BBVA expanded capital to cover losses from its U.S. subsidiary

The heavy losses suffered last year by the U.S. subsidiary of BBVA Spanish forced the agency to carry out two capital increases amounting to 711 million euros to guarantee the solvency of its American bank.

Sources of soccer's governing body to Francisco Gonzalez admitted that the decision to reorganize the stock of BBVA Compass eroded capital ratios and had to replenish its own funds, which were entirely produced by the array.
However, a bank 100% owned by the parent, there is no obligation to notify immediately.
The capital increases were carried out late last November. That is, it was at that moment when the BBVA acknowledged the problems of its subsidiary and became determined to mitigate and to replenish themselves consumed by the hole.

However, these losses are not acknowledged publicly until two months later, when the annual results presentation acknowledged a breach of 1,071 million euros.

And it took two capital to cover losses has not been disclosed to the distribution of the annual report that the entity is required to publish before the shareholder meeting, which will take place on March 12.

During 2009 the BBVA in the United States suffered losses from the impairment of financial assets (resulting from late payments) amounting to 1,419 million euros, while 1.056 million were devoted to other provisions.

In the fourth quarter of the year was when there were 533 million special sanitation and another 998 million charge for impairment of goodwill.

These allocations allowed to keep the coverage rate of BBVA Compass at 57%, although delinquencies soared from 3.4% to 5.2% in the year to update the loan portfolio related to real estate, one who has suffered the crisis in the U.S. too.

There was also much more marked deterioration at the end of 2009. Excluding extraordinary write-downs between October and December BBVA Compass lost 122 million euros, when he had won 40, 42 and 20 million in the first three quarters.
The complicated situation in the U.S., home of the financial crisis that began in the summer of 2007, is reflected in other sections of the balance of BBVA.

The second Spanish bank has an exposure of 513 million in assets considered garbage (subprime), plus another 13 million in structured products linked to toxic.
The first of the entries got fat at 22 million euros over last year, while the structured bonds fell by 13.

United States is one of the major axes of BBVA's growth in the future, along with its bid to China.