January-December 2012


The deleveraging process in Spain brought about by the current economic situation continued in the last quarter of 2012. However, from the point of view of liabilities, there is a new favorable trend in on-balance-sheet customer deposits, with BBVA steadily gaining 68 basis points in market share in total customer funds last year, according to the data available as of November 2012. This positive trend is the result of the Group’s soundness and the strategy applied in the area, which has focused on consolidating its leadership in the Spanish market and increasing its customer base using customer funds and the transactional banking business as key levers. The commercial gap and liquidity position in the area have therefore continued to improve.

Gross lending to customers as of 31-Dec-2012 was €210,982m, down 3.9% in the quarter and 1.5% over the last 12 months.

As of 31-Dec-2012, BBVA managed a volume of €170,330m in customer funds, including customer deposits, promissory notes and off-balance-sheet funds, up 11.2% year-on-year and 4.2% quarter-on-quarter. Of this figure, €129,640m correspond to on-balance deposits and promissory notes, which increased 18.5% over the last twelve months and 5.4% compared to the end of September 2012. This increase confirms the excellent management of deposit gathering and of the renewals achieved by the commercial network.

These trends in lending and customer funds have cut the loan-to-deposit (1) ratio in the domestic sector from 148% (data as of December 2011) to 135% at the close of 2012. Including mortgage-covered bonds, the ratio stands at 104%.

Off-balance-sheet funds managed by BBVA in Spain amounted to €51,915m, 2.8% up on the previous quarter and 3.0% as of the same date in 2011. Of this figure, €19,116m correspond to mutual funds, with a slight increase of 0.7% over the quarter, due basically to the good performance of the markets during this period. Over the year they fell 2.5%. The rest are distributed among other off-balance-sheet funds and pension funds, which as of 31-Dec-2012 amounted to €18,313m, a rise of 3.5% since the end of September 2012 (up 6.3% year-on-year) thanks to the positive management of renewals and new accounts gathered, very much supported by the new range of products developed by BBVA. Specifically, in the fourth quarter of 2012, the Group launched six new products that complete the range of pension plans and Basque social insurance entities available for its customers. The Bank also offers bonuses for contributions or transfers from other banks.

This has enabled BBVA to maintain its position as the number one manager in both mutual and pension funds in Spain, with market shares of 17.5% in mutual funds (according to the latest information available as of November) and 19.1% in pensions (according to data published by Inverco in September).

With respect to asset quality, the slight upward movement in the NPA ratio over previous quarters has continued, due to the difficult macroeconomic situation and the reduced volumes of lending activity. Despite this, the ratio is still far below that reported in the sector overall, and closed December at 6.9%. The significant provisions made explain the improvement in the coverage ratio, which increased from 59% as of 30-Sep-2012 to 67% at year-end.

(1) The ratio does not include securitizations or repos, but includes promissory notes distributed through the retail network.