The BBVA earned 1,210 million euros in the first quarter, compared to the losses of 1,792 million that it registered between January and March 2020 due to a deterioration of 2,084 million that appeared in the goodwill (value of its intangible assets) of its US subsidiary and the extraordinary provisions of 1,433 million to face pandemic economic impacts. The bank highlighted yesterday that the profit figure between January and March is “in the vicinity of the quarterly results prior to the pandemic” (1,164 million in the first quarter of 2019). In fact, it almost equals the 1,305 million he made in all of 2020.
Despite the improvement in the result, its CEO, Onur Young, He justified that the bank has started a process of ERE in Spain (with 3,448 exits, at the moment) because “there is no choice” if it wants to “guarantee the future of employment.” The country, he argued, is the only one where the group is present in which the profitability it obtains (it has not provided the data) is lower than the cost of taking over the capital (more than 10%), which “is not sustainable because you cannot invest to finance economic growth.
Transactions through digital channels, he continued, have a cost for the bank of one tenth of those in person and have risen 109% in the last two years, while those carried out in offices have fallen 50%. In addition, he added, the entity expects its basic income in the country to fall between 1% and 2% this year. “It is a problem that affects the entire sector: the viability and sustainability of the business,” he defended before assuring that the workforce adjustments are something that “all banks have done or are expected to do.”
Regarding the statements of the vice president Nadia Calvin crossing out dand bankers’ salaries “unacceptable”, Genç added to the common response that all executives in the sector are launching in public. Thus, he assured that he “understands the sensitivity” of the Government on the subject, but defended that wages are “widely regulated” in Europe and are approved by the councils and shareholders’ meetings: “We believe that we have acted responsibly and we will continue doing it”. However, he admitted that customer satisfaction rates in Spain are lower than in other countries, so he believes that the sector must “better explain” that in this crisis “it has been part of the solution.”
Group revenue fell 10.8% through March, more than expenses (7%), causing the net result to drop 13.6%. Thanks to the lower provisions (-57.3%), the result after the payment of corporation tax shot up 110.5%.
CC OO calls for “a State pact” to defend work in the sector
CC OO yesterday called on the central Executive, regional governments, political parties, supervisors and entities of the financial sector to reach a “great State pact” for the finance sector in order to guarantee employment and financial inclusion of all the population. In addition, he demanded that CaixaBank and BBVA «rectify their starting points in the ERE presented in order to avoid an escalation of conflict ”. The union denounced that the new restructuring processes “threaten to place the workforce of the Spanish financial sector around 150,000 people”, which represents 120,000 fewer workers than those recorded in 2008. It therefore maintains that Spain is the country of the eurozone with the greatest burden of care for each employee in the financial sector.
Eddie is an Australian news reporter with over 9 years in the industry and has published on Forbes and tech crunch.