Bloomberg News

BBVA Takes $13.1 Billion ‘Funding Cushion,’ Deutsche Bank Says

December 22, 2011

Dec. 22 (Bloomberg) -- Banco Bilbao Vizcaya Argentaria SA, Spain’s second-biggest lender, indicated it took 10 billion euros ($13.1 billion) to 11 billion euros from the European Central Bank as a funding cushion, Deutsche Bank AG said.

The amount taken by BBVA is about equal to the bank’s debt maturities for 2012, Carlos Berastain, a Madrid-based banking analyst at Deutsche Bank, said in a research note dated yesterday. Banco Sabadell SA, another Spanish lender, indicated it took 4 billion euros for the same purpose, he said.

Both banks state that the use of the three-year ECB offering “is not designed to play the carry and therefore should be interpreted solely as a funding cushion in the context of very volatile and unpredictable funding markets,” according to Berastain.

The 523 euro-zone lenders yesterday took a record 489 billion euros from the Frankfurt-based central bank in 1,134 day loans. By flooding the banking system with cheap money, policy makers are attempting to stave off a looming credit crunch by encouraging banks to maintain lending.

Sabadell will use the money from the ECB as a “funding cushion,” a spokesman for the bank, who asked not to be identified by name in line with company policy, said in a phone interview. He declined to confirm the amount cited by Deutsche.

A spokesman for Bilbao, Spain-based BBVA declined to comment.

Banco Santander SA, Spain’s biggest lender, and Banco Popular Espanol SA were reluctant to disclose how much they borrowed, while Bankia SA wasn’t immediately able to do so, Berastain said in the report.

Euro-zone banks are expected to borrow a total of 600 billion euros from the ECB’s facility after the central bank holds a second operation at the end of February, Matt Spick, a London-based analyst at Deustche Bank, said in a separate report.

--Editors: Dylan Griffiths, Jon Menon.

To contact the reporter on this story: Charles Penty in Madrid at cpenty@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net


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