This area includes all those activities not included in the business areas. Basically, this segment records the costs from headquarters with a strictly corporate function and makes allocations to corporate and miscellaneous provisions, such as early retirement. It also includes the assets and liabilities derived from the management of structural liquidity, interest-rate and exchange-rate risks by the Asset/Liability Management unit, as well as their impact on earnings that are not recognized in the business areas via transfer pricing. Finally, it includes certain portfolios and assets, with their corresponding earnings, whose management is not linked to customer relations, such as Holdings in Industrial and Financial Companies and Real Estate Management.
| Corporate Activities | Millions of Euros | ||
|---|---|---|---|
| 2011 | 2010 | % Change 2011-2010 |
|
| NET INTEREST INCOME | (621) | 121 | n.a |
| Net fees and commissions | (202) | (211) | (4.4) |
| Net gains (losses) on financial assets and liabilities and net exchange differences | 437 | 696 | (37.2) |
| Other operating income and expenses | 359 | 326 | 10.0 |
| GROSS INCOME | (27) | 932 | n.a |
| Operating expenses | (960) | (774) | 24.1 |
| Administration costs | (692) | (544) | 27.1 |
| Personnel expenses | (543) | (460) | 18.2 |
| General and administrative expenses | (148) | (84) | 75.8 |
| Depreciation and amortization | (269) | (229) | 17.1 |
| OPERATING INCOME | (987) | 158 | n.a |
| Impairment losses on financial assets (net) | (392) | (961) | (59.2) |
| Provisions (net) and other gains (losses) | (1,050) | (870) | 20.7 |
| INCOME BEFORE TAX | (2,430) | (1,673) | 45.2 |
| Income tax | 1,015 | 600 | 69.0 |
| NET INCOME | (1,415) | (1,073) | 31.9 |
| Net income attributed to non-controlling interests | 2 | - | n.a. |
| NET INCOME ATTRIBUTED TO PARENT COMPANY | (1,413) | (1,072) | 31.8 |
The changes in the principal headings of the income statement of this business area are:
“Net interest income” for 2011 is a negative €621 million, compared with a positive figure of €121 million in 2010, due basically to the rising cost of wholesale finance.
The balance of “Net gains (losses) on financial assets and liabilities” and “Exchange differences (net)” in 2011 is €437 million, a 37.2% reduction on the €696 million posted in 2010, due to the absence of earnings from portfolio sales and the loss of value of the assets as a result of the turmoil in the markets.
The balance of “Other operating income and expenses” for 2011 is €359 million, a 10% increase on the €326 million recorded in 2010. Its main component continues to be the dividends from BBVA’s investment in Telefónica.
As a result of the above, “Gross income” for 2011 is a €27 million loss, compared with a €932 million profit in 2010.
The balance of “Operating expenses” in 2011 is €960 million, an increase of 24.1% on the €774 million posted in 2010, as a result of the investments being undertaken at corporate level, mainly on technology, brand and infrastructure.
As a result of the above, “Operating income” for 2011 is a €987 million loss, compared with a €158 million profit in 2010.
“Impairment losses on financial assets (net)” for 2011 stood at €392 million, compared with a figure of €961 million in 2010, when generic provisions are made to improve the Group's coverage.
The balance of "Provisions (net)” and “Other gains (losses)” in 2011, which basically includes the provisions for early retirement and write-offs for acquired and foreclosed assets, stood at €1,050 million, an increase of 20.7% on the €870 million euros recorded in 2010. This is mainly due to loan-loss provisions for real estate and assets.
As a result of the above, “Income before taxes" for 2011 is €2,430 million in losses, compared with losses of €1,673 million in 2010.
The balance of “Income tax” in 2011 is €1,015 million in income, compared with €600 million in income in 2010, due to the increased income with a low or zero tax rate.
As a result of the above, “Net income” for 2011 is a €1,415 million loss, compared with losses of €1,073 million in 2010.
Finally, “Net income attributed to parent company” in 2011 amounted to a loss of €1,413 million, compared with losses of €1,072 million in 2010.