Francisco Gonzalez: “The EU will cope with the crisis because the advantages of the euro outweigh the current risks”
The Chairman & CEO of BBVA, Francisco González, is convinced the European Union will achieve its goals because of the advantages offered by the single currency.
- (1888PressRelease) October 13, 2011 - “The situation requires swift action in the form of economic reforms and fiscal consolidation in some European countries, and a major effort by the EU authorities” he said today at a conference organized by the Greater Houston Partnership in Houston, Texas.
The BBVA Chairman & CEO is on a trip to the US where he has meetings scheduled with representatives from the country’s economic and financial sphere. In a presentation entitled The Global Economy and the Future of Banking, Mr González discussed the European economy, BBVA’s differential position and the changes taking place in the financial industry. After painting a tricky picture for the economy, he went on to highlight the BBVA Group’s main strengths, nothing that: BBVA is one of the four AA-rated banks in the world and one of the few banks that has weathered the crisis without receiving any government. This is the result of a business strategy predicated on three main pillars: principles, people and innovation. “BBVA has never been stronger, considering how its earnings have held up and its ability to grow” he stated.
At the end of 2010, BBVA ranked fifth in its Europe peer group by profit, second by margins and first by efficiency. In the recent stress tests performed on European banks, BBVA came out as the strongest among the large banks, with a Core Tier 1 capital ratio of 9.2% in the adverse scenario.
During the crisis, BBVA has invested in the fastest growing markets –China, Latin America and Turkey. At present, 70% of its revenue comes from outside Spain (44% in developed countries and 56% in emerging economies).
In Spain, BBVA enjoys an excellent position, which it leverages to raise its market share. In Mexico, it is also gaining share and reinforcing its leadership position. In the US, the bank is set to play a major role in the development of the Sunbelt region through its franchise, BBVA Compass, which ranks among the 20 largest banks in the US by deposits.
He then went on to explain the hefty investment made by BBVA in technology in all the countries where it operates. For instance, BBVA Compass is developing a new banking platform with the goal of becoming one of the leading banks in terms of real-time data processing in the US. This has come amid sweeping changes in the financial industry, with new regulations, a shift in power from developed to emerging economies and technological advances.
“Regulatory changes are restricting debt, imposing higher capital and liquidity requirements, and requiring major investments in risk management systems,” he pointed out. “These changes hamper the present and future profitability of banks,” he said, adding that “However, they reduce risks and do away with the reckless practices that have caused so much harm to the global economy.”
In reference to the increasing leadership of emerging countries, he highlighted the EAGLE (Emerging and Growth Leading Economies) concept devised by BBVA to identify those economies that will contribute most to global growth over the next decade, such as Mexico, China, Turkey and India.
Finally, he shared his view of how technology is transforming all sectors of the economy and especially the financial industry. BBVA is investing in a distribution model that can integrate its physical and virtual platforms, designing a multi-channel model that meets its customers’ needs.
To wrap up, Mr González said that BBVA was closer to achieving its objective of “leading the financial industry of the 21st century.”
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