By Lara Holmes

The entity presided by Francisco Gonzalez requested authorization to delegate to the board of directors the power to issue up to 12,000 million Euros into convertible securities for a maximum period of five years, as reported to the CNMV.

This mechanism would allow the bank to strengthen its capital to the new provisioning requirements of the Government of assets linked to real estate and the European Banking Authority (EBA) to raise the core capital ratio to 9%.

 

This week, the agency announced that the new requirements for the sector are supposed to impact a total of 4.000 million. Of this, about 2,800 million Euros are related to impact on results and the remainder to capital. As for additional provisions for this year BBVA totaled them to 1,360 million.

 

Convertible securities are admitted by the Executive as a tool to strengthen the capital cushion to cover the portion of the assets of land and current promotions. In addition to the convertible bonds earnings can be employed or they may seek a capital increase, which will also be done by BBVA.

As explained in its letter to the regulator, in the ordinary general meeting to be held on March 16, in addition to the issuance of convertibles it will be prompted to enable the Board of Directors to increase the share capital of the bank up to 50% over the next five years through new shares with or without vote.

Also, the board will consider approving two capital increases against reserves to reward shareholders and adopted several agreements on remuneration issues.

The board of directors of BBVA also proposes to the AGM the appointment of Belen Garijo as a new independent director of the entity, so that this body would be composed of fourteen members. At this point they seek re-election of three directors.