Just one name today, but hopefully it rams home why banks are using the ECB’s three-year liquidity. From BBVA’s latest results:
Making use of the new lending facility provided by the European Central Bank (ECB), BBVA took up €11,000m at the extraordinary 36-month auction on December 21. This figure is equivalent to the sum of its wholesale debt redemptions for 2012. It means that the Group has “liquidity coverage” and demonstrates its prudence in liquidity risk management in line with the profile of maturities in upcoming years. However, it does not imply that the Group will not issue debt in 2012 if conditions improve.
Double Morgan Stanley’s earlier estimate for BBVA. Update (1150 UK time) – Whoops! Apologies to MS as their estimate was actually bang-on. Their €5bn for BBVA counted new incremental liquidity — that is, funds BBVA tapped from the LTRO that weren’t rolled over from previous, shorter-maturity ECB liquidity ops. That’s perfectly consonant with the €11bn reported above. The issue of levels of incremental borrowing is an important one ahead of February’s second three-year LTRO — there’s a difference between size estimates for this that take in total liquidity, and “only” new borrowing.
Here’s that Morgan Stanley chart again, which now looks ahead of the curve in detailing new incremental borrowing from December’s LTRO:
That’s a quarterly loss for the Spanish bank though. If there are any specific numbers in bank results we’ve missed so far, by the way — please stick ‘em in comments.
Related link:
LTRO coverage – FT Alphaville