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3rd February 2012

US Goodwill writedown main reason for BBVA profit fall

BBVA reported a Q4 net attributable LOSS of €139m (£116m $183m ¥14.0bn Y1,155m) and full year profit of €3,004m (£2,509m $3,958m ¥302.2bn Y24,970m). This compares with 2010 profits of €939 and €4,606m for the respective periods. BBVA made a charge of €1,011m in the final quarter relating to goodwill on its US operations. Excluding the one off charge net attrib. was €872m and €4015, DOWN 7% and 13% respectively.


The bank reported an improved non-performing assets ratio at 4.00% with coverage of 61% at the same time impairment provision fell 10%. Gross lending to customers was up 3.7% and the bank added 3.4% to its workforce numbers with 518 of the new jobs in Spain. A little over €1bn of the profit came from Turkey and China which it places together into one region, up 75%. The bank give regional and divisional growth on a constant Euro basis and lists Mexico up 5.4%, South America up 16.2%, the US excluding the goodwill writedown up 23.2%. Corporate and Investment banking was down 7.1%, a creditable performance in the circumstances.


Income Summary 2011-Q4 2010-Q4 2011-FY 2010-FY
$m $m $m $m
Net interest income 3,485 3,138 13,160 13,320
Net fees and commissions 1,136 1,135 4,560 4,537
Net trading income 416 252 1,479 1,894
Dividend income 230 227 562 529
Income by the equity method 207 124 600 335
Other operating income and expenses 42 70 205 295
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Gross income 5,515 4,946 20,566 20,910

Personnel expenses -1,404 -1,240 -5,311 -4,814
General and administrative expenses -1,021 -887 -3,793 -3,392
Depreciation and amortization -227 -199 -847 -761
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Operating costs -2,652 -2,325 -9,951 -8,967

Operating income 2,863 2,621 10,615 11,942
Impairment on financial assets (net) -1,337 -1,112 -4,226 -4,718
Provisions (net) -182 -75 -510 -482
Other gains (losses) -1,718 -273 -2,109 -320
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Income before tax -375 1,162 3,770 6,422
Income tax 368 -127 -285 -1,427
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Net income -7 1,034 3,485 4,995
Non-controlling interests -132 -96 -481 -389
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Net attributable profit -139 939 3,004 4,606
Net one-offs (real estate /property dev) -1,011 - -1,011 -
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Net attributable (excluding one-offs) 872 939 4,015 4,606