Carlos Torres Vila, Group Executive Chairman:
A company’s shareholders — ultimately the company’s owners — expect the company to create value that they can eventually recognize. Can the generation of shareholder value be measured? Which metric is a better indicator: book value or tangible book value?
The net interest income is the difference in euro between financial income and financial costs; that is, the difference between an asset’s profitability (the credit lines and loans that the institution has on its balance sheet, mainly) and the interest that the bank pays for the resources it needs to finance that asset (such as customer deposits and wholesale financing).
To calculate a bank’s relative productivity, the market uses what is called an efficiency ratio. This indicator calculates the income earned for the expenses required to achieve said income over a given period of time. An institution’s efficiency ratio, expressed as a percentage, is the result of the ratio between operating expenses and the gross margin. For example, if the efficiency ratio is 60% it means that to earn 100 euro, an institution needs to spend 60. Therefore, the lower the percentage, the more efficient the institution.
2020 will be another exemplary year for the environmental, social and governance (ESG) bond market, with issuances expected to reach record levels, and the potential for innovative new structures in this growing asset category, BBVA Global Markets Research analysts say.