Last checked at 15 Jul 2011 17:36
TO CNMV (SPANISH SECURITIES EXCHANGE COMMISSION)
Banco Bilbao Vizcaya Argentaria, S.A.(BBVA), in compliance with the Securities Exchange legislation, hereby files the following
RELEVANT EVENT
Banco Bilbao Vizcaya Argentaria S.A. was subject to the 2011 EU-wide stress test conducted by the European Banking Authority (EBA), in cooperation with the Banco de España, the European Central Bank (ECB), the European Commission (EC) and the European Systemic Risk Board (ESRB).
Banco Bilbao Vizcaya Argentaria S.A. notes the announcements made today by the EBA and Banco de España on the EU-wide stress test and fully acknowledges the outcomes of this exercise.
The EU-wide stress test, carried out across 91 banks covering over 65% of the EU banking system total assets, seeks to assess the resilience of European banks to severe shocks and their specific solvency to hypothetical stress events under certain restrictive conditions.
The assumptions and methodology were established to assess banks' capital adequacy against a 5% Core Tier 1 capital benchmark and are intended to restore confidence in the resilience of the banks tested. The adverse stress test scenario was set by the ECB and covers a two-year time horizon (2011-2012). The stress test has been carried out using a static balance sheet assumption as at December 2010. The stress test does not take into account future business strategies and management actions and is not a forecast of Banco Bilbao Vizcaya Argentaria S.A. profits.
As a result of the assumed shock, the estimated consolidated Core Tier 1 capital ratio of Banco Bilbao Vizcaya Argentaria S.A. would change to 9.2% under the adverse scenario in 2012 compared to 8.0% as of end of 2010. This result does not take into account future mitigating actions planned by Banco Bilbao Vizcaya Argentaria S.A.. In addition, taking into account the anticipated conversion of the €2,000 million mandatory convertible bonds approved by the Administration Board on June 22, the Core Tier 1 capital ratio of Banco Bilbao Vizcaya Argentaria S.A. would increase by 0.6% under the adverse scenario in
2012. The countercyclical provisions constitute an additional support raising our ratio in this scenario to 10.2%.
Following completion of the EU-wide stress test, the results determine that Banco Bilbao Vizcaya Argentaria S.A. meets the capital benchmark set out for the purpose of the stress test. The bank will continue to ensure that appropriate capital level must be maintained.
Madrid, July 15, 2011
To view the full document, please paste the following URL into the address bar of your browser.
http://www.rns-pdf.londonstockexchange.com/rns/5275K_-2011-7-15.pdf
Notes
The detailed results of the stress test under the baseline and adverse scenarios as well as information on Banco Bilbao Vizcaya Argentaria S.A. credit exposures and exposures to central and local governments are provided in the accompanying disclosure tables based on the common format provided by the EBA.
The stress test was carried out based on the EBA common methodology and key common assumptions (e.g. constant balance sheet, uniform treatment of securitisation exposures) as published in the EBA Methodological note. Therefore, the information relative to the baseline scenarios is provided only for comparison purposes. Neither the baseline scenario nor the adverse scenario should in any way be construed as a bank's forecast or directly compared to bank's other published information.
See more details on the scenarios, assumptions and methodology on the EBA website: http://www.eba.europa.eu/EU-wide-stress-testing/2011.aspx