The 2023 general meeting of shareholders of BBVA has been marked by the turbulence generated after the fall of the Californian bank Silicon Valley Bank and the problems of the Swiss Credit Suisse. Without referring to them (he only cited the recent problems on the stock market after what happened in the United States and Europe), the president of the Spanish group has highlighted the importance of having strong entities in times of crisis: “It is at times like the present when the more the solidity and strength of banks like BBVA is valued”.
There are dark clouds on the horizon, both at a geopolitical and economic level, according to what Torres has reviewed. A tidal wave that will continue for this 2023 from a financial point of view, “a consequence of high inflation and its possible second-round effects, which can lead to higher rates and for a longer time”, has had an impact. In this sense, he has qualified that the banking crisis in the United States and Switzerland has modified market expectations.
In this context, the president of the bank is confident in the business and the progress of the group. “Despite the uncertainty and volatility, we face 2023 with confidence and with prospects for profitable growth in our core markets,” he said. The CEO, Onur Genç, for his part, assured that another of BBVA’s advantages is the bank’s good management: “Risk management has always been one of our strengths and as you can see, we have improved in all the metrics of credit risks in 2022″. In fact, the delinquency rate remains contained, at historically low levels.
In the past year, BBVA earned 6,420 million, 38% more than last year and surpassed its record until then: the 6,126 million of 2007 before the Great Recession. Growth achieved despite the fact that Turkey did not contribute everything it should due to the impact of the application of hyperinflationary accounting in the subsidiary Garanti (BBVA has 86% of the capital). “The excellent financial results are a direct consequence of the fact that we are growing our business. But it is very important that this growth is carried out in a profitable and efficient way, and in this, we certainly lead the European banking industry”, the CEO emphasized.
At the meeting, a new cash payment to shareholders in April will have to be voted on: a complementary dividend of 0.31 euros. If approved, the payment will reach 0.43 euros per share on account of the 2022 financial year, the largest cash distribution in the last 14 years. “Thanks to these results we can reinvest in the business to continue expanding our customer base. And it allows us to distribute more than 3,000 million euros, almost half of the result, among our 800,000 shareholders, most of them small savers”, highlighted Carlos Torres before starting the meeting. In total, the distribution will be 3,015 million, 46.9% of the profit.
The top president of BBVA has had an impact on the strength of the bank due to its diversification between regions and countries. “Banks that are leaders in attractive markets, and that have had an excellent performance in the year”, among which Mexico has stood out. This geographical diversification, however, is one of the issues that investors have penalized entities such as BBVA and Santander for their exposure to emerging markets. However, at the income statement level, there is little doubt that this is a strength.
On the other hand, Torres has recalled the increase in the mass of customers, incorporating more than 11 million users around the world last year. “The success of our pioneering strategic leadership has been seen in the axes that I have been pointing out in the general meetings of recent years: digitization, innovation and sustainability, truly differential factors that increasingly drive our growth, in a profitable and sustainable way” , has settled.
On the capital side, another of the issues that have come to the fore after the problems of medium-sized US banks and Credit Suisse, the CEO recalled that BBVA’s is of high quality. “Our risk-weighted asset density is well above the average for our European competitors. This level of capital gives us strength for the future and allows us to continue growing our business.”
A capital reduction of up to 10% with the redemption of own shares that it may acquire in repurchase plans will also be put to the vote at the meeting. At the moment, it has not launched a new program, although it hopes to have prior approval so that the board can start it during the year if it deems appropriate. The appointment of Sonia Dulá as the new independent director, replacing Susana Rodríguez, was also put to a vote. As well as if the shareholders give the green light to the renewal of four other directors: Raúl Galamba, Lourdes Máiz, Ana Revenga and Carlos Salazar.
On the other hand, the meeting will have to approve the new remuneration policy for directors for the next four years (2023, 2024, 2025 and 2026). This new policy includes, for example, the payment to the president and the CEO of up to eight million shares, between payments in titles and stock options. Likewise, a review of variable remuneration has been included with a short-term and a long-term incentive that sets when managers can receive that bonus.
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