Logotype

January-December 2012

Earnings

The most significant aspects of the fourth quarter of 2012, from the standpoint of earnings, are:

  • Strong performance in gross income, underpinned, on the one hand, by high generation of recurring revenue, and, on the other, by the large contribution of net trading income (NTI).
  • A further significant increase in provisions in Spain to cover the steady impairment in real estate portfolios and assets.
  • As a result, net attributable profit for the quarter amounts to €20m.

In 2012, the BBVA Group reported a net attributable profit of €1,676m. The main feature of this result is the high quality of revenue, despite the hugely difficult and demanding background in which it has been generated. The Group has thus demonstrated for yet another year its high capacity to generate recurrent earnings, which have increased quarter-on-quarter, with an accumulated growth of 12.8% over the year. This standout performance is due to BBVA’s approach to banking based on four pillars:

1. A portfolio model shaped by:

  • A well balanced diversification in terms of geographical areas, businesses and segments, which is essential for ensuring resilience in any environment. This diversification has become increasingly important in 2012, when emerging economies contributed 56% of the gross income of the business areas.
  • Franchises with leading positions in all markets in which the Group operates and with important stakes and strategic alliances in Turkey and China.

2. A business model based on three elements:

  • A retail banking model focused on long-lasting relationships (customer-centric approach) with a very broad customer base. This ensures highly recurrent earnings and very stable funding in the form of customer deposits.
  • A distribution network with a high level of capillarity: The number of branches and ATMs has continued to increase over the year.
  • Technology is a pillar that has been strongly supported by BBVA in recent years to improve efficiency. A good example of this is the implementation of the technological platform in the United States.

3. A management model based on:

  • Prudence with respect to the decisions made, largely in the field of risks. In this respect it is important to note the increase in subjective nonperforming assets and in the provisions booked in Portugal in the fourth quarter of 2012.
  • Proactiveness in terms of the need to anticipate events and to have the flexibility to adapt easily to them. In this respect, BBVA has been particularly active in the wholesale funding market.
  • A global approach, which consists of using the whole potential of the businesses, customers and BBVA’s current footprint. In 2012 insurance activity performed outstandingly well.

4. A governance model founded on the principles of integrity, prudence and transparency, whose primary objective is to create value for its shareholders.

Consolidated income statement: quarterly evolution

(Million euros)

Download table in Excel


2012 2011

4Q 3Q 2Q 1Q 4Q 3Q 2Q 1Q
Net interest income 3,910 3,877 3,741 3,594 3,482 3,284 3,213 3,173
Net fees and commissions 1,126 1,104 1,061 1,062 1,004 1,007 1,035 985
Net trading income 646 319 461 340 403 (5) 331 751
Dividend income 17 35 311 27 230 50 259 23
Income by the equity method 191 169 175 191 205 149 122 119
Other operating income and expenses (32) 6 57 51 42 23 62 79
Gross income 5,858 5,512 5,806 5,265 5,368 4,508 5,022 5,130
Operating Costs (2,855) (2,771) (2,633) (2,528) (2,597) (2,408) (2,426) (2,307)
Personnel expenses (1,472) (1,447) (1,396) (1,347) (1,372) (1,294) (1,277) (1,247)
General and administrative expenses (1,089) (1,064) (1,001) (951) (1,000) (899) (943) (865)
Depreciation and amortization (294) (259) (236) (230) (225) (214) (206) (194)
Operating income 3,003 2,741 3,173 2,738 2,770 2,100 2,596 2,824
Impairment on financial assets (net) (2,676) (2,038) (2,182) (1,085) (1,337) (904) (962) (1,023)
Provisions (net) (227) (195) (98) (130) (182) (93) (83) (150)
Other gains (losses) (269) (561) (311) (223) (1,719) (166) (155) (71)
Income before tax (168) (53) 582 1,299 (466) 937 1,397 1,579
Income tax 220 275 3 (223) 385 (77) (167) (347)
Net income from ongoing operations 52 222 584 1,076 (81) 860 1,229 1,232
Net income from discontinued operations 138 83 75 96 74 48 66 58
Net income 190 305 659 1,173 (7) 907 1,295 1,290
Non-controlling interests (170) (159) (154) (168) (132) (103) (106) (141)
Net attributable profit 20 146 505 1,005 (139) 804 1,189 1,150
Adjusted (1) (1,042) (825) (742) (122) (1,166) (173) (82) (80)
Net attributable profit (adjusted) (1) 1,061 971 1,247 1,127 1,026 978 1,271 1,229
Basic earnings per share (euros) 0.01 0.03 0.10 0.19 (0.03) 0.16 0.24 0.23
Basic earnings per share adjusted (euros) (1) 0.19 0.18 0.23 0.21 0.20 0.20 0.26 0.25
(1) In 2011 during the fourth quarter, US goodwill impairment charge. In 2011 and 2012, impairment charge related to the deterioration of the real estate sector in Spain. And in the third quarter of 2012, impact of Unnim badwill.

Consolidated income statement

(Million euros)

Download table in Excel


2012 Δ % Δ % at constant
Exchange rates
2011
Net interest income 15,122 15.0 11.0 13,152
Net fees and commissions 4,353 8.0 4.9 4,031
Net trading income 1,767 19.3 15.3 1,481
Dividend income 390 (30.6) (30.9) 562
Income by the equity method 727 22.1 22.1 595
Other operating income and expenses 82 (60.3) (53.1) 206
Gross income 22,441 12.1 8.7 20,028
Operating Costs (10,786) 10.8 7.6 (9,737)
Personnel expenses (5,662) 9.1 6.2 (5,191)
General and administrative expenses (4,106) 10.8 7.4 (3,707)
Depreciation and amortization (1,018) 21.4 17.2 (839)
Operating income 11,655 13.3 9.8 10,290
Impairment on financial assets (net) (7,981) 88.9 84.7 (4,226)
Provisions (net) (650) 28.0 25.4 (508)
Other gains (losses) (1,365) (35.3) (38.8) (2,110)
Income before tax 1,659 (51.9) (53.2) 3,446
Income tax 276 n.s. n.s. (206)
Net income from ongoing operations 1,935 (40.3) (41.9) 3,240
Net income from discontinued operations 393 59.8 50.3 246
Net income 2,327 (33.2) (35.1) 3,485
Non-controlling interests (651) 35.3 24.2 (481)
Net attributable profit 1,676 (44.2) (45.3) 3,004
Adjusted (1) (2,730) - - (1,501)
Net attributable profit (adjusted) (1) 4,406 (2.2) (5.2) 4,505
Basic earnings per share (euros) 0.32

0.62
Basic earnings per share adjusted (euros) (1) 0.82

0.92
(1) In 2011 during the fourth quarter, US goodwill impairment charge in 2011 and 2012, impairment charge related to the deterioration of the real estate sector in Spain. And in the third quarter of 2012, impact of Unnim badwill.

Income evolution

(Million euros)


Tools