Appendix
Reconciliation of the Financial Statements of the BBVA Group
Below is the reconciliation between the Consolidated Financial Income Statements and the consolidated management income statements, shown throughout this report, for 2020 and 2019.
The main difference between them is the treatment of the results generated by the portion of the business in the United States that is subject to the sale agreement reached on November 16, 2020. As a result, in the management income statements, the results of the Group are presented by consolidating the said business for sale in continuity, compared to the treatment of the income statement of the Consolidated Financial Statements in which, according to the applicable accounting regulation, and since the transaction represents a sale agreement that includes a large section of the businesses that constitute a significant geographical area for the Group (IFRS 5.32 and Appendix A), it has been considered as a “discontinued operation”. Based on this consideration, the results obtained by the business subject to the sale are presented under a single line of the income statements - "Profit (loss) after tax from discontinued operations" - (IFRS 5.33) and the income statements of the Consolidated Financial Statements for the comparative periods presented have been re-expressed (IFRS 5.34).This line of the Consolidated Financial Statements includes the successive goodwill impairments in the United States made in the last quarter of 2019 and the first quarter of 2020 that, in the management income statements are collected in a management margin called “United States goodwill impairment and corporate operations”.
Additionally, there is a difference between both approaches that derives from the materialization of the agreement with Allianz that, in the Consolidated Financial Income Statements is included with its gross impact on the line "Gains (losses) from non-current assets and disposable groups of items classified as held for sale not qualifying as discontinued operations" and its corresponding tax effect on the line "Tax expense or income related to profit or loss from continuing operations” while, for management purposes, it has been classified as “Corporate Operation” for its net amount, being included in the same management margin mentioned above.
CONCILIATION OF THE BBVA GROUP'S INCOME STATEMENTS. 2020 (MILLIONS OF EUROS)
| Consolidated income statement | Adjustments | Management income statement | ||
|---|---|---|---|---|
| 2020 | 2020 | |||
| Interest and other income | 22,389 | 3,534 | 25,923 | Financial income |
| Interest expense | (7,797) | (1,325) | (9,122) | Financial expenses |
| NET INTEREST INCOME | 14,592 | 2,209 | 16,801 | Net interest income |
| Dividend income | 137 | (*) | ||
| Share of profit or loss of entities accounted for using the equity method | (39) | (*) | ||
| Fee and commission income | 5,980 | 677 | 6,657 | Fees and commissions income |
| Fee and commission expense | (1,857) | (183) | (2,040) | Fees and commissions expenses |
| 4,123 | 494 | 4,616 | Net fees and commissions | |
| Gains (losses) on derecognition of financial assets and liabilities not measured at fair value through profit or loss, net | 139 | |||
| Gains (losses) on financial assets and liabilities held for trading, net | 777 | |||
| Gains (losses) on non-trading financial assets mandatorily at fair value through profit or loss, net | 208 | |||
| Gains (losses) on financial assets and liabilities designated at fair value through profit or loss, net | 56 | |||
| Gains (losses) from hedge accounting, net | 7 | |||
| Exchange differences, net | 359 | |||
| 1,546 | 145 | 1,692 | Net trading income | |
| Other operating income | 492 | |||
| Other operating expense | (1,662) | |||
| Income from insurance and reinsurance contracts | 2,497 | |||
| Expense from insurance and reinsurance contracts | (1,520) | |||
| (95) | (40) | (135) | Other operating income and expenses | |
| GROSS INCOME | 20,166 | 2,808 | 22,974 | Gross income |
| Administration costs | (7,799) | (10,755) | Operating expenses (**) | |
| Personnel expense | (4,695) | (955) | (5,650) | Personnel expense |
| Other administrative expense | (3,105) | (507) | (3,612) | Other administrative expense |
| Depreciation and amortization | (1,288) | (205) | (1,494) | Depreciation |
| 11,079 | 1,140 | 12,219 | Operating income | |
| Provisions or reversal of provisions | (746) | 2 | (744) | Provisions or reversal of provisions |
| Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification | (5,179) | (729) | (5,908) | Impairment on financial assets not measured at fair value through profit or loss |
| NET OPERATING INCOME | 5,153 | 413 | 5,566 | |
| Impairment or reversal of impairment of investments in joint ventures and associates | (190) | |||
| Impairment or reversal of impairment on non-financial assets | (153) | |||
| Gains (losses) on derecognition of non - financial assets and subsidiaries, net | (7) | |||
| Negative goodwill recognized in profit or loss | - | |||
| Gains (losses) from non-current assets and disposal groups classified as held for sale not qualifying as discontinued operations | 444 | |||
| 94 | (435) | (341) | Other gains (losses) | |
| PROFIT (LOSS) BEFORE TAX FROM CONTINUING OPERATIONS | 5,248 | (22) | 5,225 | Profit/(loss) before tax |
| Tax expense or income related to profit or loss from continuing operations | (1,459) | 73 | (1,385) | Income tax |
| PROFIT (LOSS) AFTER TAX FROM CONTINUING OPERATIONS | 3,789 | 51 | 3,840 | Profit/(loss) after tax |
| Profit (loss) after tax from discontinued operations | (1,729) | 1,729 | - | |
| - | (1,780) | (1,780) | Goodwill impairment in the United States and corporate operations | |
| PROFIT FOR THE YEAR | 2,060 | - | 2,060 | Profit/(loss) for the year |
| ATTRIBUTABLE TO MINORITY INTEREST (NON-CONTROLLING INTERESTS) | (756) | - | (756) | Non-controlling interests |
| ATTRIBUTABLE TO OWNERS OF THE PARENT | 1,305 | - | 1,305 | Net attributable profit/(loss) |
- (*) Included within the Other operating income and expenses of the Management Income Statements.
- (**) Depreciations included.
CONCILIATION OF THE BBVA GROUP'S INCOME STATEMENTS. 2019 (MILLIONS OF EUROS)
| Consolidated income statement | Adjustments | Management income statement | ||
|---|---|---|---|---|
| 2019 | 2019 | |||
| Interest and other income | 27,762 | 5,880 | 33,642 | Financial income |
| Interest expense | (11,972) | (3,546) | (15,518) | Financial expenses |
| NET INTEREST INCOME | 15,789 | 2,335 | 18,124 | Net interest income |
| Dividend income | 153 | (*) | ||
| Share of profit or loss of entities accounted for using the equity method | (42) | (*) | ||
| Fee and commission income | 6,786 | 736 | 7,522 | Fees and commissions income |
| Fee and commission expense | (2,284) | (205) | (2,489) | Fees and commissions expenses |
| 4,502 | 531 | 5,033 | Net fees and commissions | |
| Gains (losses) on derecognition of financial assets and liabilities not measured at fair value through profit or loss, net | 186 | |||
| Gains (losses) on financial assets and liabilities held for trading, net | 419 | |||
| Gains (losses) on non-trading financial assets mandatorily at fair value through profit or loss, net | 143 | |||
| Gains (losses) on financial assets and liabilities designated at fair value through profit or loss, net | (98) | |||
| Gains (losses) from hedge accounting, net | 55 | |||
| Exchange differences, net | 581 | |||
| 1,286 | 98 | 1,383 | Net trading income | |
| Other operating income | 639 | |||
| Other operating expense | (1,943) | |||
| Income from insurance and reinsurance contracts | 2,890 | |||
| Expense from insurance and reinsurance contracts | (1,751) | |||
| (55) | (22) | (77) | Other operating income and expenses | |
| GROSS INCOME | 21,522 | 2,941 | 24,463 | Gross income |
| Administration costs | (8,769) | (11,902) | Operating expenses (**) | |
| Personnel expense | (5,351) | (989) | (6,340) | Personnel expense |
| Other administrative expense | (3,418) | (545) | (3,963) | Other administrative expense |
| Depreciation and amortization | (1,386) | (214) | (1,599) | Depreciation |
| 11,368 | 1,193 | 12,561 | Operating income | |
| Provisions or reversal of provisions | (614) | (3) | (617) | Provisions or reversal of provisions |
| Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification | (3,552) | (521) | (4,073) | Impairment on financial assets not measured at fair value through profit or loss |
| NET OPERATING INCOME | 7,202 | 670 | 7,872 | |
| Impairment or reversal of impairment of investments in joint ventures and associates | (46) | |||
| Impairment or reversal of impairment on non-financial assets | (128) | |||
| Gains (losses) on derecognition of non - financial assets and subsidiaries, net | (5) | |||
| Negative goodwill recognized in profit or loss | - | |||
| Gains (losses) from non-current assets and disposal groups classified as held for sale not qualifying as discontinued operations | 23 | |||
| (156) | 0 | (155) | Other gains (losses) | |
| PROFIT (LOSS) BEFORE TAX FROM CONTINUING OPERATIONS | 7,046 | 670 | 7,716 | Profit/(loss) before tax |
| Tax expense or income related to profit or loss from continuing operations | (1,943) | (110) | (2,053) | Income tax |
| PROFIT (LOSS) AFTER TAX FROM CONTINUING OPERATIONS | 5,103 | 560 | 5,663 | Profit/(loss) after tax |
| Profit (loss) after tax from discontinued operations | (758) | 758 | - | |
| - | (1,318) | (1,318) | Goodwill impairment in the United States and corporate operations | |
| PROFIT FOR THE YEAR | 4,345 | - | 4,345 | Profit/(loss) for the year |
| ATTRIBUTABLE TO MINORITY INTEREST (NON-CONTROLLING INTERESTS) | (833) | - | (833) | Non-controlling interests |
| ATTRIBUTABLE TO OWNERS OF THE PARENT | 3,512 | - | 3,512 | Net attributable profit/(loss) |
- (*) Included within the Other operating income and expenses of the Management Income Statements.
- (**) Depreciations included.
Below is the reconciliation between the balance sheets of the Consolidated Financial Statements and those of the management as of 12-31-2020 and 12-31-2019, based on which the financial information of this report is provided. The main difference between both of them is the classification in the consolidated balance sheets of the sale transactions of BBVA Paraguay (closed on January 22) and part of the BBVA Group business in the United States (expected to close by the middle of the 2021 financial year) as Non-current Assets held for Sale 2. On the other hand, the management balance sheets as of 12-31-2020 and 12-31-2019 are presented in continuity, being the assets and liabilities of these two transactions included in each corresponding balance sheet line.
CONCILIATION OF THE BBVA GROUP'S BALANCE SHEET. 2020 (MILLIONS OF EUROS)
| Consolidated balance sheet of the financial statements | Adjustments | Consolidated management balance sheet | |
|---|---|---|---|
| 31-12-20 | 31-12-20 | ||
| Cash, cash balances at central banks and other demand deposits | 65,520 | 11,784 | 77,303 |
| Financial assets held for trading | 108,467 | 821 | 109,288 |
| Non-trading financial assets mandatorily at fair value through profit or loss | 5,198 | 13 | 5,211 |
| Financial assets designated at fair value through profit or loss | 1,117 | - | 1,117 |
| Financial assets at fair value through accumulated other comprehensive income | 69,440 | 4,976 | 74,416 |
| Financial assets at amortized cost | 367,668 | 62,592 | 430,260 |
| Loans and advances to central banks and credit institutions | 20,784 | 37 | 20,821 |
| Loans and advances to customers | 311,147 | 53,859 | 365,006 |
| Debt securitie | 35,737 | 8,697 | 44,434 |
| Investments in subsidiaries, joint ventures and associates | 1,437 | (0) | 1,437 |
| Tangible assets | 7,823 | 807 | 8,629 |
| Intangible assets | 2,345 | 1,952 | 4,297 |
| Other assets (*) | 107,246 | (82,944) | 24,301 |
| Total assets | 736,258 | - | 736,258 |
| Financial liabilities held for trading | 86,591 | 98 | 86,689 |
| Other financial liabilities designated at fair value through profit or loss | 10,050 | - | 10,050 |
| Financial liabilities at amortized cost | 490,606 | 74,480 | 565,085 |
| Deposits from central banks and credit institutions | 72,806 | 4,707 | 77,513 |
| Deposits from customers | 342,661 | 66,460 | 409,122 |
| Debt certificates | 61,780 | 2,811 | 64,591 |
| Other financial liabilities | 13,358 | 501 | 13,860 |
| Liabilities under insurance and reinsurance contracts | 9,951 | - | 9,951 |
| Other liabilities (**) | 89,041 | (74,578) | 14,463 |
| Total liabilities | 686,239 | - | 686,239 |
| Non-controlling interests | 5,471 | - | 5,471 |
| Accumulated other comprehensive income | (14,356) | - | (14,356) |
| Shareholders’ funds | 58,904 | - | 58,904 |
| Total equity | 50,020 | - | 50,020 |
| Total liabilities and equity | 736,258 | - | 736,258 |
- (*) "Derivatives - hedge accounting", "Fair value changes of the hedged items in portfolio hedges of interest rate risk", "Joint ventures and associates", "Insurance and reinsurance assets", "Tax assets", "Other assets", and "Non-current assets and disposal groups classified as held for sale".
- (**) "Derivatives - hedge accounting", "Fair value changes of the hedged items in porftolio hedges of interest rate risk", "Provisions", "Tax liabilities", "Other liabilities", and "Liabilities included in disposal groups classified as held for sale".
2 As of 12-31-2019, only BBVA Paraguay is classified as Non-current Assets held for Sale and as of 12-31-2020, BBVA Paraguay and BBVA USA and the rest of Group’s companies included in the sale agreement signed with PNC are classified under this balance sheet line.
CONCILIATION OF THE BBVA GROUP'S BALANCE SHEET. 2019 (MILLIONS OF EUROS)
| Consolidated balance sheet of the financial statements | Adjustments | Consolidated management balance sheet | |
|---|---|---|---|
| 31-12-19 | 31-12-19 | ||
| Cash, cash balances at central banks and other demand deposits | 44,303 | 363 | 44,666 |
| Financial assets held for trading | 101,735 | 0 | 101,735 |
| Non-trading financial assets mandatorily at fair value through profit or loss | 5,557 | - | 5,557 |
| Financial assets designated at fair value through profit or loss | 1,214 | - | 1,214 |
| Financial assets at fair value through accumulated other comprehensive income | 61,183 | 2 | 61,186 |
| Financial assets at amortized cost | 439,162 | 1,268 | 440,430 |
| Loans and advances to central banks and credit institutions | 17,924 | 0 | 17,924 |
| Loans and advances to customers | 382,360 | 1,205 | 383,565 |
| Debt securitie | 38,877 | 63 | 38,940 |
| Investments in subsidiaries, joint ventures and associates | 1,488 | - | 1,488 |
| Tangible assets | 10,068 | 9 | 10,077 |
| Intangible assets | 6,966 | 4 | 6,970 |
| Other assets (*) | 26,060 | (1,647) | 24,413 |
| Total assets | 697,737 | - | 697,737 |
| Financial liabilities held for trading | 88,680 | 0 | 88,680 |
| Other financial liabilities designated at fair value through profit or loss | 10,010 | - | 10,010 |
| Financial liabilities at amortized cost | 516,641 | 1,542 | 518,182 |
| Deposits from central banks and credit institutions | 54,700 | 22 | 54,722 |
| Deposits from customers | 384,219 | 1,467 | 385,686 |
| Debt certificates | 63,963 | 40 | 64,004 |
| Other financial liabilities | 13,758 | 13 | 13,771 |
| Liabilities under insurance and reinsurance contracts | 10,606 | - | 10,606 |
| Other liabilities (**) | 16,875 | (1,542) | 15,333 |
| Total liabilities | 642,812 | - | 642,812 |
| Non-controlling interests | 6,201 | - | 6,201 |
| Accumulated other comprehensive income | (10,226) | - | (10,226) |
| Shareholders’ funds | 58,950 | - | 58,950 |
| Total equity | 54,925 | - | 54,925 |
| Total liabilities and equity | 697,737 | - | 697,737 |
- (*) "Derivatives - hedge accounting", "Fair value changes of the hedged items in portfolio hedges of interest rate risk", "Joint ventures and associates", "Insurance and reinsurance assets", "Tax assets", "Other assets", and "Non-current assets and disposal groups classified as held for sale".
- (**) "Derivatives - hedge accounting", "Fair value changes of the hedged items in porftolio hedges of interest rate risk", "Provisions", "Tax liabilities", "Other liabilities", and "Liabilities included in disposal groups classified as held for sale".
Companies excluded from the sale agreement of the BBVA subsidiary in the United States
Hereafter is presented the income statement and the balance sheet as of December 31, 2020 and 2019 of the companies of the United States subsidiary excluded from the sale agreement reached with PNC 3 is presented.
INCOME STATEMENTS OF THE COMPANIES EXCLUDED FROM THE SALE AGREEMENT OF THE BBVA SUBSIDIARY IN THE UNITED STATES (MILLIONS OF EUROS)
| 2020 | 2019 | |
|---|---|---|
| Net interest income | 76 | 60 |
| Net fees and commissions | 182 | 139 |
| Net trading income | 59 | 58 |
| Other operating income and expenses | 47 | 50 |
| Gross income | 364 | 307 |
| Operating expenses | (193) | (201) |
| Personnel expense | (129) | (134) |
| Other administrative expense | (62) | (62) |
| Depreciation | (3) | (5) |
| Gross income | 170 | 105 |
| Impairment on financial assets not measured at fair value through profit or loss | (47) | (30) |
| Provisions or reversal of provisions | (6) | 0 |
| Other gains (losses) | - | (0) |
| Profit/(loss) before tax | 118 | 76 |
| Income tax | (18) | (10) |
| Profit/(loss) for the year | 100 | 66 |
| Non-controlling interests | - | - |
| Net attributable profit/(loss) | 100 | 66 |
SUMMARIZED BALANCE SHEETS OF THE COMPANIES EXCLUDED FROM THE SALE AGREEMENT OF THE BBVA SUBSIDIARY IN THE UNITED STATES (MILLIONS OF EUROS)
| 31-12-20 | 31-12-19 | |
|---|---|---|
| Cash, cash balances at central banks and other demand deposits | 5,854 | 2,613 |
| Financial assets designated at fair value | 970 | 277 |
| Of which: Loans and advances | 153 | 161 |
| Financial assets at amortized cost | 5,376 | 6,650 |
| Of which: Loans and advances to customers | 5,109 | 6,475 |
| Inter-area positions | - | - |
| Tangible assets | 10 | 14 |
| Other assets | 94 | 50 |
| Total assets/liabilities and equity | 12,304 | 9,604 |
| Financial liabilities held for trading and designated at fair value through profit or loss | 803 | 163 |
| Deposits from central banks and credit institutions | 845 | 945 |
| Deposits from customers | 4,756 | 3,895 |
| Debt certificates | 105 | 391 |
| Inter-area positions | 4,943 | 3,471 |
| Inter-area positions | 305 | 233 |
| Economic capital allocated | 548 | 505 |
3 For more information about the agreement, see the chapter “Highlights” of this report.