(1888PressRelease)
April 26, 2009 - BBVA’s President and COO, José Ignacio Goirigolzarri, today affirmed that “BBVA’s strong recurrence and sustainability will be key during this slowdown”. During his speech at the XVI Financial Industry Conference, organized by Deloitte and ABC, Mr. Goirigolzarri stressed that the Spanish financial system has barely been affected thanks to its retail banking model and conservative regulation. He also highlighted that far-reaching changes are needed to promote sustainability in the medium term.
José Ignacio Goirigolzarri, President and COO of BBVA, began his speech entitled “Challenges and Opportunities for the BBVA Group in the new market” at the XVI Financial Industry Conference, organized by Deloitte and ABC, by commenting on the current crisis. He said that in 2008 a “tsunami” had swept through the financial industry.
For Mr. Goirigolzarri the crisis can be split into three stages: the first is the financial crisis with its lack of liquidity; the second is characterized by the consequences the first stage is having on the real economy while the third will entail the eventual reshaping of the financial sector. This last stage will be characterized by innovation and transformation in the sector.
“The international financial crisis has barely affected the Spanish financial system thanks to its retail banking model with minimal exposure to toxic assets, its broad customer base and its retail business model as well as the Bank of Spain’s conservative criteria”.
New backdrop
BBVA’s President and COO stressed that given the current slowdown “recurrence and sustainability” will be fundamental variables. He also emphasized that these are two of the bank’s strengths.
Recurring income, efficient distribution and prudent risk management – all cornerstones of BBVA’s business model - will help recurring earnings and the organic generation of capital.
* Recurring income: BBVA has a broad and diversified customer base (48 million). Its business is mainly retail with 88% coming from retail franchises. However, this is not enough to tackle the future, which is why we have launched our Innovation Plan. This plan focuses on three basic levers to allow for greater saturation in our relationship with our customers: knowing our customers’ needs, a well-developed sales outreach program and information all add value.
* Efficient distribution: The reach of the Spanish banking system’s network is much greater than in other European countries. BBVA has always focused on improving efficiency and, with this in mind, launched its Transformation Plan. The plan aims to boost the productivity of its distribution network in one fell swoop. This is achieved by improving the efficiency of its networks, optimizing servicing and generating income. Also, new efficiency frontiers will lead to a new distribution model, where greater emphasis will be placed on strengthening the company’s virtual presence.
* Risk management. Mr. Goirigolzarri stressed that “the risk quality will deteriorate and we aim to outperform our peers in our markets”. He also noted that “to improve risk management, adjustment must be ongoing, dynamic and pre-empt admission, monitoring and recovery models”.
* Technology. In the medium term, recurrence and sustainability require a technological revolution. “At BBVA, we are one step ahead and have rolled out our Group Platform Project which will help boost productivity and management in the new market”.
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