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Digital processing Updated: 28 May 2018

Francisco González: “We are building the best digital bank of the 21st century”

Today, BBVA held its Annual Shareholders’ Meeting in Bilbao. In their speeches, the Chairman and CEO, Francisco González, and the President and COO, Ángel Cano, recapped the milestones of 2014 and outlined BBVA’s strategy going forward. “No one stands where we do, and we are doing what no one else is. We are building the best digital bank of the 21st century.” With these remarks on BBVA’s digital transformation, Francisco González opened his annual speech to the bank’s shareholders.


The BBVA Chairman & CEO first went over the global and European economic situation, before covering the Spanish economy. “In 2011 and 2012, Spain was on the verge of collapse,” he pointed out. “And, in 2015, we expect it to lead Europe with a growth of 2.7%.” Francisco González also pointed out that more than 400,000 net jobs were created last year. Nevertheless, he said job quality needed to improve and warned about the high unemployment rate (close to 24%). Likewise, he highlighted the need to promote innovation, improve education and the Public Administrations, streamline the judicial system and effectively fight against corruption. “To build on our achievements, we need strong governments. With political stability, 2016 and the following years will be very good for Spain,” he said.

Key developments in 2014

Francisco González recapped the key developments of last year: “Despite the complex environment, 2014 was a good year for BBVA.” The Chairman & CEO of BBVA referred to income growth and the Group’s good cost performance. Furthermore, he pointed out the improved risk indicators and high solvency levels. He also underscored that BBVA was one of the strongest institutions among large European banks in the adverse scenario of the stress tests.

As for the shareholder remuneration policy, he asserted that the bank has set a “recurring profit payout target of 35-40%, all in cash. We will carry this out progressively, according to regulatory and market conditions.” In 2015, BBVA will make four payments, two in cash and two with the Dividend Option scheme, which allows the shareholder to choose between cash or shares.

He also talked about the M&A deals announced in 2014: the purchase of Catalunya Banc, the bank’s move to increase its stake in Garanti to 39.9% and the divestments in China. The Chairman & CEO then focused on the transformation of BBVA to anticipate the impact that the technological revolution will have on the banking industry. “The financial industry has lagged behind, but we see new competitors popping up in many segments of the banking value chain,” he explained. Eight years ago, BBVA started to build its new technological platform, giving us “a big edge over the vast majority of banks.” The platform now processes 350 million transactions a day, a figure that will reach 1 billion in 2017.In 2014, BBVA set up the Digital Banking area to accelerate its transformation and make “BBVA a totally digital company, including all its products and services [such as BBVA Wallet or the one-click loans,] and with our over 100,000 employees working digitally.

Francisco González also mentioned other technological milestones, such as the launching of BBVA Data & Analytics, a big data company that specializes in developing knowledge-based digital businesses; the investment in BBVA Ventures, a 100-million dollar VC fund that has already invested in 10 very promising startups in the fin-tech sector; and the acquisition of innovative companies, such as Simple or Madiva.

The Chairman and CEO said the digital transformation is already showing results. BBVA is increasing its number of active digital customers very quickly, currently totaling over 12.4 million, including Turkish bank Garanti. Of this number, 6 million are operating with a mobile phone, when 3 years ago barely 300,000 were doing so. BBVA’s digital transformation will be in very advanced stages within two years. “We are already leaders. Our goal is to keep working to hold on to and increase our lead. Sooner than later, while achieving bigger and better results, the market will start to factor this advantage into our stock price.”

The Chairman & CEO of BBVA devoted the last part of his speech to people. “We want to help them solve problems, and reach their goals,” he said. “That is why principles are vital at BBVA: prudence, integrity and transparency.” In this regard, he emphasized that “an ethical and responsible bank is a bank that helps society. The combination of principles, people and innovation is already making a lasting impression,” he said. In Spain, “BBVA is the leader in reputation, with a major advantage in innovation and ethics.”

BBVA President & COO Ángel Cano said that, “in 2014, BBVA has once again shown strength across all its businesses and regions, outperforming its rivals”. On one hand, he pointed out the excellent earnings performance, as well as controlled costs through disciplined management. On the other, he highlighted the drop in loan-loss and real-estate provisions of over €1.6 billion. In 2014, BBVA’s attributable profit increased 25.7% to €2.62 billion.

With regards to the performance of the business areas, Ángel Cano said:

Spain’s “positive performance was the big news of the year. The business dynamics and results confirm we have left the crisis behind us, and we are headed in the right direction.” He pointed out the significant increase in new loan production, especially in the last quarter of 2014. “This good data leads us to think that, at last, the deleveraging process will be completed this year,” he said. Ángel Cano also underscored that the digital transformation has generated around €340 million in cost savings in Spain and in the corporate center, and has also improved risk indicators. Banking costs fell 5.6% compared to an increase of 8.5% in gross income.

United States is the most digitized country in the world, but its banking services remain obsolete. That is why we are aiming to build a better customer experience.” Toward this end, “we are betting heavily on digital transformation.”

In Eurasia, he said “Turkey continued to drive growth in the region. Garanti has posted an excellent performance in 2014, in a complex environment.”

According to Ángel Cano, “2014 was undoubtedly Mexico’s year. BBVA Bancomer is still the indisputable leader, in terms of market share, profitability and efficiency,” he said.

“South America is a region in which BBVA has always focused and where we will continue to make a major effort to lead the banking industry of the future.” BBVA has seen its customer satisfaction rating improve in the region and, in four countries, it is already the leader.

Wrapping up his speech, Ángel Cano talked about the outlook for this year. “In 2015, our fundamentals will remain solid and we will stick to our attractive shareholder remuneration policy,” he said.