Liquidity risk

Structural liquidity risk is associated with the Bank’s ability to meet its payment obligations and fund its lending activity. The Bank actively manages its liquidity situation and its impact, and anticipates the actions necessary in normal situations and in exceptional circumstances due to internal causes or market trends.

The measures used to control liquidity risk include monitoring changes in the liquidity gap or map and analysing the specific status of the balances resulting from sales transactions, wholesale maturities, interbank assets and liabilities and other sources of funding. These analyses are performed under normal market conditions and using simulations of different scenarios.

In 2016 the commercial gap (the difference between investment and customer funds) of the business in Spain was reduced by 3.36 billion. As a result, the percentage of lending financed by customer funds rose from 83.5% to 91.4%. After consolidating the business in Portugal, this percentage stood at 90.4% and the commercial gap dropped to 2.48 billion. The considerable strength of the liquidity situation is evidenced by the fact that only one issue of mortgage-backed bonds for 350 million euros was carried out.