January-December 2012

Loans and advances to customers

At the end of 2012, gross customer lending amounted to €367 billion, up 1.7% year-on-year and down 2.6% on the figure for the end of September 2012. Apart from the buoyant activity in emerging geographical regions, the incorporation of balances from Unnim and the positive exchange-rate effect also have a positive impact on this year-on-year growth. These effects outweigh the reduced activity in Spain and in the Group’s CIB portfolios. However, the lower figures during the quarter were prompted by the sharper fall in lending in Spain during the last months of the year and the negative impact of exchange rates.

Thus, the trend in lending in the business areas is along the same lines seen during the whole of 2012:

  • The deleveraging process taking place in Spain, and which has been more acute in the latter part of the year, has been partly offset by the incorporation of Unnim balances at the end of July 2012, and the setting up of the fund to finance payments to suppliers. Overall, gross customer lending in the area is down 1.5% year-on-year and 3.9% quarter-on-quarter.
  • Performance in Eurasia has been mixed: on the one hand, the wholesale segment in Europe and Asia, and, on the other hand, the retail portfolio, mainly focused on BBVA’s stake in Garanti. Lending activity in CIB fell by 29.9% over the year, due on the one hand to the economic slowdown and, on the other hand, to its selective growth strategy in certain customers and portfolios. In contrast, gross lending to customers from Garanti is up 15.1% in the same period. At year-end, the loan book for the area had fallen 6.4% in the quarter and 13.0% year-on-year.
  • Mexico has maintained the rate of growth seen in previous quarters, largely stemming from retail portfolios. Growth is particularly significant in consumer finance and cards and in small businesses. As a result, the area’s lending has shown positive performance both over the last three months and for the year (up 1.4% and 8.6%, respectively, at constant exchange rate).
  • South America continues to post significant growth in all geographical areas and in practically all portfolios, although the excellent performance in the retail segment is worth pointing out. Overall, lending is up 5.7% in the quarter and 18.6% over the year (at constant exchange rates).
  • The United States has once again performed strongly, underpinned by the positive trend in new production reported by BBVA Compass in its target portfolios, i.e. in commercial loans and residential real estate. Therefore, and despite the continued slump in the construction real estate sector, the loan book in BBVA Compass has grown 4.1% since the end of 2011 and 0.2% since the end of September 2012 (at constant exchange rate).

In short, a domestic sector experiencing steadily declining quarter after quarter, against a non-domestic sector benefiting from the good performance in emerging economies.

Lastly, non-performing loans have shown an upward trend since the end of 2011 and are up 29.7% year-on-year and 2.3% quarter-on-quarter. As stated in the previous quarter, this trend is caused above all by the performance in the domestic sector, which is strongly impacted by the deterioration in the euro zone economy and, particularly, in Spain. Furthermore, since the end of July this heading has also included Unnim balances, though it is important to stress once again that they have a high coverage ratio, and part of them are guaranteed by an asset protection scheme (EPA). Meanwhile, the year-on-year increase in NPA ratios in the non-domestic sector are mainly due to the exchange-rate effect and the classification as subjective NPLs of specific risks in Portugal.

Customer lending

(Million euros)

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31-12-12 Δ % 31-12-11 30-09-12
Domestic sector 190,817 (0.8) 192,442 198,583
Public sector 25,399 (0.4) 25,509 27,614
Other domestic sectors 165,417 (0.9) 166,933 170,969
Secured loans 105,664 6.5 99,175 107,100
Commercial loans 5,926 (10.5) 6,620 5,176
Financial leases 4,245 (14.3) 4,955 4,413
Other term loans 36,457 (12.9) 41,863 39,074
Credit card debtors 1,666 3.1 1,616 1,584
Other demand and miscellaneous debtors 2,857 (2.8) 2,939 2,497
Other financial assets 8,603 (11.9) 9,766 11,125
Non-domestic sector 156,312 2.0 153,222 158,966
Secured loans 61,811 1.9 60,655 63,118
Other loans 94,500 2.1 92,567 95,848
Non-performing loans 20,287 29.7 15,647 19,834
Domestic sector 15,159 37.3 11,042 15,137
Non-domestic sector 5,128 11.4 4,604 4,697
Customer lending (gross) 367,415 1.7 361,310 377,383
Loan-loss provisions (14,485) 53.9 (9,410) (13,565)
Customer lending (net) 352,930 0.3 351,900 363,818

Customer lending (gross)

(Billion euros)

(1) At constant exchange rates: +1.0%.