Miguel Rodríguez Canfranc

The impact of the war in Ukraine on global inflation and growth has been the recurring theme of this latest edition of the Davos Forum 2023, organized by the World Economic Forum (WEF). From January 16-20, and under the heading, ‘Cooperation in a fragmented world’, political, business and intellectual leaders debated the critical turning point at which the world finds itself, following the double impact of the COVID-19 pandemic and the war in Ukraine. Despite the prevailing economic uncertainty, attendees showed some signs of optimism for 2023, as the latest data, especially on prices, are better than expected.

In a year marked by the pandemic, BBVA produced solid results thanks to its strong income and cost containment measures. The bank's results improved as the year progressed, mainly due to lower provisions in the second half of the year. “In 2020 we achieved excellent results in a year of great complexity. We have also announced a historic transaction for BBVA: the sale of our U.S. subsidiary. An operation that puts us in an unparalleled position of strength in the sector, allowing us to increase shareholder distributions,” said BBVA chairman Carlos Torres Vila.

The repurchase of shares is one of the ways that companies have to pay shareholders. It consists of buying a package of its own shares, normally on the open market, and amortizing them (eliminating them) with the aim of raising the price of the remaining ones.

Analyst firm reports for the most part agree that BBVA presented solid numbers for the second quarter of 2020 and particularly stress the positive quarterly performance of its capital ratio.

In an interview with the Financial Times, BBVA Group executive chairman Carlos Torres Vila stressed that: “If we want to avoid a deeper economic impact that may be irreversible, measures should be compatible with controlling infection rates, [keeping] contagion at bay [while] reactivating the economy. The best way to reconstruct is not to destroy.”

Although the consequences may be similar, there are significant differences between the economic recession of 2008 and the crisis that has abruptly erupted in 2020, primarily their origins: the Great Recession of 2008 was systemic and first took hold in the financial system; the Great Pandemic of 2020 is a cyclical crisis caused because the economy was brought to a sudden standstill in response to a health crisis. While there is a lot of uncertainty about the outcome, experts say that the rate of recovery depends on the speed with which containment measures are lifted.

On February 27th and 28th, BBVA’s CEO met with the new Head of BBVA Spain, Peio Belausteguigoitia and the team in the country. Onur Genç stressed that the Spanish franchise plays a key role in contributing to the success of the BBVA Group’s six new strategic priorities.

BBVA's third quarter results exceeded analysts’ consensus by seven percent, mainly due to higher gains on financial transactions, and to a lesser degree, improvement in earnings from fees.

Large technology companies, or bigtech, have a large customer base, access to a massive volume of data and financial strength. While banks also have some of these attributes, it is the network effect technologies that companies benefit from that could ultimately undermine data-fueled innovation that is causing regulators and businesses alike concern. According to Santiago Fernández de Lis, the Head of Regulation at BBVA, if we want to ensure the continued growth, innovation and sustainability of the digital economy, we need to shift our approach to regulation from a national, sectoral approach to a truly cross-border and intersectoral approach.

In recent times, EU institutions have made significant headway in developing a credible banking union. But despite progress, there is still a lot of work to do. According to José Manuel González-Páramo, Executive Director and Global Head of Economics and Institutional Relations at BBVA, the Europe’s new lawmaker team must promote new reforms to advance towards a true union.

"We are in an extraordinary time for the asset management industry,” says Jaime Martínez, global head of asset allocation at BBVA Asset Management. "We are witnessing a new landscape, characterized by regulation and technological disruption.” Martinez reveals five trends that are transforming the world of asset management.

BBVA customers now use digital channels to make 51 percent of their investment fund transactions. Both the bank’s web site and its mobile application have various tools that help customers make decisions about their savings and investments.

The Basel Committee has designed two liquidity ratios to ensure that financial institutions have sufficient liquidity to meet their short-term and long-term obligations: LCR and NSFR. These two requirements are intended to reduce risks in case of episodes of financial turbulence.

The European Central Bank’s statement and press conference, following the monetary policy meeting held on Thursday, July 25, was one of those examples of pre-announcement of upcoming measures. “It seems quite clear now that a depo cut will be decided soon (we expect it for September now),” says BBVA Research in its latest ECB Watch report.

An integrated and fully-entrenched capital markets union in Europe is needed to ensure an orderly transition in accordance with the United Nations Sustainable Development Goals and the Paris Agreement. José Manuel González-Páramo, BBVA Head of Global Economics and Institutional Relations stated as much today.

Art as an investment is gaining momentum as a way to help diversify wealthy customers’ portfolios. BBVA’s global private banking unit, Global Wealth, has an agreement with the consulting firm The Fine Art Group to offer its customers comprehensive art advisory services. The goal is for high net-worth customers to understand and manage art as an investment.

It is difficult to summarize everything that has happened at BBVA since 1996 when Francisco González took the reigns as chairman of Argentaria, which would be come BBVA almost four years later, after the merger with BBV. For more than 20 years the Group has stood out thanks to the chairman’s unique approach, an unwavering commitment to values and responsible banking, and the giant leap he initiated to transform the Group into a leading 21st century bank. Ultimately, his tenure as chairman has been marked by values, people, and innovation.

BBVA's international expansion began in the mid 1990s. Today, with operations in more than 30 countries, the bank’s geographic diversification represents one of the great accomplishments of Francisco González's twenty-year tenure as executive chairman, and is a key factor in the Group's repeated positive results.

Socially responsible investment funds (SRIF) are collective investment instruments that choose the assets that make up their portfolio based on environmental, social and governance criteria (ESG). These eligibility criteria contribute to making better-informed investment decisions, taking into account not only financial criteria, but also less tangible parameters.

Over the past three years, the asset allocation team of BBVA Asset Management has overhauled its investment process to bring as much objectivity as possible to decision-making when building a portfolio. Based on the principles of behavioral economics, the new process aims to determine how the power of the mind affects financial decisions.

BBVA won the Spanish Company category of the third annual Spanish-Turkish Official Chamber of Commerce and Industry prizes, which recognize achievements in promoting mutual understanding between the two countries. At the event, Jorge Sáenz de Azcúnaga, BBVA’s Director of Country Monitoring, said BBVA’s Turkish subsidiary Garanti Bank is one of the pillars of the group’s transformation.

BBVA has created the Global Patent Office (GPO), whose objective is to identify, during the Group's transformation process, the areas of innovative activity, in order to coordinate the efforts to protect BBVA’s intellectual property.

The creation model is the way the BBVA Group works to create amazing experiences for its customers. As the way customers engage with the bank evolves, so does BBVA, anticipating their needs. It’s a development model that involves designers, software engineers, data analysis experts, banking experts… all focused on delivering solutions for customers within nine months.

Nearly 200 BBVA employees, from both global and local teams, met on March 21st in Madrid for the Second Global Quarterly Planning Session. The goal of the event was to expedite the execution of the products and services the bank is developing, converting them into customer experiences. Global Executive Chairman Francisco González participated in the session, indicating that “BBVA has a unique opportunity to be one of the big ‘players" in the global financial system.

Five global teams from BBVA Customer Solutions and five local teams from BBVA in South America. A total of 10 teams met in Dallas (Texas) with a common goal in mind: connecting around shared projects to ensure that BBVA capitalizes on global capacities to create amazing customer experiences. That was BBVA South America’s Global Week in Dallas.

South America’s GDP will recover in 2017 after four years of economic slowdown, while Mexico will bear the impact of the uncertainty surrounding US policies, which is likely to hinder its growth prospects. These are the key conclusions of BBVA Research's Latin America Outlook Q1 2017 report.

The 2017 business year will mark a turning point for Latin American economies, with an estimate growth of 1.3% for the region as a whole, compared to a 1.3% dip in 2016. This is what emerges from BBVA Research’s 4th Quarter Latin America Outlook report. The recovery, however, will be gradual and the region will remain well below potential growth, about 3%.

BBVA CEO Carlos Torres Vila explained today the reasons that motivated the organization and management changes that the Group announced this week:  “We are making these changes to gain agility and efficiency,” he stressed.  “But both the strategy and the goals we defined a year ago remain the same, to become a better bank for our customers, bringing the age of opportunity to everyone.”

After a turbulent end of 2015 for Latin American emerging markets, fuelled by the collapse of commodity prices, the first half of 2016 has been quite different. Since January, investment funds operating in Latin America have reported solid profitability ratios, in many cases above 10%.

BBVA’s transformation process involves a new corporate culture with new, more agile and flexible ways of working. We spent two days in one of the quarterly planning sessions BBVA is holding around the world to find out firsthand what this new way of working is like.

Slow recovery of commodity prices and weak economic activity have affected tax revenue. This has lead to adjustments in government spending in many Latin American economies. Therefore, despite some recovery in commodity prices over recent months, BBVA Research has lowered its growth outlook for the region to an expected contraction of -1.1% in 2016. In its Latin America Economic Outlook report on the second quarter, BBVA Research affirms that it does expect to see 1.7% growth in 2017.

Market downfalls at the beginning of the year have put investors on guard. The sharp decline in oil prices and questions over the Chinese economy leave their mark on the global economic outlook. BBVA Asset Management expects to see moderate growth in the global economy in 2016 but suggests caution when building portfolios due to increased risk. Diversification and hedging are necessary.

Rising life expectancy, longevity, is a relatively recent phenomenon dating from the 19th century. Until then, for nearly 60,000 years, the life expectancy of humanity remained relatively constant. There is some evidence that increased life expectancy is a permanent phenomenon, with the implications that this might have not only for pension systems, but also for the organization of societies themselves.

Before making an investment or buying a savings product (e.g. investment fund or pension plan), we first need to determine our risk profile.

China’s slowdown is already taking its toll on Latin American economies, which are struggling to cope with the drop in the Asian giant’s commodity voracity.

How will the largest economies evolve over the next ten years? What yields may be expected from the main financial assets in that period of time? These are the two questions that the BBVA Asset Management’s strategy team has taken into consideration to elaborate a financial plan that allows to properly gauge the strategic asset portfolios it manages for its customers through different vehicles (investment funds, pension funds, SICAVs…).