Total impairment losses on financial assets rose to €5,473 million, up 86.1% on 2008, reflecting the efforts made in loss provisioning. This has been particularly intense in the last quarter, fruit of a detailed analysis of the Group’s most problematic portfolios; this has allowed for the anticipation of the potential effects on them for the current forecasts for 2010.
- In the Spain and Portugal area, additional provisions for €830 million were made to strengthen the area’s balance sheet, after the realization of gains for the sale-and-leaseback of 948 properties, in addition to the providing for non-performing assets in the consumer finance unit above the requirements of the regulatory provisioning schedule following maximum prudence criteria.
- In Mexico, the provisions increase, primarily in the fourth quarter of the year, due to an intensifying of the expected loss parameters due to the recalibration of the internal scoring models for credit cards.
- In the United States, this heading totaled €1,419 million in 2009; that is, €1,054 million more than a year ago. On the one hand, the appraisal of collateral associated with the commercial real estate portfolio has been updated, reporting a write-off for the difference, and on the other, additional provisioning has been carried out to situate the coverage ratio at the same levels as at December 31, 2008.
Excluding one-offs, €1,363 million before tax (€830 in Spain and Portugal and €533 in the United States), the Group’s risk premium stands at 1.15% as at December 31, 2009. The operating income generated by BBVA in the year could support a charge for provisions double that which was recorded, including the two one-offs mentioned.
The heading provisions consumes €458 million for the year when including the €551 million of provisions for early retirement. In 2008, €1,431 were subtracted, of which €860 corresponded to extraordinary early retirements.
Finally, the heading other gains (losses) reported negative €641 million in 2009 and can be explained by three concepts: €830 million credit from the sale-and-lease-back of 948 properties in Spain, €998 million debit for goodwill impairment in the United States and a €475 million debit for the updating of the appraisal of assets foreclosed or acquired in Spain. In 2008, a gross gain of €775 million was registered basically due to the €727 million in capital gains from the sale of its stake in Bradesco.
