Letter from the Chairman
The year 2020 was marked by COVID-19, a global pandemic with severe health and economic consequences. From the very beginning, BBVA has stepped up to protect the health and well-being of everyone: employees, customers and society in general, with a donation of more than €35 million to purchase medical equipment and support particularly vulnerable groups, and research on the disease.
We have continued providing an essential service and supporting our customers when they needed it most thanks to our digital capabilities and remote managers. We have alleviated the financial burden on families and businesses through €38 billion of deferrals and flexible payments and our active participation in government aid programs, financing €25 billion. With all of this support, we have helped three million customers overcome this crisis, preserving jobs and contributing to the recovery.
I am very proud of the Bank’s response and of all of the teams’ hard work to make it possible, in line with our purpose: to bring the age of opportunity to everyone.
The health crisis has led to sharp declines in GDP around the world. In particular, the countries where BBVA operates have posted a -7.2% fall as a whole, according to BBVA Research estimates. The rapid response from central banks and governments, with monetary and fiscal stimulus measures like assistance programs, government-backed lines of credit or measures to support jobs have prevented the crisis from having an even greater impact.
Although early 2021 continues to be affected by the same uncertainties we faced at the end of the previous year, growth will be greater in the second half of the year if vaccination plans are fulfilled. An effective, rapid and global vaccination campaign will be critical to making mobility restrictions more flexible and allowing the sectors of the economy that were hit the hardest to return to a certain level of normality.
Despite this environment and the high level of uncertainty, the Bank reported good results in 2020, posting a net attributable profit for the year of €3.08 billion excluding one-offs, thanks to the hard work of our team in a highly complex environment. Following a first quarter affected by the significant efforts to front-load provisions for the impact of COVID19, the Bank’s results have shown a growing trend, reaching €1.32 billion in the last quarter of the year. The efforts made in provisions in 2020 allow us to be better prepared for the challenges of 2021, with an 81% NPL coverage ratio - the highest of the past decade. Operating income rose 11.7% at constant exchange rates, and we continue to lead our European peers in terms of efficiency and profitability.
The pandemic we are facing has accelerated trends on which our strategy is based, such as digitization. Our pioneering commitment is paying off, and has given us an advantage over our competitors that has allowed us to better serve our customers, even in a context as complex as the present, and largely operating remotely. Over 34 million customers do their banking with us via smartphone, which represents 59% of the total customer base. In 2020, nearly two-thirds of the Group’s sales took place on digital channels.
We have also made great strides in our commitment to environmental and social sustainability - one of our strategic priorities. In this regard, BBVA has been recognized as the most sustainable bank in Europe, and the second most sustainable bank in the world, according to the Dow Jones Sustainability Index.
Our commitment to sustainability is structured around several pillars. First, we help our clients in their transition toward a sustainable and inclusive future, with advice, financing and new innovative solutions. A strategy that allows us to take advantage of the enormous business opportunity that sustainable investment represents - especially related to climate change. In 2020, we mobilized a total of €11 billion in sustainable wholesale loans and bonds, which positions us as one of the leading banks in Spain and Europe. This financing is part of our Pledge 2025, of which we have already mobilized over €50 billion in just three years, meaning we are well ahead of our total goal of €100 billion by 2025.
We have also made great progress in our commitment to the Paris Agreement on climate change. Since 2020, we have been carbon neutral in the emissions directly generated by our own activity and we have moved forward in aligning our investment portfolio to this agreement (also taking into account the impact our clients have on emissions). This will be a key issue at the next COP 26, which will be held in Glasgow this year. BBVA will certainly play a highly active role in this event.
Furthermore, in order to be successful in the fight against climate change and inequality, it is critical to have adequate information. For this reason, in 2020 we published our first TCFD (‘Task Force on Climate-related Financial Disclosure’) report on the risks and opportunities posed by climate change. We also made the commitment to publish the ESG metrics promoted by the World Economic Forum’s International Business Council in order to establish international standards to measure, compare and manage performance in sustainability.
Finally, I would like to emphasize the great work that we have been directly carrying out in social action. In 2020, BBVA allocated over €140 million to social initiatives and programs to support education, culture, science, entrepreneurship and alleviate the effects of COVID-19, benefiting more than 12 million people. But also through our foundations, which promote research, culture and education, such as the BBVA Foundation or the BBVA Foundation Mexico, and development funding in the case of the BBVA Microfinance Foundation. The efforts of the latter were awarded for a second year in a row as the second largest private philanthropic initiative in the world, and the largest in Latin America, by the Organization for Economic Cooperation and Development (OECD).
Without a doubt, the other major milestone in BBVA’s strategy in 2020 was the sale of our United States business. A historic transaction with very attractive multiples that value our United States subsidiary at nearly 20 times its 2019 profit.
The operation allows us to bring out the tremendous value of this business, generating €8.5 billion in capital. This puts at an unparalleled position of strength in the sector and gives us a wide range of strategic options.
Following the United States sale, the Group’s Common Equity Tier 1 capital ratio stands at 14.6% - well above our capital target of 11.5 to 12%. It also positions us as one of the European banks with the greatest distance between the capital ratio and the minimum requirement.
This excess capital allows us to advance in our clear commitment to create value for shareholders. With regards to the year 2020, we will propose to the Annual General Meeting a payment of 5.9 euro cents gross per share in April 2021; and expect to resume our dividend distribution policy of a 35 to 40% payout for the year 2021.
In addition, this solid capital position opens to the door to other forms of extraordinary distribution to our shareholders. Our goal is to put in place a plan to buy back around 10% of the Group’s shares after the United States sale. All subject to market conditions and the necessary approvals.
Ultimately, BBVA looks to 2021 with the same commitment to society that we have had in 2020. Thanks to our great strength, we will continue providing our support to overcome this crisis and in the recovery phase.
Thank you for your support and confidence as a shareholder in such a complex year. It motivates us to continue working for a better future.
Letter from the Chief Executive Officer
2020 has been a challenging year, marked by the strong impact of the COVID-19 pandemic, with severe health and economic consequences. In this context, our priorities have remained clear and unchanged: protecting the health of our employees, clients and society as a whole, providing an essential service to the economy, and financial support to individuals and businesses.
As a result of the pandemic, the global economy shrunk, according to BBVA Research estimates, by around 2.6% in terms of GDP in 2020. This impact is heterogeneous across the countries in which BBVA is present, with a decline of 11.0% in Spain, 9.1% in Mexico, 3.6% in the United States, and 6.8% in South America¹ as a whole, and all this despite fiscal stimulus and monetary policy measures swiftly implemented by central banks and governments. Turkey closed the year with a slight growth of 1.0% in 2020. As for 2021, we expect strong recovery across our footprint, even though uncertainty remains high.
Despite this challenging scenario, BBVA once again has demonstrated the strength of its business model, and has reported solid financial results in a context of high uncertainty, with operating income growing at double digit and remaining at the forefront of its European peer group in terms of profitability.
The net attributable profit of BBVA Group in 2020, excluding one-offs, stood at €3.08 billion, 27.2% less than in the previous year, at constant euros, as a result of front-loading of provisions and impairments during the first half of the year. Taking into account the impact of the goodwill impairment from BBVA USA and the net capital gains from the agreement reached with Allianz, the net attributable profit stood at €1.31 billion.
I would also like to comment on other major milestones we achieved in 2020, the historic sale agreement of our business in the United States, which has allowed us to emerge the tremendous value of the unit and which offers ample strategic optionality. This transaction confirms our clear commitment to creating shareholder value, placing the proforma fully-loaded CET1 capital ratio at 14.58%. Excluding the impact of this sale, the ratio closed the year at 11.73%, within the target range and almost flat compared to 2019, after recovering from a sharp drop in the first quarter due to the pandemic.
In terms of shareholder value creation, the tangible book value per share plus dividends closed the year at €6.21, a level similar to that of 2019. And yet for another year, our profitability metrics remained at the top of our peer group. Excluding the year’s one-offs, i.e. the impact of the goodwill impairment and net capital gains from the Allianz agreement, the return on equity closed at 6.9% and the return on tangible equity at 7.8%.
All this will allow us to submit, for the consideration of shareholders and supervisors, the proposal to resume shareholder distribution with a payment of 5.9 euro cents gross per share in April 2021.
It is also worth noting the solid performance of our recurring income, which despite the complexity of the environment, grew by 2.7%, at constant exchange rates – i.e. without taking into account the impact of the exchange rate -; and the discipline in controlling expenses, which, for the first time in many years, fell to 2.6%, at constant euros, despite significant inflation rates in some of the countries where BBVA is present. As a result, the efficiency ratio improved by 342 basis points, to 46.8%, leading, for yet another year, our group of comparable competitors. All of this led to an operating income growth of 11.7% compared to last year, in constant euros.
Regarding risk indicators, it should be noted that, following front-loaded provisions in the first half of the year as a result of the pandemic, they behaved better than expected. Cost of risk stood at 1.51%, at the bottom end of the expected range announced by the Bank in the first quarter of the year. The NPL rate rose slightly to 4.0%, while the coverage ratio remained at very high levels, closing the year at 81%.
As for the main business areas, I would like to underline the following:
- In Spain, the net attributable profit stood at €606 million, down 56.3% from the previous year, due to provisions related to the pandemic. However, operating income grew 4.7%, driven by revenues from fees and commissions and the drop in operating expenses. The cost of risk improved as the year progressed, after a first half impacted by significant provisioning efforts, to finish at 0.67%. The NPL ratio improved to 4.27% and the NPL coverage ratio closed the year at 67%. BBVA’s coverage ratio is the highest in Spain’s banking sector.
- In the United States, the net attributable profit stood at €429 million in 2020, after declining 25.5% from 2019, at constant euros, due mainly to the increase in loan-loss provisions. As for the top lines, it is worth underscoring the 4.4% growth of the operating income, driven by growth in fees and commissions and net trading income and by the decline in operating expenses. Cost of risk closed at 1.18%, a significantly lower level than expected in the third quarter.
- In Mexico, net attributable profit reached €1,769 million, a figure that represents a 25.8% year-on-year decline, at constant euros, as a result of the loan-loss provisions recorded to face the pandemic, partially offset by cost containment efforts, which kept expenses well below inflation. Risk indicators closed the year in line with expectations, after a first half of the year impacted by strong provisioning efforts.
- In Turkey, the net attributable profit reached €563 million. Excluding the currency fluctuations during the year –that is, in constant terms – this figure represents a 41% increase from the preceding year. It is worth noting the positive performance of the net interest income, driven by investment growth and solid price management practices, as well as net trading income and cost containment efforts.
- In South America, it is worth noting the solid performance in the main countries: Argentina, Colombia and Peru. The area’s attributable profit stood at €446 million in 2020, down 22.6% at constant terms, as a result of provisions related to the pandemic.
I would like to end by expressing my gratitude to the Group’s more than 123,000 employees for their constant dedication, their continuous effort and their contribution to these results in a particularly difficult year for everyone. It is thanks to each one of these individuals that we are able to work as one team. And of course, I would also like to thank you, the shareholders, for your trust and your constant support that drives us to deliver on our purpose: to bring the age of opportunity to everyone.
¹Includes Argentina, Brazil, Chile, Colombia and Peru.
History of BBVA
The history of BBVA is the history of many different people; people who have been a part of the more than one hundred financial institutions that have joined our corporate journey since it first began in the mid-19th century. Today at BBVA, we work to create a better future for people. We seek to build long-lasting relationships with our customers that change the way we look at the business. As a result, BBVA has become a global leader and one of the most highly regarded banks in the world.
BBVA is firmly committed to the future and is a pioneer in adapting to the needs of an increasingly global market - especially to the banking industry of the 21st century.
Over 160 years of experience support this commitment.
The history of BBVA dates back to 1857 in the city of Bilbao, in northern Spain, where the Board of Commerce promoted the founding of the Banco de Bilbao as an issuer and discount bank. It was a pioneering initiative at the time, driven by the region’s economic growth. In fact, it was the city’s only bank until the end of the 19th century.
In the second half of the 19th century, Banco de Bilbao financed several important infrastructure and steel industry projects. In 1878, it lost the right to issue its own banknotes and was restructured as a loan and discount bank. Banco de Vizcaya was founded in 1901; it carried out its first transactions in Bilbao and little by little, began to expand across the country. Apart from its activity as a commercial and depositary bank, Banco de Vizcaya participated in the creation and development of a large part of Spanish industry. In 1902, Banco de Bilbao and the Banco de Comercio merged, although both institutions maintained their status as legal entities.
In 1909, Caja Postal was created as a public-law entity and in 1916, it began to issue and administer savings account passbooks.
A consortium of bankers and industrialists founded the Banco de Crédito Industrial (BCI) in 1920, for the express purpose of promoting the installation and consolidation of industries by granting long-term credits. Banco de Bilbao and Banco de Vizcaya were part of this consortium.
In 1923, the National Agricultural Credit Service was created. Under the umbrella of the Ministry of Agriculture, it granted loans to agricultural and livestock associations, under the joint and several liability of its associates.
During the economic development of the 1960s, Banco de Bilbao acquired other banks and began to create a financial group. Meanwhile, Banco de Vizcaya continued to grow and establish itself as a modern, universal bank and an important financial group. More flexible rules on opening offices allowed the bank to expand its commercial network.
Caja Postal added more customer services, including checking accounts, stock purchases/sales, and lending in certain areas. The 1962 Banking Law nationalized BCI, BHE and BCL and transformed the National Agricultural Credit Service into the Banco de Crédito Agrícola (BCA). All four banks became entities governed by public law. But in 1971, they became official credit institutions (under the Law Regulating Official Credit) as limited companies.
In the 1980s, Banco de Bilbao based its strategy on reaching a size that would allow it to access the financial business that was emerging at the time from the technological advances, deregulation, securitization and the interplay between national and international markets. Banco de Vizcaya contributed to the rescue of banks that were affected by the economic crisis and developed a policy of strong growth through acquisitions, which led it to create a large banking group. Its most significant operation was its purchase of Banca Catalana in 1984.
Meanwhile, official credit institutions continued to expand their business through market operations. In 1982, BEX lost its exclusive rights to export credit, redirecting its business to universal banking, and forming a financial group. It acquired Banco de Alicante (1983) during this process. In 1988, Banco de Bilbao and Banco de Vizcaya merged to create BBV.
Corporación Bancaria de España was established in 1991 as a state-owned enterprise and credit institution with the status of a bank. Its history began with a federated banking model, but in 1988, Corporación Bancaria de España (now privatized through public offerings), BEX (merged with BCI), BHE and Caja Postal merged into a single bank under the brand Argentaria.
BBVA unified its network of offices in Catalonia in May 2013 after the acquisition of Unnim Banc was complete.
The merger of BBV and Argentaria
In an effort to continue adding value, BBV and Argentaria announced their merger on October 19, 1999, creating the new bank (BBVA). It was of a substantial size, with strong solvency, a large financial structure, ample geographic diversification of business and risks, and as a result, greater potential for raising its profits.
Customers now had access to an extensive distribution network, a wider range of products, new channels and a stronger international presence. Employees, meanwhile, had greater opportunities for professional development.
The integration of the two banks was exemplary for multiple reasons:
- Strategic decisions were made quickly. The organizational structure was defined immediately and a framework agreement was established with workers.
- Working groups were formed and plans for the different areas of activity were defined quickly.
- Ambitious deadlines were met, sometimes ahead of schedule.
- The effort benefited from the excitement, participation and team spirit shown by everyone in BBVA.
The integration process received a major boost when a single BBVA brand was adopted in January 2000. This allowed the bank to create an image based on its own unique identity in very little time. BBVA’s integration process took place quickly and efficiently and concluded in February 2001.
The integration of the group’s retail businesses in Spain (BBV, Argentaria, Banca Catalana, Banco del Comercio and Banco de Alicante) allowed the bank to take advantage of the potential offered by an extensive network of branches with the BBVA image.
Prestigious financial publications recognized the efficiency of BBVA’s integration, naming it the best bank in the world (Forbes) and in Spain (The Banker) and in the year 2000, the best bank in Latin America (Forbes) and the best bank in Europe (Lafferty) in 2001.
The international group
BBVA in the world
BBVA is a customer-centric global financial services group founded in 1857. The Group has a strong leadership position in the Spanish market, is the largest financial institution in Mexico, it has leading franchises in South America. It is also the leading shareholder in Turkey’s Garanti BBVA and has an important investment, transactional and capital markets banking business in the U.S. Its purpose is to bring the age of opportunities to everyone, based on our customers’ real needs: provide the best solutions, helping them make the best financial decisions, through an easy and convenient experience. The institution rests in solid values: Customer comes first, we think big and we are one team. Its responsible banking model aspires to achieve a more inclusive and sustainable society.
Data at the end June 2021. Those countries in which BBVA has no legal entity or the volume of activity is not significant, are not included
Relevant data of the BBVA Group (consolidated figures) at 30-06-2021. This section contains all the updated quarterly figures on the balance sheet and income statement, and other relevant data.
More financial information is available on the Shareholders and Investors website.
Business Units Business Units
Global Functions Global Functions
Legal and Control Legal and Control
BBVA Organizational chart
At the end of 2018, the Board of Directors of BBVA approved a new organizational structure to foster the Group’s transformation, while further specifying responsibilities for executive roles.
The main aspects of the new organizational structure are as follows:
The Chairman is responsible for the management and proper functioning of the Board of Directors, the supervision of the Group’s management, institutional representation, and leading the Group’s strategy and transformation process.
The areas reporting directly to the Chairman are those related to key levers in the transformation: Engineering & Organization, Talent & Culture and Data; as well as those related to the Group’s strategy: Global Economics & Public Affairs, Strategy & M&A, Communications & Responsible Business, and the new figure of Senior Advisor to the Chairman; and areas related to legal issues and the Board l: Legal and Secretary General.
The Chief Executive Officer (CEO) is in charge of the daily management of the Group’s businesses, reporting directly to BBVA’s Board of Directors.
Reporting to the CEO are the business units in the different countries, Corporate & Investment Banking, as well as the following global functions: Client Solutions, Finance & Accounting, which includes the functions of accounting and taxes, and Global Risk Management.
Additionally, certain control areas are given greater independence, reporting directly to the Board of Directors through its corresponding committees. These control areas include Internal Auditing and the newly created Regulation & Internal Control, an area in charge of relations with regulators and supervisors, monitoring and analysis of regulatory trends, and developing the Group’s regulatory agenda, and managing compliance-related risks.
In 2019, BBVA carried out a strategic review to continue its transformation and continue adapting to the major trends reshaping the world and the financial services industry:
- A challenging macroeconomic outlook, characterized by rising uncertainty at a global level, lower economic growth, low interest rates, greater regulatory requirements, geopolitical tensions and the emergence of new risks (cybersecurity, etc.).
- An evolution in clients’ behaviors and expectations. Clients are demanding more digital, simple and personalized value propositions, based on expert advice, to make the best decisions.
- A strong competitive environment, where digitization is already a common priority for banks and the role of big tech companies and ecosystems is rising. They offer financial services within their global solutions and an excellent customer experience.
- Society is concerned about achieving a sustainable and inclusive world. Climate change is a reality and all stakeholders (consumers, companies, investors, regulators and public institutions) have made achieving a more sustainable world a priority. The transition toward this sustainable world has major economic implications and the financial sector must play a very active role to ensure the success of this evolution.
- Data has become a key differentiating factor. Data management produces solid competitive advantages as it makes it possible to offer customized value propositions, improves automation to enhance the efficiency of processes and reduce operational risks. Data also entails the management of new risks with relevant implications in terms of privacy, security, ethics, etc.
In this context, BBVA’s strategy has evolved with six strategic priorities which aim to accelerate and deepen the Group’s transformation and the achievement of its purpose.
Our purpose and strategic priorities
In this context, BBVA’s strategy has evolved with six strategic priorities that aim to accelerate and deepen the Group’s transformation and the achievement of its purpose:‘to bring the age of opportunity to everyone.’
1. Improving our clients’ financial health
Help our clients, through personalized advice, make better decisions and manage their finances to achieve their life and business goals.
2. Helping our clients transition toward a sustainable future
Progressively align our activity with the Paris Agreement and use our role to help our clients transition toward a more sustainable future inspired by selected Sustainable Development Goals.
3. Reaching more clients
Accelerate profitable growth by being where clients are, leveraging our digital channels and those of third parties.
4. Driving operational excellence
Provide the best customer experience with simple, automated processes and a continuous focus on risk management and optimal capital allocation.
5. The best and most engaged team
A diverse and empowered team guided by our purpose, values, and behaviors, propelled by a talent development model that creates growth opportunities for all team members.
6. Data and technology
Advanced data analytics coupled with secure and reliable technologies to build distinctive high-quality solutions and deliver on our strategy.
The BBVA Group has developed new people management models and new ways of working that have enabled the bank to continue transforming its operational model, while also also promoting a cultural transformation and fostering the ability to become a purpose-driven company, or, in other words, a company where staff’s actions are guided by the values, and are genuinely inspired and motivated by the same purpose.
BBVA engaged in an open process to identify the Group’s values, which took on board the opinion of employees from across the Group’s global footprint and various units. These values define our identity and are the pillars for making our Purpose a reality:
Customer comes first
BBVA has always been customer-oriented, but the customer now comes first before everything else. The bank aspires to take a holistic vision of customers that goes beyond financial aspects. This means working with empathy, agility and integrity, among other things.
- We are empathetic: we take the customer’s viewpoint into account from the outset, putting ourselves in their shoes to better understand their needs..
- We have integrity: everything we do is legal, publishable and morally acceptable to society. We always put customer interests’ first.
- We meet their needs: We are swift, agile and responsive in resolving the problems and needs of our customers, overcoming any difficulties we encounter.
We think big
It is not about innovating for its own sake but instead to have a significant impact on people’s lives, enhancing their opportunities. The BBVA Group is ambitious, constantly seeking to improve, and not settling for doing things reasonably well, but instead always striving for excellence.
- We are ambitious: we set ourselves ambitious and aspirational challenges to have a real impact on people’s lives.
- We break the mold: we question everything we do to discover new ways of doing things, innovating and testing new ideas that enables us to learn.
- We amaze our customers: we seek excellence in everything we do in order to amaze our customers, creating unique experiences and solutions that exceed their expectations.
We are one team
People are what matters most to the Group. All employees are owners and share responsibility in this endeavor. We break down silos and trust others as we do ourselves. We are BBVA.
- I am committed: I am committed to my role and my objectives. I feel empowered and fully responsible for delivering them, working with passion and enthusiasm.
- I trust others: I trust others from the outset and work generously, collaborating and breaking down silos between areas and hierarchical barriers.
- I am BBVA: I feel ownership of BBVA. The bank’s objectives are my own and I do everything in my power to achieve them and make our purpose a reality.
Sustainability and responsible banking model
BBVA has a unique way of doing banking based on the purpose “to bring the age of opportunity to everyone”, always acting in line with its corporate values and its goal of having a positive impact on the lives of people, businesses and society as a whole.
It is a commitment to a responsible way of doing banking and to creating value for all its stakeholders over the long-term, which is reflected in the different bank policies - especially in the General Sustainability Policy and in the Corporate Social Responsibility Policy.
- The General Sustainability Policy on sustainable development aims to achieve economic development, social development and environmental protection in a balanced way.
- The Corporate Social Responsibility (CSR) Policy focuses on managing the responsibility of BBVA’s impact on people and society..
BBVA will abide by the following general principles for corporate social responsibility:
- Having a positive impact on society.
- Respect for people’s dignity and inherent rights.
- Community investment.
- Involvement as an agent of social change.
The Group will also carry out its activities in the sustainability and corporate social responsibility area based on the following general principles, which are already applied in its different management policies:
- Prudent risk management.
- Achievement of a profitable and sustainable long-term business.
- Creating long-term value for all stakeholders.
- Compliance with applicable law at any given time.
All the business and support areas integrate these two policies into their internal regulations and activities. The Global Sustainability Office and the Responsible Business department coordinate and support them in their implementation.
Banks play a crucial role in the fight against climate change and in achieving the United Nations Sustainable Development Goals thanks to their unique position in mobilizing capital through investments, loans, issuance and advisory functions. They have effective measures in place to help tackle these challenges: first, providing innovative solutions to help customers transition to a low-carbon economy and driving sustainable finance; and, second, systematically incorporating social and environmental risk into their decision-making processes.
BBVA’s commitment to sustainable development is reflected in its global-reach Environmental Commitment. In 2018, BBVA announced its strategy on climate change and sustainable development to help the bank meet the United Nations Sustainable Development Goals and achieve the objectives of the Paris Agreement on climate change. The Pledge 2025 will help the bank to progressively align its activity with the Paris Agreement on climate change and strike a balance between sustainable energy and investments in fossil fuels. The strategy is based on a threefold commitment:
- To finance: BBVA is pledging to mobilize € 100 billion in green finance, sustainable infrastructure and agribusiness, entrepreneurship and financial inclusion.
- To manage the environmental and social risk associated with the bank’s activity in order to minimize potentially negative direct and indirect impacts.
- To engage all stakeholders in order to increase the financial sector’s collective contribution to sustainable development.
BBVA’s environmental commitment and strategy on climate change and sustainable development are both approved by the Chief Executive Officer and backed by senior management.
Investment in social programs
Through its social programs, BBVA acts as a driver of opportunity for people, seeking to have a positive impact on their lives, and delivering on its aim of making the opportunities of this new era available to those facing the greatest difficulties, the vulnerable. In 2019, the BBVA Group allocated €113.8 million to social initiatives that benefited 11.5 million people. This figure represents 2.4 percent of the bank’s net attributable profit.
BBVA channeled its investment through its local banks and corporate foundations. We contribute to the development of society in the countries where we have a presence. The foundations play a fundamental role in channeling a vital part of the group’s social investment initiatives.
The BBVA Foundation focuses on promoting knowledge, culture, the dissemination of science and art, and the recognition of talent and innovation. Its activities can be grouped into five strategic areas: environment; biomedicine and health; economy and society; basic sciences and technology; and culture. In each of these areas it designs, develops and finances research projects - either individually or in teams; facilitates advanced and specialized training through scholarships, courses, seminars and workshops; awards prizes to researchers and professionals who have contributed significantly to the advancement of knowledge; and communicates and disseminates this knowledge through publications and conferences.
The BBVA Microfinance Foundation is a non-profit organization established in 2007 by BBVA within the framework of its corporate social responsibility to support vulnerable people and provide them with access to productive activities. It has a budget of 300 million dollars and over 150 years of experience. Its objective is to create opportunities for people in vulnerable situations, expanding and facilitating access to financial services. For this, it uses a proprietary methodology called “Productive Finance”, which seeks to develop the customer and offer personalized attention to the entrepreneurs to whom it provides. That is, it provides not only financial products and services, but also advice and training for the administration and financial management of their small businesses.
Its overall objective is to promote a concept of financial education in a broad sense through the Global Financial Education Plan, which is based on three lines of action:
- Financial education for society: Promote the acquisition of knowledge, skills and attitudes in all countries where BBVA has a presence through its own programs and in collaboration with third parties. The aim is to achieve greater knowledge of financial concepts and create a change in behavior in terms of financial decision-making, helping to improve people’s financial health. In 2019, a total of 1.9 million children and young people, adults and SMEs benefited from local initiatives.
- Financial education in customer solutions: Integrate financial capabilities in the customer's experience in order to facilitate informed decision-making, which will result in an improvement in their financial well-being and allow them to access greater opportunities.
- Financial education in customer solutions: Integrate financial capabilities in the customer’s experience. In order to facilitate informed decision-making, which will lead to an improvement in their financial well-being and allow them to access greater opportunities, financial education content was integrated into customer solutions in 2019. In 2019, 20,110 users accessed financial education content published on bbva.com and 288 people attended events held by the Center for Education and Financial Capabilities. In 2019, €7.7 million were spent on financial education.
BBVA has a long-term commitment to financial education, with €89 million invested and 15.5 million people benefiting from different programs since 2008.
In 2019, BBVA allocated €9.8 million to entrepreneurship initiatives that benefited 2.2 million people. The following are among the global initiatives related to entrepreneurship:
BBVA Momentum is a global program that helps social entrepreneurs grow and broaden their impact. It includes training, strategic accompaniment, networking and access to funding. 167 entrepreneurs from Colombia, the United States, Mexico and Turkey participated in the program in 2019.
BBVA Open Talent is a fintech startup competition that aims to foster innovative technological solutions and raise awareness of emerging projects capable of transforming the financial sector. In 2019, 770 startups from 95 countries participated, with 290 professionals involved.
Knowledge, education and culture
Regarding the knowledge, education and culture activities, €77.6 million were invested, benefiting 7.2 million people in 2019. BBVA contributes to the dissemination of knowledge through BBVA Research, the BBVA Foundation and BBVA OpenMind.
BBVA’s Code of Conduct
The Code of Conduct establishes the behavioral guidelines that, according to the principles of the BBVA Group, ensure that conduct adheres to the internal values of the Organization. To this end, it establishes the duty to respect applicable laws and regulations for all its members in an integral and transparent manner, with the diligence and professionalism that correspond to the social impact of financial activity and to the trust that shareholders and customers have placed in BBVA.
The Code was approved by the BBVA Board of Directors on May 28, 2015.
BBVA's Whistleblower Channel
A fundamental mechanism to guarantee the effective application of the regulations and guidelines of the Code of Conduct is the Whistleblower Channel, through which not only BBVA employees, but also other third parties not belonging to the BBVA Group can can confidentially and, if they wish, anonymously report any conduct that does not adhere to the Code of Conduct or that violates applicable legislation, including human rights-related complaints.
The Compliance area will handle complaints diligently and promptly. The information will be analyzed objectively and impartially and the identity of the whistleblower will be kept confidential. Those who report facts or actions in good faith through the Whistleblower Channel will not be subject to retaliation or suffer adverse consequences for this communication.
This Channel allows you to maintain, if you wish, a dialogue with the Manager of your complaint. For this purpose, we have designed a system (secure mailbox) that will allow you to communicate with BBVA, preserving your anonymity at all times.
The Whistleblower Channel is available 24 hours a day, 365 days a year from any computer or cell phone.
If you observe or someone informs you of an action or situation related to BBVA that may be contrary to the regulations or the values and guidelines of our BBVA Code of Conduct, please report it through:
The Whistleblower Channel is not the appropriate channel for dealing with customer complaints.
BBVA’s tax strategy
BBVA’s corporate principles for tax issues and fiscal strategy, approved by the Board of Directors.
U.S. Patriot Act
The USA Patriot Act is a U.S. law approved in 2001 following the September 11th terrorist attacks. Its main purpose is to increase government control to fight terrorism and improve different U.S. security agencies’ capacities through coordination and granting the agencies greater monitoring power.
One of the ways in which the USA Patriot Act combats terrorism is by monitoring banks to prevent money laundering, a source of funding for terrorist groups.
According to the requirements of the USA Patriot Act, all banks located outside the U.S. that wish to engage in or maintain international relations with a U.S. bank or broker/dealer are required to provide certain information about the nature of their business and their supervision.
That’s how the USA Patriot Act applies to BBVA.
Global USA PATRIOT ACT Certificate – PDF Document / (2745 KB)
Global USA PATRIOT ACT Certificate for use by any financial institution that provides, or could provide services to any institution in the BBVA Group or the entire BBVA Group.
The Foreign Account Tax Compliance Act (FATCA) is a law introduced by the U.S. Department of Treasury and Internal Revenue Service (IRS) to encourage enhanced tax compliance and transparency with respect to U.S. citizens or residents. FATCA requires financial institutions around the world to identify U.S. persons that have foreign bank accounts, among others, and report them to the U.S. tax authorities. To ensure compliance, a 30 percent withholding tax will be imposed on certain payments to non-compliant institutions and individuals.
BBVA, along with its subsidiaries and branches, is committed to helping guarantee international tax compliance while maintaining high standards of customer data security. BBVA is therefore proactively implementing changes in its current business practices to ensure compliance with FATCA.
BBVA institutions affected by FATCA have already been registered with the IRS and will appeal in the next official IRS list of participating financial institutions.
FATCA requires financial institutions across the globe to fulfill certain requirements:
- Identify the following customers with a BBVA account:
- U.S. citizens or residents
- U.S. corporations
- Certain legal institutions, mainly private equity entities owned by U.S. citizens
- Report information on account holders listed above to the IRS or local tax authorities. This information includes:
- Personal information: name, address and U.S. Tax Identification Number (US TIN)
- Account information: account number, account balance and payments made or received in the account
- Withhold 30 percent from account holders on certain payments from the U.S. (mainly interest and dividends) that fail to comply with FATCA.
However, It is not expected that FATCA will affect most of BBVA’s customers. FATCA entered into force on July 1, 2014. Reporting began in 2015.
Please note that BBVA does not provide tax advice. If required, we recommend that our customers seek independent advice on FATCA from a professional tax advisor. BBVA and its subsidiaries are not liable for any errors, omissions or opinions contained within this document.
BBVA Due Diligence
Know more about our regulatory framework, financials reports, Corporate Governance and Corporate Integrity Models.