The unit also actively manages the Group’s structural
interest-rate exposure on its balance sheet. This keeps
the performance of short and medium-term net interest
income more uniform by cutting out interest-rate
fluctuations. During the first nine months of 2009, it
has maintained its hedging against a less positive
economic scenario in Europe for 2009-2010, while the
risk on its USA and Mexico balance sheets remains
within comfort parameters. These strategies are
managed both with hedging derivatives (caps, floors,
swaps, FRA’s, etc) and with balance-sheet instruments
(mainly top-rated government bonds). As September
2009 ended, the Group had asset portfolios
denominated in euros, US dollars and Mexican pesos.
Holdings in Industrial and Financial
Companies
This unit manages its portfolio of shares in companies
operating in the telecommunications, media, electricity,
oil, gas and finance sectors. Like Financial Planning, this
unit forms part of the Group’s Finance Department.
BBVA operates this portfolio with strict requirements
regarding its risk-control procedures, economic-capital
consumption and return on investment, diversifying
investments over different sectors. It also applies
dynamic management techniques to holdings through
monetisation and coverage strategies. During the first
nine months of 2009, it has made investments for
€313m and divestments for €527m.
At 30-Sep-09, the industrial and financial holdings
portfolio was marked to market at €4,448m with latent
capital gains of €1,467m.
Real-Estate Management
Given the current economic scenario and the outlook,
BBVA set up a Real-Estate Management unit to apply
specialist management to real-estate assets from
foreclosures, assets assigned in lieu of payment, purchases
of distressed assets and the BBVA Propiedad real-estate
fund. The earnings generated by this new unit are not
significant, as it is conceived as a long-term project.
3Q09 BUSINESS AREAS
Corporate Activities
53
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