Carlos Torres Vila: Customers’ financial health and sustainability are priorities for BBVA

BBVA’s Group executive chairman began his presentation by explaining the main figures from the year, within the economic context that marked 2019. He underscored “the solid growth in profit despite the complex environment” influenced by trade and geopolitical tensions and low interest rates. “The good news is that we expect higher macroeconomic growth in 2020.”

In this complex environment, Carlos Torres Vila called the results “excellent”, the result of the bank’s ability to “generate recurring revenue - net interest income plus fees - at a pace of over five percent, and costs that are growing at 3.5 percent.” BBVA obtained a net attributable profit without one-offs of €4.83 billion in 2019 (2.7 percent more than in 2018)  -- the highest since 2009.

Torres Vila also pointed to BBVA’s solid asset quality indicators, as well as its ability to generate capital: the fully-loaded CET1 ratio stood at 11.74 percent, in the upper part of the target range of 11.5 percent to 12 percent. He also announced that the bank expects to end the year around 12 percent.

“BBVA has a shareholder remuneration policy that is very consistent over time”

The bank’s Group executive chairman also spoke of the upcoming dividend. BBVA will propose to its governing bodies a divided of €0.16 per share to be paid in April. In other words, the same amount from the previous year, with a total remuneration of €0.26 against 2019 earnings. This translates into a payout of 36 percent -- within the 35 to 40 percent range established in the bank’s dividend policy. “BBVA has a shareholder remuneration policy that is very consistent over time,” he stressed. In the future, as the bank continues to accumulate capital and once the 12 percent mark has been passed, “we will think about the best way to return value to shareholders.”

Reaping the rewards from the strategy BBVA presented in 2015

“In 2015, we formulated a strategy focused on transformation grounded in a purpose: to bring the age of opportunity to everyone.” Carlos Torres Vila analyzed the bank’s accomplishments since then.

First, he underscored “the spectacular growth” in digital and mobile customers (57 percent and 51 percent of the total, respectively, as of December 2019), and also in digital sales, which represent 59 percent of all sales. Digital capabilities have allowed BBVA to improve user experience and impact customer growth and satisfaction. “This is the result of the unique value proposition on all channels, particularly mobile,” he said.

This is the result of the unique value proposition on all channels, particularly mobile

Second, he noted that these accomplishments in the bank’s transformation have had an impact on the main financial indicators, consolidating BBVA’s position as one of the leaders in efficiency, and leading to superior profitability.

New strategic priorities

In 2019 “BBVA carried out a strategic review process” which “led to six new priorities to accelerate and deepen the transformation, and strengthen the way we fulfill our purpose,” explained the Group executive chairman.

BBVA’s new priorities are grouped into three areas. The first is related to “our value proposition” and includes two priorities: improving our customers’ financial health and helping them in the transition to a sustainable future. The second area revolves around the “drivers to attain exceptional performance” and includes the priorities of growing in customers and achieving operational excellence. The third area consists of two priorities that are intended to be “strategy accelerators”: having the best, most committed team, and harnessing data and technology.

Over 440,000 new customers a year in Spain

Meanwhile, Onur Genç reviewed the biggest accomplishments of the different locations where BBVA has a presence. The bank’s CEO also announced some of the performance trends that are expected for each of them in 2020.

During the time for questions from the media,  Onur Genç stressed that over 440,000 new customers began banking with BBVA in Spain over the past year. “These are excellent figures in a market as mature as Spain’s,” he added. This trend in new customers was also emphasized by Carlos Torres Vila, who noted that since 2015, BBVA has gained around nine million active customers around the world.

Both the Group executive chairman and the CEO answered several questions about the diversification model and BBVA’s presence in emerging economies - one of the “Group’s greatest strengths”. “We combine well growth potential with diversification, which allows us avoid volatility. That’s the best of both worlds,” said Carlos Torres Vila.

Regarding journalists questions about Cenyt, Carlos Torres Vila explained that the bank’s priority has always been to clarify the facts and collaborate with the justice system. “What we want is for the facts to be clarified, and a legal investigation is important for that,” the Group executive chairman said.