Current Report by Foreign Issuer (Form 6-K)
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FORM 6-K
REPORT OF FOREIGN ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of February, 2022
Commission file number: 1-10110
(Exact name of Registrant as specified in its charter)
BANK BILBAO VIZCAYA ARGENTARIA, S.A.
(Translation of Registrant's name into English)
28050
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F X Form 40-F
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Yes No X
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
Yes No X
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BBVA Creating Opportunities January-
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Strong core revenue Leading growth efficiency Nil+ Fee Income Efficiency Ratio (YTD) (YTD) +9.1°/o 45.2°/o w #, RANKING · PEER GROUP' vs.2020 (€ constant) 1
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Main data
BBVA GROUP MAIN DATA (CONSOLIDATED FIGURES) | ||||||||||||||||
D % | ||||||||||||||||
Balance sheet (millions of euros) | ||||||||||||||||
Total assets | 662,885 | (9.7) | 733,797 | 695,471 | ||||||||||||
Loans and advances to customers (gross) (1) | 330,055 | 2.1 | 323,252 | 337,388 | ||||||||||||
Deposits from customers (1) | 349,761 | 2.1 | 342,661 | 320,589 | ||||||||||||
Total customer funds (1) | 465,529 | 4.5 | 445,608 | 428,392 | ||||||||||||
Total equity | 48,760 | (2.5) | 50,020 | 54,925 | ||||||||||||
Income statement (millions of euros) | ||||||||||||||||
Net interest income | 14,686 | 0.6 | 14,592 | 15,789 | ||||||||||||
Gross income | 21,066 | 4.5 | 20,166 | 21,522 | ||||||||||||
Operating income | 11,536 | 4.1 | 11,079 | 11,368 | ||||||||||||
Net attributable profit (loss) | 4,653 | 256.6 | 1,305 | 3,512 | ||||||||||||
Net attributable profit (loss) excluding non-recurring impacts (2) | 5,069 | 85.7 | 2,729 | 4,270 | ||||||||||||
The BBVA share and share performance ratios | ||||||||||||||||
Number of shares issued (million) | 6,668 | - | 6,668 | 6,668 | ||||||||||||
Share price (euros) | 5.25 | 30.1 | 4.04 | 4.98 | ||||||||||||
Adjusted earning (loss) per share (euros) (3) | 0.71 | 101.4 | 0.35 | 0.58 | ||||||||||||
Earning (loss) per share (euros) (3)(4) | 0.67 | n.s. | 0.14 | 0.47 | ||||||||||||
Book value per share (euros) (3)(4) | 6.86 | 2.5 | 6.70 | 7.32 | ||||||||||||
Tangible book value per share (euros) (3)(4) | 6.52 | 7.8 | 6.05 | 6.27 | ||||||||||||
Market capitalization (millions of euros) | 35,006 | 30.1 | 26,905 | 33,226 | ||||||||||||
Yield (dividend/price; %) (5) | 2.6 | 4.0 | 5.2 | |||||||||||||
Significant ratios (%) | ||||||||||||||||
Adjusted ROE (net attributable profit (loss)/average shareholders' funds +/- average accumulated other comprehensive income) (2) | 11.4 | 6.1 | 8.7 | |||||||||||||
Adjusted ROTE (net attributable profit (loss)/average shareholders' funds excluding average intangible assets +/- average accumulated other comprehensive income) (2) | 12.0 | 6.5 | 9.3 | |||||||||||||
Adjusted ROA (Profit (loss) for the year/average total assets) (2) | 0.94 | 0.54 | 0.84 | |||||||||||||
Adjusted RORWA (Profit (loss) for the year/average risk-weighted assets - RWA) (2) | 2.01 | 1.16 | 1.69 | |||||||||||||
Efficiency ratio | 45.2 | 45.1 | 47.2 | |||||||||||||
Cost of risk (6) | 0.93 | 1.55 | 1.04 | |||||||||||||
NPL Ratio (6) | 4.1 | 4.2 | 4.2 | |||||||||||||
NPL coverage ratio (6) | 75 | 82 | 75 | |||||||||||||
Capital adequacy ratios (%) | ||||||||||||||||
CET1 fully-loaded | 12.75 | 11.73 | 11.74 | |||||||||||||
CET1 phased-in(7) | 12.98 | 12.15 | 11.98 | |||||||||||||
Total ratio phased-in(7) | 17.24 | 16.46 | 15.92 | |||||||||||||
Other information | ||||||||||||||||
Number of clients (million) (8) | 81.7 | 4.2 | 78.4 | 75.6 | ||||||||||||
Number of shareholders | 826,835 | (6.0) | 879,226 | 874,148 | ||||||||||||
Number of employees | 110,432 | (10.3) | 123,174 | 126,973 | ||||||||||||
Number of branches | 6,083 | (18.2) | 7,432 | 7,744 | ||||||||||||
Number of ATMs | 29,148 | (6.0) | 31,000 | 32,658 |
General note: the results generated by
(1) Excluding the assets and liabilities figures from
(2)Non-recurring impacts include: (I) profit (loss) after tax from discontinued operations as of 31-12-21,31-12-20 and 31-12-19; (II) the net costs related to the restructuring process as of 31-12-21; and (III) the net capital gain from the bancassurance operation with
(3) For the adjusted earning (loss) per share and earning (loss) per share calculation the additional Tier 1 instrument remuneration is adjusted. As of 31-12-21, 112 million shares acquired within the share buyback program in 2021 were considered.
(4) The estimated number of shares pending from buyback as of
(5) Calculated by dividing shareholder remuneration over the last twelve months by the closing price of the period.
(6) Excluding
(7)Phased-in ratios include the temporary treatment on the impact of IFRS 9, calculated in accordance with Article 473 bis amendments of the Capital Requirements Regulation (CRR), introduced by the Regulation (EU) 2020/873.
(8) Excluding
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Highlights
Results and business activity
Taking into account the non-recurring impacts -namely the €280m corresponding to the profit generated by
In a complex environment, the Group's results in 2021 were influenced by the good performance in recurring income from the banking business, i.e. net interest income and net fees and commissions, as well as by a higher contribution of net trading income (NTI), so that gross income closed the year with a growth of 9.7%, at constant exchange rates.
Operating expenses increased (+8.5% in year-on-year terms) and excluding the exchange rate effect in all areas except
Thus, the efficiency ratio stood at 45.2% as of
The lower provisions for impairment on financial assets stand out (-38.7% in year-on-year terms and at constant exchange rates), mainly due to the strong impact of provisions for COVID-19 in 2020.
In 2021, provisions were lower (-62.8% at constant exchange rates) than the previous year, due to provisions made in 2020 in
Finally, in terms of results, the other gains line closed 2021 with a positive balance, which is an improvement over the previous year, which reflected the impairment of investments in subsidiaries, joint ventures or associates.
Loans and advances to customers recorded a growth of 2.5% compared to the end of
Customer funds showed an increase of 4.5% compared to the end of
LOANS AND ADVANCES TO CUSTOMERS AND TOTAL CUSTOMER FUNDS (VARIATION COMPARED TO 31-12-20) |
1 European peer group: Barclays,
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Business areas
As for the business areas, the provisions for impairment on financial assets decreased in all of them, compared to 2020 which was impacted by the outbreak of the pandemic. In addition, excluding the effect of currency fluctuation in those areas where it has an impact, in each of them it is worth mentioning:
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With regard to this business area, on
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Rest of Business: This area, which mainly incorporates the Group's wholesale business developed in |
Corporate Center: the net attributable loss of the Corporate Center includes the aforementioned non-recurring impacts of the Group, and at the close of
Lastly and to allow a broader understanding of the Group's activity and results, supplementary information is provided below for the wholesale business carried out by BBVA, Corporate & Investment Banking (CIB), in the countries where it operates. Thus, the CIB area generated a net attributable profit of €1,248m in 2021, which represents a 45.3% increase in year-on-year terms, thanks to the growth in the recurring income and the NTI.
NET ATTRIBUTABLE PROFIT (LOSS) (MILLIONS OF EUROS) |
NET ATTRIBUTABLE PROFIT BREAKDOWN (1) (PERCENTAGE. 2021) |
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General note: excludes (I) |
(1) Excludes the Corporate Center. |
Solvency
The Group's CET1 Fully-loaded ratio stood at 12.75% as of
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Shareholder remuneration
Regarding shareholder remuneration, on
Other highlights
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Regarding the Group's shareholder remuneration policy, on |
This policy will be implemented through the distribution of an interim dividend for the year (expected to be paid in October of each year) and a final dividend (to be paid once the year has ended and the allocation of the year-end profit has been approved, expected to take place in April of each year), with the possibility of combining cash distributions with share buybacks (the execution of the shares buyback program is considered to be an extraordinary shareholder distribution and is therefore not included in the scope of the policy), all subject to the relevant authorizations and approvals applicable at any given time.
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On |
Upon receiving the authorization from the
With regard to the first tranche, BBVA announced on
In addition, BBVA announced on
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In |
For management information purposes, as it is considered a strategic decision, the impacts of the process have been assigned to the Corporate Center. The savings generated by this process have started to materialize in the last months of 2021, but most of them will materialize starting in 2022.
2 However, BBVA reserves the right to temporarily suspend the First Tranche or to early terminate it in the event of any circumstance that so advises or requires.
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Macroeconomic environment
In 2021 the global economy has grown significantly, recovering in part from the crisis caused by the pandemic, which caused a sharp fall in global GDP in 2020. The significant uptuin global growth has been due to progress in the vaccination against COVID-19 and important economic stimuli adopted by public authorities.
Activity indicators show, however, that the economic recovery process has lost momentum in recent months. The recent slowdown in economic growth is taking place in an environment marked by a sharp increase in infections caused by new variants of the COVID-19, although the increasing immunization of the world population has helped to generally prevent the adoption of mobility restrictions, which would have had a greater impact on the economy.
The effects of reduced production due to the pandemic and its persistence, coupled with fiscal stimuli and strong demand for goods, once restrictions have been lifted, contribute to maintaining the problems in global supply chains observed since the beginning of 2021 which, in addition to negatively affecting economic activity, generate significant upward pressure on prices.
Against this backdrop, annual inflation in
High inflation rates and their increased persistence have put pressure on central banks to withdraw monetary stimuli earlier than they had originally anticipated. The United States Federal Reserve, in particular, has begun the rollback in its bond-buying program and has suggested that monetary policy interest rates will adjust upwards earlier and faster than expected by financial markets and financial analysts, and also that a downsizing of its balance sheet may soon begin. In the
According to
REAL GDP GROWTH AND INFLATION IN 2020 (REAL PERCENTAGE GROWTH) | ||||||||||||||||
2021 | 2022 | |||||||||||||||
GDP | INFLATION | GDP | INFLATION | |||||||||||||
|
5.1 | 5.0 | 3.7 | 1.1 | ||||||||||||
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5.6 | 7.0 | 4.2 | 3.2 | ||||||||||||
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8.0 | 3.0 | 5.2 | 2.0 | ||||||||||||
Source: |
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Group
Quarterly evolution of results
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Growth in recurring revenues in all business areas, as well as in CIB. |
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Favorable performance of the NTI (+17.8% at constant exchange rates), thanks to the evolution of the NTI in all areas, with the exception of Rest of Business. |
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Evolution of the other operating income and expenses line was affected by the contribution made by |
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Growth in operating expenses in all business areas in an environment of high inflation and recovery of activity. |
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Increase in impairment on financial assets, although lower than in the same period of the previous year. |
CONSOLIDATED INCOME STATEMENT: QUARTERLY EVOLUTION (MILLIONS OF EUROS) | ||||||||||||||||||||||||||||||||||||
2021 | 2020 | |||||||||||||||||||||||||||||||||||
4Q | 3Q | 2Q | 1Q | 4Q | 3Q | 2Q | 1Q | |||||||||||||||||||||||||||||
Net interest income |
3,978 | 3,753 | 3,504 | 3,451 | 3,477 | 3,553 | 3,537 | 4,024 | ||||||||||||||||||||||||||||
Net fees and commissions |
1,247 | 1,203 | 1,182 | 1,133 | 1,042 | 1,023 | 934 | 1,124 | ||||||||||||||||||||||||||||
Net trading income |
438 | 387 | 503 | 581 | 175 | 357 | 470 | 544 | ||||||||||||||||||||||||||||
Other operating income and expenses |
(187) | (13) | (85) | (11) | (147) | 46 | (80) | 86 | ||||||||||||||||||||||||||||
Gross income |
5,477 | 5,330 | 5,104 | 5,155 | 4,547 | 4,980 | 4,862 | 5,778 | ||||||||||||||||||||||||||||
Operating expenses |
(2,554) | (2,378) | (2,294) | (2,304) | (2,264) | (2,163) | (2,182) | (2,477) | ||||||||||||||||||||||||||||
Personnel expenses |
(1,399) | (1,276) | (1,187) | (1,184) | (1,186) | (1,124) | (1,113) | (1,272) | ||||||||||||||||||||||||||||
Other administrative expenses |
(850) | (788) | (800) | (812) | (766) | (725) | (754) | (860) | ||||||||||||||||||||||||||||
Depreciation |
(305) | (314) | (307) | (309) | (312) | (315) | (316) | (345) | ||||||||||||||||||||||||||||
Operating income |
2,923 | 2,953 | 2,810 | 2,850 | 2,282 | 2,817 | 2,679 | 3,300 | ||||||||||||||||||||||||||||
Impairment on financial assets not measured at fair value through profit or loss |
(832) | (622) | (656) | (923) | (901) | (706) | (1,408) | (2,164) | ||||||||||||||||||||||||||||
Provisions or reversal of provisions |
(40) | (50) | (23) | (151) | (139) | (88) | (219) | (300) | ||||||||||||||||||||||||||||
Other gains (losses) |
7 | 19 | (7) | (17) | (82) | (127) | (103) | (29) | ||||||||||||||||||||||||||||
Profit (loss) before tax |
2,058 | 2,299 | 2,124 | 1,759 | 1,160 | 1,895 | 950 | 807 | ||||||||||||||||||||||||||||
Income tax |
(487) | (640) | (591) | (489) | (337) | (515) | (273) | (204) | ||||||||||||||||||||||||||||
Profit (loss) for the year |
1,571 | 1,659 | 1,533 | 1,270 | 823 | 1,380 | 678 | 603 | ||||||||||||||||||||||||||||
Non-controlling interests |
(230) | (259) | (239) | (237) | (110) | (312) | (162) | (172) | ||||||||||||||||||||||||||||
Net attributable profit (loss) excluding non-recurring impacts |
1,341 | 1,400 | 1,294 | 1,033 | 713 | 1,068 | 516 | 431 | ||||||||||||||||||||||||||||
Profit (loss) after tax from discontinued operations (1) |
- | - | 103 | 177 | 302 | 73 | 120 | (2,224) | ||||||||||||||||||||||||||||
Corporate operations (2) |
- | - | - | - | 304 | - | - | - | ||||||||||||||||||||||||||||
Net cost related to the restructuring process |
- | - | (696) | - | - | - | - | - | ||||||||||||||||||||||||||||
Net attributable profit (loss) |
1,341 | 1,400 | 701 | 1,210 | 1,320 | 1,141 | 636 | (1,792) | ||||||||||||||||||||||||||||
Adjusted earning (loss) per share (euros) (3) |
0.19 | 0.20 | 0.18 | 0.14 | 0.09 | 0.15 | 0.06 | 0.05 | ||||||||||||||||||||||||||||
Earning (loss) per share (euros) (3)(4) |
0.20 | 0.20 | 0.09 | 0.17 | 0.18 | 0.16 | 0.08 | (0.29) |
General note: the results generated by
(1) Profit (loss) after tax from discontinued operations includes the goodwill impairment in
(2) Net capital gains from the sale to
(3) Adjusted by additional Tier 1 instrument remuneration. In the fourth quarter of 2021, 112 million shares acquired within the share buyback program in 2021 were considered.
(4) In the fourth quarter of 2021, the estimated number of shares pending from buyback as of
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Year-on-year evolution of results
In a complex environment, the Group's results in 2021 were influenced by the good performance in net interest income and net fees and commissions, i.e. recurring income from the banking business, which, together with the positive evolution of net trading income (NTI), offset the lower performance of the other operating income and expenses line. Thus, in constant terms, the gross income closed the year with a growth close to the double digit and higher than the growth in operating expenses, allowing an improvement in the efficiency ratio. Finally, in the lower part of the income statement, it is worth highlighting lower provisions for impairment on financial assets, which were particularly high in 2020 due to the outbreak of the pandemic.
CONSOLIDATED INCOME STATEMENT (MILLIONS OF EUROS) | ||||||||||||||||
D % at constant | ||||||||||||||||
2021 | D % | exchange rates | 2020 | |||||||||||||
Net interest income |
14,686 | 0.6 | 6.1 | 14,592 | ||||||||||||
Net fees and commissions |
4,765 | 15.6 | 19.8 | 4,123 | ||||||||||||
Net trading income |
1,910 | 23.5 | 30.5 | 1,546 | ||||||||||||
Other operating income and expenses |
(295 | ) | 210.6 | 222.4 | (95 | ) | ||||||||||
Gross income |
21,066 | 4.5 | 9.7 | 20,166 | ||||||||||||
Operating expenses |
(9,530 | ) | 4.9 | 8.5 | (9,088 | ) | ||||||||||
Personnel expenses |
(5,046 | ) | 7.5 | 11.5 | (4,695 | ) | ||||||||||
Other administrative expenses |
(3,249 | ) | 4.7 | 8.0 | (3,105 | ) | ||||||||||
Depreciation |
(1,234 | ) | (4.2 | ) | (1.2 | ) | (1,288 | ) | ||||||||
Operating income |
11,536 | 4.1 | 10.8 | 11,079 | ||||||||||||
Impairment on financial assets not measured at fair value through profit or loss |
(3,034 | ) | (41.4 | ) | (38.7 | ) | (5,179 | ) | ||||||||
Provisions or reversal of provisions |
(264 | ) | (64.6 | ) | (62.8 | ) | (746 | ) | ||||||||
Other gains (losses) |
2 | n.s. | n.s. | (341 | ) | |||||||||||
Profit (loss) before tax |
8,240 | 71.2 | 86.8 | 4,813 | ||||||||||||
Income tax |
(2,207 | ) | 66.2 | 80.0 | (1,328 | ) | ||||||||||
Profit (loss) for the year |
6,034 | 73.1 | 89.3 | 3,485 | ||||||||||||
Non-controlling interests |
(965 | ) | 27.7 | 62.6 | (756 | ) | ||||||||||
Net attributable profit (loss) excluding non-recurring impacts |
5,069 | 85.7 | 95.5 | 2,729 | ||||||||||||
Profit (loss) after tax from discontinued operations (1) |
280 | n.s. | n.s. | (1,729 | ) | |||||||||||
Corporate operations (2) |
- | - | - | 304 | ||||||||||||
Net cost related to the restructuring process |
(696 | ) | - | - | - | |||||||||||
Net attributable profit (loss) |
4,653 | 256.6 | n.s. | 1,305 | ||||||||||||
Adjusted earning (loss) per share (euros) (3) |
0.71 | 0.35 | ||||||||||||||
Earning (loss) per share (euros) (3)(4) |
0.67 | 0.14 |
General note: the results generated by
(1) Profit (loss) after tax from discontinued operations includes the goodwill impairment in
(2) Net capital gains from the sale to
(3) Adjusted by additional Tier 1 instrument remuneration. In 2021, 112 million shares acquired within the share buyback program in 2021 were considered.
(4) In 2021, the estimated number of shares pending from buyback as of
3 With regard to the recording of costs related to the restructuring process, it should be noted that, solely for management purposes and for the purpose of the comments provided in this report, these are included in the income statement line "Net cost related to the restructuring process". The financial information is presented to the Group's Senior Management using this approach. This report includes a reconciliation between the management approach and the
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Unless expressly indicated otherwise, to better understand the changes under the main headings of the Group's income statement, the year-on-year rates of change provided below refer to constant exchange rates. In doing so, with regard to income statement amounts, average exchange rates for the year 2021 are used for each currency in the geographical areas where the Group operates for all periods.
Net interest income as of
All areas, with the exception of Rest of Business, showed a positive performance in the net fees and commissions line compared to the accumulated amount reported in this line in 2020 (+19.8% in the Group), which is partly explained by the increase in activity and higher fees from payment systems, deposits and asset management in 2021, compared to 2020, which was affected by the removal of certain fees as a measure to support customers during the worst moments of the pandemic.
NET INTEREST INCOME/ATAS (1) (PERCENTAGE) |
NET INTEREST INCOME PLUS NET FEES AND COMMISSIONS (MILLIONS OF EUROS AT CONSTANT EXCHANGE RATES) |
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(1) Excluding |
NTI showed a year-on-year increase of +30.5% as of
The other operating income and expenses line accumulated a result of €-295m as of
GROSS INCOME (MILLIONS OF EUROS AT CONSTANT EXCHANGE RATES) |
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Operating expenses increased (+8.5% in year-on-year terms) in all areas except
The efficiency ratio stood at 45.2% as of
OPERATING EXPENSES (MILLIONS OF EUROS AT CONSTANT EXCHANGE RATES) |
EFFICIENCY |
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Impairment on financial assets not measured at fair value through profit or loss (impairment on financial assets) closed December, 2021 with a negative balance of €3,034m, significantly lower than the previous year (-38.7%) and with a decrease in all geographical areas mainly due to the negative impact of provisions for COVID-19 in 2020.
OPERATING INCOME (MILLIONS OF EUROS AT CONSTANT EXCHANGE RATES) |
IMPAIRMENT ON FINANCIAL ASSETS (MILLIONS OF EUROS AT CONSTANT EXCHANGE RATES) |
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The provisions or reversal of provisions line (hereinafter "provisions") closed with a negative balance of €-264m as of
With regard to other gains (losses) line, it closed
As a result of the above, the
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The results generated by |
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The net cost related to the restructuring process of |
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Taking into account both impacts, the Group's net attributable profit between January and
The cumulative net attributable profits, in millions of euros, at the close of
NET ATTRIBUTABLE PROFIT (LOSS) (MILLIONS OF EUROS AT CONSTANT EXCHANGE RATES) |
NET ATTRIBUTABLE PROFIT (LOSS) EXCLUDING NON-RECURRING IMPACTS (MILLIONS OF EUROS AT CONSTANT EXCHANGE RATES) | |||
Note: year-on-year variation at current exchange rates of +256.6%. |
General note: non-recurring impacts include: (I) (1) At current exchange rates: +85.7%. |
TANGIBLE BOOK VALUE PER SHARE (1)(2) AND DIVIDENDS (EUROS) |
ADJUSTED EARNING (LOSS) PER SHARE (1) AND EARNING (LOSS) PER SHARE (1)(2) (EUROS) |
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General note: replenishing dividends paid in the period. |
General note: adjusted earning per share excludes: (I) |
(1) For the adjusted earning (loss) per share and earning (loss) per share calculation the additional Tier 1 instrument remuneration is adjusted. In the fourth quarter of 2021, 112 million shares acquired within the share buyback program in 2021 were considered.
(2) In the fourth quarter of 2021, the estimated number of shares pending from buyback as of
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The Group's profitability indicators improved compared to the end of
ROE AND ROTE(1)(PERCENTAGE) | ROA AND RORWA (1) (PERCENTAGE) | |||
(1) Excludes: (I) |
(1) Excludes: (I) |
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Balance sheet and business activity
The most relevant aspects related to the evolution of the Group's balance sheet and business activity as of
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Loans and advances to customers recorded a growth of 2.5% compared to the end of |
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Customer funds showed an increase of 4.5% compared to the end of |
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The year-on-year decrease in the |
CONSOLIDATED BALANCE SHEET (MILLIONS OF EUROS) | ||||||||||||
D % | ||||||||||||
Cash, cash balances at central banks and other demand deposits |
67,799 | 3.5 | 65,520 | |||||||||
Financial assets held for trading |
123,493 | 16.6 | 105,878 | |||||||||
Non-trading financial assets mandatorily at fair value through profit or loss |
6,086 | 17.1 | 5,198 | |||||||||
Financial assets designated at fair value through profit or loss |
1,092 | (2.2 | ) | 1,117 | ||||||||
Financial assets at fair value through accumulated other comprehensive income |
60,421 | (13.0 | ) | 69,440 | ||||||||
Financial assets at amortized cost |
372,676 | 1.4 | 367,668 | |||||||||
Loans and advances to central banks and credit institutions |
18,957 | (8.8 | ) | 20,784 | ||||||||
Loans and advances to customers |
318,939 | 2.5 | 311,147 | |||||||||
Debt securities |
34,781 | (2.7 | ) | 35,737 | ||||||||
Investments in subsidiaries, joint ventures and associates |
900 | (37.3 | ) | 1,437 | ||||||||
Tangible assets |
7,298 | (6.7 | ) | 7,823 | ||||||||
Intangible assets |
2,197 | (6.3 | ) | 2,345 | ||||||||
Other assets |
20,923 | (80.5 | ) | 107,373 | ||||||||
Total assets |
662,885 | (9.7 | ) | 733,797 | ||||||||
Financial liabilities held for trading |
91,135 | 8.4 | 84,109 | |||||||||
Other financial liabilities designated at fair value through profit or loss |
9,683 | (3.6 | ) | 10,050 | ||||||||
Financial liabilities at amortized cost |
487,893 | (0.6 | ) | 490,606 | ||||||||
Deposits from central banks and credit institutions |
67,185 | (7.7 | ) | 72,806 | ||||||||
Deposits from customers |
349,761 | 2.1 | 342,661 | |||||||||
Debt certificates |
55,763 | (9.7 | ) | 61,780 | ||||||||
Other financial liabilities |
15,183 | 13.7 | 13,358 | |||||||||
Liabilities under insurance and reinsurance contracts |
10,865 | 9.2 | 9,951 | |||||||||
Other liabilities |
14,549 | (83.7 | ) | 89,061 | ||||||||
Total liabilities |
614,125 | (10.2 | ) | 683,777 | ||||||||
Non-controlling interests |
4,853 | (11.3 | ) | 5,471 | ||||||||
Accumulated other comprehensive income |
(16,476 | ) | 14.8 | (14,356 | ) | |||||||
Shareholders' funds |
60,383 | 2.5 | 58,904 | |||||||||
Total equity |
48,760 | (2.5 | ) | 50,020 | ||||||||
Total liabilities and equity |
662,885 | (9.7 | ) | 733,797 | ||||||||
Memorandum item: |
||||||||||||
Guarantees given |
45,956 | 6.1 | 43,294 |
General note: in 2020, the "Other assets" and "Other liabilities" figures mainly include the non-current assets and liabilities held for sale related to
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15 |
LOANS AND ADVANCES TO CUSTOMERS (MILLIONS OF EUROS) |
||||||||||||
D % | ||||||||||||
Public sector | 19,656 | 1.5 | 19,363 | |||||||||
Individuals | 146,433 | 1.5 | 144,304 | |||||||||
Mortgages |
91,324 | (0.1 | ) | 91,428 | ||||||||
Consumer |
31,026 | 4.9 | 29,571 | |||||||||
Credit cards |
12,936 | 7.7 | 12,016 | |||||||||
Other loans |
11,146 | (1.3 | ) | 11,289 | ||||||||
Business | 149,309 | 3.0 | 144,912 | |||||||||
Non-performing loans | 14,657 | (0.1 | ) | 14,672 | ||||||||
Loans and advances to customers (gross) |
330,055 | 2.1 | 323,252 | |||||||||
Allowances (1) |
(11,116 | ) | (8.2 | ) | (12,105 | ) | ||||||
Loans and advances to customers |
318,939 | 2.5 | 311,147 |
(1) Allowances include the valuation adjustments for credit risk during the expected residual life of those financial instruments which have been acquired (mainly originated from the acquisition of
The evolution of loans and advances to customers and the customer funds of the
LOANS AND ADVANCES TO CUSTOMERS (BILLIONS OF EUROS) |
CUSTOMER FUNDS (BILLIONS OF EUROS) | |||
CUSTOMER FUNDS (MILLIONS OF EUROS) |
||||||||||||
D % | ||||||||||||
Deposits from customers | 349,761 | 2.1 | 342,661 | |||||||||
Demand deposits |
293,015 | 10.1 | 266,250 | |||||||||
Time deposits |
55,059 | (27.2 | ) | 75,610 | ||||||||
Other deposits |
1,687 | 110.6 | 801 | |||||||||
Other customer funds | 115,767 | 12.5 | 102,947 | |||||||||
Mutual funds and investment companies |
74,810 | 15.3 | 64,869 | |||||||||
Pension funds |
38,763 | 7.0 | 36,215 | |||||||||
Other off-balance sheet funds |
2,195 | 17.8 | 1,863 | |||||||||
Total customer funds |
465,529 | 4.5 | 445,608 |
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16 |
Solvency
Capital base
The Group's CET1 Fully-loaded ratio stood at 12.75% as of
In addition to the above-mentioned effect, during the fourth quarter of 2021, the recurrent income generation net of dividends and remunerations of AT1 instruments contributed 18 basis points. On the other hand, the growth of risk-weighted assets (RWAs) had an impact of -49 basis points, which is mostly explained by the growth of activity in the quarter and additionally, to a lesser extent, by the update of the RWAs for operational risk (which is carried out annually, and which is explained by the increase in the level of revenues compared to previous periods) and by the growth of the RWAs that are specific to market activity and are exposed to higher volatility. Finally, the other items affecting the CET1, most notably the effect of exchange rate evolution and portfolio valuation, resulted in a reduction of 12 basis points.
The consolidated fully-loaded additional Tier 1 capital (AT1) stood at 1.87% as of
The consolidated fully-loaded Tier 2 ratio as of
Following the latest SREP (Supervisory Review and Evaluation Process) decision, received on February, 2022 and applicable as from
The phased-in CET1 ratio, on consolidated terms, stood at 12.98% as of
FULLY-LOADED CAPITAL RATIOS (PERCENTAGE) |
CAPITAL BASE (MILLIONS OF EUROS) |
||||||||||||||||||||||||
CRD IV phased-in | CRD IV fully-loaded | |||||||||||||||||||||||
Common Equity Tier 1 (CET 1) |
39,937 | 42,931 | 43,653 | 39,172 | 41,345 | 42,856 | ||||||||||||||||||
Tier 1 |
45,674 | 49,597 | 49,701 | 44,910 | 48,012 | 48,775 | ||||||||||||||||||
Tier 2 |
7,383 | 8,547 | 8,304 | 7,283 | 8,101 | 7,464 | ||||||||||||||||||
Total Capital (Tier 1 + Tier 2) |
53,057 | 58,145 | 58,005 | 52,193 | 56,112 | 56,240 | ||||||||||||||||||
Risk-weighted assets |
307,791 | 353,273 | 364,448 | 307,331 | 352,622 | 364,942 | ||||||||||||||||||
CET1 (%) |
12.98 | 12.15 | 11.98 | 12.75 | 11.73 | 11.74 | ||||||||||||||||||
Tier 1 (%) |
14.84 | 14.04 | 13.64 | 14.61 | 13.62 | 13.37 | ||||||||||||||||||
Tier 2 (%) |
2.40 | 2.42 | 2.28 | 2.37 | 2.30 | 2.05 | ||||||||||||||||||
Total capital ratio (%) |
17.24 | 16.46 | 15.92 | 16.98 | 15.91 | 15.41 |
(1) As of
(2) Preliminary data.
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17 |
Regarding shareholder remuneration, after the lifting of the recommendations by the
SHAREHOLDER STRUCTURE (31-12-2021) | ||||||||||||||||
Shareholders | Shares issued | |||||||||||||||
Number of shares | Number | % | Number | % | ||||||||||||
Up to 500 |
341,510 | 41.3 | 63,972,992 | 1.0 | ||||||||||||
501 to 5,000 |
381,597 | 46.2 | 671,795,023 | 10.1 | ||||||||||||
5,001 to 10,000 |
55,785 | 6.7 | 392,338,799 | 5.9 | ||||||||||||
10,001 to 50,000 |
43,159 | 5.2 | 824,841,257 | 12.4 | ||||||||||||
50,001 to 100,000 |
3,092 | 0.4 | 210,665,277 | 3.2 | ||||||||||||
100,001 to 500,000 |
1,410 | 0.2 | 256,532,572 | 3.8 | ||||||||||||
More than 500,001 |
282 | 0.0 | 4,247,740,660 | 63.7 | ||||||||||||
Total |
826,835 | 100.0 | 6,667,886,580 | 100.0 |
With regard to MREL (Minimum Requirement for own funds and Eligible Liabilities) requirements, BBVA must reach, by
With the aim of reinforcing compliance with these requirements, in
Lastly, the Group'sleverageratio stood at 6.7% fully-loaded (6.8% phased-in)8 as of
Ratings
During 2021, BBVA's rating has continued to show its strength and all agencies have maintained their rating in the A category. Last December, S&P upgraded BBVA's rating one notch to A from A-, considering that a sizable enough cushion of bail-inable instruments has been issued, and following a methodological update that recognizes the strength of the
RATINGS |
Rating agency | Long term (1) | Short term | Outlook | |||||
DBRS |
A (high) | R-1 (middle) | Stable | |||||
Fitch |
A- | F-2 | Stable | |||||
Moody's |
A3 | P-2 | Stable | |||||
|
A | A-1 | Negative |
(1) Ratings assigned to long term senior preferred debt. Additionally, Moody's and Fitch assign A2 and A- rating respectively, to BBVA's long term deposits.
4 Pursuant to the new applicable regulation, the MREL in RWAs and the subordination requirement in RWAs do not include the combined requirement of applicable capital buffers.
5 In accordance with the resolution strategy MPE ("
6 Own resources and eligible liabilities to meet, both, MREL and the combined capital buffer requirement applicable.
7 As of
8 The Group's leverage ratio is provisional at the date of release of this report.
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18 |
Risk management
Credit risk
In 2020, following the outbreak of the pandemic, the local authorities of the countries in which the Group operates initiatedeconomic support measures for the management of the COVID-19 crisis, including the granting of relief measures in terms of temporary payment deferrals to customers affected by the pandemic, as well as the granting of loans covered by public guarantees, especially to companies and self-employed workers.
These measures were supported by the rules issued by the authorities of the geographical areas where the Group operates, as well by certain industry agreements, and were intended to ease the temporary liquidity needs of the customers. By the end of the year, the temporary deferral measures had been completed in all the geographical areas.
For the purposes of classifying exposures based on their credit risk, the Group has maintained a rigorous application of IFRS 9 at the time of granting the moratoriums and has reinforced the procedures to monitor credit risk both during their teand upon their maturity. In this regard, additional indicators were introduced to identify the significant increase in risk that may have occurred in some operations or a set of them and, where appropriate, proceed to classify it in the corresponding risk stage.
Likewise, the indications provided by the
In relation to the temporary payment deferrals for customers affected by the pandemic and with the goal of mitigating as much as possible the impact of these measures in the Group, due to the high concentration of its maturities over time, continuous monitoring of the effectiveness of these measures has been carried out in order to verify their compliance and to adapt dynamically to the evolution of the crisis. As of
Calculation of expected losses due to credit risk
To respond to the circumstances generated by the COVID-19 pandemic in the macroeconomic environment, characterized by a high level of uncertainty regarding its intensity, duration and speed of recovery, forward-looking information was updated in the IFRS 9 models to incorporate the best information available at the date of the publication of this report. The estimation of the expected losses was calculated for the different geographical areas in which the Group operates, with the best information available for each of them, considering both the macroeconomic perspectives and the effects on specific portfolios, sectors or specific debtors. The scenarios used consider the various economic measures that have been announced by governments as well as monetary, supervisory and macroprudential authorities around the world.
The classification of vulnerable activities to COVID-19 was established at the outbreak of the pandemic, in order to identify activities susceptible to further deterioration in the Group's portfolio. Based on this classification, management measures were taken, with preventive rating adjustments and restrictive definition of risk appetite. Given the progress made during the course of the pandemic, which has led to the almost complete elimination of restrictions on mobility and the subsequent recovery from these restrictions, consideration is now being given to the specific characteristics of each client over and above their belonging to a particular sector.
As of
The situation generated by the pandemic continued to affect
• |
Credit risk has increased by 1.2% in the quarter (+3.5% at constant exchange rates). At constant exchange rates and at the Group level, there was a generalized increase in this metric during the quarter, led by |
• |
The balance of non-performing loans (NPL) increased in the fourth quarter of the year (+3.9% in current terms and 5.8% at constant rates) in practically all geographical areas, as a result of the aforementioned implementation of the new definition of default. Compared to the end of 2020, the balance decreased by 0.1% (+3.6% at constant exchange rates) with decreasing NPL flows in the first three quarters of the year supported by contained inflows and positive recoveries, and a fourth quarter impacted by the implementation of the aforementioned new definition of default. |
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19 |
NON-PERFORMING LOANS (1) AND PROVISIONS (1) (MILLIONS OF EUROS) |
(1) Excludes
• |
The NPL ratio stood at 4.1% as of |
• |
Loan-loss provisions decreased by 8.4% compared to |
• |
The NPL coverage ratio amounted to 75%, -682 basis points in contrast with the end of 2020. Compared to the previous quarter, the NPL coverage ratio was -533 basis points lower. |
• |
The cumulative cost of risk as of |
NPL (1) AND NPL COVERAGE (1) RATIOS AND COST OF RISK (1) (PERCENTAGE) |
(1) Excluding
CREDIT RISK (1) (MILLIONS OF EUROS) |
Credit risk |
376,011 | 371,708 | 370,348 | 365,292 | 366,883 | |||||||||||||||
Non-performing loans |
15,443 | 14,864 | 15,676 | 15,613 | 15,451 | |||||||||||||||
Provisions |
11,536 | 11,895 | 12,033 | 12,612 | 12,595 | |||||||||||||||
NPL ratio (%) |
4.1 | 4.0 | 4.2 | 4.3 | 4.2 | |||||||||||||||
NPL coverage ratio (%) (2) |
75 | 80 | 77 | 81 | 82 |
General note: figures excluding
(1) Includes gross loans and advances to customers plus guarantees given.
(2) The NPL coverage ratio includes the valuation adjustments for credit risk during the expected residual life of those financial instruments which have been acquired (mainly originated from the acquisition of
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20 |
NON-PERFORMING LOANS EVOLUTION (MILLIONS OF EUROS) |
4Q21 (1) | 3Q21 | 2Q21 | 1Q21 | 4Q20 | ||||||||||||||||
Beginning balance |
14,864 | 15,676 | 15,613 | 15,451 | 15,006 | |||||||||||||||
Entries |
2,875 | 1,445 | 2,321 | 1,915 | 2,579 | |||||||||||||||
Recoveries |
(1,235) | (1,330) | (1,065) | (921) | (1,016) | |||||||||||||||
Net variation |
1,640 | 115 | 1,256 | 994 | 1,563 | |||||||||||||||
Write-offs |
(832) | (848) | (1,138) | (796) | (1,149) | |||||||||||||||
Exchange rate differences and other |
(228) | (80) | (55) | (36) | 31 | |||||||||||||||
Period-end balance |
15,443 | 14,864 | 15,676 | 15,613 | 15,451 | |||||||||||||||
Memorandum item: |
||||||||||||||||||||
Non-performing loans |
14,657 | 14,226 | 15,013 | 14,933 | 14,709 | |||||||||||||||
Non performing guarantees given |
786 | 637 | 663 | 681 | 743 |
General note: figures excluding
(1) Preliminary data.
Structural risks
Liquidity and funding
Liquidity and funding management at BBVA aims to finance the recurring growth of the banking business at suitable maturities and costs, using a wide range of instruments that provide access to a large number of alternative sources of financing. In this context, it is important to notice that, given the nature of BBVA's business, the funding of lending activity is fundamentally carried out through the use of stable customer funds.
Due to its subsidiary-based management model, BBVA is one of the few major European banks that follows the
In view of the initial uncertainty caused by the outbreak of COVID-19 in
• |
|
• |
The net stable funding ratio (NSFR), defined as the ratio between the amount of stable funding available and the amount of stable funding required, demands banks to maintain a stable funding profile in relation to the composition of their assets and off-balance sheet activities. This ratio should be at least 100% at all times. |
The breakdown of these ratios in the main geographical areas in which the Group operates is shown below:
LCR AND NSFR RATIOS (PERCENTAGE. 31-12-21) |
||||||||
LCR |
190 | 245 | 211 | All countries >100 | ||||
NSFR |
126 | 149 | 162 | All countries >100 |
(1) Perimeter:
One of the key elements in
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21 |
The most relevant aspects related to the main geographical areas are the following:
• |
In the |
• |
In BBVA Mexico, commercial activity has provided liquidity between January and |
• |
In the fourth quarter, the |
• |
In |
The main wholesale financing transactions carried out by the companies of the
• |
In |
• |
In |
• |
In |
Foreign exchange
Foreign exchange risk management of BBVA's long-term investments, principally stemming from its overseas franchises, aims to preserve the Group's capital adequacy ratio and ensure the stability of its income statement.
The
EXCHANGE RATES (EXPRESSED IN CURRENCY/EURO) |
Year-end exchange rates | Average exchange rates | |||||||||||||||||||
D% on | D% on | D% on | ||||||||||||||||||
2021 | 2020 | |||||||||||||||||||
|
1.1326 | 8.3 | 2.2 | 1.1827 | (3.5) | |||||||||||||||
Mexican peso |
23.1438 | 5.5 | 2.6 | 23.9842 | 2.3 | |||||||||||||||
Turkish lira |
15.2335 | (40.2) | (32.4) | 10.5067 | (23.4) | |||||||||||||||
Peruvian sol |
4.5045 | (1.3) | 6.2 | 4.5867 | (13.0) | |||||||||||||||
Argentine peso (1) |
116.37 | (11.3) | (1.8) | - | - | |||||||||||||||
Chilean peso |
956.70 | (8.8) | (2.7) | 897.78 | 0.6 | |||||||||||||||
Colombian peso |
4,509.06 | (6.6) | (1.5) | 4,427.36 | (4.8) |
(1) According to IAS 29 "Financial information in hyperinflationary economies", the year-end exchange rate is used for the conversion of the
BBVA maintains its policy of actively hedging its main investments in emerging markets, covering on average between 30% and 50% of annual earnings and around 70% of the CET1 capital ratio surplus. The closing of the sale of
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22 |
Interest rate
Interest rate risk management seeks to limit the impact that BBVA may suffer, both in terms of net interest income (short-term) and economic value (long-term), from adverse movements in the interest rate curves in the various currencies in which the Group operates. BBVA carries out this work through an internal procedure, pursuant to the guidelines established by the
The model is based on assumptions intended to realistically mimic the behavior of the balance sheet. Of particular relevance are assumptions regarding the behavior of accounts with no explicit maturity and prepayment estimates. These assumptions are reviewed and adapted at least once a year to take into account any changes in observed behavior.
At the aggregate level, BBVA continues to maintain a moderate risk profile, in accordance with the established objective, showing positive sensitivity toward interest rate increases in the net interest income. Effective management of structural balance sheet risk has mitigated the negative impact of the downward trend in interest rates and the volatility experienced as a result of the effects of COVID-19, and is reflected in the soundness and recurrence of net interest income.
At the market level, the fourth quarter of 2021, has seen flattening of the main sovereign curves in developed countries (mainly due to higher increases in the short sections of the curve), resulting from biases towards more restrictive monetary policies of central banks in the face of higher inflation levels (especially in
By area, the main features are:
• |
|
• |
On the other hand, the |
• |
|
• |
In |
• |
In |
INTEREST RATES (PERCENTAGE) |
Official |
0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||||||||||
Euribor 3 months (1) | (0.58) | (0.55) | (0.54) | (0.54) | (0.54) | (0.49) | (0.38) | (0.42) | ||||||||||||||||||||||||
Euribor 1 year (1) | (0.50) | (0.49) | (0.48) | (0.49) | (0.50) | (0.41) | (0.15) | (0.27) | ||||||||||||||||||||||||
0.25 | 0.25 | 0.25 | 0.25 | 0.25 | 0.25 | 0.25 | 0.25 | |||||||||||||||||||||||||
TIIE ( |
5.50 | 4.75 | 4.25 | 4.00 | 4.25 | 4.25 | 5.00 | 6.50 | ||||||||||||||||||||||||
CBRT ( |
14.00 | 18.00 | 19.00 | 19.00 | 17.00 | 10.25 | 8.25 | 9.75 |
(1) Calculated as the month average.
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23 |
Business areas
This section presents and analyzes the most relevant aspects of the Group's different business areas. Specifically, for each one of them, it shows a summary of the income statement and balance sheet, the business activity figures and the most significant ratios.
The structure of the business areas reported by the
The composition of
• |
|
• |
|
• |
|
• |
|
• |
Rest of Business mainly incorporates the wholesale activity carried out in |
The Corporate Center contains the centralized functions of the Group, including: the costs of the head offices with a corporate function; structural exchange rate positions management; portfolios whose management is not linked to customer relations, such as financial and industrial holdings; stakes in Funds & Investment Vehicles in tech companies including the venture capital fund
In addition to these geographical breakdowns, supplementary information is provided for the wholesale business carried out by BBVA, Corporate & Investment Banking (CIB), in the countries where it operates. This business is relevant to have a broader understanding of the Group's activity and results due to the important features of the type of customers served, products offered and risks assumed.
The information by business areas is based on units at the lowest level and/or companies that make up the Group, which are assigned to the different areas according to the main region or company group in which they carry out their activity. The figures corresponding to 2020 have been elaborated following the same criteria and the same structure of the areas previously explained, so that the year-on-year comparisons are homogeneous.
Regarding the shareholders' funds allocation, in the business areas, a capital allocation system based on the consumed regulatory capital is used.
Finally it should be noted that, as usual, in the case of the different business areas in America,
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24 |
MAIN INCOME STATEMENT LINE ITEMS BY BUSINESS AREA (MILLIONS OF EUROS) |
||||||||||||||||||||||||||||
Business areas | ||||||||||||||||||||||||||||
BBVA Group |
South America |
Rest of businesses |
S Business areas |
Corporate Center |
||||||||||||||||||||||||
2021 |
||||||||||||||||||||||||||||
Net interest income |
14,686 | 3,502 | 5,836 | 2,370 | 2,859 | 281 | 14,849 | (163) | ||||||||||||||||||||
Gross income |
21,066 | 5,925 | 7,603 | 3,422 | 3,162 | 741 | 20,854 | 212 | ||||||||||||||||||||
Operating income |
11,536 | 2,895 | 4,944 | 2,414 | 1,661 | 291 | 12,204 | (668) | ||||||||||||||||||||
Profit (loss) before tax |
8,240 | 2,122 | 3,528 | 1,953 | 961 | 314 | 8,878 | (638) | ||||||||||||||||||||
Net attributable profit (loss) excluding non-recurring impacts (1) | 5,069 | 1,581 | 2,568 | 740 | 491 | 254 | 5,633 | (564) | ||||||||||||||||||||
2020 |
||||||||||||||||||||||||||||
Net interest income |
14,592 | 3,566 | 5,415 | 2,783 | 2,701 | 291 | 14,756 | (164) | ||||||||||||||||||||
Gross income |
20,166 | 5,567 | 7,025 | 3,573 | 3,225 | 839 | 20,229 | (63) | ||||||||||||||||||||
Operating income |
11,079 | 2,528 | 4,680 | 2,544 | 1,853 | 372 | 11,977 | (898) | ||||||||||||||||||||
Profit (loss) before tax |
4,813 | 823 | 2,475 | 1,522 | 896 | 280 | 5,996 | (1,183) | ||||||||||||||||||||
Net attributable profit (loss) excluding non-recurring impacts (1) | 2,729 | 652 | 1,761 | 563 | 446 | 222 | 3,644 | (915) |
(1)Non-recurring impacts include: (I) profit (loss) after tax from discontinued operations in 2021 and 2020 ; (II) the net costs related to the restructuring process in 2021; and (III) the net capital gain from the bancassurance operation with
GROSS INCOME (1), OPERATING INCOME (1) AND NET ATTRIBUTABLE PROFIT (1) BREAKDOWN (PERCENTAGE. 2021) |
MAIN BALANCE-SHEET ITEMS AND RISK-WEIGHTED ASSETS BY BUSINESS AREA (MILLIONS OF EUROS) |
||||||||||||||||||||||||||||||||||||||||
Business areas | ||||||||||||||||||||||||||||||||||||||||
BBVA Group |
South America |
Rest of businesses |
S Business areas |
Corporate Center |
Deletions | NCA&L (1) | ||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||
Loans and advances to customers | 318,939 | 171,097 | 55,809 | 31,414 | 34,608 | 26,949 | 319,877 | 1,006 | (1,945) | - | ||||||||||||||||||||||||||||||
Deposits from customers |
349,761 | 206,663 | 64,003 | 38,341 | 36,340 | 6,266 | 351,613 | 175 | (2,027) | - | ||||||||||||||||||||||||||||||
Off-balance sheet funds |
115,767 | 70,072 | 26,445 | 3,895 | 14,756 | 597 | 115,765 | 2 | - | - | ||||||||||||||||||||||||||||||
Total assets/liabilities and equity | 662,885 | 413,477 | 118,106 | 56,245 | 56,124 | 40,314 | 684,266 | 30,835 | (52,216) | - | ||||||||||||||||||||||||||||||
RWAs |
307,791 | 113,825 | 64,573 | 49,718 | 43,334 | 29,252 | 300,703 | 7,088 | - | - | ||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||
Loans and advances to customers | 311,147 | 167,998 | 50,002 | 37,295 | 33,615 | 24,015 | 312,926 | 505 | (1,299) | (985) | ||||||||||||||||||||||||||||||
Deposits from customers |
342,661 | 206,428 | 54,052 | 39,353 | 36,874 | 9,333 | 346,040 | 363 | (2,449) | (1,293) | ||||||||||||||||||||||||||||||
Off-balance sheet funds |
102,947 | 62,707 | 22,524 | 3,425 | 13,722 | 569 | 102,947 | - | - | - | ||||||||||||||||||||||||||||||
Total assets/liabilities and equity | 733,797 | 408,030 | 110,236 | 59,585 | 55,436 | 35,172 | 668,460 | 105,416 | (40,080) | - | ||||||||||||||||||||||||||||||
RWAs |
353,273 | 104,388 | 60,825 | 53,021 | 39,804 | 24,331 | 282,370 | 70,903 | - | - |
(1)Non-current assets and liabilities held for sale (NCA&L) from BBVA Paraguay as of 31-12-20.
Table of Contents
25 |
With regard to the number of employees in
NUMBER OF EMPLOYEES |
NUMBER OF BRANCHES | |||
NUMBER OF ATMS |
||||
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26 |
Highlights
● |
Growth in lending activity throughout the year |
● |
Favorable performance of recurring income, driven by commissions |
● |
Improvement in the efficiency ratio and outstanding gross income growth |
● |
Decrease in impairment on financial assets, compared to a 2020 that was strongly affected by the pandemic, resulting in a lower cost of risk |
BUSINESS ACTIVITY (1) (VARIATION COMPARED TO 31-12-20) |
NET INTEREST INCOME/ATAS (PERCENTAGE) | |||
(1) Excluding repos.
OPERATING INCOME (MILLIONS OF EUROS) |
NET ATTRIBUTABLE PROFIT (LOSS) (MILLIONS OF EUROS) | |||
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27 |
FINANCIAL STATEMENTS AND RELEVANT BUSINESS INDICATORS (MILLIONS OF EUROS AND PERCENTAGE) |
||||||
Income statement | 2021 | D % | 2020 | |||
Net interest income |
3,502 | (1.8) | 3,566 | |||
Net fees and commissions |
2,189 | 21.5 | 1,802 | |||
Net trading income |
343 | 97.4 | 174 | |||
Other operating income and expenses |
(109) | n.s. | 25 | |||
Of which: Insurance activities (1) |
357 |
(23.2) |
465 |
|||
Gross income |
5,925 | 6.4 | 5,567 | |||
Operating expenses |
(3,030) | (0.3) | (3,039) | |||
Personnel expenses |
(1,738) |
- |
(1,738) |
|||
Other administrative expenses |
(861) |
2.3 |
(841) |
|||
Depreciation |
(431) |
(6.3) |
(460) |
|||
Operating income |
2,895 | 14.5 | 2,528 | |||
Impairment on financial assets not measured at fair value through profit or loss |
(503) | (56.9) | (1,167) | |||
Provisions or reversal of provisions and other results |
(270) | (49.8) | (538) | |||
Profit (loss) before tax |
2,122 | 157.9 | 823 | |||
Income tax |
(538) | 221.7 | (167) | |||
Profit (loss) for the year |
1,584 | 141.6 | 655 | |||
Non-controlling interests |
(2) | (32.5) | (3) | |||
Net attributable profit (loss) |
1,581 | 142.6 | 652 | |||
(1) Includes premiums received net of estimated technical insurance reserves. |
||||||
Balance sheets | D % | |||||
Cash, cash balances at central banks and other demand deposits |
26,386 | (31.2) | 38,356 | |||
Financial assets designated at fair value |
145,544 | 7.3 | 135,590 | |||
Of which: Loans and advances |
50,631 |
78.9 |
28,301 |
|||
Financial assets at amortized cost |
199,663 | 0.8 | 198,173 | |||
Of which: Loans and advances to customers |
171,097 |
1.8 |
167,998 |
|||
Inter-area positions |
34,005 | 28.4 | 26,475 | |||
Tangible assets |
2,534 | (12.7) | 2,902 | |||
Other assets |
5,346 | (18.2) | 6,535 | |||
Total assets/liabilities and equity |
413,477 | 1.3 | 408,030 | |||
Financial liabilities held for trading and designated at fair value through profit or loss |
81,376 | 13.7 | 71,542 | |||
Deposits from central banks and credit institutions |
54,759 | (6.8) | 58,783 | |||
Deposits from customers |
206,663 | 0.1 | 206,428 | |||
Debt certificates |
38,224 | (6.8) | 41,016 | |||
Inter-area positions |
- | - | - | |||
Other liabilities |
18,453 | 8.8 | 16,955 | |||
Regulatory capital allocated |
14,002 | 5.2 | 13,306 | |||
Relevant business indicators | D % | |||||
Performing loans and advances to customers under management (1) |
168,251 | 1.7 | 165,511 | |||
Non-performing loans |
8,450 | 1.3 | 8,340 | |||
Customer deposits under management (1) |
205,908 | 0.0 | 205,809 | |||
Off-balance sheet funds (2) |
70,072 | 11.7 | 62,707 | |||
Risk-weighted assets |
113,825 | 9.0 | 104,388 | |||
Efficiency ratio (%) |
51.1 | 54.6 | ||||
NPL ratio (%) |
4.2 | 4.3 | ||||
NPL coverage ratio (%) |
62 | 67 | ||||
Cost of risk (%) |
0.30 | 0.67 | ||||
(1) Excluding repos. |
||||||
(2) Includes mutual funds and pension funds. |
Table of Contents
28 |
Macro and industry trends
The economic recovery continued in the fourth quarter of 2021, despite the negative impact on activity of the increased infections caused by new variants of the COVID-19. Activity indicators for the fourth quarter suggest a dynamism that could offset, at least partially, the impact on GDP in 2021 of the lower growth in the third quarter (2.6% quarterly) compared to the initial forecast by
With regard to the banking system, with data as of the end of
Activity
The most relevant aspects related to the area's activity during 2021 were:
• |
Lending activity (performing loans under management) was higher than at the end of 2020 (+1.7%) mainly due to growth in loans to SMEs (+10.2%), consumer loans (+9.1% including credit cards) and the increased activity of CIB in the fourth quarter of 2021 (+1.1 % year-on-year), |
• |
With regard to asset quality, the non-performing loan ratio increased by 13 basis points in the quarter to stand at 4.2%, mainly due to the increase in non-performing loans, resulting from the reclassification due to the implementation of the aforementioned new definition of default. As a result of this increased balance of non-performing loans, the area's NPL coverage ratio is reduced to 62% as of |
• |
Total customer funds increased (+2.8%) compared to 2020 year-end, supported by the favorable performance of off-balance sheet funds (+11.7%). For its part, the balance of customer deposits under management was stable during the year (0.0%), as the increase in deposits held by retail customers was offset by the decrease in the balances held by wholesale customers. By product, demand deposits grew by 7.4%, compensating for the drop in time deposits (-41.6%). |
The most relevant aspects related to the area's activity in the fourth quarter of 2021 were:
• |
Lending activity (performing loans under management) was higher that in the previous quarter (+1.4%), with the same growth dynamics as reported in the year-on-year trend: growth in the SME segments (+3.7%), consumer loans and credit cards (+2.6 %) and, in particular, in CIB, which continued the upward trend of the previous quarter and grew by 5.8%. |
• |
Total customer funds increased compared to the previous quarter (+3.5%), thanks to the seasonal growth in demand deposits (+5.0%), which compensated for the decrease in time deposits (-12.8%) and also supported by the favorable performance of off-balance sheet funds (+4.4%). |
Results
The most notable aspects of the year-on-year changes in the area's income statement at the end of
• |
Net interest income decreased by 1.8%, mainly due to the effect of the declining interest rates environment on the stock of loans and the lower contribution of the ALCO portfolios, which were partially offset by lower financing costs. |
• |
Net fees and commissions continued to show a very positive performance (+21.5% year-on-year), mainly favored by a greater contribution from banking services, revenues associated with asset management and the contribution of insurance, in the latter case, by the bancassurance operation with |
• |
NTI showed at the end of |
• |
The other operating income and expenses line performed poorly compared to the previous year, due to the lower contribution from the insurance business in this line due to the bancassurance operation with |
• |
Operating expenses remained under control (-0.3% in year-on-year terms). |
• |
As a result of gross income growth and contained expenses, the efficiency ratio stood at 51.1%, representing a significant improvement compared to 54.6% recorded at the end of |
• |
Impairment on financial assets recorded a significant reduction compared to the amount accumulated during 2020, mainly due to the negative impact of the worsening macroeconomic scenario caused by the pandemic following the outbreak of COVID-19 in |
• |
The provisions and other results line closed at €-270m, which was well below the €-538m recorded in the same period last year, which included provisions for potential claims. |
In the fourth quarter of 2021,
Table of Contents
29 |
Highlights
● |
Growth in lending activity in the year driven by the continued acceleration in the retail portfolio segment since the second quarter of 2021 |
● |
Increase in demand deposits and therefore improvement in the funding mix |
● |
Growth in recurring income and strength of operating income throughout the year |
● |
Better performance of impairment on financial assets in 2021 |
BUSINESS ACTIVITY (1) (VARIATION AT CONSTANT EXCHANGE RATE COMPARED TO 31-12-20) |
NET INTEREST INCOME/ATAS (PERCENTAGE AT CONSTANT EXCHANGE RATE) |
|||
(1) Excluding repos.
OPERATING INCOME (MILLIONS OF EUROS AT CONSTANT EXCHANGE RATE) |
NET ATTRIBUTABLE PROFIT (LOSS) (MILLIONS OF EUROS AT CONSTANT EXCHANGE RATE) |
|||
(1) At current exchange rate: +5.6%. |
(1) At current exchange rate: +45.8%. |
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30 |
FINANCIAL STATEMENTS AND RELEVANT BUSINESS INDICATORS (MILLIONS OF EUROS AND PERCENTAGE) |
Income statement | 2021 | D % | D % (1) | 2020 | ||||||||||||
Net interest income |
5,836 | 7.8 | 5.4 | 5,415 | ||||||||||||
Net fees and commissions |
1,211 | 14.1 | 11.6 | 1,061 | ||||||||||||
Net trading income |
366 | (13.3 | ) | (15.3 | ) | 423 | ||||||||||
Other operating income and expenses |
190 | 50.3 | 46.9 | 126 | ||||||||||||
Gross income |
7,603 | 8.2 | 5.8 | 7,025 | ||||||||||||
Operating expenses |
(2,659 | ) | 13.4 | 10.9 | (2,344 | ) | ||||||||||
Personnel expenses |
(1,199 | ) | 22.9 | 20.2 | (976 | ) | ||||||||||
Other administrative expenses |
(1,134 | ) | 7.3 | 4.9 | (1,057 | ) | ||||||||||
Depreciation |
(326 | ) | 4.6 | 2.3 | (312 | ) | ||||||||||
Operating income |
4,944 | 5.6 | 3.3 | 4,680 | ||||||||||||
Impairment on financial assets not measured at fair value through profit or loss |
(1,440 | ) | (33.7 | ) | (35.2 | ) | (2,172 | ) | ||||||||
Provisions or reversal of provisions and other results |
24 | n.s. | n.s. | (33 | ) | |||||||||||
Profit (loss) before tax |
3,528 | 42.5 | 39.4 | 2,475 | ||||||||||||
Income tax |
(960 | ) | 34.5 | 31.5 | (714 | ) | ||||||||||
Profit (loss) for the year |
2,568 | 45.8 | 42.6 | 1,761 | ||||||||||||
Non-controlling interests |
(0 | ) | 41.4 | 38.3 | (0 | ) | ||||||||||
Net attributable profit (loss) |
2,568 | 45.8 | 42.6 | 1,761 | ||||||||||||
Balance sheets | D % | D % (1) | ||||||||||||||
Cash, cash balances at central banks and other demand deposits |
12,985 | 41.7 | 34.4 | 9,161 | ||||||||||||
Financial assets designated at fair value |
35,126 | (3.4 | ) | (8.4 | ) | 36,360 | ||||||||||
Of which: Loans and advances |
835 | (67.7 | ) | (69.4 | ) | 2,589 | ||||||||||
Financial assets at amortized cost |
65,311 | 9.2 | 3.5 | 59,819 | ||||||||||||
Of which: Loans and advances to customers |
55,809 | 11.6 | 5.8 | 50,002 | ||||||||||||
Tangible assets |
1,731 | 5.1 | (0.4 | ) | 1,647 | |||||||||||
Other assets |
2,953 | (9.1 | ) | (13.9 | ) | 3,249 | ||||||||||
Total assets/liabilities and equity |
118,106 | 7.1 | 1.6 | 110,236 | ||||||||||||
Financial liabilities held for trading and designated at fair value through profit or loss |
19,843 | (16.6 | ) | (21.0 | ) | 23,801 | ||||||||||
Deposits from central banks and credit institutions |
3,268 | (36.2 | ) | (39.6 | ) | 5,125 | ||||||||||
Deposits from customers |
64,003 | 18.4 | 12.2 | 54,052 | ||||||||||||
Debt certificates |
7,984 | 4.5 | (0.9 | ) | 7,640 | |||||||||||
Other liabilities |
15,779 | 22.2 | 15.8 | 12,911 | ||||||||||||
Regulatory capital allocated |
7,229 | 7.8 | 2.2 | 6,707 | ||||||||||||
Relevant business indicators | D % | D % (1) | ||||||||||||||
Performing loans and advances to customers under management (2) |
55,926 | 10.9 | 5.1 | 50,446 | ||||||||||||
Non-performing loans |
1,921 | 5.7 | 0.1 | 1,818 | ||||||||||||
Customer deposits under management (2) |
63,349 | 17.8 | 11.7 | 53,775 | ||||||||||||
Off-balance sheet funds (3) |
26,445 | 17.4 | 11.3 | 22,524 | ||||||||||||
Risk-weighted assets |
64,573 | 6.2 | 0.6 | 60,825 | ||||||||||||
Efficiency ratio (%) |
35.0 | 33.4 | ||||||||||||||
NPL ratio (%) |
3.2 | 3.3 | ||||||||||||||
NPL coverage ratio (%) |
106 | 122 | ||||||||||||||
Cost of risk (%) |
2.67 | 4.02 |
(1) Figures at constant exchange rate.
(2) Excluding repos.
(3) Includes mutual funds and other off-balance sheet funds.
Table of Contents
31 |
Macro and industry trends
Economic growth decelerated in the second half of 2021 after a strong expansion in the first half of the year. Given the recent slowdown,
With regard to the banking system, based on data at the end of
Unless expressly stated otherwise, all the comments below on rates of change, for both activity and results, will be given at constant exchange rate. These rates, together with changes at current exchange rates, can be found in the attached tables of financial statements and relevant business indicators.
Activity
The most relevant aspects related to the area's activity during 2021 were:
● |
Lending activity (performing loans under management) grew by 5.1% compared to |
● |
With regard to asset quality indicators, the NPL ratio recorded an increase of 63 basis points in the fourth quarter of 2021 and a decrease of 16 basis points compared to |
● |
Customer deposits under management showed an increase of 11.7% during 2021. This performance is explained by a growth of 15.9% in demand deposits, due to customers' preference for having liquid balances in an uncertain environment, compared to the decline observed in time deposits (-6.1%). The above has allowed BBVA Mexico to improve its deposits mix, with 84% of total deposits in lower-cost funds. Finally, mutual funds grew by 11.3% between January and |
The most relevant aspects related to the area's activity during the fourth quarter of 2021 were:
● |
Lending activity (performing loans under management) grew by 2.0% between October and |
● |
Total funds under management increased in the quarter (+5.7%) with growth in demand deposits (+8.5%), partially offset by a decrease in time deposits (-2.0%). For their part, mutual funds closed December with a growth of 3.2%. |
Results
In
The most relevant aspects of the year-on-year changes in the income statement at the end of
● |
Net interest income closed 2021 with an increase of 5.4%, due to lower financing costs, the negative impact on this line due to the customer support measures against a backdrop of the pandemic in the second quarter of 2020 and, to a lesser extent, the aforementioned improvement in the portfolio mix in 2021. Also notable is the favorable trend towards recovery in the new retail loan origination, which has already been reflected in this line since the third quarter. |
● |
Net fees and commissions increased by 11.6% thanks to higher levels of transactions, especially on credit cards, as well as those arising from investment banking operations and mutual fund management. |
● |
NTI decreased by 15.3% year-on-year, mainly due to lower results from the Global Markets unit in 2021, as well as lower results from ALCO portfolios. |
● |
The other operating income and expenses line recorded a year-on-year increase of 46.9%, mainly thanks to the results of the insurance unit in 2021 and also supported by the extraordinary revenue generated by the effects of initiatives aimed at transforming the production model, which have allowed operational efficiencies to be increased. |
Table of Contents
32 |
● |
Operating expenses increased (+10.9%) in an environment of relatively high inflation, mainly due to higher personnel expenses against a backdrop of increased activity. Also contributing to the year-on-year growth is the fact that certain expenses were not incurred in 2020 as a result of the pandemic, and thus increased general expenses in 2021, like technology expenses, among others. |
● |
The impairment on financial assets decreased significantly compared to the same period last year (-35.2%), mainly due to additional provisions for COVID-19 recorded in 2020. As a result of all the above, the cumulative cost of risk as of |
● |
The provisions and other results line showed a favorable comparison, driven by higher sales of foreclosed assets in 2021 and lower provisions related to contingent risks compared to those recorded during 2020. |
In the quarter, excluding the effect of the exchange rate variation, BBVA Mexico generated a net attributable profit of €749m, with a growth of 10.9% compared to the accumulated profit between July and September, in a quarter marked by the good performance of the net interest income (+3.6%), together with a better evolution of the NTI, the increase in operating expenses against a backdrop of recovering activity (+4.8%), increased provisions for impairment on financial assets (+10.1%, still below pre-pandemic levels), and a better performance of the other operating income and expenses line, thanks to the strong performance of insurance results in the quarter (+30.3%).
Table of Contents
33 |
Highlights
● |
Activity driven by Turkish lira loans and deposits |
● |
Year-on-year growth in recurring income and NTI |
● |
Year-on-year decrease in the cost of risk |
● |
Net attributable profit growth driven by higher revenues and lower impairment on financial assets |
BUSINESS ACTIVITY (1) (VARIATION AT CONSTANT EXCHANGE RATE COMPARED TO 31-12-20) |
NET INTEREST INCOME/ATAS (PERCENTAGE AT CONSTANT EXCHANGE RATE) |
|||
(1) Excluding repos. |
OPERATING INCOME (MILLIONS OF EUROS AT CONSTANT EXCHANGE RATE) |
NET ATTRIBUTABLE PROFIT (LOSS) (MILLIONS OF EUROS AT CONSTANT EXCHANGE RATE) |
|||
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34 |
FINANCIAL STATEMENTS AND RELEVANT BUSINESS INDICATORS (MILLIONS OF EUROS AND PERCENTAGE) |
||||||||||||||||
Income statement | 2021 | D % | D %(1) | 2020 | ||||||||||||
Net interest income |
2,370 | (14.8) | 11.2 | 2,783 | ||||||||||||
Net fees and commissions |
564 | 10.6 | 44.4 | 510 | ||||||||||||
Net trading income |
413 | 81.9 | 137.4 | 227 | ||||||||||||
Other operating income and expenses |
74 | 39.4 | 81.9 | 53 | ||||||||||||
Gross income |
3,422 | (4.2) | 25.0 | 3,573 | ||||||||||||
Operating expenses |
(1,008) | (2.1) | 27.8 | (1,029) | ||||||||||||
Personnel expenses |
(593) | 5.8 | 38.0 | (561) | ||||||||||||
Other administrative expenses |
(297) | (7.0) | 21.4 | (319) | ||||||||||||
Depreciation |
(118) | (20.8) | 3.3 | (150) | ||||||||||||
Operating income |
2,414 | (5.1) | 23.8 | 2,544 | ||||||||||||
Impairment on financial assets not measured at fair value through profit or loss |
(494) | (44.8) | (27.9) | (895) | ||||||||||||
Provisions or reversal of provisions and other results |
33 | n.s. | n.s. | (127) | ||||||||||||
Profit (loss) before tax |
1,953 | 28.3 | 67.4 | 1,522 | ||||||||||||
Income tax |
(455) | 19.9 | 56.5 | (380) | ||||||||||||
Profit (loss) for the year |
1,498 | 31.1 | 71.1 | 1,142 | ||||||||||||
Non-controlling interests |
(758) | 30.9 | 70.8 | (579) | ||||||||||||
Net attributable profit (loss) |
740 | 31.3 | 71.4 | 563 | ||||||||||||
Balance sheets | D % | D %(1) | ||||||||||||||
Cash, cash balances at central banks and other demand deposits |
7,764 | 41.7 | 136.9 | 5,477 | ||||||||||||
Financial assets designated at fair value |
5,289 | (0.8) | 65.8 | 5,332 | ||||||||||||
Of which: Loans and advances |
295 | (29.0) | 18.7 | 415 | ||||||||||||
Financial assets at amortized cost |
41,544 | (11.1) | 48.7 | 46,705 | ||||||||||||
Of which: Loans and advances to customers |
31,414 | (15.8) | 40.8 | 37,295 | ||||||||||||
Tangible assets |
623 | (30.8) | 15.7 | 901 | ||||||||||||
Other assets |
1,025 | (12.4) | 46.4 | 1,170 | ||||||||||||
Total assets/liabilities and equity |
56,245 | (5.6) | 57.8 | 59,585 | ||||||||||||
Financial liabilities held for trading and designated at fair value through profit or loss |
2,272 | (2.7) | 62.6 | 2,336 | ||||||||||||
Deposits from central banks and credit institutions |
4,087 | 20.9 | 102.1 | 3,381 | ||||||||||||
Deposits from customers |
38,341 | (2.6) | 62.9 | 39,353 | ||||||||||||
Debt certificates |
3,618 | (10.4) | 49.8 | 4,037 | ||||||||||||
Other liabilities |
2,166 | (49.7) | (16.0) | 4,308 | ||||||||||||
Regulatory capital allocated |
5,761 | (6.6) | 56.1 | 6,170 | ||||||||||||
Relevant business indicators | D % | D %(1) | ||||||||||||||
Performing loans and advances to customers under management (2) |
30,610 | (16.5) | 39.7 | 36,638 | ||||||||||||
Non-performing loans |
2,995 | (5.9) | 57.3 | 3,183 | ||||||||||||
Customer deposits under management (2) |
38,335 | (2.6) | 62.9 | 39,346 | ||||||||||||
Off-balance sheet funds (3) |
3,895 | 13.7 | 90.1 | 3,425 | ||||||||||||
Risk-weighted assets |
49,718 | (6.2) | 56.7 | 53,021 | ||||||||||||
Efficiency ratio (%) |
29.5 | 28.8 | ||||||||||||||
NPL ratio (%) |
7.1 | 6.6 | ||||||||||||||
NPL coverage ratio (%) |
75 | 80 | ||||||||||||||
Cost of risk (%) |
1.33 | 2.13 |
(1) Figures at constant exchange rate.
(2) Excluding repos.
(3) Includes mutual funds and pension funds.
Table of Contents
35 |
Macro and industry trends
Activity indicators suggest that GDP has continued to grow strongly in the fourth quarter of 2021, supporting a revision of
With regard to the banking system, based on data as of
Unless expressly stated otherwise, all comments below on rates of changes for both activity and income, will be presented at constant exchange rates. These rates, together with changes at current exchange rates, can be observed in the attached tables of the financial statements and relevant business indicators.
Activity
The most relevant aspects related to the area's activity during 2021 were:
● |
Lending activity (performing loans under management) increased by 39.7% between January and |
● |
In terms of asset quality, the NPL ratio increased by 57 basis points to 7.1% compared to the end of |
● |
Customer deposits under management (68% of total liabilities in the area as of |
The most relevant developments in the area's activity in the fourth quarter of 2021 were:
● |
Lending activity growth (performing loans under management) was above the previous quarter (+18.6%), as a result of the growth in Turkish lira loans (+4.7%), while foreign currency loans (in |
● |
Total funds under management showed a positive quarterly evolution (+36.3%), driven by the growth of deposits, both in local and foreign currencies. |
Results
The most significant aspects of the year-on-year evolution in the area's income statement at the end of
● |
Net interest income increased by 11.2%, mainly due to larger loan volumes and also due to a higher contribution from inflation-linked bonds. This was partly offset by the contraction of the customer spread during 2021 and by higher financing costs. |
● |
Net fees and commissions recorded significant growth (+44.4%) mainly driven by the positive performance in payment systems, money transfer, brokerage and guarantees. |
● |
NTI performed significantly well (+137.4%), mainly due to the earnings of the Global Markets unit, as well as gains from securities transactions. |
● |
Other operating income and expenses increased by 81.9% in 2021, mainly due to the greater contribution of the subsidiaries of Garanti BBVA, most notably the leasing operations. |
● |
Operating expenses increased by 27.8%, impacted by the higher average annual inflation rate (above 19%), the depreciation of the Turkish Lira and increased activity. On the other hand, there was a reduction in some discretionary expenses in 2020 due to COVID-19, affecting the year-on-year evolution. Nevertheless, the efficiency ratio remained low (29.5%). |
Table of Contents
36 |
● |
Impairment on financial assets decreased by 27.9% compared to those registered in 2020, mainly due to the negative impact of the deterioration in the macroeconomic scenario as a result of the outbreak of the COVID-19 pandemic in |
● |
The provisions and other results line closed December with a profit of €33m, compared to the loss of €-127m recorded in the same period of the previous year, mainly thanks to lower provisions for special funds and contingent liabilities and commitments and capital gains from the sale of real estate assets. |
In the last quarter of 2021, excluding the exchange rate effect,
Table of Contents
37 |
Highlights
● |
Increase in lending activity in 2021, with growth in both retail and commercial segments |
● |
Reduction in higher-cost customer funds |
● |
Favorable year-on-year evolution of recurring income and higher adjustment for inflation in |
● |
Reduction in the impairment on financial assets line as 2020 was affected by the outbreak of the pandemic |
BUSINESS ACTIVITY (1) (VARIATION AT CONSTANT EXCHANGE RATES COMPARED TO 31-12-20) |
NET INTEREST INCOME/ATAS (PERCENTAGE AT CONSTANT EXCHANGE RATES) |
|||
(1) Excluding repos. It excludes the balances of BBVA Paraguay as of 31-12-2020. |
General note: Excluding BBVA Paraguay. |
OPERATING INCOME (MILLIONS OF EUROS AT CONSTANT EXCHANGE RATES) |
NET ATTRIBUTABLE PROFIT (LOSS) (MILLIONS OF EUROS AT CONSTANT EXCHANGE RATES) |
|||
(1) At current exchange rates:-10.4%. At constant exchange rates, excluding BBVA Paraguay:+2.0%. |
(1) At current exchange rates: +10.1%. At constant exchange rates, excluding BBVA Paraguay: +30.3%. |
Table of Contents
38 |
FINANCIAL STATEMENTS AND RELEVANT BUSINESS INDICATORS (MILLIONS OF EUROS AND PERCENTAGE) |
||||||||||||||||||||
Income statement | 2021 | D % | D % (1) | D % (2) | 2020 | |||||||||||||||
Net interest income |
2,859 | 5.8 | 15.5 | 18.1 | 2,701 | |||||||||||||||
Net fees and commissions |
589 | 21.8 | 34.9 | 37.8 | 483 | |||||||||||||||
Net trading income |
324 | (20.3) | (11.6) | (9.8) | 407 | |||||||||||||||
Other operating income and expenses |
(611) | 66.4 | 71.9 | 74.4 | (367) | |||||||||||||||
Gross income |
3,162 | (2.0) | 8.1 | 10.6 | 3,225 | |||||||||||||||
Operating expenses |
(1,501) | 9.4 | 19.4 | 22.0 | (1,372) | |||||||||||||||
Personnel expenses |
(724) | 8.2 | 18.4 | 21.4 | (670) | |||||||||||||||
Other administrative expenses |
(632) | 15.0 | 25.3 | 27.6 | (549) | |||||||||||||||
Depreciation |
(145) | (5.7) | 2.4 | 4.8 | (154) | |||||||||||||||
Operating income |
1,661 | (10.4) | (0.4) | 2.0 | 1,853 | |||||||||||||||
Impairment on financial assets not measured at fair value through profit or loss |
(622) | (28.0) | (21.3) | (20.0) | (864) | |||||||||||||||
Provisions or reversal of provisions and other results |
(77) | (17.0) | (7.7) | (6.8) | (93) | |||||||||||||||
Profit (loss) before tax |
961 | 7.3 | 21.3 | 25.3 | 896 | |||||||||||||||
Income tax |
(287) | 3.5 | 16.0 | 17.3 | (277) | |||||||||||||||
Profit (loss) for the year |
674 | 9.0 | 23.8 | 29.1 | 618 | |||||||||||||||
Non-controlling interests |
(184) | 6.3 | 25.9 | 25.9 | (173) | |||||||||||||||
Net attributable profit (loss) |
491 | 10.1 | 23.0 | 30.3 | 446 | |||||||||||||||
Balance sheets | D % | D % (1) | D % (2) | |||||||||||||||||
Cash, cash balances at central banks and other demand deposits |
8,549 | 20.0 | 24.1 | 33.1 | 7,127 | |||||||||||||||
Financial assets designated at fair value |
7,175 | (2.1) | 2.5 | 2.5 | 7,329 | |||||||||||||||
Of which: Loans and advances |
157 | 45.4 | 55.6 | 55.6 | 108 | |||||||||||||||
Financial assets at amortized cost |
37,747 | (2.1) | 1.8 | 5.0 | 38,549 | |||||||||||||||
Of which: Loans and advances to customers |
34,608 | 3.0 | 7.0 | 10.7 | 33,615 | |||||||||||||||
Tangible assets |
895 | 10.7 | 13.7 | 14.9 | 808 | |||||||||||||||
Other assets |
1,758 | 8.3 | 14.4 | 16.6 | 1,624 | |||||||||||||||
Total assets/liabilities and equity |
56,124 | 1.2 | 5.3 | 8.7 | 55,436 | |||||||||||||||
Financial liabilities held for trading and designated at fair value through profit or loss |
1,884 | 42.0 | 50.6 | 50.7 | 1,326 | |||||||||||||||
Deposits from central banks and credit institutions |
5,501 | 2.3 | 5.1 | 5.4 | 5,378 | |||||||||||||||
Deposits from customers |
36,340 | (1.4) | 2.3 | 6.5 | 36,874 | |||||||||||||||
Debt certificates |
3,215 | (1.7) | 3.8 | 4.7 | 3,269 | |||||||||||||||
Other liabilities |
4,207 | 10.3 | 16.1 | 17.9 | 3,813 | |||||||||||||||
Regulatory capital allocated |
4,977 | 4.2 | 8.8 | 12.7 | 4,776 | |||||||||||||||
Relevant business indicators | D % | D % (1) | D % (2) | |||||||||||||||||
Performing loans and advances to customers under management (3) |
34,583 | 2.6 | 6.6 | 10.3 | 33,719 | |||||||||||||||
Non-performing loans |
1,813 | 1.8 | 5.6 | 8.1 | 1,780 | |||||||||||||||
Customer deposits under management (4) |
36,364 | (1.4) | 2.3 | 6.5 | 36,886 | |||||||||||||||
Off-balance sheet funds (5) |
14,756 | 7.5 | 3.7 | 3.7 | 13,722 | |||||||||||||||
Risk-weighted assets |
43,334 | 8.9 | 13.6 | 17.6 | 39,804 | |||||||||||||||
Efficiency ratio (%) |
47.5 | 42.6 | ||||||||||||||||||
NPL ratio (%) |
4.5 | 4.4 | ||||||||||||||||||
NPL coverage ratio (%) |
99 | 110 | ||||||||||||||||||
Cost of risk (%) |
1.65 | 2.36 |
(1) Figures at constant exchange rates.
(2) At constant exchange rates excluding BBVA Paraguay.
(3) Excluding repos.
(4) Excluding repos and including specific marketable debt securities.
(5) Includes mutual funds and pension funds.
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39 |
|
||||||||||||||||||||||||||||||||
Operating income | Net attributable profit (loss) | |||||||||||||||||||||||||||||||
Country |
2021 | D % | D % (1) | 2020 | 2021 | D % | D % (1) | 2020 | ||||||||||||||||||||||||
|
260 | (24.2) | n.s. | 343 | 63 | (29.4) | n.s. | 89 | ||||||||||||||||||||||||
|
569 | (3.8) | 1.0 | 591 | 228 | 38.5 | 45.4 | 165 | ||||||||||||||||||||||||
|
685 | (4.6) | 9.6 | 718 | 122 | 11.4 | 28.0 | 110 | ||||||||||||||||||||||||
Other countries (2) |
147 | (26.8) | (24.9) | 200 | 77 | (5.8) | (2.4) | 82 | ||||||||||||||||||||||||
Total |
1,661 | (10.4) | (0.4) | 1,853 | 491 | 10.1 | 23.0 | 446 |
(1) Figures at constant exchange rates.
(2)
|
||||||||||||||||||||||||
Performing loans and advances to customers under management (1)(2) |
3,333 | 2,495 | 12,334 | 10,913 | 15,552 | 14,914 | ||||||||||||||||||
Non-performing loans and guarantees given (1) |
81 | 46 | 697 | 632 | 966 | 892 | ||||||||||||||||||
Customer deposits under management (1)(3) |
6,083 | 4,101 | 12,814 | 11,330 | 13,946 | 15,648 | ||||||||||||||||||
Off-balance sheet funds (1)(4) |
1,716 | 860 | 998 | 1,463 | 1,543 | 2,119 | ||||||||||||||||||
Risk-weighted assets |
6,775 | 5,685 | 14,262 | 13,096 | 18,016 | 15,845 | ||||||||||||||||||
Efficiency ratio (%) |
68.2 | 53.6 | 36.2 | 35.2 | 37.6 | 37.7 | ||||||||||||||||||
NPL ratio (%) |
2.3 | 1.8 | 5.0 | 5.2 | 4.9 | 4.5 | ||||||||||||||||||
NPL coverage ratio (%) |
146 | 241 | 103 | 113 | 89 | 101 | ||||||||||||||||||
Cost of risk (%) |
2.20 | 3.24 | 1.85 | 2.64 | 1.59 | 2.13 |
(1) |
Figures at constant exchange rates. |
(2) |
Excluding repos. |
(3) |
Excluding repos and including specific marketable debt securities. |
(4) |
Includes mutual funds. |
Unless expressly stated otherwise, all the comments below on rates of change, for both activity and results, will be given at constant exchange rates. These rates, together with the changes at current exchange rates, can be found in the attached tables of the financial statements and relevant business indicators. The information for this business area includes BBVA Paraguay with regard to data on the results, activity, balance sheet and relevant business indicators for 2020, but does not include
Activity and results
The most relevant aspects related to the area's activity during 2021 were:
● |
Lending activity (performing loans under management) recorded a variation of +10.3% over the period, with growth in all products and in all countries of the region, highlighting consumer and credit cards portfolios (+15.2%) and corporate portfolio (+9.3%). |
● |
With regard to asset quality, the NPL ratio stood at 4.5%, which represents a decrease of 6 basis points compared to the end of |
● |
Customer funds under management increased (+5.7%) compared to the previous year's closing balances, with growth in demand deposits (+13.3%) and off-balance sheet funds (+3.7%) and a reduction in time deposits, in line with the strategy of some countries to reduce higher-cost liabilities in an environment whereby the Group's liquidity situation throughout the region is adequate. |
The most relevant aspects of the area's activity in the fourth quarter of 2021 were:
● |
Lending activity (performing loans under management) was higher than in the previous quarter (+4.3%), mainly thanks to the good performance of consumer loans and credit cards (+5.2% and +11.8%, respectively) and the performance of the corporate portfolio (+3.6%). |
● |
Total customer funds recorded a slight increase in the quarter (+0.9%), favored by the growth in both demand deposits (+4.7%) and off-balance sheet funds (+0.4%), which offset the decrease in time deposits (-8.5%). |
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40 |
With regard to the year-on year evolution of the results of
In the quarter, excluding the exchange rate effect,
More detailed information on the most representative countries of the business area is provided below:
Macro and industry trends
Greater control of the pandemic during the second half of 2021 has allowed for a rapid recovery of economic activity.
The banking system continues to be influenced by the high inflation scenario. At the end of
Activity and results
● |
Lending activity increased by 33.6% compared to the close of |
● |
Balance sheet funds grew by 48.3% in 2021 and off-balance sheet funds (mutual funds) grew by 99.5% compared to |
● |
In the fourth quarter of 2021, |
Macro and industry trends
Economic activity has shown greater dynamism than expected in the last months of 2021, so that growth in the year could reach 10% (one point higher than expected three months ago), a significant recovery from the 6.8% contraction of GDP in 2020. In addition, the high inflation has helped the
Total lending in the banking system recovered (+7.5% at the end of
Activity and results
● |
Lending activity grew by 13.0% compared to 2020 year-end, with a good performance in both wholesale (+20.3%) and retail portfolios (+9.0%). In terms of asset quality, between September and |
● |
Customer deposits under management increased by 13.1%, compared to 2020 year-end, with growth in demand deposits, which compensated for the strategic reduction of time deposits, with higher costs for BBVA Colombia. For its part, off-balance sheet funds closed with a negative variation of 31.8% in 2021 due to the volatility of investments made by institutional customers. |
● |
In the fourth quarter of 2021, BBVA Colombia recorded a growth in gross margin, due to the good evolution of the net interest income and the NTI. There was also an increase in operating expenses against a backdrop of increased activity, as well as lower provisions for impairment on financial assets. The net attributable profit for 2021 stood at €228m, significantly higher (+45.4% year-on-year) than the €165m reached in 2020, thanks to the favorable evolution of recurring income, as well as lower provisions for impairment on financial assets in 2021 compared to the previous year, when they increased notably due to the outbreak of the pandemic, which offset the negative impact on the other operating income and expenses line and the increased costs. |
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41 |
Macro and industry trends
The economic recovery process continued in the last months of 2021. Activity indicators have surprised positively compared to what was expected. Thus,
Total lending in the banking system recovered (+5.6% at the end of
Activity and results
● |
Lending activity was favored by improving economic conditions and closed |
● |
Customers funds under management decreased by 12.8% in 2021, mainly due to lower balances in time deposits, with the aim of reducing their cost, as well as the reduction in mutual funds, which also recorded a decrease compared to the close of |
● |
In the fourth quarter, BBVA Peru has shown a good evolution in net interest income and the NTI, as well as a reduction in provisions for impairment on financial assets. In the year-on-year evolution of the income statement, recurring income grew by 11.1%, thanks to the favorable evolution of the net interest income and commissions, which grew by 8.2% and 21.8%, respectively, offsetting the increase in operating expenses. Regarding items below operating income on the income statement, the year-on-year reduction in provisions for impairment on financial assets has boosted the results (-16.1%), as a result of high provision charges in 2020 following the pandemic outbreak. As a result, the net attributable profit stood at €122m at the end of |
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42 |
Rest of Business
Highlights
● |
Increase in lending due to evolution in the second half of the year and decrease in customer funds in 2021 |
● |
Good performance of recurring income in the fourth quarter |
● |
Favorable evolution of risk indicators in the quarter |
● |
Reversal in the impairment on financial assets line, which contrasts with provisions made in 2020 |
BUSINESS ACTIVITY (1) (VARIATION AT CONSTANT EXCHANGE RATES COMPARED TO 31-12-20) |
NET INTEREST INCOME/ATAS (PERCENTAGE AT CONSTANT EXCHANGE RATES) |
|||
(1) Excluding repos. | ||||
OPERATING INCOME (MILLIONS OF EUROS AT CONSTANT EXCHANGE RATES) |
NET ATTRIBUTABLE PROFIT (LOSS) (MILLIONS OF EUROS AT CONSTANT EXCHANGE RATES) |
|||
(1) At current exchange rates: -21.9%. | (1) At current exchange rates: +14.2% |
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43 |
FINANCIAL STATEMENTS AND RELEVANT BUSINESS INDICATORS (MILLIONS OF EUROS AND PERCENTAGE) |
||||||||||||||||
Income statement |
2021 | D % | D % (1) | 2020 | ||||||||||||
Net interest income |
281 | (3.3) | (5.4) | 291 | ||||||||||||
Net fees and commissions |
248 | (25.4) | (24.8) | 332 | ||||||||||||
Net trading income |
197 | 15.0 | 13.3 | 171 | ||||||||||||
Other operating income and expenses |
16 | (65.4) | (65.3) | 45 | ||||||||||||
Gross income |
741 | (11.6) | (12.3) | 839 | ||||||||||||
Operating expenses |
(451) | (3.4) | (3.4) | (467) | ||||||||||||
Personnel expenses |
(233) | (9.3) | (8.9) | (257) | ||||||||||||
Other administrative expenses |
(197) | 4.3 | 3.7 | (189) | ||||||||||||
Depreciation |
(20) | (0.3) | (0.7) | (20) | ||||||||||||
Operating income |
291 | (21.9) | (23.3) | 372 | ||||||||||||
Impairment on financial assets not measured at fair value through profit or loss |
27 | n.s. | n.s. | (85) | ||||||||||||
Provisions or reversal of provisions and other results |
(4) | (51.9) | (54.6) | (8) | ||||||||||||
Profit (loss) before tax |
314 | 12.2 | 11.4 | 280 | ||||||||||||
Income tax |
(60) | 4.8 | 4.3 | (57) | ||||||||||||
Profit (loss) for the year |
254 | 14.2 | 13.2 | 222 | ||||||||||||
Non-controlling interests |
- | - | - | - | ||||||||||||
Net attributable profit (loss) |
254 | 14.2 | 13.2 | 222 | ||||||||||||
Balance sheets |
D % | D % (1) | ||||||||||||||
Cash, cash balances at central banks and other demand deposits |
3,970 | (35.1) | (40.0) | 6,121 | ||||||||||||
Financial assets designated at fair value |
5,684 | 286.8 | 266.2 | 1,470 | ||||||||||||
Of which: Loans and advances |
4,693 | n.s. | n.s. | 153 | ||||||||||||
Financial assets at amortized cost |
30,299 | 11.3 | 9.4 | 27,213 | ||||||||||||
Of which: Loans and advances to customers |
26,949 | 12.2 | 10.2 | 24,015 | ||||||||||||
Inter-area positions |
- | - | - | - | ||||||||||||
Tangible assets |
70 | (6.9) | (8.2) | 75 | ||||||||||||
Other assets |
291 | (0.6) | (3.3) | 293 | ||||||||||||
Total assets/liabilities and equity |
40,314 | 14.6 | 11.2 | 35,172 | ||||||||||||
Financial liabilities held for trading and designated at fair value through profit or loss |
5,060 | n.s. | n.s. | 849 | ||||||||||||
Deposits from central banks and credit institutions |
1,709 | 0.5 | (3.5) | 1,700 | ||||||||||||
Deposits from customers |
6,266 | (32.9) | (35.9) | 9,333 | ||||||||||||
Debt certificates |
1,166 | (22.8) | (24.0) | 1,511 | ||||||||||||
Inter-area positions |
22,103 | 21.9 | 19.4 | 18,132 | ||||||||||||
Other liabilities |
723 | 18.8 | 15.5 | 608 | ||||||||||||
Regulatory capital allocated |
3,287 | 8.2 | 5.6 | 3,039 | ||||||||||||
Relevant business indicators |
D % | D % (1) | ||||||||||||||
Performing loans and advances to customers under management (2) |
26,983 | 12.3 | 10.2 | 24,038 | ||||||||||||
Non-performing loans |
261 | (19.6) | (20.2) | 324 | ||||||||||||
Customer deposits under management (2) |
6,266 | (32.9) | (35.9) | 9,333 | ||||||||||||
Off-balance sheet funds (3) |
597 | 4.9 | 4.9 | 569 | ||||||||||||
Risk-weighted assets |
29,252 | 20.2 | 17.7 | 24,331 | ||||||||||||
Efficiency ratio (%) |
60.8 | 55.6 | ||||||||||||||
NPL ratio (%) |
0.7 | 1.0 | ||||||||||||||
NPL coverage ratio (%) |
116 | 109 | ||||||||||||||
Cost of risk (%) |
(0.11) | 0.30 |
(1) Figures at constant exchange rates.
(2) Excluding repos.
(3) Includes pension funds.
Table of Contents
44 |
Unless expressly stated otherwise, all the comments below on rates of change, for both activity and results, will be given at constant exchange rates. These rates, together with the changes at current exchange rates, can be found in the attached tables of the financial statements and relevant business indicators. Comments that refer to
Activity
The most relevant aspects of the activity of Rest of Business of
● |
Lending activity (performing loans under management) increased during the year (+10.2%), thanks to the business growth of BBVA's branches located in |
● |
Regarding credit risk indicators, the NPL ratio stood at 0.7%, 23 basis points below the end of |
● |
Customer funds under management decreased by 33.6% mainly due to a decrease in deposits from wholesale customers in the |
The most relevant developments in the area's activity in the fourth quarter of 2021 were:
● |
Lending activity (performing loans under management) increased by 7.5% compared to the previous quarter due to the favorable performance of lending to wholesale customers of the |
● |
Total customer funds under management decreased in the quarter (-14.3%) with a reduction both in demand deposits (-8.0%) and time deposits (-25.5%), and a growth in off-balance sheet funds (+5.4%). |
Results
The most significant aspects of the year-on-year evolution in the area's income statement at the end of
● |
The net interest income decreased -5.4% compared to the same period of the previous year, mainly due to the evolution of the |
● |
Net commissions fell by 24.8% compared to the end of |
● |
The NTI line increased (+13.3%) driven by a better performance of |
● |
Year-on-year decrease in operating expenses (-3.4%) due to lower expenses recorded by |
● |
The impairment on financial assets line closed December with a reversal of €27m, which positively compares against the €-85m recorded twelve months earlier, mainly explained by the positive evolution of impaired clients of the |
● |
As a result, the area's cumulative net attributable profit between January and |
In the fourth quarter of 2021, excluding the exchange rate effect, the Group's Rest of Business as a whole generated a net attributable profit of €48 million (-18.3% compared to the previous quarter), with a good performance in recurring income in the quarter, offset by lower NTI and higher operating expenses.
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45 |
Corporate Center
FINANCIAL STATEMENTS (MILLIONS OF EUROS AND PERCENTAGE) |
||||||||||||
Income statement | 2021 | D % | 2020 | |||||||||
Net interest income |
(163) | (0.4) | (164) | |||||||||
Net fees and commissions |
(36) | (45.5) | (66) | |||||||||
Net trading income |
266 | 84.2 | 144 | |||||||||
Other operating income and expenses |
146 | n.s. | 22 | |||||||||
Gross income |
212 | n.s. | (63) | |||||||||
Operating expenses |
(881) | 5.4 | (836) | |||||||||
Personnel expenses |
(558) | 13.2 | (493) | |||||||||
Other administrative expenses |
(129) | (13.4) | (149) | |||||||||
Depreciation |
(194) | - | (194) | |||||||||
Operating income |
(668) | (25.6) | (898) | |||||||||
Impairment on financial assets not measured at fair value through profit or loss |
(2) | n.s. | 4 | |||||||||
Provisions or reversal of provisions and other results |
32 | n.s. | (289) | |||||||||
Profit (loss) before tax |
(638) | (46.1) | (1,183) | |||||||||
Income tax |
94 | (64.9) | 268 | |||||||||
Profit (loss) for the year |
(544) | (40.6) | (915) | |||||||||
Non-controlling interests |
(20) | n.s. | - | |||||||||
Net attributable profit (loss) excluding non-recurring impacts |
(564) | (38.3) | (915) | |||||||||
Profit (loss) after tax from discontinued operations (1) |
280 | n.s. | (1,729) | |||||||||
Corporate operations (2) |
- | - | 304 | |||||||||
Net cost related to the restructuring process |
(696) | - | - | |||||||||
Net attributable profit (loss) |
(980) | (58.1) | (2,339) |
(1) |
Including the results generated by |
(2) |
Net capital gains from the sale to |
Balance sheets | D % | |||||||||||
Cash, cash balances at central banks and other demand deposits |
9,609 | n.s. | 874 | |||||||||
Financial assets designated at fair value |
2,099 | 43.3 | 1,464 | |||||||||
Of which: Loans and advances |
- | n.s. | - | |||||||||
Financial assets at amortized cost |
2,175 | 26.6 | 1,718 | |||||||||
Of which: Loans and advances to customers |
1,006 | 99.4 | 505 | |||||||||
Inter-area positions |
- | - | - | |||||||||
Tangible assets |
1,964 | (4.8 | ) | 2,063 | ||||||||
Other assets |
14,988 | (84.9 | ) | 99,298 | ||||||||
Total assets/liabilities and equity |
30,835 | (70.7 | ) | 105,416 | ||||||||
Financial liabilities held for trading and designated at fair value through profit or loss |
84 | 17.3 | 72 | |||||||||
Deposits from central banks and credit institutions |
825 | (2.4 | ) | 845 | ||||||||
Deposits from customers |
175 | (51.7 | ) | 363 | ||||||||
Debt certificates |
1,556 | (64.2 | ) | 4,344 | ||||||||
Inter-area positions |
7,758 | n.s. | 64 | |||||||||
Other liabilities |
6,932 | (91.7 | ) | 83,707 | ||||||||
Regulatory capital allocated |
(35,257 | ) | 3.7 | (33,998 | ) | |||||||
Total equity |
48,760 | (2.5 | ) | 50,020 |
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46 |
Results
The Corporate Center recorded a net attributable loss of €564m between January and
● |
The profit (loss) after tax from discontinued operations which includes the results generated by the Group's businesses in |
● |
The net cost related to the restructuring process of |
Including both non-recurring impacts, the Corporate Center recorded a cumulative net attributable loss of €-980m at the end of
In addition to the aforementioned, the most relevant aspects of the year-on-year evolution are summarized below:
● |
Net fees and commissions evolved positively, since those from the previous year recorded expenses associated with the issuance of the first green convertible bond (CoCo) for an amount of €1,000m. |
● |
NTI increased by 84.2% as a result, mainly, from the valuation of the Group's stakes in Funds & Investment Vehicles in tech companies. |
● |
The other operating income and expenses line registered a positive result at the end of |
● |
Finally, the provisions or reversal of provisions and other results line compares very positively with the balance of the previous year, mainly due to the deterioration of investments in subsidiaries, joint venture or associates businesses in 2020. |
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47 |
Other information: Corporate & Investment Banking
Highlights
• |
Recovery of lending activity, which was above pre-pandemic levels, and reduction of customer funds |
• |
Growth of recurring income and good performance of NTI |
• |
Efficiency ratio remains at low levels thanks to the good performance of revenue items and management of discretionary expenses |
• |
Significant reduction in the impairment on financial assets line, compared to 2020 which was strongly affected by the effects of the pandemic |
BUSINESS ACTIVITY (1) (VARIATION AT CONSTANT EXCHANGE RATES COMPARED TO 31-12-20) |
GROSS INCOME/ATAS (PERCENTAGE AT CONSTANT EXCHANGE RATES) |
|||
(1) Excluding repos. |
OPERATING INCOME (MILLIONS OF EUROS AT CONSTANT EXCHANGE RATES) |
NET ATTRIBUTABLE PROFIT (LOSS) (MILLIONS OF EUROS AT CONSTANT EXCHANGE RATES) |
|||
(1) At current exchange rates: +11.8%. |
(1) At current exchange rates: +40.4%. |
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48 |
FINANCIAL STATEMENTS AND RELEVANT BUSINESS INDICATORS (MILLIONS OF EUROS AND PERCENTAGE) |
||||||||||||||||
Income statement | 2021 | D % | D % (1) | 2020 | ||||||||||||
Net interest income |
1,576 | 6.3 | 12.2 | 1,482 | ||||||||||||
Net fees and commissions |
794 | 5.7 | 11.1 | 751 | ||||||||||||
Net trading income |
905 | 22.5 | 31.2 | 739 | ||||||||||||
Other operating income and expenses |
(40 | ) | 5.6 | 7.6 | (38 | ) | ||||||||||
Gross income |
3,235 | 10.3 | 16.7 | 2,934 | ||||||||||||
Operating expenses |
(987 | ) | 7.0 | 8.7 | (922 | ) | ||||||||||
Personnel expenses |
(474 | ) | 15.9 | 17.1 | (409 | ) | ||||||||||
Other administrative expenses |
(405 | ) | 1.8 | 4.4 | (398 | ) | ||||||||||
Depreciation |
(107 | ) | (6.7 | ) | (6.6 | ) | (115 | ) | ||||||||
Operating income |
2,248 | 11.8 | 20.6 | 2,011 | ||||||||||||
Impairment on financial assets not measured at fair value through profit or loss |
(69 | ) | (84.9 | ) | (82.5 | ) | (454 | ) | ||||||||
Provisions or reversal of provisions and other results |
(12 | ) | (78.4 | ) | (78.4 | ) | (54 | ) | ||||||||
Profit (loss) before tax |
2,168 | 44.2 | 52.9 | 1,504 | ||||||||||||
Income tax |
(593 | ) | 50.4 | 59.0 | (394 | ) | ||||||||||
Profit (loss) for the year |
1,575 | 42.0 | 50.7 | 1,109 | ||||||||||||
Non-controlling interests |
(327 | ) | 48.3 | 75.7 | (220 | ) | ||||||||||
Net attributable profit (loss) |
1,248 | 40.4 | 45.3 | 889 |
(1) Figures at constant exchange rates.
Balance sheets | D % | D % (1) | ||||||||||||||
Cash, cash balances at central banks and other demand deposits |
5,125 | (31.6 | ) | (35.5 | ) | 7,491 | ||||||||||
Financial assets designated at fair value |
131,711 | 22.1 | 21.7 | 107,838 | ||||||||||||
Of which: Loans and advances |
55,232 | 91.8 | 92.8 | 28,804 | ||||||||||||
Financial assets at amortized cost |
72,363 | 1.9 | 5.6 | 71,031 | ||||||||||||
Of which: Loans and advances to customers |
62,042 | 4.8 | 9.3 | 59,225 | ||||||||||||
Inter-area positions |
- | - | - | - | ||||||||||||
Tangible assets |
43 | (13.3 | ) | (10.9 | ) | 50 | ||||||||||
Other assets |
110 | (87.0 | ) | (85.5 | ) | 843 | ||||||||||
Total assets/liabilities and equity |
209,352 | 11.8 | 12.8 | 187,253 | ||||||||||||
Financial liabilities held for trading and designated at fair value through profit or loss |
95,283 | 11.9 | 11.0 | 85,129 | ||||||||||||
Deposits from central banks and credit institutions |
12,884 | (19.3 | ) | (19.5 | ) | 15,958 | ||||||||||
Deposits from customers |
38,360 | (10.7 | ) | (9.1 | ) | 42,966 | ||||||||||
Debt certificates |
5,746 | 174.2 | 190.9 | 2,096 | ||||||||||||
Inter-area positions |
44,184 | 46.2 | 54.1 | 30,218 | ||||||||||||
Other liabilities |
2,913 | 38.1 | 14.2 | 2,108 | ||||||||||||
Regulatory capital allocated |
9,983 | 13.7 | 20.4 | 8,778 | ||||||||||||
(1) Figures at constant exchange rates. |
||||||||||||||||
Relevant business indicators | D % | D % (1) | ||||||||||||||
Performing loans and advances to customers under management (2) |
61,588 | 6.7 | 11.3 | 57,704 | ||||||||||||
Non-performing loans |
1,417 | 11.2 | 63.8 | 1,275 | ||||||||||||
Customer deposits under management (2) |
37,445 | (11.5 | ) | (9.9 | ) | 42,313 | ||||||||||
Off-balance sheet funds (3) |
1,249 | 21.3 | 28.1 | 1,030 | ||||||||||||
Efficiency ratio (%) |
30.5 | 31.4 |
(1) Figures at constant exchange rates.
(2) Excluding repos.
(3) Includes mutual funds and other off-balance sheet funds.
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Unless expressly stated otherwise, all the comments below on rates of change, for both activity and results, will be given at constant exchange rates. These rates, together with changes at current exchange rates, can be found in the attached tables of financial statements and relevant business indicators.
Activity
The most relevant aspects related to the area's activity in 2021 were:
● |
Lending activity (performing loans under management) recorded a growth of (11.3%) in the year, standing at the end of |
● |
Customer funds fell by 9.0% in 2021, due to some transactions originated in the last months of 2020 that had not been renewed in 2021, being this trend widespread in all business areas, except for |
The most significant aspects of the evolution in the area's activity in the fourth quarter of 2021 were:
● |
Lending activity (performing loans under management) increased significantly in the quarter (+10.6%), mainly due to the good performance in |
● |
Customer funds increased in the last quarter of the year (+5.2%), with a positive evolution in demand deposits (+16.3%) and off-balance sheet funds (+5.4%) and a reduction in time deposits (-13.9%). |
Results
CIB generated a net attributable profit of €1,248m in 2021, which represents an increase of 45.3% on a year-on-year basis, thanks to the growth in recurring income and NTI as well as lower provisions for impairment on financial assets, which increased significantly in 2020 due to the COVID-19 pandemic. It should also be noted that all business lines of the CIB area recorded growth, both in income and at the level of net attributable profit, compared to 2020.
The most relevant aspects of the year-on-year evolution in the income statement of Corporate & Investment Banking are summarized below:
● |
Net interest income registered double-digit growth (+12.2%), supported by the evolution in |
● |
Increase in net fees and commissions (+11.1%), mainly due to the performance of investment and transactional banking, the latter benefiting from the reactivation of business in 2021, with relevant agreements in |
● |
NTI showed a good evolution (+31.2%), mainly due to the performance of the Global Markets unit, due to income from foreign exchange positions in emerging markets, where the macro situation and political uncertainty in many of them favored volatility, boosting business with customers and trading operations, and to the recovery of dividends after the payment restrictions in force in 2020. |
● |
Operating expenses increased by 8.7% in 2021. The year-on-year comparison is affected by the cost containment plans implemented by CIB in 2020 which did not re-occur in 2021 after the retuto normality, although the area continues to focus its efforts on vacancy management and discretionary expenses. |
● |
Provisions for impairment on financial assets were significantly lower than in the previous year, driven by the improved outlook, compared to 2020 which was severely affected by provisions related to COVID-19, as well as by lower impacts on individual clients. |
In the fourth quarter of 2021 and excluding the exchange rate effect, the Group's wholesale businesses as a whole generated a net attributable profit of €302m (-3.2% compared to the previous quarter). This development is mainly explained by the recovery in NTI compared to the previous quarter, together with the good performance in net interest income and commissions, and is impacted by the provisions for impairment on financial assets, compared to the reversals recorded in the previous quarter.
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Alternative Performance Measures (APMs)
BBVA presents its results in accordance with the International Financial Reporting Standards (EU-IFRS). However, it also considers that some Alternative Performance Measures (hereinafter APMs) provide useful additional financial information that should be taken into account when evaluating performance. These APMs are also used when making financial, operational and planning decisions within the Entity. The Group firmly believes that they give a true and fair view of its financial information. These APMs are generally used in the financial sector as indicators for monitoring the assets, liabilities and economic and financial situation of entities.
● |
Include clear and readable definitions of the APMs. |
● |
Disclose the reconciliations to the most directly reconcilable line item, subtotal or total presented in the financial statements of the corresponding period, separately identifying and explaining the material reconciling items. |
● |
Are standard measures generally used in the financial industry, so their use provides comparability in the analysis of performance between issuers. |
● |
Do not have greater preponderance than measures directly stemming from financial statements. |
● |
Are accompanied by comparatives for previous periods. |
● |
Are consistent over time. |
Constant exchange rates
When comparing two dates or periods in this management report, the impact of changes in the exchange rates against the euro of the currencies of the countries in which BBVA operates is sometimes excluded, assuming that exchange rates remain constant. This is done for the amounts in the income statement by using the average exchange rate against the euro in the most recent period for each currency of the geographical areas in which the Group operates, and applying it to both periods; for amounts in the balance sheet and activity, the closing exchange rates in the most recent period are used.
Reconciliation of the Financial Statements of the
Below is the reconciliation between the consolidated income statements of the consolidated Financial Statements and the consolidated management income statements, shown throughout this report, for the years 2021 and 2020.
In 2021, the main difference between them is the treatment of the cost related to the restructuring process in 2021 which, for management purposes, are included in a single line, net of taxes, of the income statement called "Net cost related to the restructuring process", compared to the treatment in the consolidated Financial Statements, which record the gross impacts and their tax effect in the corresponding headings.
In 2020, the main difference between them derives from the capital gains resulting from the materialization of the agreement with
Additionally, for 2021 and 2020, there is a difference in the positioning of the results generated by
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CONCILIATION OF THE BBVA GROUP'S INCOME STATEMENTS. 2021 (MILLIONS OF EUROS) |
||||||||||||||
CONSOLIDATED INCOME STATEMENT | ADJUSTMENTS | CONSOLIDATED MANAGEMENT INCOME STATEMENT | ||||||||||||
2021 | 2021 | |||||||||||||
NET INTEREST INCOME | 14,686 | - | 14,686 | Net interest income | ||||||||||
Dividend income | 176 | (*) | ||||||||||||
Share of profit or loss of entities accounted for using the equity method | 1 | (*) | ||||||||||||
Fee and commission income | 6,997 | 6,997 | Fees and commissions income | |||||||||||
Fee and commission expense | (2,232) | (2,232 | ) | Fees and commissions expenses | ||||||||||
4,765 | - | 4,765 | Net fees and commissions | |||||||||||
Gains (losses) on derecognition of financial assets and liabilities not measured at fair value through profit or loss, net | 134 | |||||||||||||
Gains (losses) on financial assets and liabilities held for trading, net | 341 | |||||||||||||
Gains (losses) on non-trading financial assets mandatorily at fair value through profit or loss, net | 432 | |||||||||||||
Gains (losses) on financial assets and liabilities designated at fair value through profit or loss, net | 335 | |||||||||||||
Gains (losses) from hedge accounting, net | (214) | |||||||||||||
Exchange differences, net | 883 | |||||||||||||
1,910 | - | 1,910 | Net trading income | |||||||||||
Other operating income | 661 | |||||||||||||
Other operating expense | (2,041) | |||||||||||||
Income from insurance and reinsurance contracts | 2,593 | |||||||||||||
Expense from insurance and reinsurance contracts | (1,685) | |||||||||||||
(295) | - | (295 | ) | Other operating income and expenses | ||||||||||
GROSS INCOME | 21,066 | - | 21,066 | Gross income | ||||||||||
Administration costs | (8,296) | (9,530 | ) | Operating expenses (**) | ||||||||||
Personnel expense |
(5,046) | - | (5,046 | ) | Personnel expenses | |||||||||
Other administrative expense |
(3,249) | - | (3,249 | ) | Other administrative expenses | |||||||||
Depreciation and amortization | (1,234) | - | (1,234 | ) | Depreciation | |||||||||
11,536 | - | 11,536 | Operating income | |||||||||||
Provisions or reversal of provisions | (1,018) | 754 | (264 | ) | 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 | (3,034) | - | (3,034 | ) | Impairment on financial assets not measured at fair value through profit or loss | |||||||||
NET OPERATING INCOME | 7,484 | 754 | 8,238 | |||||||||||
Impairment or reversal of impairment of investments in joint ventures and associates | - | |||||||||||||
Impairment or reversal of impairment on non-financial assets | (221) | |||||||||||||
Gains (losses) on derecognition of non - financial assets and subsidiaries, net | 24 | |||||||||||||
Gains (losses) from non-current assets and disposal groups classified as held for sale not qualifying as discontinued operations | (40) | |||||||||||||
(237) | 240 | 2 | Other gains (losses) | |||||||||||
PROFIT (LOSS) BEFORE TAX FROM CONTINUING OPERATIONS | 7,247 | 994 | 8,240 | Profit (loss) before tax | ||||||||||
Tax expense or income related to profit or loss from continuing operations | (1,909) | (298 | ) | (2,207 | ) | Income tax | ||||||||
PROFIT (LOSS) AFTER TAX FROM CONTINUING OPERATIONS | 5,338 | 696 | 6,034 | Profit (loss) for the year | ||||||||||
Profit (loss) after tax from discontinued operations | 280 | (280 | ) | |||||||||||
PROFIT (LOSS) FOR THE YEAR | 5,618 | 416 | 6,034 | Profit (loss) for the year | ||||||||||
ATTRIBUTABLE TO MINORITY INTEREST (NON-CONTROLLING INTERESTS) | (965) | - | (965 | ) | Non-controlling interests | |||||||||
ATTRIBUTABLE TO OWNERS OF THE PARENT | 4,653 | 416 | 5,069 | Net attributable profit (loss) excluding non-recurring impacts | ||||||||||
280 | 280 | Profit (loss) after tax from discontinued operations | ||||||||||||
(696 | ) | (696 | ) | Net cost related to the restructuring process | ||||||||||
ATTRIBUTABLE TO OWNERS OF THE PARENT | 4,653 | - | 4,653 | Net attributable profit (loss) |
(*) Included within the Other operating income and expenses of the Management Income Statements
(**) Depreciations included.
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CONCILIATION OF THE BBVA GROUP'S INCOME STATEMENTS. 2020 (MILLIONS OF EUROS) |
||||||||||||||
CONSOLIDATED INCOME STATEMENT | ADJUSTMENTS | CONSOLIDATED MANAGEMENT INCOME STATEMENT | ||||||||||||
2020 | 2020 | |||||||||||||
NET INTEREST INCOME | 14,592 | - | 14,592 | 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 | 5,980 | Fees and commissions income | |||||||||||
Fee and commission expense | (1,857) | (1,857 | ) | Fees and commissions expenses | ||||||||||
4,123 | - | 4,123 | 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 | - | 1,546 | 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) | - | (95 | ) | Other operating income and expenses | ||||||||||
GROSS INCOME | 20,166 | - | 20,166 | Gross income | ||||||||||
Administration costs | (7,799) | (9,088 | ) | Operating expenses (**) | ||||||||||
Personnel expense |
(4,695) | - | (4,695 | ) | Personnel expenses | |||||||||
Other administrative expense |
(3,105) | - | (3,105 | ) | Other administrative expenses | |||||||||
Depreciation and amortization | (1,288) | - | (1,288 | ) | Depreciation | |||||||||
11,079 | - | 11,079 | Operating income | |||||||||||
Provisions or reversal of provisions | (746) | - | (746 | ) | 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) | - | (5,179 | ) | Impairment on financial assets not measured at fair value through profit or loss | |||||||||
NET OPERATING INCOME | 5,153 | - | 5,153 | |||||||||||
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) | |||||||||||||
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 | (435 | ) | 4,813 | Profit (loss) before tax | |||||||||
Tax expense or income related to profit or loss from continuing operations | (1,459) | 130 | (1,328 | ) | Income tax | |||||||||
PROFIT (LOSS) AFTER TAX FROM CONTINUING OPERATIONS | 3,789 | (304 | ) | 3,485 | Profit (loss) for the year | |||||||||
Profit (loss) after tax from discontinued operations | (1,729) | 1,729 | ||||||||||||
PROFIT (LOSS) FOR THE YEAR | 2,060 | 1,424 | 3,485 | 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 | 1,424 | 2,729 | Net attributable profit (loss) excluding non-recurring impacts | ||||||||||
(1,729 | ) | (1,729 | ) | Profit (loss) after tax from discontinued operations | ||||||||||
304 | 304 | Corporate operations | ||||||||||||
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.
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Profit (loss) for the year
Explanation of the formula: The profit (loss) for the year is the profit (loss) for the year from the Group's consolidated income statement, which comprises the profit (loss) after tax from continued operations and the profit (loss) after tax from discontinued operations of
Relevance of its use: This measure is commonly used, not only in the banking sectors, for homogeneous comparison purposes.
Profit (loss) for the year |
||||||||||||||||||
Jan.-Dec.2021 | Jan.-Dec.2020 | Jan.-Dec.2019 | ||||||||||||||||
(Millions of euros) |
+ | Profit (loss) after tax from continued operations | 5,338 | 3,789 | 5,103 | |||||||||||||
(Millions of euros) |
+ | Profit (loss) after tax from discontinued operations (1) | 280 | (1,729) | (758) | |||||||||||||
= |
Profit (loss) for the year | 5,618 | 2,060 | 4,345 |
(1) January-December 2021 only includes the results generated by
Adjusted profit (loss) for the year
Explanation of the formula: The adjusted profit (loss) for the year is the profit (loss) from continued operations for the period from the Group's consolidated income statement, excluding those extraordinary items that, for management purposes, are defined at any given moment. If the described metric is presented on a date prior to the end of the year, it will be presented on an annualized basis.
Relevance of its use: This measure is commonly used, not only in the banking sector, for homogeneous comparison purposes.
Adjusted profit (loss) for the year |
||||||||||||||||||
Jan.-Dec.2021 | Jan.-Dec.2020 | Jan.-Dec.2019 | ||||||||||||||||
(Millions of euros) |
+ | Profit (loss) after tax from continued operations | 5,338 | 3,789 | 5,103 | |||||||||||||
(Millions of euros) |
- | Net capital gains from the bancassurance operation | - | 304 | - | |||||||||||||
(Millions of euros) |
- | Net cost related to the restructuring process | (696 | ) | - | - | ||||||||||||
= |
Adjusted profit (loss) for the year | 6,034 | 3,485 | 5,103 |
Net attributable profit (loss)
Explanation of the formula: The net attributable profit (loss) is the net attributable profit (loss) of the Group's consolidated income statement from continued operations and the profit (loss) after tax from discontinued operations of
Relevance of its use: This measure is commonly used, not only in the banking sector, for homogeneous comparison purposes.
Net attributable profit (loss) |
||||||||||||||||||
Jan.-Dec.2021 | Jan.-Dec.2020 | Jan.-Dec.2019 | ||||||||||||||||
(Millions of euros) |
+ | Net attributable profit (loss) from continued operations | 4,373 | 3,033 | 4,270 | |||||||||||||
(Millions of euros) |
+ | Net attributable profit (loss) from discontinued operations (1) | 280 | (1,729 | ) | (758 | ) | |||||||||||
= |
Net attributable profit (loss) | 4,653 | 1,305 | 3,512 |
(1) |
January-December 2021 only includes the results generated by |
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Adjusted net attributable profit (loss)
Explanation of the formula: The adjusted net attributable profit (loss) is the net attributable profit (loss) of the Group's consolidated income statement from continued operations excluding those extraordinary items that, for management purposes are defined at any given moment. If the described metric is presented on a date prior to the end of the year, it will be presented on an annualized basis.
Relevance of its use: This measure is commonly used, not only in the banking sector, for comparison purposes.
Adjusted net attributable profit (loss) |
||||||||||||||||||
Jan.-Dec.2021 | Jan.-Dec.2020 | Jan.-Dec.2019 | ||||||||||||||||
(Millions of euros) |
+ | Net attributable profit (loss) from continued operations | 4,373 | 3,033 | 4,270 | |||||||||||||
(Millions of euros) |
- | Net capital gains from the bancassurance operation | - | 304 | - | |||||||||||||
(Millions of euros) |
- | Net cost related to the restructuring process | (696) | - | - | |||||||||||||
= |
Adjusted net attributable profit (loss) | 5,069 | 2,729 | 4,270 |
ROE
The ROE (retuon equity) ratio measures the retuobtained on an entity's shareholders' funds plus accumulated other comprehensive income. It is calculated as follows:
Net attributable profit (loss) | ||
Average shareholders' funds + Average accumulated other comprehensive income |
Explanation of the formula: The numerator is the net attributable profit (loss) previously defined in these alternative performance measures, If the metric is presented on a date before the close of the fiscal year, the numerator will be annualized.
Average shareholders' funds are the weighted moving average of the shareholders' funds at the end of each month of the period analyzed, adjusted to take into account the execution of the "dividend-option" at the closing dates on which it was agreed to deliver this type of dividend prior to the publication of the Group´s results.
Average accumulated other comprehensive income is the moving weighted average of "Accumulated other comprehensive income", which is part of the equity on the Entity's balance sheet and is calculated in the same way as average shareholders' funds (above).
Relevance of its use: This ratio is very commonly used not only in the banking sector but also in other sectors to measure the retuobtained on shareholders' funds.
ROE |
||||||||||||||||
Jan.-Dec.2021 | Jan.-Dec.2020 | Jan.-Dec.2019 | ||||||||||||||
Numerator (Millions of euros) |
= | Net attributable profit (loss) | 4,653 | 1,305 | 3,512 | |||||||||||
Denominator (Millions of euros) |
+ | Average shareholder's funds | 60,030 | 57,626 | 58,888 | |||||||||||
+ | Average accumulated other comprehensive income | (15,396) | (12,858) | (9,921) | ||||||||||||
= | ROE | 10.4% | 2.9% | 7.2% |
Adjusted ROE
The adjusted ROE (retuon equity) ratio measures the retuobtained on an entity's shareholders' funds plus accumulated other comprehensive income. It is calculated as follows:
Adjusted net attributable profit (loss) |
Average shareholders' funds + Average accumulated other comprehensive income |
Explanation of the formula: The numerator is the adjusted net attributable profit (loss) previously defined in these alternative performance measures. If the metric is presented on a date before the close of the fiscal year, the numerator will be annualized.
Average shareholders' funds are the weighted moving average of the shareholders' funds at the end of each month of the period analyzed, adjusted to take into account the execution of the "dividend-option" at the closing dates on which it was agreed to deliver this type of dividend prior to the publication of the Group´s results.
Average accumulated other comprehensive income is the moving weighted average of "Accumulated other comprehensive income", which is part of the equity on the entity's balance sheet and is calculated in the same way as average shareholders' funds (above).
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Relevance of its use: This ratio is very commonly used not only in the banking sector but also in other sectors to measure the retuobtained on shareholders' funds.
Adjusted ROE |
||||||||||||||||
Jan.-Dec.2021 | Jan.-Dec.2020 | Jan.-Dec.2019 | ||||||||||||||
Numerator (Millions of euros) |
= | Adjusted net attributable profit (loss) | 5,069 | 2,729 | 4,270 | |||||||||||
Denominator (Millions of euros) |
+ | Average shareholder's funds | 60,030 | 57,626 | 58,888 | |||||||||||
+ | Average accumulated other comprehensive income | (15,396) | (12,858) | (9,921) | ||||||||||||
= | Adjusted ROE | 11.4% | 6.1% | 8.7% |
ROTE
The ROTE (retuon tangible equity) ratio measures the retuon an entity's shareholders' funds, plus accumulated other comprehensive income, and excluding intangible assets. It is calculated as follows:
Net attributable profit (loss)
Average shareholders' funds + Average accumulated other comprehensive income -Average intangible assets
Explanation of the formula: The numerator "Net attributable profit (loss)" and the items in the denominator "Average intangible assets" and "Average accumulated other comprehensive income" are the same items and are calculated in the same way as explained for ROE.
Average intangible assets are the intangible assets on the balance sheet, including goodwill and other intangible assets. The average balance is calculated in the same way as explained for shareholders funds in ROE.
Relevance of its use: This metric is generally used not only in the banking sector but also in other sectors to measure the retuobtained on shareholders' funds, not including intangible assets.
ROTE |
||||||||||||||||
Jan.-Dec.2021 | Jan.-Dec.2020 | Jan.-Dec.2019 | ||||||||||||||
Numerator (Millions of euros) |
= | Net attributable profit (loss) | 4,653 | 1,305 | 3,512 | |||||||||||
Denominator (Millions of euros) |
+ | Average shareholder's funds | 60,030 | 57,626 | 58,888 | |||||||||||
+ | Average accumulated other comprehensive income | (15,396) | (12,858) | (9,921) | ||||||||||||
- | Average intangible assets | 2,265 | 2,480 | 2,824 | ||||||||||||
- | Average intangible assets from |
897 | 2,528 | 5,481 | ||||||||||||
= | ROTE | 11.2% | 3.3% | 8.6% |
(1) BBVA Paraguay includes 4 millions of euros as of January-December 2020 and January-December 2019.
Adjusted ROTE
The adjusted ROTE (retuon tangible equity) ratio measures the retuon an entity's shareholders' funds, plus accumulated other comprehensive income, and excluding intangible assets. It is calculated as follows:
Adjusted net attributable profit (loss)
Average shareholders' funds + Average accumulated other comprehensive income -Average intangible assets
Explanation of the formula: The numerator is the adjusted net attributable profit (loss) previously defined in these alternative performance measures. If the metric is presented on a date before the close of the fiscal year, the numerator will be annualized.
Average intangible assets are the intangible assets on the balance sheet, excluding the assets from
Relevance of its use: This metric is generally used not only in the banking sector but also in other sectors to measure the retuobtained on shareholders' funds, not including intangible assets.
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Adjusted ROTE |
||||||||||||||||
Jan.-Dec.2021 | Jan.-Dec.2020 | Jan.-Dec.2019 | ||||||||||||||
Numerator (Millions of euros) |
= | Adjusted net attributable profit (loss) | 5,069 | 2,729 | 4,270 | |||||||||||
Denominator (Millions of euros) |
+ | Average shareholder's funds | 60,030 | 57,626 | 58,888 | |||||||||||
+ | Average accumulated other comprehensive income | (15,396) | (12,858) | (9,921) | ||||||||||||
- | Average intangible assets | 2,265 | 2,480 | 2,824 | ||||||||||||
- | Average intangible assets from BBVA Paraguay | - | 4 | 4 | ||||||||||||
= | Adjusted ROTE | 12.0% | 6.5% | 9.3% |
ROA
The ROA (retuon assets) ratio measures the retuobtained on an entity's assets. It is calculated as follows:
Profit (loss) for the year
Average total assets
Explanation of the formula: The numerator is the profit (loss) for the year, previously defined in these alternative performance measures. If the metric is presented on a date before the close of the fiscal year, the numerator must be annualized.
Average total assets are taken from the Group's consolidated balance sheet. The average balance is calculated as explained for average shareholders' funds in the ROE.
Relevance of its use: This ratio is generally used not only in the banking sector but also in other sectors to measure the retuobtained on assets.
ROA |
||||||||
Jan.-Dec.2021 | Jan.-Dec.2020 | Jan.-Dec.2019 | ||||||
Numerator (Millions of euros) |
= Profit (loss) for the year | 5,618 | 2,060 | 4,345 | ||||
Denominator (Millions of euros) |
= Average total assets | 678,563 | 727,014 | 690,622 | ||||
= ROA | 0.83% | 0.28% | 0.63% |
Adjusted ROA
The adjusted ROA (retuon assets) ratio measures the retuobtained on an entity's assets. It is calculated as follows:
Adjusted profit (loss) for the year
Average total assets
Explanation of the formula: The numerator is the adjusted profit (loss) for the year previously defined in these alternative performance measures. If the metric is presented on a date before the close of the fiscal year, the numerator will be annualized.
Average total assets are taken from the Group's consolidated balance sheets, excluding the assets from BBVA and the rest companies in
Relevance of its use: This ratio is generally used not only in the banking sector but also in other sectors to measure the retuobtained on assets.
Adjusted ROA |
||||||||
Jan.-Dec.2021 | Jan.-Dec.2020 | Jan.-Dec.2019 | ||||||
Numerator (Millions of euros) |
= Adjusted profit (loss) for the year | 6,034 | 3,485 | 5,103 | ||||
Denominator (Millions of euros) |
= Average total assets | 640,142 | 639,943 | 607,468 | ||||
= Adjusted ROA | 0.94% | 0.54% | 0.84% |
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RORWA
The RORWA (retuon risk-weighted assets) ratio measures the accounting retuobtained on average risk-weighted assets. It is calculated as follows:
Profit (loss) for the year
Average risk-weighted assets
Explanation of the formula: The numerator is the profit (loss) for the year previously defined in these alternative performance measures. If the metric is presented on a date before the close of the fiscal year, the numerator will be annualized.
Average risk-weighted assets (RWA) are the moving weighted average of the risk-weighted assets at the end of each month of the period under analysis.
Relevance of its use: This ratio is generally used in the banking sector to measure the retuobtained on RWA.
RORWA |
||||||||
Jan.-Dec.2021 | Jan.-Dec.2020 | Jan.-Dec.2019 | ||||||
Numerator (Millions of euros) |
= Profit (loss) for the year | 5,618 | 2,060 | 4,345 | ||||
Denominator (Millions of euros) |
= Average RWA | 324,819 | 358,675 | 361,359 | ||||
= RORWA | 1.73% | 0.57% | 1.20% |
Adjusted RORWA
The adjusted RORWA (retuon risk-weighted assets) ratio measures the retuobtained on an entity's assets. It is calculated as follows:
Adjusted profit (loss) for the year
Average risk-weighted assets
Explanation of the formula: The numerator is the adjusted profit (loss) for the year previously defined in these alternative performance measures. If the metric is presented on a date before the close of the fiscal year, the numerator will be annualized.
Average risk-weighted assets (RWA) are the moving weighted average of the risk-weighted assets at the end of each month of the period under analysis, excluding the RWA from
Relevance of its use: This ratio is generally used not only in the banking sector but also in other sectors to measure the retuobtained on assets.
Adjusted RORWA |
||||||||
Jan.-Dec.2021 | Jan.-Dec.2020 | Jan.-Dec.2019 | ||||||
Numerator (Millions of euros) |
= Adjusted profit (loss) for the year | 6,034 | 3,485 | 5,103 | ||||
Denominator (Millions of euros) |
= Average RWA | 300,276 | 300,518 | 302,233 | ||||
= Adjusted RORWA | 2.01% | 1.16% | 1.69% |
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Earning per share
The earning per share is calculated in accordance to the criteria established in the IAS 33 "Earnings per share".
Earning (loss) per share |
||||||||||||||||
Jan.-Dec.2021 | Jan.-Dec.2020 | Jan.-Dec.2019 | ||||||||||||||
(Millions of euros) |
+ | Net attributable profit (loss) | 4,653 | 1,305 | 3,512 | |||||||||||
(Millions of euros) |
+ | Remuneration related to the Additional Tier 1 securities | 359 | 387 | 419 | |||||||||||
Numerator (millions of euros) |
= | Net attributable profit (loss) ex.CoCos remuneration | 4,293 | 917 | 3,093 | |||||||||||
Denominator (millions) |
+ | Average number of shares issued | 6,668 | 6,668 | 6,668 | |||||||||||
- | Average treasury shares of the period | 12 | 13 | 20 | ||||||||||||
- | Share buyback program (1) | 255 | - | - | ||||||||||||
= | Earning (loss) per share (euros) | 0.67 | 0.14 | 0.47 |
(1) Considering 112 millions shares acquired within the shares buyback program in 2021 and the estimated shares pending from buyback as of December 31, 2021 of the first tranche approved by the BBVA Board of Directors in October 2021 (€1,500m), in process at the end of the year 2021.
Additionally, for management purposes, earnings per share are presented excluding: (I) the profit after tax from discontinued operations, that is, the results generated by
Adjusted earning (loss) per share |
||||||||||||||||
Jan.-Dec.2021 | Jan.-Dec.2020 | Jan.-Dec.2019 | ||||||||||||||
(Millions of euros) |
+ | Net attributable profit (loss) ex. CoCos remuneration | 4,293 | 917 | 3,093 | |||||||||||
(Millions of euros) |
- | Discontinued operations | 280 | (1,729) | (758) | |||||||||||
(Millions of euros) |
- | Corporate operations | - | 304 | - | |||||||||||
(Millions of euros) |
- | Net cost related to the restructuring process | (696) | - | - | |||||||||||
Numerator (millions of euros) |
= | Net Attributable profit (loss) ex.CoCos and non-recurring impacts | 4,709 | 2,342 | 3,851 | |||||||||||
Denominator (millions) |
+ | Average number of shares issued | 6,668 | 6,668 | 6,668 | |||||||||||
- | 21 | 13 | 20 | |||||||||||||
= | Adjusted earning (loss) per share (euros) | 0.71 | 0.35 | 0.58 |
(1) Considering 112 millions shares acquired within the shares buyback program in 2021.
Efficiency ratio
This measures the percentage of gross income consumed by an entity's operating expenses. It is calculated as follows:
Operating expenses
Gross income
Explanation of the formula: Both "Operating expenses" and "Gross income" are taken from the Group's consolidated income statement. Operating expenses are the sum of the administration costs (personnel expenses plus other administrative expenses) plus depreciation. Gross income is the sum of net interest income, net fees and commissions, net trading income dividend income, share of profit or loss of entities accounted for using the equity method, and other operating income and expenses. For a more detailed calculation of this ratio, the graphs on "Results" section of this report should be consulted, one of them with calculations with figures at current exchange rates and another with the data at constant exchange rates.
Relevance of its use: This ratio is generally used in the banking sector. In addition, it is the metric for one of the six Strategic Priorities of the Group.
Efficiency ratio |
||||||||
Jan.-Dec.2021 | Jan.-Dec.2020 | Jan.-Dec.2019 | ||||||
Numerator (Millions of euros) |
Operating expenses | 9,530 | 9,088 | 10,155 | ||||
Denominator (Millions of euros) |
Gross income | 21,066 | 20,166 | 21,522 | ||||
Efficiency ratio | 45.2% | 45.1% | 47.2% |
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Dividend yield
This is the remuneration given to the shareholders in the last twelve calendar months, divided by the closing price for the period. It is calculated as follows:
∑ Dividend per share over the last twelve months
Closing price
Explanation of the formula: The remuneration per share takes into account the gross amounts per share paid out over the last twelve months, both in cash and through the flexible remuneration system called "dividend option".
Relevance of its use: This ratio is generally used by analysts, shareholders and investors for companies that are traded on the stock market. It compares the dividend paid out by a company every year with its market price at a specific date.
Dividend yield |
||||||||||||||
31-12-21 | 31-12-20 | 31-12-19 | ||||||||||||
Numerator (Euros) | ∑ Dividends | 0.14 | 0.16 | 0.26 | ||||||||||
Denominator (Euros) | Closing price | 5.25 | 4.04 | 4.98 | ||||||||||
= |
Dividend yield | 2.6% | 4.0% | 5.2% |
Book value per share
The book value per share determines the value of a company on its books for each share held. It is calculated as follows:
Shareholders' funds + Accumulated other comprehensive income
Number of shares outstanding -
Explanation of the formula: The figures for both "Shareholders' funds" and "Accumulated other comprehensive income" are taken from the balance sheet. Shareholders' funds are adjusted to take into account the execution of the "dividend-option" at the closing dates on which it was agreed to deliver this type of dividend prior to the publication of the Group´s results. The denominator includes the final number of outstanding shares excluding own shares (treasury shares) and also excluding the shares corresponding to the first tranche of the share buyback program approved by the BBVA Board of Directors in October 2021. The denominator is also adjusted to include the capital increase resulting from the execution of the dividend options explained above. Both the numerator and the denominator take into account period-end balances.
Relevance of its use: It shows the company's book value for each share issued. It is a generally used ratio, not only in the banking sector but also in others.
Book value per share |
||||||||||||||||
31-12-21 | 31-12-20 | 31-12-19 | ||||||||||||||
Numerator (Millions of euros) |
+ | Shareholders' funds | 60,383 | 58,904 | 58,950 | |||||||||||
+ | Dividend-option adjustment | - | - | - | ||||||||||||
+ | Accumulated other comprehensive income | (16,476) | (14,356) | (10,226) | ||||||||||||
Denominator (Millions of shares) |
+ | Number of shares issued | 6,668 | 6,668 | 6,668 | |||||||||||
+ | Dividend-option | - | - | - | ||||||||||||
- | 15 | 14 | 13 | |||||||||||||
- | Share buyback program (1) | 255 | - | - | ||||||||||||
= |
Book value per share (euros) | 6.86 | 6.70 | 7.32 |
(1) Considering 112 million shares acquired within the share buyback program in 2021 and the estimated shares pending from buyback as of December 31, 2021 of the first tranche approved by the BBVA Board of Directors in October 2021 (€1,500m), in process at the end of the year 2021.
Tangible book value per share
The tangible book value per share determines the value of the company on its books for each share held by shareholders in the event of liquidation. It is calculated as follows:
Shareholders' funds + Accumulated other comprehensive income - Intangible assets
Number of shares outstanding -
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Explanation of the formula: The figures for "Shareholders' funds", "Accumulated other comprehensive income" and "Intangible assets" are all taken from the balance sheet. Shareholders' funds are adjusted to take into account the execution of the "Dividend-option" at the closing dates on which it was agreed to deliver this type of dividend prior to the publication of the Group´s results. The denominator includes the final number of shares outstanding excluding own shares (treasury shares) and also excluding the shares corresponding to the first tranche of the share buyback program approved by the BBVA Board of Directors in October 2021. The denominator is also adjusted to include the result of the capital increase resulting from the execution of the dividend options explained above. Both the numerator and the denominator take into account period-end balances.
Relevance of its use: It shows the company's book value for each share issued, after deducting intangible assets. It is a generally used ratio, not only in the banking sector but also in others.
Tangible book value per share |
||||||||||||||||
31-12-21 | 31-12-20 | 31-12-19 | ||||||||||||||
+ | Shareholders' funds | 60,383 | 58,904 | 58,950 | ||||||||||||
+ | Dividend-option adjustment | - | - | - | ||||||||||||
Numerator (Millions |
+ | Accumulated other comprehensive income | (16,476) | (14,356) | (10,226) | |||||||||||
of euros) |
- | Intangible assets | 2,197 | 2,345 | 2,783 | |||||||||||
- | Intangible assets from |
- | 1,952 | 4,187 | ||||||||||||
+ | Number of shares issued | 6,668 | 6,668 | 6,668 | ||||||||||||
Denominator |
+ | Dividend-option | - | - | - | |||||||||||
(Millions of shares) |
- | 15 | 14 | 13 | ||||||||||||
- | Share buyback program (2) | 255 | - | - | ||||||||||||
= |
Tangible book value per share (euros) | 6.52 | 6.05 | 6.27 |
(1) BBVA Paraguay includes 3 millions of euros as of 31-12-20 and 4 millions as of 31-12-19.
(2) Considering 112 million shares acquired within the share buyback program in 2021 and the estimated shares pending from buyback as of December 31, 2021 of the first tranche approved by the BBVA Board of Directors in October 2021 (€1,500m), in process at the end of the year 2021.
Non-performing loan (NPL) ratio
It is the ratio between the risks classified for accounting purposes as non-performing loans and the total credit risk balance, both excluding the balances from
Non-performing loans
Total credit risk
Explanation of the formula: non-performing loans and the credit risk balance are gross, meaning they are not adjusted by associated accounting provisions.
Non-performing loans are calculated as the sum of "loans and advances at amortized cost" and the "contingent risk" in stage 39 and the following counterparties:
● |
other financial entities |
● |
public sector |
● |
non-financial institutions |
● |
households |
The credit risk balance is calculated as the sum of "Loans and advances at amortized cost" and "Contingent risk" in stage 1 + stage 2 + stage 3 of the previous counterparts.
This indicator is shown, as others, at a business area level.
Relevance of its use: This is one of the main indicators used in the banking sector to monitor the current situation and changes in credit risk quality, and specifically the relationship between risks classified in the accounts as non-performing loans and the total balance of credit risk, with respect to customers and contingent liabilities.
Non-Performing Loans (NPLs) ratio |
||||||||||||
31-12-21 | 31-12-20 | 31-12-19 | ||||||||||
Numerator (Millions of euros) |
NPLs |
15,443 | 15,451 | 16,086 | ||||||||
Denominator (Millions of euros) |
Credit Risk |
376,011 | 366,883 | 383,700 | ||||||||
= |
Non-Performing Loans (NPLs) ratio |
4.1 % | 4.2 % | 4.2 % |
9 IFRS 9 classifies financial instruments into three stages, which depend on the evolution of their credit risk from the moment of initial recognition. The stage 1 includes operations when they are initially recognized, stage 2 comprises operations for which a significant increase in credit risk has been identified since their initial recognition and,stage 3, impaired operations.
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NPL coverage ratio
This ratio reflects the degree to which the impairment of non-performing loans has been covered in the accounts via allowances, excluding assets from
Provisions
Non-performing loans
Explanation of the formula: It is calculated as "Provisions" from stage 1 + stage 2 + stage 3, divided by non-performing loans, formed by "credit risk" from stage 3.
This indicator is shown, as others, at a business area level.
Relevance of its use: This is one of the main indicators used in the banking sector to monitor the situation and changes in the quality of credit risk, reflecting the degree to which the impairment of non-performing loans has been covered in the accounts via value adjustments.
NPL coverage ratio |
||||||||||||
31-12-21 | 31-12-20 | 31-12-19 | ||||||||||
Numerator (Millions of euros) |
Provisions |
11,536 | 12,595 | 12,121 | ||||||||
Denominator (Millions of euros) |
NPLs |
15,443 | 15,451 | 16,086 | ||||||||
= |
NPL coverage ratio |
75 % | 82 % | 75 % |
Cost of risk
This ratio indicates the current situation and changes in credit-risk quality through the annual cost in terms of impairment losses (accounting loan-loss provisions) of each unit of loans and advances to customers (gross). It excludes the risk attributable to
Loan-loss provisions
Average loans and advances to customers (gross)
Explanation of the formula: "Loans to customers (gross)" refers to the "Loans and advances at amortized cost" portfolios with the following counterparts:
● |
other financial entities |
● |
public sector |
● |
non-financial institutions |
● |
households, excluding central banks and other credit institutions. |
Average loans to customers (gross) is calculated by using the average of the period-end balances of each month of the period analyzed plus the previous month. "Annualized loan-loss provisions" are calculated by accumulating and annualizing the loan-loss provisions of each month of the period under analysis.
Loan-loss provisions refer to the aforementioned loans and advances at amortized cost portfolios.
This indicator is shown, as others, at a business area level.
Relevance of its use: This is one of the main indicators used in the banking sector to monitor the situation and changes in the quality of credit risk through the cost over the year.
Cost of risk |
||||||||||||
Jan.-Dec.2021 | Jan.-Dec.2020 | Jan.-Dec.2019 | ||||||||||
Numerator (Millions of euros) |
Loan-loss provisions |
3,026 | 5,160 | 3,462 | ||||||||
Denominator (Millions of euros) |
Average loans to customers (gross) |
325,013 | 332,096 | 332,804 | ||||||||
= |
Cost of risk |
0.93 % | 1.55 % | 1.04 % |
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Disclaimer
This document is only provided for information purposes and does not constitute, nor should it be interpreted as, an offer to sell, exchange or acquire, or an invitation for offers to acquire securities issued by any of the aforementioned companies, or to contract any financial product. Any decision to purchase or invest in securities or contract any financial product must be made solely and exclusively on the basis of the information made available to such effects by the company in relation to each specific matter.
This document includes or may include forward looking statements with respect to the intentions, expectations or projections of BBVA or its management on the date thereof, that refer to or incorporate various assumptions and projections, including projections regarding future earnings of the business. The statements contained herein are based on our current projections, although the actual results may be substantially modified in the future due to certain risks and uncertainties and other factors that may cause the final results or decisions to differ from said intentions, projections or estimates. These factors include, but are not limited to, (1) the market situation, macroeconomic factors, regulatory, political or government guidelines, (2) domestic and international stock markets movements, exchange rates and interest rates, (3) competitive pressure, (4) technological changes, (5) variations in the financial situation, creditworthiness or solvency of our clients, debtors or counterparts. These factors could cause or result in actual events differing from the information and intentions set forth, projected, or forecast in this document or in other past or future documents. BBVA does not undertake to publicly update or communicate the update of the content of this or any other document, either if the events are not as described herein, or if there are changes in the information contained in this document.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: February 3, 2022 |
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By: /s/ María Ángeles Peláez Morón |
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|
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Title: Authorized representative |
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