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Financial inclusion 19 May 2016

Vicente Rodero, the head of Country Networks at BBVA: “We aim to lead the transformation of banks in all the regions where we have a presence”

The head of Country Networks at BBVA, Vicente Rodero, underscored the bank’s excellent position to face the challenges European and Spanish banks have before them.

“Our geographic diversity, universal, customer-centric banking model, our focus on risk management and the development of new digital functionalities are key elements of our strategy. We aim to lead the transformation of banks in all the regions where we have a presence,” Vicente Rodero explained at an event organized by APD (Asociación para el Progreso de la Dirección) this morning in Bilbao.

The head of Country Networks at BBVA indicated at the 2nd National CFO Congress organized by APD that “negative rates, regulation and the development of technology are the three main challenges banks are currently facing.” During his presentation at the opening session of the congress, he stressed that these factors are lowering profit for banks in Spain and Europe.

“European banks’ income has fallen sharply since 2010. It would be difficult for bank profit to reach pre-crisis levels. This environment will put a great deal of pressure on the sector’s costs, which will have to be reduced organically and probably also through mergers that will have to take place over the next few years,” Rodero affirmed.

Given this situation, he added, “at BBVA, we focus on growth with the belief that it can only be achieved by offering the best customer service. That’s why we aim to be at the forefront of technological change and of the development of new digital functionalities to accompany our customers as they evolve.”

 

Vicente Rodero, the head of Country Networks at BBVA, at the National CFO Congress organized by APD this morning at the BEC Bilbao

Vicente Rodero feels that the current interest rate environment in Europe “significantly limits banks’ ability to generate income from liabilities and although it’s not happening now, sooner or later, assets will be repriced which will allow Spanish banks to maintain minimum profit levels. In any case, we believe that euro zone rates will not decrease even further into negative territory and will stay where they are for a while.”

The challenge is to lead the way and efficiently carry out this transition in a way that will benefit customers in terms of quality service

With respect to regulators’ demanding higher capital requirements, Rodero notes that “this has forced banks to retain profits (paying lower dividends), reduce assets or issue equity, which is diminishing banks’ ability to increase their income statements.”

Regarding technological change, the BBVA director believes that digitization and the incorporation of new technology is a change process that affects banks as well as other sectors. “The challenge is to lead the way and efficiently carry out this transition in a way that will benefit customers in terms of quality service, and banks in terms of efficiency. Nevertheless, we think that offices and personalized customer service centers will continue to play an important role in our relationship with customers for a long time.” Rodero explained that he has recognized that “technology gives way to the arrival of new digital competitors that are creating incentives for traditional banks to speed up their adoption of these new technologies and ways of working.”

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