"BBVA has been, is, and will continue to be an honest bank"

In the question and answer session with journalists, the chairman wanted to make his position on the news published in recent weeks very clear, “if true” they are “diametrically opposed to what the bank represents, to our values, to the ethical standards that have always characterized BBVA's activity.” These values “are in BBVA's DNA,” he added.

“Now is the time to investigate as quickly as possible,” but also to act with the prudence that the situation calls for.” Once the bank has the results of its investigation, Carlos Torres Vila assured that “depending on what emerges, what I can promise is an uncompromising commitment to zero tolerance (for bad practices), with no exceptions, of any kind.”

Now is the time to investigate as quickly as possible,” but also to act with the prudence that the situation calls for

Carlos Torres Vila clarified that the investigation entrusted to PwC at the end of January 2019 to review the services provided by Grupo Cenyt, widened the scope of the standard review that BBVA had begun in June 2018. Due to the sheer volume of the documentation that needs to be analyzed, the investigation could “span months.” We need to be patient and “wait for its conclusion,” he reiterated.

Asked specifically about BBVA's former chairman, Francisco González, Carlos Torres Vila said that during the ten years he worked by his side “he demonstrated great leadership, he is an extremely dedicated, hard-working person. Clearly a visionary,” he added.

BBVA’s chairman used the opportunity to stress that “in today's climate where there is so much talk about the reputation of banking, we also have to showcase all that we do to contribute to society.” Along these lines, he mentioned the generation of wealth, our contribution to public funds through taxes and job creation. All this “with the mission to bring the age of opportunity to everyone.”

In today's climate where there is so much talk about the reputation of banking, we also have to showcase all that we do to contribute to society

Significant value-generating ability in a complex environment

BBVA's chairman underscored the bank's ability to generate value in 2018. Carlos Torres Vila presented what he called “positive results” with a net attributable profit of €5.32 billion (including capital gains on the sale of BBVA Chile), results that were underpinned by recurring revenues and cost containment efforts. “All this, with some of the highest profitability rates in the industry: a return on equity (ROE) of 11.6 percent,” he stressed.

All this, with some of the highest profitability rates in the industry: a return on equity (ROE) of 11.6 percent

Additionally, the efficiency, which is “a management priority,” continued to improve from previous quarters. The efficiency ratio stood at 49.3 percent in 2018.

The efficiency improvement has a lot to do with the digitization of the business, BBVA's chairman explained. He also emphasized other tangible impacts of the bank’s transformation such as the excellent trend in digital sales (41 percent of all transactions made in 2018) and coming out on top in the customer satisfaction index in six of the countries where the bank has a presence (Spain, Mexico, Turkey, Peru, Uruguay, and Paraguay).

A significant milestone for the bank, he explained, is that the number of customers banking through digital channels exceeded the 50-percent mark in 2018, reaching  51 percent of the total customer base. “We have also had a positive performance in terms of mobile customers, who now total 23 million.” BBVA has a target of having mobile customers represent 50 percent of the total customer base in 2019 (up from 43 percent).

He also mentioned the solid risk indicators, with an NPL ratio of 3.9 percent for Group BBVA and a capital position with a fully loaded CET1 ratio of 11.34 percent. Regarding the bank’s capital position, BBVA’s chairman announced that the bank has set itself a new target, moving this ratio to between 11.5 percent and 12 percent, to be achievable by the end of 2019.

Carlos Torres Vila indicated that BBVA will propose for the consideration of the competent governing bodies a cash payment in a gross amount of €0.16 per share to be paid in April 2019 as final dividend for 2018. This represents a 7 percent increase compared to the final dividend that was paid out in April 2018, and represents a payout of 37 percent of recurring profit. “In the future, we continue to be committed to our dividend policy,” he affirmed. This policy establishes a payout of between 35 and 40 percent.

In the future, we continue to be committed to our dividend policy

Onur Genç’s first time with the press

This was Onur Genç’s first press conference as CEO of BBVA.  The new CEO reviewed the bank’s main figures for each of the Group’s business units in 2018. He pointed to the macroeconomic environment as a challenge in some countries and expressed his confidence that “our business model is a good recipe for overcoming these challenges.” Proof of this is the growth in the Group’s net profit despite the difficulties in some locations, he explained.

Our business model is a good recipe for overcoming the challenges

The second challenge Onur Genç mentioned is the changing nature of clients. He was optimistic about the ability of “BBVA’s transformation project” to face this challenge.

Finally, he described the trends for 2019 in the different business areas. “In Spain, we will continue focusing on improving margins while lowering costs; the Non Core Real Estate area will disappear in 2019 and become part of the Banking Activity unit in Spain after significantly reducing its losses; in the U.S., net interest income will be the main driver of results; in Mexico, we expect the solid growth to continue, similar to the trend in 2018; in Turkey, the strong capacity to generate profit before provisions will help overcome the challenges of the macroeconomic environment; and finally, we have a very good outlook for the Andean countries in South America.”