Balance sheet

When BBVA Compass rolled out the BBVA Compass RealTime ARP™ product, which recently won an award recognizing its innovation, the bank aimed at revolutionizing a process that is critical to the success of any commercial operation.

BBVA Compass RealTime ARP™ has been named the 2019 Innovator in Cash Management by Global Finance Magazine, as part of the publication’s annual The Innovators 2019 awards.

BBVA Compass recently announced the launch of two new industry-leading fraud prevention and account reconciliation products, BBVA Compass RealTimeARP™ and BBVA Compass RealTime Positive Pay™. Shortly after the launch, we took a closer look at Positive Pay. Today, we put the bank’s ARP product under the microscope.

Türkiye Garanti Bankası A.Ş., announced its financial statements dated September 30, 2017. With an asset size of TL 339 billion 679 million 127 thousand, Garanti’s contribution to the economy through cash and non-cash lending reached TL 274 billion 87 million 604 thousand, based on the consolidated financials. The Bank posted a net income of TL 4 billion 685 million 989 thousand in the first 9 months of 2017. The Bank delivered an ROAE (Return on Average Equity) of 17.4% and an ROAA (Return on Average Assets) of 2.0%.

Türkiye Garanti Bankası A.Ş., announced its financial statements dated June 30, 2017. With an asset size of TL 335 billion 942 million 185 thousand, Garanti’s contribution to the economy through cash and non-cash lending reached TL 272 billion 980 million 362 thousand, based on the consolidated financials. The Bank posted a net income of TL 3 billion 100 million 273 thousand in the first six months of 2017. The Bank delivered an ROAE (Return on Average Equity) of 18.1% and an ROAA (Return on Average Assets) of 2.1%.

The agreement reached with Metrovacesa Suelo y Promoción (hereinafter Metrovacesa S.A), in which BBVA holds a stake, represents a significant step forward in the bank’s real estate strategy.  BBVA participated in a non-monetary capital increase, together with the other shareholders, through which the bank will transfer high-potential land holdings intended for housing developments valued at €431 million.

The ECB has published its annual report on the supervisory activities appointed to it by the Single Supervisory Mechanism. Key achievements in 2016: effectively addressing the non-performing loan (NPL) issue, the improvement the solvency of the euro area banking sector and the further harmonisation of banking supervision in the euro area. In the spotlight for 2017: new challenges, like the new scenario for European banks after Brexit and fintech-related risks.

The fall of Lehman Brothers made it clear that the size of a bank can be important. Its collapse demonstrated the impact that an institution’s bankruptcy could have on the whole financial system and its repercussions for a country’s entire real economy. As a result, the G20 authorities sought to protect financial stability. Their first step was to identify other systemic banks.

According to Investorpedia, retail banks are banks devoted to provide services to particular savers and investors and small and medium sized enterprises. On the other hand, wholesale banks specialize in the provision of services in large operations, generally with large companies and organizations.

Although financial institutions today specialize in a certain type of activity, this has not always been the case. In fact, it was not until after the crash of 1929 that these two types of banking began to operate separately.

This took place in 1933 through the Glass-Steagal Law, which was promoted by Roosevelt as part of a package to stimulate the economy (The New Deal). This law was abolished by Bill Clinton in 1999, which allowed both models of banking to be housed under the same institution once again. However, after the financial crisis that devastated banks in 2008, these activities currently operate separately in most cases.

The main difference between both banking sectors is that they each specialize in different types of customers, but this is not the only difference, Let's take a look at other things that distinguish them.

Banks play a critical role as providers of funds to the real economy. In this regard, the active management of the balance sheet has become more and more important, and is now a strategic area for financial institutions. Some of its key goals are guaranteeing liquidity, strengthening solvency and reducing exposure to credit risk.

A bank balance sheet is a key way to draw conclusions regarding a bank’s business and the resources used to be able to finance lending. The volume of business of a bank is included in its balance sheet for both assets (lending) and liabilities (customer deposits or other financial instruments).

The core activity of a bank is financial intermediation. This function entails using resources from customers (liabilities) to offer financing to the same or other bank customers (assets). Therefore, it is essential to be able to understand a bank’s balance sheet and each line linked directly to customers.

Javier Malagón, CFO of BBVA Bancomer, the most profitable bank in Mexico and the leader of the country’s financial sector, presented the bank’s strategy and main financial data at the Barclays Global Financial Services Conference today.

The potential resolution of a bank could have major ramifications on the economies where it operates. During the recent financial crisis, authorities have had to pump funds to prevent some institutions from collapsing.  Having learned their lesson, they are taking steps to prevent taxpayers from having to foot the bill of eventual bank insolvencies in the future. This means that, from now on, the ailing bank’s shareholders and investors will shoulder part of the bailout. And the key to who pays first lies in a bank’s balance sheet. Therefore, banks with robust balance sheets, i.e., which have the resources to assume unexpected losses, will become more attractive both for investors and savers.

A bank is not like any other company. Its main activity consists of using money from savers to lend to those requesting credit. This means that a bank’s balance sheet is somewhat different from a company that is not a financial institution. To be sure you’ve got it clear, we have summarized the main characteristics of a bank’s balance sheet below.

BBVA CEO Carlos Torres Vila said today that the sustainability of the banking business model in the current context of negative interest rates requires a change: To leave behind a money-centric infrastructure, based on revenues generated by interests, and develop a banking model that seeks to make a bigger difference in customers' lives. Speaking during BBVA’s Q1 2016 results presentation, Carlos Torres Vila expressed his conviction that “the more we are capable of offering a distinctive value, the more satisfied customers will be and the more viable and sustainable our business model will be.”

BBVA presented its first-quarter results today. CEO Carlos Torres Vila noted that BBVA stands out in this quarter for “its strong capital position, recurring revenue growth, the contribution of emerging markets and lower impairment losses in Spain.” This trend, together with the seasonal effect of the banking business in some places (where activity is lower in the first part of the year) indicates that the results will increase gradually throughout 2016.

The European Banking Authority (EBA) just released a new stress test for banks in the region, something it hasn’t done since 2014.  That’s why it published a detailed description  of the methodology and macroeconomic scenarios in which the institutions have to estimate the potential repercussions on their ability to generate profit and capital.

BBVA earned €1.33 billion in the first half of 2014, 53.9% less than in the year-earlier period, due to the absence of corporate operations. Without including such operations, net income from ongoing operations rose 11.7% to €1.54 billion. For the second quarter in a row, the Group’s NPA ratio fell. Net entries to NPAs from the banking business in Spain were negative in the second quarter.

BBVA posted an attributable profit of €1.93 billion between January and September, 37.3% less than in the same period a year earlier, when it booked capital gains on the sale of non-strategic assets. Without taking into account such gains, net income from ongoing operations rose 43.2% year-over-year, totaling €2.28 billion.

• Earnings: the strength and recurrence of BBVA revenues were once again evident. Gross income exceeded €21 billion for the whole year
• Risks: risk indicators tended to stabilize. Excluding real estate activity in Spain, the Group’s NPA ratio stands at 4.6% and the coverage ratio is 59%. Entries to NPLs show an improvement in their behavior. Non-performing assets were down in Spain in the fourth quarter
• Capital adequacy: the core capital ratio under Basel II stands at 11.6% compared to 10.8% a year earlier.