Onur Genç (BBVA): “We expect economic growth in our main markets”
BBVA's CEO Onur Genç said that "In the future, we expect economic growth in our main markets, despite the context.” He also stressed that BBVA’s digital strategy has proven successful. One example is the bank's model in Italy. "In one or two years we will consider expanding this model to one or two new markets," he said Tuesday, during his participation at the 30th Financial Sector Meeting, hosted by Spanish daily ABC and Deloitte.
Onur Genç reviewed the uncertain geopolitical and macroeconomic landscape. In his opinion, the most relevant is high inflation. The BBVA CEO cited some structural factors that are keeping inflation at high levels, such as a certain backward movement in globalization, and changes in the composition of the labor force or in consumption patterns in developed markets. High inflation, which has translated into an increase in interest rates, has a notable impact on investment, spending, credit, and therefore, on economic growth.
Despite this environment and the risks involved, Onur Genç sees opportunities for banks such as BBVA. First, "the need to finance decarbonization," which is one of the cornerstones of the bank's strategy. Furthermore, the BBVA CEO expects growth in the main countries where the bank is present, such as Mexico, Spain and Türkiye.
The CEO emphasized that BBVA is "ahead of its competitors in its digital transformation." Onur Genç elaborated on how digitization has propelled BBVA’s business, for example, in terms of digital sales, which now account for 78 percent of total sales during the first nine months of the year. Digitization is also reflected in customer acquisition. So far in 2023, BBVA has added 8.3 million new customers, 65 percent through digital channels, compared to 11 percent five years ago. For Genç, however, the real competitive advantage of digitization lies in advising customers and clients.
From the CEO's perspective, BBVA's leadership in digitization and innovation is a major strategic driver. "Our experience in Italy proves that BBVA's all-digital model works," he said. The bank expects to add more than 200,000 new users in Italy by 2023, above its initial estimate. "In 1 to 2 years, we will consider extending this model to one or two new markets," he said.
He then reminded the audience that "sustainability is at the core of BBVA's strategy", for several reasons: because of its commitment to society, because it is essential to risk management and, at the same time, because it is a business opportunity. BBVA is constantly moving forward on sustainability. First, from a business standpoint, through September 2023 BBVA channeled €185 billion in sustainable financing, 62% of its target of channeling €300 billion between 2018 and 2025. Secondly, with respect to the goal of helping customers and clients in their transition, BBVA recently announced that "76 percent of BBVA's lending to emission-intensive sectors corresponds to clients making progress in their transition.”
Onu Genç placed special emphasis on the contribution of banks, and BBVA in particular, to society. He said that banks are working to improve the sector’s reputation in Spain. “It is an important task,” he said. In this sense, he added that banks contribute to economic development and social welfare through their main activity of granting credit to companies and households.
Likewise, banks create value for all their stakeholders: employees, suppliers, shareholders and society as a whole, for example, through the payment of taxes. "In Spain alone, so far this year, the tax on BBVA's earnings reached €941 million," he said. Furthermore, BBVA also contributes to inclusive growth and has channeled between January and September 2023 more than €12 billion in financing to ensure that growth reaches the whole of society, with project such as social housing and entrepreneurship.
The BBVA CEO acknowledged that, “the banks’ main asset is the talent of our employees.” He stressed that companies must be flexible enough to allow teams to continually build in new skills. “We are giving employees all the tools to develop these skills.” Consequently, BBVA has trained more than 91,000 employees in sustainability and 83 percent of its workforce in cybersecurity.