May 2006 13th XBRL International Conference XBRL and its uses in a financial institution such as BBVA.

May 2006

13th XBRL International Conference

XBRL and its uses in a financial institution such as BBVA

- 2 - May 2006


Contents

1. Introduction

2. Scope of XBRL Implementation

I. Financial Institutions

II. BBVA

3. Summing Up

- 3 - May 2006


OBJECTIVESOBJECTIVES

1. Introduction

Introduction of BBVA.

New international framework of corporate reporting.

XBRL creating value in the new framework.

New opportunities to apply XBRL in Financial

Organizations.

Keys for success in the development of XBRL initiatives.

• The main objectives to be achieved in this session are:

- 4 - May 2006


BBVA – GENERAL INFORMATIONBBVA – GENERAL INFORMATION

• First Bank in efficiency in the Eurozone.

• Efficiency Ratio : 45.9% (1Q 2006).

• ROE: 34.1% (1Q 2006).

• 7,410 Offices.

• 94,681 Employees.

• 34 million euros invested in Training.

• Number of Clients: 38.4 million

• 70% Client Satisfaction.

• Developing the XBRL Project (BBVA joins

the Spanish XBRL Association: September 2004).

1. Introduction

- 5 - May 2006


BBVA – INTERNATIONAL CONTEXTBBVA – INTERNATIONAL CONTEXT

• Japan• China (Pekin, Shangai, Hong Kong)• Iran

• Spain• Portugal• Andorra• France• England

• Belgium• Switzerland •Germany• Italy• Russia

• USA (New York, Miami)• Mexico• Cuba• Puerto Rico• Panama• Venezuela• Colombia

• Peru• Chile• Argentina• Uruguay• Paraguay• Brazil

1. Introduction

- 6 - May 2006


EVOLUTION OF DEMAND FOR INFORMATIONEVOLUTION OF DEMAND FOR INFORMATION

• Stakeholders’ demand for more information has been evident in the

last few years and has been caused mainly by:

Outstanding Global Events

Changes in Legislation

Change of Information

Management Model

1. Introduction

- 7 - May 2006


NEW CORPORATE REPORTING REQUIREMENTSNEW CORPORATE REPORTING REQUIREMENTS

Transparency

Accuracy

Homogeneity

Increased availability

Efficiency

Itemization

Comparison among competitors

Support for decision-making

1. Introduction

• The information requested by the “stakeholders” involves new

reporting requirements:

- 8 - May 2006


1. Introduction

GREAT NUMBER OF INFORMATION SENTGREAT NUMBER OF INFORMATION SENT

Global Scope (International)Global Scope (International)

International Stock Market

Local Scope (National/International)Local Scope (National/International)Regulatory Organizations

National Stock Market

Self-Goverment

Communities

External Audit

Regulatory Organizations Associations- Other External Agents

Associations- Other External Agents

StatisticalFinancial Credit Others

City Councils

Consulates

- 9 - May 2006


• Segmentation• Conditions• Statistical data

AccountingAccounting

• At any Organization level• Daily• Extended accounting scheme• Management mechanism

(transfer rates, synergies.)

Asset Risk and Expected ReturnAsset Risk and

Expected ReturnCustomersCustomers

Reporting

Contract/OperationsContract/Operations

• Operating Level• Daily, monthly• Movements, positions,

attributes, future flows…

• Operating Level • Financial Capital• Expected Losses• Exposure

MAIN REPORTING COMPONENTSMAIN REPORTING COMPONENTS

1. Introduction

- 10 - May 2006


CONTENT OF INFORMATION OUTPUTSCONTENT OF INFORMATION OUTPUTS

• The kind of information periodically delivered to Regulators can be

classified in:

INFORMATIVEINFORMATIVE

BANKING OPERATIONBANKING OPERATION

Balance P&L Relevant facts

Signed Annual Report Companies House Reports

CIRBE ASNEF

LEGALLEGAL

STATISTICALSTATISTICAL

TAXTAX

INE Regional Communities Non Residents Operations - PNR

Normalized files External audit

IVA, IRPF e IS Tax models.

MANAGEMENTMANAGEMENT

1. Introduction

- 11 - May 2006


DEFICIENCIES IN CORPORATE REPORTINGDEFICIENCIES IN CORPORATE REPORTING• The main corporate reporting inefficiencies noticed in financial entities, due to the new information management

environment:

Information Retrieval.

Working, Analysis.

Publication.

Information Validation.

1 Item – N Requests – N Sources1 Item – N Requests – N Sources

Validation of heavy processesValidation of heavy processes

N Presentation FormatsN Presentation Formats

Same information in N presentation Same information in N presentation

formats to N Organizations.formats to N Organizations.

1. Introduction

- 12 - May 2006


XBRL CONTRIBUTION IN VIEW OF NEW REQUIREMENTS XBRL CONTRIBUTION IN VIEW OF NEW REQUIREMENTS

• Due to the new management and information reporting

environment:

Integrity

Reduction of publication cycles

Quality

Standardization

1. Introduction

Optimal Working

- 13 - May 2006


1. Introduction



II. BBVA

3. Summing Up

Contents

- 14 - May 2006


XBRL AND FINANCIAL ENTITIESXBRL AND FINANCIAL ENTITIES

Financial Entity

Clients

Financial Organizations

Local / International Regulators Software and

Technology Vendors

Information Administrators

Investors

Vendors

Financial / Market

Analysts

2. Scope of XBRL Applications – Financial Entities

- 15 - May 2006


VARIETY OF FINANCIAL INFORMATION INTERCHANGE VARIETY OF FINANCIAL INFORMATION INTERCHANGE PROCESSESPROCESSES

Administrative Information Retrieval Processes

Retrieval of Market Information

International Client Management

Competitors, Industry, Capital Markets and Subsidiary Analysis Processes

Control Processes and Internal Audit

Risk Management and Analysis

Information publication

Reporting to Official Organizations

2. Scope of XBRL Applications – Financial Entities

- 16 - May 2006


1. Introduction



II. BBVA

3. Summing Up

Contents

- 17 - May 2006


XBRL INITIATIVES LAUNCHED IN BBVAXBRL INITIATIVES LAUNCHED IN BBVA

Retrieval of Market Information

SIIF Project – Bank of Spain

CNMV Project - IPP

COREP (*)

Financial information delivery to SEC (*)

Release in BBVA Web (*)

Competitor Analysis Capital Market Analysis Industry Analysis

Risk Analysis and Management

(*) In Process

2. Scope of XBRL Applications - BBVA

- 18 - May 2006


COREP - XBRLCOREP - XBRL

Contract Guarantees

Ratings, Scorings

Operational Risk

Clients’ Condition

Sources Calculation Engine

Internal Advance

d

Standard

Consolidated

Information

Internal Working

XBRL

XB

RL

Fra

mew

ork

XB

RL

Rep

osit

ory

COREPCOREP

TaxonomyTaxonomy

Internal Basic

BBVA

Standard

Consolidation


- 19 - May 2006



BBVA ORGANIZATIONBBVA ORGANIZATION

• A XBRL Project Office has been created in order to manage and

promote internal and external XBRL initiatives to develop in BBVA.

Suppliers

XBRL Internal/External Initiatives

Regulators

User Departments

Systems

Technology

External Agents

BBVA Areas

- SIIF Project- CNMV Project

- Capital Laundering- COREP

- Others

XBRL Project OfficeNegotiator between agents

Taxonomy Experts Data Dictionary

Reporting BBVA XBRL – BBVA Knowledge

- 20 - May 2006


1. Introduction



II. BBVA

3. Summing Up

Contents

- 21 - May 2006


XBRL INITIATIVES – KEYS OF SUCCESSXBRL INITIATIVES – KEYS OF SUCCESS

• To achieve success, XBRL initiatives require a mix of the

following factors:

Publication of more information in XBRL.

Development of new XBRL tool functionalities in

order to manage XBRL information.

Joint performance between Public Administration

and the Private Sector.

More specifically, in the scope of financial

organizations, the joint performance of all the

participants in the financial system would become

necessary to launch new XBRL initiatives.Keys for Success

t

3. Summing Up

Current Situation

- 22 - May 2006


CONCLUSIONSCONCLUSIONS

• XBRL is creating value in financial organizations, firstly

focused on external reporting and, afterwards, on the

internal one.

• Nowadays, there are few organizations working in XBRL

projects. The main initiatives are the result of Regulators

demands.

• The commitment of market agents is required for the success

and consolidation of XBRL.

3. Summing Up

- 23 - May 2006


May 2006 13th XBRL International Conference XBRL and its uses in a financial institution such as BBVA.

Documents

introduction slide

xbrl project bbva

bbva slide

scope of xbrl implementation

spanish xbrl association

kind of information

new reporting requirements

new framework