54
BUSINESS AREAS 4Q09
Corporate Activities
During 2009, this hedging has mitigated the impact of
American currencies’ depreciation against the euro. In
2010, the same policy of prudence and anticipation will be
pursued in managing the Group’s exchange-rate exposure.
The unit also actively manages the structural
interest-rate exposure on the Group’s balance sheet.
This keeps the performance of short and medium-term
net interest income more uniform by cutting out
interest-rate fluctuations. During 2009, the outcome of
this management has been highly satisfactory. Hedging
has been maintained against a less positive economic
scenario in Europe for 2009-2010, while the risk on the
Group’s 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 government
bonds with highest credit and liquidity ratings). As 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 reports to 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. In 2009, it
invested €353m and divested €594m.
On 31st December 2009, the market value of the
Holdings in Industrial & Financial Companies portfolio
was €4,698m, with unrealised capital gains of
€1,542m.
During the year, management of the industrial and
financial holdings generated €247m in dividends and
€107m in net trading income. The attributable profit
was €287m.
Real-Estate Management
Given the current economic scenario and forecasts as to
how it may develop, BBVA has set up a Real-Estate
Management unit to apply specialist management to
real-estate assets from foreclosures, asset-for-debt
swaps, purchases of distressed assets and the assets in
BBVA Propiedad, the real-estate fund.
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