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Economic results 29 Apr 2019

"BBVA’s power lies in its diversified model"

During today’s first-quarter earnings presentation to analysts and journalists, BBVA CEO Onur Genç underscored the strength of BBVA’s diversified business, which has allowed the company to grow its operating income by 10 percent yoy, in constant euros.  “Diversification helps markets balance each other. BBVA’s power lies in its diversified model,” he explained.

Onur Genç pointed out the growth in recurring revenues and an improvement in efficiency achieved by the company since the beginning of the year, as well as solid risk and capital indicators and an “outstanding” trend in digital sales and customer digitalization. But above all, he stressed that BBVA “remains focused on creating value for our shareholders.

During the conference call, Onur Genç pointed out, as first message, the growth in core revenues (i.e., net interest income plus commissions), which stood at 8 percent in constant euros.

“The good performance of the top part of the P&L, coupled with our continued focus on efficiency, has led us to show that double digit growth, specifically of 10.2 percent, on operating income, and our cost to income ratio, which has dropped 118bps to 48.1 percent, the lowest quarterly cost income ratio that we have had as a group since the third quarter of 2012.”

“The good performance of the top part of the P&L, coupled with our continued focus on efficiency, has led us to show that double digit growth”

Likewise, he emphasized, on the one hand, the soundness of the risk indicators – with a “good trend” in the NPL ratio, which closed at 3.9 percent, the improvement in the coverage ratio, which reached 74 percent – and the resilient capital position, with a fully-loaded CET1 ratio of 11.35 percent (after absorbing the impact coming from IFRS16, which came into force in January.)

In terms of profitability, he said, “BBVA is a leader in the European banking industry.”  In this regard, the CEO of the bank noted that ROTE remained strong in the first quarter of 2019, at 11.9 percent.

“In terms of profitability BBVA is a leader in the European banking industry”

Regarding the digitalization of the entity, BBVA’s CEO underscored the “outstanding” trend both in digital sales, which already rose to 57 percent on the total units sold in the first quarter of the year, and digital customers, which grew 17 percent to 28.4 million. Likewise, Onur Genç emphasized that the number of mobile customers reached 24.4 million, with a yoy growth rate of 24 percent and 45 percent penetration, in line with this year’s 50 percent target threshold.

Spanish economy

Asked about Spain’s macroeconomic situation, following the recent general elections, Onur Genç stressed that “Spain requires consensus to accomplish the reforms that the country needs”, such as in the labor market and education.

“Spain requires consensus to accomplish the reforms that the country need”

Also, he underscored that the Spanish economy has shown strengths in the past, “keeping a solid growth rate even during extended periods of political uncertainty.” “Spain needs to lay down the foundations of a high, inclusive growth which helps to face the technological change and the digital revolution challenges, in order to foster employment and increase productivity,” he said.

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