Carlos Torres Vila: “BBVA’s ability to combine growth and profitability sets us apart from our competitors”

Carlos Torres Vila began his address by taking stock of 2023, “a great year for BBVA” on the back of leading franchises, the commitment of the team, and progress in strategic pillars like innovation and sustainability.

In his words, “In 2023, we have increased our positive impact on all countries where we operate.” First, through the bank’s main activity, granting loans. “Banks promote economic growth, channeling savings toward productive investment,” the Chair recalled. In 2023, BBVA added over 11 million new customers and increased its loan portfolio by 7.6 percent. The bank also channeled €15 billion to projects fostering inclusive growth, such as financing for sustainable infrastructure, support for entrepreneurship and financial inclusion. “Financing families and businesses is our biggest contribution to the progress of society in the countries where we operate,” he said.

From a financial standpoint, 2023 was also a historic year for BBVA, with its best results yet, €8.02 billion. Net attributable profit increased by 26 percent and earnings per share rose even more, “an impressive 32 percent, bolstered by the share buybacks that took place throughout the year.” “Our ability to combine high profitability with significant growth in activity and results clearly sets us apart from our European competitors,” he said.

These results have allowed BBVA to reinvest in its business to continue creating value and increase distributions for its shareholders. Specifically, “we are proposing to the AGM the distribution of more than €4 billion, which represents 50 percent of the annual attributable profit. And we will do so through a cash dividend payment of €0.39 per share, which together with the €0.16 per share paid in October, amounts to a total gross dividend of €0.55 per share; and a new €781 million share buyback program, which is already underway”. In addition, the bank also executed share buybacks in 2023 that amounted to €1.42 billion. “These buyback programs will contribute to the growth of the dividend per share in the future,” he added.

“The 2023 dividend of €0.55 per share is nearly 30 percent higher than last year,” he said. In total, should this dividend be approved, BBVA will have distributed approximately €13.2 billion in dividends and share buybacks in the past three years. Furthermore, including the recently initiated share buyback program, the bank will have canceled about 14 percent¹ of its shares, “with the corresponding positive impact for the bank’s nearly 800,000 shareholders.”

Carlos Torres Vila underlined that the market is rewarding BBVA’s strengths and strategy. This recognition is reflected in the appreciation of the bank’s share price: From January 2023 to date², and taking into account the dividends paid and the share performance, BBVA has delivered a total return for its shareholders of 95 percent - more than double the average of its competitors in Spain (+41 percent) and Europe (+39 percent). Since early 2019, BBVA’s total return stands at over 190 percent, nearly tripling its value, compared to a 74 percent increase among European competitors, and 39 percent among the rest of Spanish banks.

The BBVA Chair considers that on top of the positive impact on clients and shareholders, “this value creation allows us to have a greater positive impact on society.” By the end of 2023, BBVA had allocated over €410 million to its Community Investment Plan, nearly 75 percent of our total commitment for 2021 to 2025, benefiting almost 90 million people. Carlos Torres Vila also mentioned the work of the bank’s foundations. On one hand, in 2023, the BBVA Microfinance Foundation contributed more than €1.5 billion to finance vulnerable entrepreneurs with limited resources. On the other, the BBVA Foundation has continued to foster knowledge and research, as demonstrated by the Frontiers of Knowledge awards, presented every year in Bilbao.

A strategy to leverage the opportunities from innovation and sustainability

In 2024, BBVA expects the economy to continue growing, although at a more moderate pace than in 2023. Carlos Torres Vila foresees a year marked by some uncertainties, with elections in several countries, and inflation still above the central banks’ goal. He also expects that “the gradual normalization of interest rates in the financial sector will help banking activity to continue growing.”

In this context, he feels that “BBVA is in a solid position to leverage the opportunities related to innovation and sustainability, two key pillars of our strategy.”

First, he referred to digitization, “because our customers benefit tremendously from this commitment,” offering them convenient, simple and accessible channels to interact with the bank, whenever and however they prefer. Digitization is allowing the bank to grow in customers and increase satisfaction and engagement.

Moreover, BBVA will continue to be at the forefront of innovation and new technologies: “We are pioneers in using advanced data analytics and artificial intelligence,” Torres Vila said. Specifically, “in 2024 we expect to extend their use to advise our customers, including the use of generative artificial intelligence on the bank’s app.”

The other main pillar of BBVA’s strategy is sustainability. Carlos Torres Vila said that “just as we were pioneers by investing in fintech, we are now investing in the most cutting-edge funds to finance innovation in new clean technologies, or cleantech.”

In addition, he shared advances in decarbonization. As a founding member of the Net Zero Banking Alliance, BBVA has laid out its own roadmap in order to be neutral in carbon emissions by 2050. With that in mind, in 2023 the bank established intermediate decarbonization targets for two new sectors with high emissions -aviation and shipping- which join six others (oil and gas, power generation, the automotive sector, steel, cement and coal).

BBVA believes that sustainability is also a tremendous business opportunity, as proven by the figures channeled for sustainable business in 2023: More than €70 billion in one year, with a total of €206 billion since 2018, exceeding the pace expected through 2025. Due to all of the above, and for the fourth year in a row, BBVA received the best score in the European banks category of the Dow Jones Sustainability Index.

To conclude, Carlos Torres Vila predicted that: “In 2024, we will continue to grow profitably, increasing our positive impact on society and creating opportunities for everyone.”

BBVA, leading European banking in growth, profitability and efficiency

BBVA CEO Onur Genç shared additional information on the bank’s earnings in 2023. He also underlined the bank’s strengths looking to the future.

First, he emphasized the trend of rising recurring profit at BBVA: “In 2023, we tripled our profit from 10 years ago, and it is about 70 percent higher than five years ago.” BBVA’s good performance stands out among other competitors and puts the bank “at the top of the European banking industry in activity growth, profitability and efficiency.”

Furthermore, he compared some of the bank’s main metrics against those of its European competitors. While BBVA’s loan portfolio grew in 2023, “the average of our European peers saw a reduction in activity during the year.” BBVA achieved this growth in a profitable and efficient way: ROTE reached 17 percent vs. an average of 12 percent for its competitors, “a truly exceptional performance.” The efficiency ratio stood at 42 percent vs. 54 percent for the average of comparable European banks. Therefore, “we have created a unique profile in Europe, combining growth and profitability at the same time,” he added.

Onur Genç also went over BBVA’s figures for each business area, underlining that in 2023, the bank gained market share in loans in all countries. Moreover, he expects growth in the bank’s net attributable profit this year, which will allow BBVA to surpass 17 percent of profitability and put its efficiency rate below 42 percent. “We expect to beat all the targets set for 2024 at our Investor Day in 2021,” he stated.

Onur Genç also shared details about key aspects of BBVA’s business. First, its ability to add customers in all business segments. In 2023, the number of retail customers increased by 6.2 percent, those of SMEs grew almost 8 percent, and corporations added 3.2 percent. “In the future, with a larger customer base, we will continue to execute our winning strategy in innovation and digitization, which will allow us to offer a better service to all of them,” he added.

Second, he mentioned the growth of sustainable business in all countries and segments. The retail segment rose 43 percent, with corporations and corporate banking growing 99 percent and 20 percent, respectively.

The BBVA CEO made a special mention of the BBVA team. “Our great bank and the excellent results we are presenting are the result of the work of more than 120,000 employees who are part of BBVA.”

¹Considering that the last €781 million share buyback is the equivalent of 1.6 percent of the Group’s capitalization.
²With data as of March, 13, 2024.