The accompanying table shows the amount of eligible capital resources, net of deductions, of the different elements comprising the capital base:
(Million euros)
|
|
Eligible capital resources | |
|---|---|---|
| Eligible capital resources | 2012 | 2011 |
| Capital | 2,670 | 2,403 |
| Reserves (1) | 39,067 | 35,208 |
| Minority interests | 2,025 | 1,375 |
| Deductions | -10,778 | -10,837 |
| - Goodwill | -8,444 | -8,507 |
| - Treasury stock | -110 | -300 |
| - Other deductions | -2,223 | -2,030 |
| Net attrib. profit and interim and final Group dividends | 335 | 2,170 |
| Preferred securities and other eligible liabilities | 3,074 | 5,189 |
| Other deductions from Basic Capital and Additional Capital (2) | -2,636 | -2,652 |
| BASIC CAPITAL (TIER I) | 33,758 | 32,856 |
| Subordinated debt | 1,852 | 3,871 |
| Valuation adjustments in the AFS portfolio | 0 | 173 |
| Surplus on provisions | 2,609 | 1,900 |
| Other deductions from Basic Capital and Additional Capital (2) | -2,636 | -2,652 |
| ADDITIONAL CAPITAL (TIER II) | 1,825 | 3,292 |
| TOTAL | 35,583 | 36,148 |
| TIER I | 10.25% | 9.90% |
| TIER II | 0.55% | 0.99% |
| Total | 10.80% | 10.89% |
| RWA | 329.416 | 332.040 |
|
|
|
|
| Additional capital resources mixed group (3) | 1,290 | 1,070 |
| Total including mixed group | 36,872 | 37,218 |
(2) Mainly holdings in financial and insurance institutions are divided equally between Basic Capital and Additional Capital.
(3) Article 6 of Spanish Royal Decree 1332/2005, of 11 November, on the capital adequacy of financial groups and mixed group reporting.
The increase in basic capital (Tier 1) is basically due to the earnings for the period, combined with the currency effect, which has also contributed to the increased reserves.
In addition, the most significant changes in the components of basic capital can be explained by the inclusion of 2011 earnings in reserves and the conversion of convertible bonds into shares in 2012. This conversion increased capital by €194 million and the share premium (included under Reserves) by €1,998 million. (See Note 27 of the Annual Consolidated Financial Statements). With respect to additional capital (Tier II), the reduction in the subordinated debt heading is basically due to the maturity of securities and the buy-back of subordinated debt by the Bank. (See Note 23.4 of the Annual Consolidated Financial Statements).
The table below shows the differences between the elements making up shareholders' equity and regulatory capital for solvency purposes:
(Million euros)
| Reconciliation of shareholders' equity with regulatory capital | 2012 |
|---|---|
| Capital | 2,670 |
| Share premium | 20,968 |
| Reserves | 19,734 |
| Own shares in portfolio | -111 |
| Attributed net income | 1,676 |
| Attributed dividend | -1,323 |
| Total shareholders’ funds (public balance sheet) | 43,614 |
| Valuation adjustments | -2,184 |
| Minority interests | 2,372 |
| Total equity (public balance sheet) | 43,802 |
|
|
|
| Total equity (public balance sheet) | 43,802 |
| Goodwill and other intangible assets | -10,604 |
| Shares and other eligible preferred securities | 3,098 |
| Non-distributed dividend | -257 |
| Other adjustments | 355 |
| Other deductions from Basic Capital and Additional Capital | -2,636 |
| BASIC CAPITAL (TIER I) | 33,758 |
Other requirements on minimum capital levels
Irrespective of the aforementioned requirements, in 2011, the European Banking Authority (EBA) issued the recommendation of reaching, as of June 30, 2012, a new minimum capital level of 9%, in the ratio known as Core Tier I (CT1). In addition, this minimum ratio should have a sufficient excess amount to absorb the “sovereign buffer” calculated based on sovereign exposure. As of June 30, 2012, the BBVA Group´s EBA Core Tier I capital stood at 9,9% (before taking into account the sovereign buffer), thus complying with the minimum required level. “The Bank of Spain endorsed these recommendations for Spanish institutions that participated in the EBA exercise, and extended the maintenance of this minimum recommended ratio beyond June 30, 2012. As of December 31, 2012, the BBVA Group continued to have an EBA Core Tier I ratio above the minimum required, at 9.7%.