Carlos Torres Vila: "There is an opportunity to increase BBVA shareholder returns" in the medium to long term
In an interview published by the Spanish newspaper ABC, BBVA’s Group executive chairman took stock of recent years and anticipated the bank’s focus looking ahead with new strategic priorities. Carlos Torres Vila underscored that the bank has reached “the [capital] levels where we want to be.” Now that this has been accomplished, in the medium to long term “there is an opportunity to increase BBVA shareholder returns through dividends or share buybacks,” he said.
“Investors are focusing on the bank’s performance, results and strategy for the future,” said BBVA Group executive chairman. Regarding the upcoming Annual General Meeting, Carlos Torres Vila explained that: “We have undergone a digital transformation process at the bank in which we were pioneers. It has produced significant results in terms of the digitization of business and financial metrics, and 2019 was a year in which we reviewed and updated our strategy.” In the same way that BBVA was one step ahead with digitization, it is now doing it again, putting the focus on two very important issues: helping customers improve their financial health and in their transition to a sustainable future.
“We have an enormous opportunity to use this digitization to amplify the impact on our customers and on society. It’s a way to build a relationship based on trust, which is essential in our business,” he explained. To achieve this, “the use of data and technology is a gigantic opportunity.”
Another one of BBVA’s new priorities that Carlos Torres Vila referred to is reaching more clients. When he was asked about a possible acquisition or merger, either in Spain or abroad, he explains that “the focus is on organic growth, taking advantage of digitization.”
“Digitization allows us to better serve our customers because they have in their hand, with their smartphones, access to everything they could possibly need from BBVA for their daily activities,” BBVA’s Group executive chairman said. Nevertheless, he clarifies that: “Branches are becoming more important. What is demanded is a lot of advice.”
In response to questions about Spain, Carlos Torres Vila feels that the country needs “an efficient tax system”. For this reason, “sectors that do not generate a negative externality like banking” should not be harmed, also adding “it’s a catalyst for economic growth”. Regarding the government’s economic policy, he believes they “need to keep digging deeper into reforms that enable economic growth and job creation in the medium to long term. And there I would emphasize the importance of working on fomenting investment.” But for BBVA’s Group executive chairman, the key to the future of Spain lies in “developing human capital through education -- the way to lower the structural unemployment rate, which is so high in Spain.”
Maximum collaboration with the courts
Asked about the Cenyt case, BBVA Group executive chairman Carlos Torres Vila reiterated that: “There is a legal investigation underway and it’s important to allow it to progress and reach its conclusions.” “It’s going to be a long process, so it’s important not to get ahead of ourselves. We need to let the courts act and not prejudge the facts.”
In this regard, he clarified that: “Since the beginning of the process, the Board has been very clear that the appropriate procedural strategy is maximum, complete collaboration.” BBVA’s Group executive chairman was very clear on this point, stating that: “We have provided all of the documents on the investigation to the judge. We are even doing searches on the judge’s request. Greater collaboration is not possible and it could not be any other way. It’s the best way to defend BBVA’s interests in the process.”
In addition, on the changes in the bank’s corporate governance in recent years, he added: “They are continuous improvement processes and our corporate governance has also been modified.”
Regarding the bank’s performance in 2019, the Group executive chairman stressed that: “We had the highest recurrent net attributable profit of the past ten years and also had significant growth in customers: over 400,000 new customers in Spain. And it was an excellent year in many other parameters, also in the stock market. We were the Spanish bank with the best performance in the stock exchange. If we look at shareholder returns, including the share increase plus the dividend, 2019 was 13 percent higher.”
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