Information of Prudential Relevance 2014

2.1. Characteristics of the eligible capital

Print this page

For the purposes of calculating its minimum capital requirements, the Group considers the capital defined in the second part of chapter IV, section I of the Solvency Regulations to be Tier 2 capital. In addition, it considers the deductions to be those defined as such in section II of the above chapter. The distribution of the various component elements of capital and the deductions between basic capital and auxiliary capital are carried out in keeping with the provisions chapter II, sections I and III of the second part of the Solvency Regulations. In addition, the entity considers eligible capital to include the additional Tier 1 capital elements and instruments as defined in Article 51 of the Solvency Regulations, as well as its corresponding deductions under Article 56 as mentioned above.

In line with what is stipulated in the solvency regulation, capital essentially comprises:

  • Common equity: This is the Bank’s share capital.
  • Share premium.
  • Retained profits and undisclosed reserves: These are understood to be those produced and charged to profits when their balance is in credit and those amounts which, without being included on the income statement, must be booked in the “other reserves” account, in keeping with the provisions contained in the Accounting Circular. In application of Rules Eighteen and Fifty-one of the aforementioned Accounting Circular, exchange rate differences will also be classified as reserves. Likewise, valuation adjustments in the coverage of net investments in businesses abroad and the balance of the equity account which contains remuneration accrued on capital instruments will also be included in reserves.
  • Minority interests: The holdings representing minority interests, and corresponding to those ordinary shares in the companies belonging to the consolidated group that are fully paid up, excluding the part which is included in revaluation reserves and in valuation adjustments. Earnings net of dividends attributable to these shareholders are also included hereunder.
  • Net income for the year, referring to the perimeter of credit institutions and deducting the foreseeable amount corresponding to dividend payments.

Capital is, moreover, adjusted mainly through the following deductions:

  • Intangible assets and goodwill.
  • Loss carry-forwards (LCFs).
  • Valuation adjustments corresponding to the prudential valuation and debt valuation adjustment (DVA).
  • Shares or other securities eligible as capital that are held by any consolidated entity in the Group, as well as those held by entities in the economic group itself that are not consolidable.
  • Finance for third parties with the aim of acquiring shares or other securities eligible as bank capital of the financer or of other institutions in its consolidable group.
  • The outstanding debit balance of each of the total equity accounts that reflect valuation adjustments in available-for-sale financial assets and exchange-rate variations.
  • The valuation adjustments corresponding to defined-benefit plans.
  • Shortfall of provisions, if any, for the expected loss in positions calculated according to the model based on internal ratings, as well as the amount of securitizations that receive a risk weighting of 1.250%, as indicated by Article 36.1.k.ii of the CRR.

The application of some of the above deductions (mainly intangible assets and LCFs) shall be carried out gradually over a transition period of 5 years (phased in), as set out in the current regulation.

In addition, the Group includes as eligible capital the additional Tier 1 capital instruments defined in Article 51 of the Solvency Regulations:

  • Capital instruments, if they meet the conditions established under Article 52.1.
  • Issue premiums related to the instruments to which the above section refers.

Finally, the entity also includes additional capital as total eligible capital. This is largely made up of the following elements:

  • Subordinated debt received by the Group, understood as that which, for credit seniority purposes, comes behind all the common creditors. The issues, moreover, have to fulfill a number of conditions which are laid out in Article 63 of the Solvency Regulations.
  • The surplus resulting between the allowances for losses on risks related to exposures calculated as per the IRB method on the losses they are expected to incur, for the part that is below 0.6% of the risk-weighted exposures calculated according to this method.

It will also include the book balances of generic allowances referring to securitized exposures which have been excluded from the risk-weighted exposures calculation under the IRB method, for the part not exceeding 0.6% of the risk-weighted exposures that would have corresponded to these securitized exposures, had they not been excluded. There is no treatment defined for the surplus of allowances over expected loss in portfolios assessed under the IRB approach above the 0.6% limit.

Furthermore, the book balance for generic allowances for losses reached in keeping with the Accounting Circular and which corresponds to those portfolios to which the standardized approach is applied, for an amount up to 1.25% of the weighted risks that have been the basis for the coverage calculation, will also be considered eligible additional capital.

Generic allowances for losses for those securitized assets that have been excluded from the risk-weighted exposures under the standardized approach are also eligible up to a limit of 1.25% of the weighted risks that would have corresponded to them, had they not been excluded. The surplus over the 1.25% limit is deducted from exposure.

The table below presents the Group's issues of other equity instruments and subordinated debt, which as explained above, form part of additional Tier 1 capital:

TABLE 6: Issues of preferred securities outstanding as of 31/Dec/2014

(Millions of euros)

Preferred securities by issuers 2014 2013 2012
BBVA International Preferred, S.A.U. (*) 1,750 1,666 1,695
Unnim Group (**) 109 109 95
BBVA Capital Finance, S.A.U. (***) 25 29 32
Phoenix Loan Holdings, Inc. 20 15 16
BBVA International, Ltd. (***) 7 8 9
Total 1,910 1,827 1,847
Eligible limit (1) 1,470

(*) Listed on the London and New York Stock Exchanges (**) Unnim Group: Issues prior to the acquisition by BBVA. The outstanding balance of these issues after the exchange of certain issues of preferred securities for BBVA shares completed in October 2012 is shown as of December 31, 2014. (***) Issues traded on the AIAF market in Spain. As of December 31, 2014, the outstanding balances of these issues correspond to the holders of preferred securities that in December 2011 did not take part in the exchange of those preferred securities issues for subordinated bonds. (1) Calculated based on article 486 of CRR
TABLE 7: Issues of subordinated debt as of 31/Dec/2014

(Millions of euros)

Issuer company and issue date Currency Issue date Maturity date Eligibility Current balance Balance
Issues in euros


EUR Jul-96 12/22/2016 YES 27 6

EUR Jul-08 7/4/2023 YES 100 100

EUR Feb-07 2/16/2022 NO 253 255

EUR Mar-08 3/3/2033 NO 125 125

EUR Several issues Several YES

EUR Several issues Several NO 315 112
Subtotal EUR

820 665

EUR Jul-99 10/16/2015 YES 58 0

EUR Oct-01 10/10/2016 YES 10 2

EUR Oct-01 10/15/2016 YES 46 9

EUR Nov-01 11/2/2016 YES 53 11

EUR Dec-01 12/20/2016 YES 56 11
Subtotal EUR

223 33
BBVA Subordinated Capital Finance SAU

EUR Jul-08 7/22/2018 YES 20 12

EUR May-08 5/19/2023 YES 50 50

EUR Oct-05 10/13/2020 NO 96 99

EUR Apr-07 4/4/2022 YES 66 68

EUR Apr-14 4/11/2024 YES 1485 1,480
Subtotal EUR

1,717 1,709
Total issues in euros

Issues in foreign currency

BBVA GLOBAL FINANCE LTD. USD Dec-95 12/1/2025 YES 165 160
Subtotal USD

165 160
Subtotal CLP

578 519
BBVA BANCOMER USD Mar-11 3/10/2021 NO 1031 1030

USD Apr-10 4/22/2020 NO 825 824

USD Jul-12 9/30/2022 NO 825 824

USD Sep-12 9/30/2022 NO 413 412

USD May-07 5/17/2022 NO 413 412

USD Nov-14 11/12/2029 NO 165 165
Subtotal USD

3,672 3,665

MXN Dec-08 11/26/2020 NO 160 160
Subtotal MXN

160 160
Texas Regional Statutory Trust I USD Feb-04 3/17/2034 NO 41 41
Subtotal USD

41 41
State National Capital Trust I USD Jul-03 9/30/2033 NO 12 12
Subtotal USD

12 12
State National Statutory Trust II USD Mar-04 3/17/2034 NO 8 8
Subtotal USD

8 8
Texasbanc Capital Trust I USD Jul-04 7/23/2034 NO 21 21
Subtotal USD

21 21
BBVA COMPASS BANCSHARES, INC. USD Mar-05 4/1/2020 NO 182 188

USD Mar-06 4/1/2026 NO 56 59

USD Sep-07 10/1/2017 NO 288 115
Subtotal USD

526 361
BBVA COLOMBIA, S.A. COP Sep-11 9/19/2018 NO 35 21

COP Sep-11 9/19/2021 NO 36 36

COP Sep-11 9/19/2026 NO 54 54

COP Feb-13 2/19/2023 NO 69 69

COP Feb-13 2/19/2028 NO 57 57

COP Nov-14 11/26/2034 NO 55 55

COP Nov-14 11/26/2029 NO 31 31
Subtotal COP

337 323
BANCO CONTINENTAL, S.A. USD Dec-06 15-02-17 NO 25 25

USD May-07 14-05-27 NO 17 16

USD Sep-07 24-09-17 NO 16 16

USD Feb-08 28-02-28 NO 17 16

USD Jun-08 15-06-18 NO 25 25

USD Nov-08 15-02-19 NO 17 16

USD Oct-10 07-10-40 NO 165 165

USD Oct-13 08-10-28 NO 37 37

USD Sep-14 22-09-29 YES 246 247
Subtotal USD

565 564

PEN May-07 07-05-22 NO 11 11

PEN Jun-07 18-06-32 NO 19 15

PEN Nov-07 19-11-32 NO 17 14

PEN Jul-08 08-07-23 NO 15 12

PEN Sep-08 09-09-23 NO 16 14

PEN Dec-08 15-12-33 NO 10 8
Subtotal PEN

88 75
BBVA Paraguay, S.A. USD Nov-14 11/5/2021 NO 16 16
Subtotal USD

16 16
BBVA URUGUAY S.A. USD Dec-14 12/19/2024 NO 12 12
Subtotal USD

12 12
Total issues in other currencies (million euros)


Total balance eligible as fully-loaded

TABLE 8: Issues of Contingent Convertible Bonds as of 31/Dec/2014
Issuer company Currency Issue date December 2014
Issues in euros


USD May-13 1,235

EUR Feb-14 1,500