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TheStreet Open House

Francisco Gonzalez: "BBVA Is At The Start Of A New Cycle Of Strong Growth"

2012 highlights

Francisco Gonzalez was followed by BBVA president and chief operating officer, Angel Cano, who reviewed last year's strategic priorities:

  • Earnings: a recurring generation of income to tackle the high extraordinary provisioning associated with real-estate business in Spain
  • Capital: compliance with the capital adequacy ratios required by the European Banking Authority (EBA), the preparation for Basel III and the stress tests
  • Strengthening of our liquidity position
  • Group strategy: portfolio management, with the sale of operations in Puerto Rico, the sale process of pension funds firms in Mexico and South America, and the acquisition of Unnim Banc in Spain
  • Investment in technology and innovation as a means of distinguishing the bank, achieving new levels of efficiency
  • Lastly, BBVA's social commitment

Angel Cano also commented on the highlights, the challenges and the performance of the various business units in 2012. 

In Spain the complex environment "offered an opportunity for banks like BBVA that have emerged stronger" from the crisis with market share increases in lending and deposits. Mr. Cano said the area's operating income was close to €4 billion and it had "negative earnings of €1.27 billion as a result of provisions associated with deterioration in the real estate sector."

Eurasia will become "one of the key parts of BBVA's diversification," he said. The unit's operating income increased 9% and net attributable profit for 2012 came to €950 million, with Turkey as a growth driver.

He pointed out that " Mexico recorded a big surge in both lending and customer funds." Operating income was more than €3.5 billion and net attributable profit exceeded €1.8 billion. "Once again BBVA Bancomer strengthens itself as the top franchise in that country and the market still has high growth potential," he added.

Mr. Cano said, " South America continues to be the area with the best performance in new business and in earnings." The buoyant activity was reflected in all levels of earnings, which continue to grow at more than 20%. Furthermore, " South America has substantial growth potential and it contributed net attributable profit of €1.35 billion."

In the United States , local activities (lending and customer funds) grow at double-digit rates. The area ended the year with net attributable income of €475 million, up 40%. "The solid growth of earnings was obtained despite important regulatory demands, which required considerable investment, and there was a sharp improvement in the tools and methods used in the risk and internal control areas," Mr. Cano explained. Last year also witnessed the rollout of the new technology platform. This makes BBVA Compass "the first of the 50 majors in the United States with the ability to process information in real time."

He summed up by saying: "In 2012 BBVA has continued to demonstrate its considerable ability to generate results at the same time as it invested in opportunities to ensure future growth."

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