Financial markets and monetary economics

Juan Blasco, Global Head of Institutional Business at BBVA CIB, has been appointed Chair of the Board of the Association for Financial Markets in Europe (AFME). Blasco takes on this role with the goal of contributing to the strengthening of European capital markets, fostering their integration and enhancing their ability to meet the needs of businesses and investors.

BBVA’s CEO, Onur Genç, spoke on Tuesday at a financial event held in London to address the need to consolidate large European banks capable of leading an increasingly competitive global market: “Europe needs larger, stronger and more efficient institutions to support economic growth.” The combination between BBVA and Banco Sabadell is a major step forward in this direction. Not only will it benefit Spain, but it will also make the bank a stronger competitor on the global stage, supporting SMEs and financing high-impact projects, explained BBVA’s CEO at the Global Banking Summit organized by the Financial Times.

The scenario for 2025 markets is positive, but not without uncertainty. According to forecasts by BBVA Asset Management & Global Wealth (BBVA AM&GW), the largest economies will see another year of growth, although conditioned by the policies adopted by the Trump administration. “As we look ahead to 2025, it is currently presenting significant uncertainty, but the ultimate outcome doesn’t necessarily have to be bad in terms of investments,” explained Joaquín García Huerga, Director of Global Strategy at BBVA AM & GW, at the presentation of the Market Outlook for 2025. “The markets continue to have revaluation potential and fixed income offers positive expected returns. Therefore, mixed portfolios, including conservative portfolios, could obtain positive returns in 2025 once again, both in nominal and real terms.”

BBVA contributed a record €7,668 million in own taxes in 2023 across all the countries in which it operates.  A further €5,950 million was also collected from third parties, making a grand total of €13,618 million in taxes, the highest tax contribution ever recorded by the bank. In Spain alone, BBVA paid a total of €1,191 million in its own taxes. With third-party taxes included, the bank contributed €3,384 million to the public treasury. This effort reflects BBVA's commitment to the social and economic well-being of the countries within its footprint and its strong support for local economies.

On Wednesday of this week, BBVA placed €1.25 billion in a 12-year Tier 2 subordinated debt issue, with a call option at seven years. The market response has been excellent, with demand reaching nearly €6 billion, five times the amount ultimately allotted. The price was set at mid swap + 240 basis points, significantly below the starting price (mid swap + 275 basis points).

BBVA, together with Bank of America Securities and Citigroup Capital Markets, led Ecopetrol’s new issuance of corporate debt in the U.S. market in the amount of $1.85 billion. This placement consolidates BBVA’s role as one of the top financial institutions in the structuring, placement and sale of corporate bonds.

Brand Finance's 2023 survey also recognized Garanti BBVA as Türkiye’s most valuable bank brand.

BBVA today placed a 3-year €1 billion issue, with a redemption option in the second year. This is the first senior preferred debt issue of BBVA in 2023.

This Tuesday, BBVA launched an 8-year senior non-preferred debt issue, maturing in January 2031, with a redemption option in the seventh year. The exit rate is MS+190/195bps. This is the Group's first issue in 2023.

Joy Macknight, editor of The Banker, spoke with Alfonso Gómez, the CEO of BBVA Switzerland, to discuss the details of the bank’s cryptocurrency trading and custody service. BBVA Switzerland is the first traditional bank in Europe, and one of the first in the world to offer a service of this kind.

BBVA is back in the Euro Stoxx 50, Eurozone's main index. Just one year after its exit, the bank's recent good performance on the stock market has allowed it to return to the index, a milestone -exit and re-enter the following year- which at least in the last decade had never happened before. Normally, it takes longer for companies that exit the index to recover their position and re-enter.

BBVA has executed its first sustainability-linked interest rate swap for the glass bottle design and manufacturing company Vidrala. The conditions of this product are tied to the company reducing its carbon footprint, and will allow it to transform variable flows into fixed flows, thus reducing the interest rate risk.

Due to its international presence, BBVA has an exchange rate risk hedging policy which is intended to preserve the Group's capital ratios and provide stability to its results.

Over the past two years, market volatility has caused investors to think twice before investing in Turkish assets. In an interview for Bloomberg in Turkey, Emre Hatem, head of Corporate Loans and Project Finance Restructuring at Garanti BBVA, discusses the country’s economic outlook for 2020 following 2019’s slump in transactions.

Garanti BBVA and the Export-Import Bank of China have agreed to a $300 million, three-year loan to be used by Turkish companies to finance imports from China. A partner and trusted advisor to its clients engaging in international trade, BBVA’s Turkish unit forges international agreements in order to be able to offer customized financing solutions to this commercial segment. The agreement with China’s Exim Bank demonstrates the strength of Garanti BBVA’s long-lasting relationships with Chinese banks.

Garanti BBVA shared its project financing expertise at the 8th annual PPP in Turkey Forum. The two-day conference, held in Ankara, addressed the complexities around public-private partnerships (PPP).

BBVA today tapped the markets with its third senior non-preferred bond of 2019. The €1 billion 5-year issue was priced at mid swap plus 80 basis points, with a coupon of 0.375 percent, the lowest for a senior non preferred debt issue in Spain as well as the lowest for BBVA senior debt (preferred and non preferred). Demand peaked at €1.8 billion with more than 130 orders.

BBVA – with Deloitte and PCS acting as independent third parties – has completed the first issuance of securitized bonds in Spain, which will be registered with the ESMA (European Securities and Markets Authority) as Simple, Transparent and Standardized (STS).  With this securitization, BBVA takes advantage of European regulation in force since January 1 that will confer preferential capital treatment to financial institutions issuing STS securitizations.

The Juncker Plan, which was launched in 2004, has helped reduce the investment gap caused by the economic and financial crisis. Looking forward to the next decade, Europe should focus on a two-pronged strategy: implementing a greener sustainable investment model and backing key digital capabilities. According to BBVA's executive board member, José Manuel González-Páramo, Europe must develop a forward-looking sustainable finance model.

On Wednesday, BBVA CEO Onur Genç underscored BBVA’s commitment to continue advancing in the Group’s transformation process. Speaking to a group of international investors, he also emphasized BBVA’s strengths —both globally and by business area— in markets like Mexico and Turkey.

76 percent of Spanish enterprise businesses and 68 percent of SMEs will increase their investment in Latin America in 2019. Spanish investors see the best prospects in Colombia, Brazil, and Mexico, according to the latest report 'Spanish Investment Landscape in Latin America', which was prepared by IE University, in collaboration with Llorente & Cuenca and Iberia, and presented at Casa de América in Madrid.

Banks play a fundamental role in the planet’s sustainability due to their ability to finance sustainable activities and manage risks. This was the main topic discussed at a panel in Davos, Switzerland in which José Manuel González-Páramo participated. BBVA’s Executive Board Member and Head of Global Economics and Public Affairs encouraged all banks to join the Principles for Responsible Banking to press for this change. In his opinion, these principles give banks the opportunity to demonstrate their commitment to society.

The previous year has come to a close, and with it comes reflection on what 2018 brought. However, a look forward to 2019 can also have its advantages.

The European Banking Authority (EBA) has just released its work programme for next year. Understanding the risks and opportunities arising from financial innovation and a better handling of data are some of the priorities the institution has outlined for 2019.

José Manuel González-Páramo, Executive Member of the Board and the Head of Global Economics, Regulation and Public Affairs at BBVA, attended a meeting on the challenges facing the banking industry’s regulatory architecture on an international and local level.  He spoke of the importance of further developing the Basel III framework, as well as the need to implement it in a consistent and flexible manner.

Switzerland is the global center of private banking and a country many investors go to in search of diversification. But private banking is much more than that. It involves constant striving to understand the complexity of the financial markets in order to offer customers the best advice possible.

The reform of the reference rates in the eurozone to adapt to the new regulations, driven by the European Central Bank (ECB) along with other authorities, is taking shape. Today the ECB has announced a proposal for a new intraday rate as an alternative to the Eonia: the ESTER.

Anne-Joëlle Viguier-Galley is BBVA Compass’ Chief of Equity and Alternative Investments for the bank’s Global Wealth team. She also doubles as the Chief Investment Strategist for BBVA Wealth Solutions, Inc., the bank’s investment adviser affiliate.