BBVA CEO Carlos Torres Vila explained today the reasons that motivated the organization and management changes that the Group announced this week: “We are making these changes to gain agility and efficiency,” he stressed. “But both the strategy and the goals we defined a year ago remain the same, to become a better bank for our customers, bringing the age of opportunity to everyone.”
Carlos Torres Vila started this year’s first-half earnings press conference explaining the purpose of the organizational changes announced this week, which basically have two lines of change. On one hand, the suppresion of the Country Networks area, to which all countries reported. As a result of this change all geographies will now report to the CEO. Spain, Mexico, the U.S. and Turkey will report directly, while the remaining countries will report through a newly-created area, Country Monitoring, led by Jorge Sáenz-Azcúnaga, which will help the CEO monitor all countries.
On the other hand, the Customer Solutions area, under Derek White’s leadership, will now group all key areas to build new offerings and ways to interact with customers. This area will include the business development areas of the countries, Marketing and Digital Sales, Insurance & Prevision, Asset Management & Global Wealth and Consumer Finance. Customer Solutions also integrates the New Digital Businesses area, which focuses on investing in and launching new digital businesses, as well as bolstering collaboration with the startup and developer ecosystems.
“The new organization will help us boost efficiency and accelerate the transformation,” said Carlos Torres Vila.
A solid set of results
Carlos Torres Vila underscored the robustness of the second quarter’s figures. Between April and June, BBVA Group generated the highest quarterly profit of the past 12 months, €1.12 billion, up 58.4% from the previous quarter. Net attributable profit for the first half of the year stood at €1.83 billion, down 33.6% from the same period in 2015, due to the impact of exchange rates and the lack of corporate operations. Stripping out these two factors, profits grew 5.8% y-o-y. “This may be the quarter where we’ll see the peak of the negative effect of the exchange rate,” he added.
Delving deeper into the banks’ results, the BBVA CEO broke down some of the figures to shed some light on the Group’s progress toward digitization. Digital customers grew 21% y-o-y, mobile customers 45%. In terms of penetration, digital customers now account for 35% of the total customer base, mobile customers for 22%.
“We continue developing functionalities and products and experiences for customers aimed at improving the service we deliver and at making a difference on the way they manage their lives and businesses through finance,” he said, and made reference to specific examples such as Commerce 360 in Spain (the big data service for businesses), the expansion of the remote manager model that is being implemented in Argentina, Turkey and Peru, or the direct auto insurance business that Garanti launched in Turkey.
“All these efforts to develop new products and functionalities and to offer new customer experiences have an impact on how our customers rate us
Improvement in customer referrals
“All these efforts to develop new products and functionalities and to offer new customer experiences have an impact on how our customers rate us,” he said. “According to the NPS (Net Promoter Score) indexes we use as the key yardstick to measure our positive impact on our customers, we are still taking the top spot in many of our markets.”
Carlos Torres Vila also shared some relevant information about the new digital business area. During the first quarter, BBVA’s venture fund, Propel Venture Partners, made four new investments in start-ups, as the group completed Simple’s integration into BBVA Compass.
Efficiency, a priority
Carlos Torres Vila underscored that efficiency and cost savings are now a priority for the Group, but denied that the Group was considering an extraordinary workforce adjustment plan, beyond the one agreed with the CatalunyaCaixa’s labor unions which will entail the closing of 400 offices in September.
“However, we still have many additional options to boost efficiency in Spain and outside Spain; we have many levers that we can operate. Sometimes we tend to think about efficiency in terms of less people, but there are other additional measures that also can contribute significantly to improve it,” he said, and offered some examples, such as the use of cloud technology in the field of engineering or the use of spaces. “For example, this very office complex (Ciudad BBVA) can sit up to 8,000 people. We now have 6,000 people working here, and that will allow us to free-up two buildings in Madrid. And this we can do because the new work environments, with open spaces, are much more flexible now. This helps us to keep the quality of the work environment, while materializing the efficiencies,” he explained.
About Catalunya Banc, the CEO indicated that progress toward the achievement of all the synergies envisaged in the integration plan is picking up speed, in a way such that the goal of €200 million in savings set for 2018 will be reached in 2017.
The CEO also spoke about Turkey. “Garanti is a tremendously important part of the Group. Garanti is a great bank. We are fully committed to Turkey in the long term, and nothing of what is happening changes that strategy,” he said.