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Finance

Finance

In a presentation for investors organized by Bank of America (BoFA) and in which BBVA CEO took part this morning, BBVA raised the Group’s guidance for 2020, thanks mostly to an improvement in its business activity in Mexico. At Group level, recurring revenues in constant euros will grow in 2H20 compared to the previous half of the year thanks to a recovery in new retail loan production and focus on price management. Furthermore, BBVA expects to beat its expectations regarding cost reductions for 2020, and improves its cost of risk expectations for 2020, to a range between 1.5 and 1.6 percent in cumulative terms for the year, thanks to a better performance in Mexico. The Group plans to close 2020 with a fully-loaded CET1 capital ratio above the target range. BBVA’s intention is to resume dividend payments once the existing supervisory recommendation is eliminated and COVID-19 uncertainties dissipate.

GDPR-bbva-dos-anos-apertura

On May 25, 2020, the General Data Protection Regulation celebrated its second year of entry into application. As envisaged in the standard itself, the European Commission performed an assessment on its application and functioning over this period of time, taking into account the feedback provided by associations, companies, consumers and EU institutions. The commission has finally released the corresponding findings, which concludes that, on top of having a very positive impact, the COVID-19 crisis has demonstrated that the Regulation is prepared for the new digital age

Speaking at IIF Digital Interchange meeting, BBVA Group Executive Chairman Carlos Torres Vila said that the lockdown as a result of the pandemic boosted pre-existing trends toward the adoption of new technologies, towards digital. In his opinion, digital inclusion suppports all types of inclusion: educational, social and economic. That is why society needs to make an effort to ensure that no one’s left behind. “I think what stands out is the need for a more sustainable and a more inclusive economy. For this, we need a policy and regulatory environment that fosters innovation,” he noted.

BBVA placed on Thursday a $2-billion issue of senior preferred debt filed with the U.S. SEC. The issue consists of two tranches, with a maturity of three and five years: The three-year tranche accounted for $1.2 billion, while the five-year one reached $800 million. Demand topped a maximum of $5 billion, with 210 orders, and the book closed with orders of $4.5 billion: $2.5 billion for the three-year tranche and $2 billion for the five-year tranche. Investors’ appetite allowed for the starting price to be set lower. The interest rate has been set at the U.S. Treasury rate plus 75 basis points spread for the three-year tranche (versus a starting spread of 100 bps) and a 100 bps spread for the five-year tranche (vs. a starting spread of 125 bps).

The COVID-19 crisis is pushing vulnerable groups – those bearing the economic brunt of the crisis – to the limit. Leora Klapper, lead economist of the World Bank’s Development Research Group and member of the Advisory Board of the BBVA Center for Financial Education and Capability, analyzes the key factors to boosting these groups’ economic resilience and promoting their financial inclusion.