BBVA in 2012

The economic capital of the Pensions business in the Americas is estimated at €168m. Marketrisk, essentially resulting from the regulatory reserve requirement (related to the volume of assetsunder management), accounts for 60% of total economic capital, and as second in relevance,operational risk accounts for 33%. The BBVA Group is currently undergoing a divestiture process inthese businesses.45Pensions in the Americas. Economic capital breakdown by type of risk(31-12-2012)Technical 1%Rest 3%Credit 3%Operational 33%Market 60%Total economic capital: 168 million eurosIn mutual fund administration, the economic capital at the end of 2012 stood at €234m,guarantee risk being the main component.46Asset Management. Economic capital breakdown by type of risk(31-12-2012)Credit 0.2%Operational 25.0%Market 74.8%Total economic capital: 234 million eurosReal-estate business riskBecause of the current economic background, improvement in this area has been necessary,adapting risk models of BBVA’s real-estate activities to the current market situation. Thisadjustment largely consists of calculating the fair value of these assets, according to the corporatemethodology, with the aim of estimating potential losses.Risk is estimated by simulating variations in the price of housing while taking into account theappraisal value and the main drivers identified (volatility, project delays, liquidity, etc.) for the definedtime horizon. The model also has a portfolio focus, segmenting the information of each project andasset.The result obtained, which is called economic capital (the standard metric with the rest of theGroup’s risks), is integrated into the BBVA capital map.Risk management in non-banking activities127