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Carlos Torres Vila 15 Jan 2024

Carlos Torres Vila: “2024 will be another great year for BBVA, with greater contribution to economic and social progress”

BBVA Chair Carlos Torres Vila stressed that 2023 was good for the bank in strategic, and financial terms, and especially in terms of its contribution to society. All of this was reflected in the bank’s stock performance, and its attractive distributions to shareholders. He is once again expecting growth in banking activity in 2024 thanks to the Group’s leading franchises and its strategy focused on digitization, innovation and sustainability. Therefore, “2024 will be another great year for BBVA, with greater contribution to social and economic progress,” he said in an interview.

In January 2023, Carlos Torres Vila predicted that 2023 would be a year of growth and of creating opportunities for the bank and all of its stakeholders. Taking stock of the year, he assured that: “This was the case, and it even went beyond my expectations in terms of increasing our contribution to society through our banking activity.” In this regard, he underscored that BBVA added 11 million new customers over the past 12 months. “This has also led us to increase lending, which was growing at a rate of 8 percent in September. This is financing for vital projects, mortgages, financing for SMES and for large companies,” he said. A significant portion of this financing is sustainable. “We are on track to far surpass the target we set, a target that we have raised twice,” he added. BBVA has also established itself as “the bank of reference for high-growth entrepreneurial companies through BBVA Spark.”

It was also a good year for the bank when it comes to financial metrics. In fact, profit was growing at a rate of 24 percent in September (the end of the year figures have not been published yet), “with leading profitability and efficiency ratios in Europe and a solid capital position.”

“All of this translates into good news for our shareholders,” Carlos Torres Vila noted. In 2023, BBVA continued its share buyback programs, including a €1 billion extraordinary buyback. Since the bank began these programs, the number of shares has decreased by 12 percent. Therefore, with a growing profit, a declining number of shares and a constant dividend policy - with distributions between 40 to 50 percent of profit - “we see how the dividend per share is clearly growing year after year,” he explained. Furthermore, “we expect the dividend we pay our shareholders for the year 2023 to be higher per share than it was last year,” he stated.

All of this is reflected in the stock performance. BBVA is the bank  that has appreciated the most in the Spanish stock exchange in 2023, 46 percent, more than double the average of its Spanish and European peers (up 20 percent and 19 percent, respectively). And he emphasized that: “If we take into account the higher share price and dividends, the increase in value per share for our shareholders was 57 percent in 2023.”

BBVA will continue to grow in 2024

Looking toward the new year, the BBVA Chair spoke of the effects of a possible change in monetary policy. In this sense, he is expecting a gradual return to normalized interest rates, but not reaching the extremely low levels of the past decade. Nevertheless, he anticipates activity will continue growing, although more slowly than in recent years. In Spain, for example, he estimates economic growth of 1.5 percent, and close to 3 percent in Mexico, which will benefit from strong consumer behavior, trade with Canada and the U.S. and its potential related to expanding access to banking services. In Turkey, he emphasized the “radical shift in economic policies to correct the imbalances, including monetary policy,” as well as its long-term potential, something which is also notable for South America. In this region he expects slower growth in 2024.

Beyond this economic context, Carlos Torres underscored BBVA’s structural strengths, which will be the driving force behind its strong performance in the future, particularly its leading franchises with enormous capacity to attract customers and its successful strategy based on innovation and sustainability. Without a doubt, “2024 will be another great year for BBVA, a year that we will continue to grow, having a positive impact on the societies where we operate and contributing to economic and social progress,” he said.

“The more we grow, the more our positive impact on society grows”

Carlos Torres Vila spoke of how important the contribution of companies, and especially banks, is for the well-being of all of society. In this regard, he stressed that: “We have to stop viewing profitable companies negatively because far from being a bad thing, they help society prosper.” In his opinion, this is particularly relevant when it comes to banks due to the work they do. “One of the factors that contributes the most to long-term social and economic development is private investment. Private investment leads to economic growth and progress, but this investment requires financing,” he added. Therefore, in order for banks to do so, they need to be profitable. Thus, “the more we increase our activity, the more our positive impact on society grows,” he noted.

One way to look at this impact is to see where income goes. “Half of our income goes to three things: to paying the salaries of the 120,000 people who work for the bank; to paying our suppliers, which also generates economic activity; and to covering credit provisions,” he says. “The other half of the income, which is the profit before taxes, is roughly distributed as follows: approximately one third goes directly to paying taxes; another third, we return it to our 800,000 shareholders, many of whom are families and small savers; and approximately the final third we allocate to reinvesting in our business so that we can continue to increase our lending.”

In the words of Carlos Torres Vila, “our ability to have a positive impact is highly motivating as we look toward 2024. It’s something that makes me very proud to work for BBVA, and also very proud of everyone who works at the bank.”

Sustainability and innovation, sources of opportunities

He then discussed two of the biggest global challenges, which are also pillars in the bank’s strategy: sustainability and innovation.

Regarding sustainability, he said that “decarbonization is proving to be a much greater business opportunity that we imagined because it transcends borders and impacts all sectors.” Moreover, BBVA aims to reach zero emissions by 2050, which has translated into concrete decarbonization goals for 2030 in eight sectors, those with the most emissions. The bank also invests in cutting-edge clean technology funds in order to be close to these developments and be able to finance them, “attempting to replicate the success we have had with our investments in fintech funds.” All of this positions BBVA as a leading bank in sustainability. For the fourth year in a row  BBVA was recognized as the most sustainable bank in Europe by the Dow Jones Sustainability Index. 

Looking toward the future, the BBVA Chair pointed to three trends related to sustainability. First, its universalization, as it affects all sectors, companies and society as a whole; second, the necessary industrialization of the solutions that are created, greater capillarity, as we already see by channeling sustainable products through our sales networks; and third, the growing importance of preserving and restoring natural capital and biodiversity.

In terms of innovation, Carlos Torres Vila was proud of the fact that “it has been a fixture at the bank for my years and has brought us great satisfaction,” with examples such as the best app in the world. “Now we can continue down this path, harnessing data and technologies that are experiencing a lot of growth like artificial intelligence in order to take the next step in advising our customers,” he stated.

To conclude, the BBVA Chair underscored his positive outlook for BBVA in 2024: “2024 will be a great year for the bank. We will increase our positive contribution to progress and to the social and economic development of the countries where we have a presence.