Saturday, December 4

BBVA wants to place a fund or insurance for one out of every two clients to grow in commissions

BBVA this Thursday has set the main lines of its strategy at a global level and in its three key markets: Mexico, Spain and Turkey. The bank has indicated for the Spanish market that it wants to focus its efforts on “profitable businesses”, among which it has highlighted consumer credit, loans for SMEs and the management of customer savings. The objective, as the CEO Onur Genç has outlined, is to increase commission income.

The group has set a series of milestones over the next three years, until the end of 2024. The main one has been the one that refers to the management of investment funds and the insurance business. Peio Belausteguigoitia, head of the bank in Spain, has set the goal that one out of every two Spanish clients of the entity has an investment fund or insurance. Currently less than a third have it. These businesses are commission-intensive, a line of income on which banks are focusing their strategy, given the low interest rates that reduce their turnover in this way.

Regarding consumer loans, BBVA aims to grow 30% in this business over the next three years. Also in the business of attention to SMEs. These loans usually have interest rates that far exceed those of mortgages and large companies, but they carry an increased risk of default. The head of the bank in Spain has ensured that it intends to grow without having to increase the entity’s risk exposure.

With these two levers, the bank argues that it is capable of attracting 3.6 million more clients in these three years, which would mean doubling the rate of acquisition of previous years. For this, the entity has left open the option of recovering the search for mergers in Spain, after the fiasco that the negotiation with Sabadell supposed a year ago. “Regarding Sabadell, they already know that we were in talks with them and that we had to suspend them because we did not reach an agreement on the terms of the operation. We will see what the future holds,” said Carlos Torres, president of BBVA during the meeting with investors.

Belausteguigoitia has assured that “it is not foreseen” that in the next three years there will be a new restructuring in the company after the ERE carried out this year. However, he has emphasized the loss of relevance that bank branches are going to have. As he pointed out, the growth to which the bank aspires will be based on “remote” channels, which aspires to account for 50% of the “sales force”, to the detriment of physical offices. “We are going to continue reducing costs,” he emphasized.

Torres and Genç have chosen not to specify the merger plans both in Spain and in the rest of the markets in which it is located, although they have pointed out that they have the capital to undertake “growth” operations. One of them has been announced in recent days with the tender issued on the 51% of shares that it does not have in the Turkish subsidiary, which is listed on the Stock Exchange. The bank aspires to have 100% of the shares or, at least, to exceed 50% in order to increase its participation in the future, as Torres has detailed. The manager has defended this operation despite the doubts raised by investors, who have warned of the risks. “We have a vision of investing in the long term, despite the volatility in the short term,” he said.

The two executives have been in charge of advancing the bank’s global lines, which is going to grow in emerging markets, while for developed economies it has pointed to its digital platform as a method of entry to new countries. A few weeks ago it landed in Italy, where it had no physical presence, with its application. The result of this operation will determine whether the bank does the same in other markets, albeit with “caution”, according to Genç.

In addition, the bank has announced that it will increase the dividend it offers to shareholders, from the commitment of between 35% and 40% of profit, to between 40% and 50%. Added to this are plans to accelerate the acquisition of customers around the world and improve the profitability of the business. However, the stock market has responded negatively to what was announced by the bank, falling 5.5% in a single day, due to the drop in rates in Turkey that joins the previous negative days since the takeover was announced on its Turkish subsidiary.

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