“You can’t penalize those who have followed the law”
At a press conference Carlos Torres Vila released BBVA’s earnings for the January-September 2018 period. The forthcoming decision on who should pay the levy on documenting mortgages loans - banks or the customers - which is due to be made by Spain's Supreme Court on November 5, was raised during the presentation. In regard to the possibility of the ruling being retroactive, he stated “You can’t penalize those who have followed the law. This is precisely what the principle of legal certainty embodies, which protects us all.”
BBVA’s CEO was very clear: "Banks have not charged our customers anything in relation to this tax.” Rather, “customers have paid the tax directly to the regional tax authorities.” He also reiterated that the bank has fulfilled its current legal tax obligations at every turn, and it will continue doing so in the future.
Banks have not charged our customers anything in relation to this tax
"We are continuing to drive forward with our transformation”
During the presentation he stopped to analyze the unflagging digitization of BBVA's business. More than 39 percent of units were sold over digital channels between January and September 2018. In addition, online sales grew in all BBVA operating countries. The reasons behind this growth include the availability of DIY solutions -by signing up for products on the mobile application – as well as BBVA's enhanced user experience.
At the same time, the digital customer base is growing. Carlos Torres Vila explained that the figures "for both digital and mobile clients, continue to rise – at a pace of 23 percent and 37 percent respectively." For their part, active digital customers already make up almost 50 percent of the total, and active mobile customers “will reach more than 50 percent next year.”
These numbers demonstrate for another quarter how at BBVA “we continue to drive forward with our transformation,” he stated. Another “clear example of proof that BBVA is leading digital transformation” in the banking sector is their mobile banking app, which for the second year in a row was ranked the best in the world by the consulting firm, Forrester Research. "We have also had the added satisfaction this year of seeing BBVA's mobile app in Turkey taking second place in the ranking,” he said.
BBVA's CEO Carlos Torres Vila - BBVA
"Very solid results"
Carlos Torres Vila stressed that the quarterly results were “very solid” despite challenges in some markets, such as Turkey and Argentina. This provides further proof for the bank's business model and strategy of geographical diversification. Between January and September 2018, BBVA earned €4.32 billion, a 25 percent increase from the year before.
BBVA’s CEO placed particular emphasis on gains in recurring revenues, which saw year-on-year growth of 10.1 percent at constant exchange rates, while costs grew only 2.7 percent.
Additionally, efficiency continues to improve, remaining below the 50-percent threshold at 49.6 percent. "One of the things that contributes to our efficiency improvement is the digitization of the business, which is a key element of our strategy," he said.
One of the things that contributes to our efficiency improvement is the digitization of the business, which is a key element of our strategy
Carlos Torres Vila also underscored the strength of BBVA's risk indicators. The bank has reduced its NPL ratio to 4.1 percent, 46 basis points less than a year ago. It is also maintaining a strong capital position with a fully-loaded CET1 ratio of 11.34 percent, above the 11-percent target.
"We have the best banking project in the world.”
Carlos Torres Vila is expected to take over as executive chairman of the bank in January 2019. In today's presentation he called the banking project that he will lead up “the best in the world.” And this, he explained, is due in large part to two decades of management under the current executive chairman, Francisco González. “It has been a period of positive development for the bank, with a clear vision of where he had to take the Group.” he stated. In addition, "Its international expansion has made the bank one of the major players in the world.”
Its international expansion has made the bank one of the major players in the world
He also received several questions from journalists about the still-unannounced appointment of the next CEO. Carlos Torres Vila reiterated that the selection of a candidate is part of “an orderly, well-planned transition, which has its steps. As we've already said, it will be announced this quarter.” He added, “It will be someone in-house.”