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January-September 2013

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Asset/Liability Management

The Assets and Liabilities Management unit is responsible for managing structural interest-rate and foreign-exchange positions, as well as the Group’s overall liquidity and shareholders’ funds.

Earnings from the management of liquidity and the structural interest-rate positions in each balance sheet are registered in the corresponding areas.

With respect to the management of exchange-rate risk of BBVA’s long-term investments, their earnings are included in the Corporate Center and explained in detail in the section on Risk Management, in the sub-section on “Structural Risks”.

The Bank’s capital management has a twofold aim: to maintain levels of capitalization appropriate to the business targets in all the countries in which it operates and, at the same time, to maximize return on shareholders’ funds through the efficient allocation of capital to the various units, good management of the balance sheet and proportionate use of the various instruments that comprise the Group’s equity: common stock, preferred shares and subordinated debt.

No significant actions were undertaken in the third quarter of 2013 as regards the Group’s capital management, as the current levels of capitalization enable the Bank to fulfill all of its capital objectives. One aspect worth mentioning is the payment in cash in July of the first interim dividend against 2013 earnings, amounting to €0.10 per share.

In addition, at its meeting on September 25, 2013 the Board of Directors of BBVA agreed to carry out the second share capital increase to continue with the implementation of the flexible remuneration scheme known as the “Dividend Option”. This scheme offers shareholders a wider range of remuneration alternatives for their shares, while providing capital savings through greater retention of the earnings for the current year. The Bank shareholders who were eligible as of 11:59 pm (Madrid time) on September 27, 2013 received one free allotment right for every BBVA share they owned at that time. Once again, this has proved to be a successful initiative, since the owners of 88.3% of the free allotment rights opted to receive new BBVA shares, which began to be traded on the Spanish stock markets last October 23.


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