Logotype

January-December 2012

Spain

Spain highlights in the fourth quarter

  • A further significant increase in provisions.
  • Favorable trend in customer deposits.
  • Market share gain of customer funds.
  • BBVA Spain, the best global bank according to The Banker.

Industry Trends

In the fourth quarter of 2012, the commercial activity of Spanish credit institutions continued to face a very complex environment marked by the uncertainty surrounding the macroeconomic situation, high pressure on margins and low activity levels. In addition, the sector’s NPA ratio continues to increase. At the end of November, the ratio hit 11.4%, according to Bank of Spain data.

The fourth quarter was also a key time in terms of the progress made in the restructuring of the Spanish financial system, with the culmination of several stages of the schedule set in the Memorandum of Understanding (MoU):

  • Last November, the European Commission approved the restructuring plans of the four Spanish banks taken into administration. According to the Commission, the four will need an injection of €37 billion in public funds, less than the €52.5 billion needed according to the stress test conducted by Oliver Wyman on these four banks. The one taking most of the public aid is Bankia, which requires €18 billion, 49% of the total. In exchange, the Commission requires the banks to reduce their assets as of 2010 by 60% before 2017.
  • The banks included initially in Group 3 have managed to meet their capital needs independently.
  • December 20 saw the approval of the recapitalization plans of the banks included in Group 2. The total capital they will receive is estimated at €1,865m. As in the case of the banks taken into administration, they will have to reduce the assets on their balance sheets as of December 31, 2010 by between 25% and 40% (depending on the bank) before 2017.
  • The asset management company SAREB was set up on November 28, and the transfer of toxic assets by the nationalized banks was completed on December 31. Specifically, it has received €36,695m from BFA Bankia, Catalunya Banc, NCG Banco and Banco de Valencia, which in exchange have received senior debt issued by SAREB and guaranteed by the Estate. The transfer of assets for Group 2 will take place during the first quarter of 2013 and will require a new capital increase and the issue of subordinated debt, which will be subscribed by the current shareholders and by new ones who join.
  • On November 27, the Fund for the Orderly Restructuring of the Banking Sector (FROB) awarded Banco de Valencia to CaixaBank. The total cost of this sale, including other support measures requested, is less than the amount that winding up the bank would involve.

In short, the restructuring process will enable a reduction of the installed capacity in the industry and lead to a financial system with fewer but solvent, healthy and more efficient banks.

Income statement

(Million euros)

Download table in Excel


Spain

2012 Δ % 2011
Net interest income 4,836 10.1 4,391
Net fees and commissions 1,607 10.0 1,461
Net trading income (13) n.s. 11
Other income/expenses 355 (23.6) 464
Gross income 6,784 7.2 6,328
Operating costs (2,818) 1.1 (2,787)
Personnel expenses (1,679) (0.5) (1,687)
General and administrative expenses (1,043) 4.0 (1,002)
Deprecation and amortization (96) (1.9) (98)
Operating income 3,967 12.0 3,541
Impairment on financial assets (net) (5,710) 233.6 (1,711)
Provisions (net) and other gains (losses) (98) n.s. 68
Income before tax (1,841) n.s. 1,897
Income tax 575 n.s. (546)
Net income (1,267) n.s. 1,352
Non-controlling interests (1) 106.4 (0)
Net attributable profit (1,267) n.s. 1,352
Adjusted (1) (2,478) - (128)
Net attributable profit (adjusted) (1) 1,211 (18.2) 1,480
(1) In 2011 and 2012, impairment charge related to the deterioration of the real estate sector.

Balance sheet

(Million euros)

Download table in Excel


Spain

31-12-12 Δ% 31-12-11
Cash and balances with central banks 11,427 (14.5) 13,373
Financial assets 77,867 12.9 68,974
Loans and receivables 221,906 (1.6) 225,480
Loans and advances to customers 200,568 (4.3) 209,543
Loans and advances to credit institutions and other 21,338 33.9 15,937
Inter-area positions - - -
Tangible assets 823 (8.9) 903
Other assets 5,127 57.4 3,257
Total assets/Liabilities and equity 317,151 1.7 311,987
Deposits from central banks and credit institutions 52,274 17.2 44,592
Deposits from customers 126,777 10.4 114,832
Debt certificates 8,222 124.2 3,668
Subordinated liabilities 2,999 (48.2) 5,788
Inter-area positions 44,250 (32.4) 65,471
Financial liabilities held for trading 53,157 9.9 48,351
Other liabilities 17,361 (7.3) 18,727
Economic capital allocated 12,110 14.7 10,558

Significant ratios

(Percentage)

Download table in Excel


Spain

31-12-12 30-09-12 31-12-11
Efficiency ratio 41.5 41.0 44.0
NPA ratio 6.9 6.5 4.8
NPA coverage ratio 67 59 44
Risk premium 2.66 2.31 0.78

Spain. Operating income

(Million euros)

Spain. Net attributable profit (adjusted)

(Million euros)


Tools