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Results Updated: 26 Sep 2018

Carlos Torres Vila: “We are laying the foundations of BBVA’s future success”

BBVA CEO Carlos Torres Vila  focused on the company’s solid quarterly financials. The results reflect the Group’s capacity to “generate recurring revenues across all countries in which it operates,” he said. This, together with the Bank’s ongoing digital transformation and improving macroeconomic outlook, is enabling the company to “lay the foundations for BBVA’s future success.”

BBVA CEO started his presentation noting that company’s good performance in the first quarter of the year. “We’ve gotten off to a strong start this year, with cost control, recurring revenues and strong capital generation, while accelerating the sale of real estate assets and making substantial progress in our transformation. And this is reflected in our earnings,” said Carlos Torres Vila.

We’ve gotten off to a strong start this year, with cost control, recurring revenues and strong capital generation

Our net attributable profit for the January-March quarter - €1.2 billion – is the “highest in the past seven quarters.” In his opinion, “the quarter’s highlight is the solid performance in recurring revenues, which increased 9.2%, in contrast with expense growth.” Higher growth in gross income compared to expenses generated “significantly positive jaws”, he noted.

Regarding the impact of the U.S. in Mexico, Carlos Torres Vila considers that “the pessimism that may have surrounded American policies is being looked at in a different light.” In fact, “stakeholder confidence has increased over the past three months.” Regarding Turkish bank Garanti, he indicated that “despite the uncertainty in the region, the franchise is performing strongly.”

Capital ratio: “We are right where we want to be”

Carlos Torres Vila stressed a “significant capital generation during the quarter,” reaching a fully-loaded CET1 capital ratio of 11.01%, 11 basis points above the figure for December. These levels place BBVA “right where we want to be” in terms of capital. The institution’s current capital position is in line with its 11% target for 2017.

Carlos Torres Vila emphasized that “efficiency has increased significantly, more than 3 percentage points since the end of last year.” The efficiency ratio closed at 49.1% in March, “well below our peer group’s average, which stands at 68%.” The CEO explained that leadership in efficiency is one of the six strategic priorities that BBVA defined in 2016, simplifying processes and focusing on more efficient distribution channels.

This is not the only strategic priority that Carlos Torres Vila mentioned. BBVA’s CEO also made reference to the capital allocation optimization, improvement in customer experience, growth in digital sales and the importance of nurturing the best workforce. “We are happy with the team we have. We have a winning project and clear ideas,” he said.

We are happy with the team we have. We have a winning project and clear ideas

Asked about Catalunya Banc’s contribution to the group, Carlos Torres Vila said that “we are very happy and satisfied with the integration process, its outcome and how it is bringing value to BBVA at all levels.”

“What we are doing is transforming the way in which we do banking”

Carlos Torres Vila emphasized the improvements in user experience. “They are tangible, real, we’ve been delivering them to our customers during these past three months.” He also offered some examples of the new digital products and services rolled out during the first quarter of the year. This is the case of the “Mis Recibos (My Bills)” functionality in the mobile banking application in Spain, or the iris recognition option in Turkey.

The improvements in user experience are tangible, real, we’ve been delivering them to our customers during these past three months

Another one of the indicators he focused on was growth in digital sales. “We’ve seen significant growth compared to the previous year,” he noted. In Spain, transactions through digital channels grew from 17% of the total in 2016 to 24% in the first months of 2017; in Turkey, the represent 30.1% of the total.

For Carlos Torres Vila, the use of technology and data will offer the essential capabilities needed to develop value proposals for customers. In this sense, he emphasized that building customer trust is at the core of BBVA’s strategy. Taking that as a starting point, “we build what we want: to help them in their lives, deliver solutions that help them make better decisions with their money.” “Ultimately, what we are doing is transforming the way in which we do banking.”