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financial statements 2012

14. Held-to-maturity investments

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The breakdown of the balance under these headings in the accompanying consolidated balance sheets is as follows:

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Held-to-Maturity Investments
2012
Millions of Euros
Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Fair
Value
Domestic Debt Securities



Spanish Government and other government agency debt securities 6,469 2 (406) 6,065
Other domestic debt securities 809 2 (27) 784
Issued by credit institutions 250 2 (3) 249
Issued by other institutions 559 - (24) 535
Subtotal 7,278 4 (433) 6,849
Foreign Debt Securities



Government and other government agency debt securities 2,741 121 - 2,862
Other debt securities 143 6 - 149
Subtotal 2,884 127 - 3,011
Total 10,162 131 (433) 9,860
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Held-to-Maturity Investments
2011
Millions of Euros
Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Fair
Value
Domestic Debt Securities



Spanish Government and other government agency debt securities 6,520 1 (461) 6,060
Other domestic debt securities 853 - (65) 788
Issued by credit institutions 255 - (11) 244
Issued by other institutions 598 - (54) 544
Subtotal 7,373 1 (526) 6,848
Foreign Debt Securities



Government and other government agency debt securities 3,376 9 (236) 3,149
Other debt securities 206 3 (16) 193
Subtotal 3,582 12 (252) 3,342
Total 10,955 13 (778) 10,190
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Held-to-Maturity Investments
2010
Millions of Euros
Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Fair
Value
Domestic Debt Securities



Spanish Government and other government agency debt securities 6,611 2 (671) 5,942
Other domestic debt securities 892 - (63) 829
Subtotal 7,503 2 (734) 6,771
Foreign Debt Securities



Government and other government agency debt securities 2,181 10 (20) 2,171
Other debt securities 262 6 (21) 247
Subtotal 2,443 16 (41) 2,418
Total 9,946 18 (775) 9,189

The foreign securities held by the Group as of December 31, 2012, 2011 and 2010 in the held-to-maturity investments portfolio correspond basically to European issuers.

As of December 31, 2012, after analyzing the unrealized losses, it was decided that they were temporary, as the interest payment dates of all the securities have been satisfied, and because there is no evidence that the issuer will not continue to comply with the payment obligations, nor that future payments of both principal and interests will not be sufficient to recover the cost of the debt securities.

The following is a summary of the gross changes in 2012, 2011 and 2010 under this heading in the accompanying consolidated balance sheets:

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Held-to-Maturity Investments
Changes on the Period
Nots Millions of Euros
2012 2011 2010
Balance at the beginning
10,956 9,947 5,438
Acquisitions
60 - 4,969
Reclassifications
- 1,817 -
Redemptions and others
(853) (808) (460)
Balance at the end
10,163 10,956 9,947
Impairment 7.1.8 (1) (1) (1)
Total
10,162 10,955 9,946

In the third quarter of 2011, some debt securities amounting to €1,817 million were reclassified from "Available-for-sale financial assets" to “Held-to-maturity investments”, as the intention of the Group had changed with respect to some of the sovereign debt securities due to the current market situation (see Note 7.1.5).

Information about the fair value and carrying amounts of these reclassified financial assets is given here:

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Debt Securities reclassified to "Held to Maturity Investments" Millions of Euros
As of Reclassification date (*) As of December 31, 2012
Carrying Amount Fair Value Carrying Amount Fair Value
Greece sovereign debt 1,739 1,739 1,929 1,947
Greece sovereign debt (**) 56 56 - -
Portugal sovereign debt 22 22 15 15
Total 1,817 1,817 1,944 1,962
(*) The balance under the heading “Total Equity - Valuation adjustments” as of the date of reclassification stood at €157 million. (**) As of December 31, 2012, no Greek sovereign debt securities are held (see Note 7.1.5).

The following table presents the amount recognized in the 2012 BBVA Group Consolidated Income Statement from the valuation at amortized cost of the reclassified financial assets that remained on the consolidated balance sheet as of December 31, 2012, as well as the impact recognized on the income statement and under the heading “Total Equity - Valuation adjustments”, as of December 31, 2012, if the reclassification had not been performed.

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Effect on Income Statement and Other Comprehensive Income Millions of Euros
Recognized in Effect of not Reclassifying

Income Statement Income Statement Equity
Valuation Adjustments
Italy sovereign debt (18) - 18
Portugal sovereign debt (2) - 2
Total (20) - 20

As of December 31, 2012, the amount in “Total Equity - Valuation adjustments” pending amortization for the reclassified debt instruments is €55 million.

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