22
2Q09
Risk and economic capital management
Credit risk
The second quarter of 2009 saw a continuation of the
crisis that has beset economic activity since last year.
Reflecting this scenario, quality indicators on the
loan-book have deteriorated further, although there are
some signs of stabilisation that should be confirmed
over the forthcoming quarters. Nonetheless, prudent
risk management policies and the fact that practically
all the BBVA Group’s loan-books were generated by its
own networks have enabled the Group to conserve
sound asset-quality parameters.
At 30th June 2009, total customer risk (including
contingent liabilities) stood at €369,313m. This was
down 1.5% from the €374,962m reported in March
2009. The quarter has continued the trend of
increasing the weight of lower risk lending
(mortgages, big corporations and the public sector)
and thus reducing those of higher risk (basically
consumer and credit cards).
In the second quarter, non-performing assets have
grown more slowly than in previous quarters,
standing at €11,774m, as against €10,543 at the
Credit risk management
(Million euros)
TOTAL RISK EXPOSURE (1)
Non-performing assets
Total risks
Provisions
•Specific
•Generic and country-risk
NPA ratio (%)
NPA coverage ratio (%)
MEMORANDUM ITEM:
Foreclosed assets
Foreclosed asset provisions
Coverage (%)
(1) Including contingent liabilities.
Risk management
30-06-09
end of the first quarter of 2009. This 11.7%
increase, compares with the 23.1% rise in the
previous quarter. It was driven by a 19.2% reduction
in gross entries into arrears and an increase in
recoveries. As a percentage of net entries, recoveries
accounted for 44.4%, as compared with 32.4% in
the first quarter of 2009.
At the end of June, the Group’s non-performing
asset ratio was 3.2%, as against 2.8% on 31st
March 2009. However, BBVA’s positive performance
gap in this ratio was significant. It reported one of
the lowest NPA ratios among its European peers.
NPA ratio
(Percentage)
1.3
1.7
2.3
June September December March
June
2008 2008 2008 2009
2009
Δ%
2.8
30-06-08 31-03-09 31-12-08
11,774 149.4 4,720 10,543 8,568
369,313 (0.7) 371,754 374,962 378,635
8,023 1.9 7,875 8,000 7,841
4,132 101.2 2,054 3,679 3,282
3,891 (33.2) 5,821 4,321 4,558
3.2 1.3 2.8 2.3
68 167 76 92
546 68.7 323 461 391
123 70.4 72 108 98
22 22 23 25
3.2
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