28
3Q09
Aggregating information by areas is a fundamental
management tool for the various business that together
form the BBVA Group. In this section we discuss the
more significant aspects of the activities and earnings of
the Group’s five business areas, along with those of the
main units within each, plus Corporate Activities. We
focus on their income statements, balance sheets and a
set of relevant management indicators, namely, lending,
deposits, off-balance-sheet funds, ROE, cost-income
ratio, non-performing assets and coverage. The areas
are structured as follows:
Spain and Portugal
Wholesale Banking & Asset Management:
• Corporate and Investment Banking.
• Global Markets.
Mexico:
• Banking business.
• Pensions and Insurance.
The United States
South America:
• Banking businesses.
• Pensions and Insurance.
Which in turn comprise:
Spain and Portugal: This includes the Spanish retail
branch network (individual customers, high net-
worth individuals and small companies and
businesses in the domestic market); the business &
corporate banking unit (SMEs, large companies,
institutions and developers in the domestic market);
and the remaining units, in particular, consumer
finance, insurance business and BBVA Portugal.
Wholesale Banking & Asset Management: This
consists of corporate and investment banking
(including the activities of the European, Asian and
New York offices with large corporate and business
customers); global markets (trading floor business and
distribution in Europe, Asia and New York); asset
management (mutual and pension funds in Spain, and
hedge funds); the Group’s own long maturing equity
portfolios and private equity activities (Valanza
S.C.R); and Asia (through the Group’s holding in the
Citic group). Wholesale Banking & Asset
Management also operates in these businesses in
Mexico and South America. However, this report
covers its activities and earnings in those regions
under the umbrella of the business areas there.
Business areas
Mexico: This area operates the banking, insurance
and pension businesses in Mexico.
The United States: This area operates the banking
and insurance business in the United States and in the
Associate State Puerto Rico.
South America: This area operates the banking,
insurance and pension businesses in South America.
Apart from the above units, all business areas have a
residual compartment in which to place its other
businesses as well as eliminations and unallocated items.
Finally, the Corporate Activities area handles the
Group’s general management functions. These mainly
consist of structural positions for interest rates
associated with the euro balance sheet and exchange
rates, together with liquidity and shareholders’ funds.
The management of structural risks related to interest
rates in currencies other than the euro is handled by the
corresponding areas. This area also includes the Group’s
industrial portfolio management unit and financial
shareholdings, along with its non-international real-
estate business.
BBVA has maintained the criteria it applied in 2008 to
the composition of the business areas very much the
same for 2009, with only a few insignificant changes.
These do not affect the Group-level information and
their impact on the figures for the different business
units and areas is practically irrelevant. Nonetheless, the
2008 data have been reformatted to include these
marginal changes to ensure like-for-like comparison. As
usual, in the case of units in the Americas, we provide
the year-on-year percentage changes calculated at
constant exchange rates as well as at current rates.
The breakdown by business area starts at the lowest-
level units, where all the initial accounting data for the
business in question are collected. Management groups
the data from these units in a predefined manner to
arrive at the picture for the main units and, finally, for
the business areas themselves. The Group’s subsidiaries
are also assigned to particular business areas according
to their activity.
Once the composition of each business area has been
defined, certain management criteria are applied. The
most relevant are the following:
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