January-December 2012

Capital base

The most relevant events with respect to the Group’s capital base in the fourth quarter of 2012 are:

  • The previous quarter’s Basel II core capital ratio (10.8%) has been maintained, and the EBA’s capital recommendations have continued to be complied with.
  • Risk-weighted assets (RWA) have fallen as a result of the sale of the business in Puerto Rico, the decline in activity in Spain and the reduction in portfolios with CIB customers.
  • Tier II capital has decreased, due to the repurchase of subordinated debt by the Group.
  • In addition to the above, there is a negative exchange-rate effect that has impacted the capital base as well as the RWA.

At the close of 2012, the Group’s capital base is at practically the same level as at the close of 2011, at €42,836m, with a 3.7% decrease over the quarter. The main effects to take into account in the last three months of the year are the aforementioned repurchase of subordinated debt and the negative exchange-rate impact. In contrast, the effect of foreign currencies on the Group’s capital base is positive in year-on-year terms.

RWA amounted to €329,033m, with a year-on-year decline of 0.5% and 1.8% over the quarter. The deleveraging process in Spain, reduced activity with wholesale customers and the sale of the Puerto Rico subsidiary have countered the positive effects on this item, such as the strength of the banking business in emerging countries and the incorporation of Unnim.

Breaking down the capital base by its different components, core capital at €35,451m remains at levels similar to the previous quarter, and 3.8% up on the figure posted 12 months previously. The core and Tier I ratios at 10.8% are also practically the same as at the close of the third quarter, and 45 basis points up on the figures at the close of 2011.

Finally, Tier II amounted to €7,386m as of 31-Dec-2012, with a decline of €1,007m on the figure as of 30-Sep-2012 due to the repurchase of subordinated debt mentioned above. This represents a fall of 14.2% on the amount registered 12 months previously. As a result, the Tier II ratio closed the quarter at 2.2%.

Finally, the BBVA Group’s BIS II ratio closed 2012 at 13.0%, and continues above the minimum 9% capital ratio required by the EBA.

Capital base (BIS II Regulation)

(Million euros)

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31-12-12 30-09-12 30-06-12 31-03-12 31-12-11
Core capital 35,451 36,075 35,924 35,290 34,161
Capital (Tier 1) 35,451 36,075 35,924 35,290 34,161
Other eligible capital (Tier II) 7,386 8,393 6,841 8,241 8,609
Capital base 42,836 44,467 42,765 43,531 42,770
Risk-weighted assets 329,033 335,203 332,036 329,557 330,771
BIS ratio (%) 13.0 13.3 12.9 13.2 12.9
Core capital (%) 10.8 10.8 10.8 10.7 10.3
Tier I (%) 10.8 10.8 10.8 10.7 10.3
Tier II (%) 2.2 2.5 2.1 2.5 2.6

Core capital evolution (BIS II Regulation)

(Million euros and percentage)