BBV » Topics » Summary of Results of Operations

This excerpt taken from the BBV 6-K filed Feb 27, 2007.

Summary of Results of Operations

Net interest income rose 16.2% to €8,374 million for the year ended December 31, 2006 from €7,208 million for the year ended December 31, 2005 due to higher business volume and the improvement in spreads. Net income from fees and insurance was up 12.6% to €4,985 million for the year ended December 31, 2006 from €4,427 million for the year ended December 31, 2005.

Net trading income rose 60.5% to €2,034 million in 2006 from €1,267 million in 2005. Of the €2,034 million, €523 million was related to capital gains booked in the second quarter following the sale of the Group’s interest in Repsol YPF (“Repsol”) and the remaining increase was attributable to market operations and derivative sales to customers in the Wholesale Business area as well as BBVA’s South American operations (particularly in Argentina).

Operating profit in 2006 was €8,883 million compared to €6,823 million in 2005, an increase of 30.2%. Operating profit rose 22.5% to €8,360 million in 2006 from €6,822 million in 2005, excluding the capital gains on divestments in Repsol.

BBVA booked profit of €1,157 million in 2006 from capital gains related to divestments in Banca Nazionale del Lavoro, S.p.A. (“BNL”) (€568 million) and Banc Internacional d’Andorra (“Andorra”) (€183 million) and net trading income related to the divestment of Repsol (€523 million). This profit helped to offset the non-recurrent charges BBVA faced in the fourth quarter, including €777 million for the early retirement program associated with the restructuring of branch networks in Spain and those derived from the new organizational structure announced in December. A further €457 million provision was made in 2006 due to new corporate tax rules in Spain that will reduce the effective rate in future years but which required the Group to write off its existing tax credits in 2006.

Net attributable profit increased 24.4% to €4,736 million for the year ended December 31, 2006 from €3,806 million for the year ended December 31, 2005, due to a significant increase in business volume and recurrent earnings, and to widespread positive performance by all the Group’s business areas.

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