €145 million recorded for the year ended December 31, 2013.
''Profit Attributable To Parent Company'' of this operating segment for the year ended December 31, 2014 amounted to €428 million, a 10% increase compared with the €390 million recorded for the year ended December 31, 2013.
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Millions of Euros | ||
|---|---|---|---|
| The United States | 2014 | 2013 | % Change |
| Total Assets | 69,261 | 53,046 | 30.6 |
| Loans and advances to customers | 49,667 | 38,067 | 30.5 |
| Customer deposits under management | 51,394 | 39,844 | 29.0 |
| Efficiency ratio (%) | 70.1 | 69.8 |
|
| NPA Ratio (%) | 0.9 | 1.2 |
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| NPA Coverage Ratio (%) | 167 | 134 |
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“Loans And Advances To Customers'' of this operating segment as of December 31,2014 amounted to €49,667 million, a 30,5% increase compared with the €38,067 million recorded as of December 31, 2013 as a result of a widespread growth in companies portfolio (15.4%), consumer finance (+14.9%) and residential mortgages (+9.0%). At constant rates the growth is 14.9%.
The asset quality indicators continue to improve. ''NPA ratio'' of this operating segment as of December 31, 2014 was 0,9% compared with 1.2% as of December 31, 2013, as a result of a decrease in non-performing loans and a growth of loans and advances to customers (mainly in the commercial loan portfolio).
''NPA coverage ratio'' of this operating segment as of December 31, 2014 was 167% compared with 134% as of December 31, 2013, as a result of the decrease in non-performing assets.
''Customer deposits under management'' of this operating segment as of December 31, 2014 amounted to €51,394 million, a 29% increase compared with the €39,844 million recorded as of December 31, 2013, as a result of Compass campaigns designed to attract deposits since the beginning of 2014. At constant rates, the growth is 13.6%.
2.4.7. Corporate Center
As already mentioned, Corporate Center aggregate includes the result of certain corporate operations completed by the Group over 2013, in order to ensure that the accounts are comparable with the results of 2014, the effects resulting from the aforementioned corporate operations have been transferred to the heading “Income from corporate activities".
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Millions of Euros | ||
|---|---|---|---|
| Corporate Center | 2014 | 2013 | % Change |
| NET INTEREST INCOME | (651) | (671) | (3.0) |
| Net fees and commissions | (92) | (3) | n.m. |
| Net gains (losses) on financial assets and liabilities and net exchange differences | (60) | 347 | n.m. |
| Other operating income and expenses | 139 | (89) | n.m. |
| GROSS INCOME | (664) | (416) | 59.6 |
| Operating expenses | (989) | (1,168) | (15.3) |
| Administration costs | (530) | (733) | (27.7) |
| Personnel expenses | (450) | (479) | (6.1) |
| General and administrative expenses | (80) | (254) | (68.6) |
| Depreciation and amortization | (459) | (435) | 5.6 |
| OPERATING INCOME | (1,653) | (1,584) | 4.4 |
| Impairment losses on financial assets (net) | 3 | (11) | n.m. |
| Provisions (net) and other gains (losses) | (270) | (85) | 215.9 |
| Provisions (net) | (222) | (67) | 228.7 |
| Other gains (losses) | (48) | (18) | 167.9 |
| OPERATING PROFIT/ (LOSS) BEFORE TAX | (1,920) | (1,680) | 14.3 |
| Income tax | 472 | 296 | 59.4 |
| PROFIT FROM CONTINUING TRANSACTIONS | (1,447) | (1,384) | 4.6 |
| Profit from discontinued transactions (net) | - | 383 | n.m. |
| PROFIT | (1,447) | (1,001) | 44.6 |
| Profit attributable to non-controlling interests | 3 | (116) | n.m. |
| PROFIT ATTRIBUTABLE TO PARENT COMPANY | (1,444) | (1,117) | 29.3 |
The changes in the main headings of the income statement of this business area are:
"'Net Interest Income'' of this operating segment for the year ended December 31, 2014 was a loss of €651 million, compared with the €671 million loss recorded for the year ended December 31, 2013.
''Net Gains (Losses) On Financial Assets and Liabilities and Net Exchange Differences'' of this operating segment for the year ended December 31, 2014 was a loss of €60 million, compared with the €347 million recorded for the year ended December 31, 2013 when certain portfolios from Unnim were sold. The lower contribution from investments in associate and joint ventures entities and negative exchange hedges also contributed to the year-on-year decrease.
''Other Operating Income And Expenses'' of this operating segment for the year ended December 31, 2014 amounted to €139 million, compared with a loss of €89 million recorded for the year ended December 31, 2013. Notice that under "Other Operating Income and Expenses" in 2013 is included the impact of the restatement of the contribution to the Deposit Guarantee Fund mentioned above. Without this impact, the amount for this heading would increase at 18.2% as a result of the dividends received from Telefónica during 2014.
''Gross Income'' of this operating segment for the year ended December 31, 2014 was a loss of €664 million, compared with a loss of €416 million recorded for the year ended December 31, 2013.
''Administration Costs'' of this operating segment for the year ended December 31, 2014 was a loss of €530 million, a 27.7% decrease compared with the €733 million recorded for the year ended December 31, 2013, mainly as a result of the cut costs plans related to the transformation processes carried out by the Group.
''Operating Income'' of this operating segment for the year ended December 31, 2014 was a loss of €1,653 million, compared with a loss of €1,584 million recorded for the year ended December 31, 2013.
''Impairment Losses On Financial Assets (Net)'' of this operating segment for the year ended December 31, 2014 amounted to €3 million, compared with the €11 million recorded for the year ended December 31, 2013.
''Provisions (Net) And Other Gains (Losses)'' of this operating segment for the year ended December 31, 2014 was a loss of €270 million, compared with the €85 million recorded for the year ended December 31, 2013. ''Provisions (Net)'' of this operating segment was a loss of €222 million, compared with the €67 million recorded 2013, as a result of higher provisions for the costs related to the transformation processes undertaken by the Group.
''Operating Profit/ (Loss) Before Tax'' of this operating segment for the year ended December 31, 2014 was a loss of €1,920 million, compared with the €1,680 million loss recorded for the year ended December 31, 2013.
''Income Tax'' of this operating segment for the year ended December 31, 2014 amounted to €472 million, compared with the €296 million gain recorded for the year ended December 31, 2013.
''Profit Attributable To Parent Company'' of this operating segment for the year ended December 31, 2014 was a loss of €1,444 million, compared with the €1,117 million loss recorded for the year ended December 31, 2013. As noted above, the heading includes the earnings from corporate operations, providing a positive result of €383 million.