Banco Bilbao Vizcaya Argentaria SA

MAD:BBVA

Earnings Call Analysis

BBVA Surpasses €8 Billion Profit in 2023

In 2023, BBVA experienced a significant year with an 8% increase in lending and 11 million new customers. BBVA capitalized on opportunities in decarbonization, channeling €70 billion toward climate change and inclusive growth initiatives. The total profit exceeded €8 billion, allowing reinvestment and shareholder returns: €4 billion was paid in taxes, enhancing societal well-being, and €4 billion returned to shareholders through dividends (€0.55 per share) and a share buyback program (€781 million). The bank reinvests the remaining profits to bolster future lending. BBVA anticipates further growth in 2024, driven by ongoing innovation, digitization, and sustainability, enhancing its societal impact.

Robust Growth and Record Profits in 2023

BBVA experienced a year of considerable expansion in 2023. The bank’s loan portfolio grew by 8%, reflecting a strong demand for its financial services. This growth is also mirrored in the substantial addition of over 11 million new customers, signifying BBVA’s increased market reach and consumer trust. The focus on financing climate change-related initiatives, a sector that vastly surpassed the bank's initial expectations, played a significant role in this success, with EUR 70 billion directed towards environmentally conscious investments.

Stakeholder Value Enhancement

With profits hitting an unprecedented high of over EUR 8 billion, BBVA has demonstrated its ability to translate business growth into value for a broad range of stakeholders. The distribution of the profit was strategically balanced; one-third contributing to corporate income tax, underpinning the bank's commitment to social welfare. An equal allocation via dividends and a new share buyback program amounting to EUR 0.55 per share and EUR 781 million respectively, reflected the bank’s dedication to shareholder returns. The remaining funds were earmarked for reinvestment, signaling confidence in future growth opportunities.

Promising Outlook for 2024

Looking ahead, BBVA forecasts another year of growth in 2024, buoyed by the robustness of its operations and ongoing strides in the incorporation of innovation, digitalization, and sustainability in its strategic direction. This growth is seen not just as a financial target but as a means to impact positively on customers' lives, reinforcing BBVA’s dedication to social and economic contributions beyond mere profitability.

Earnings Call Transcript 2023-Q4

[Carlos Torres Vila, executive]

2023 was a very positive year for BBVA. We increased lending by 8% and added more than 11 million new customers, helping more families and companies meet their goals and carry out their projects. In addition, decarbonization has clearly exceeded our expectations as a business opportunity. In 2023, we channeled EUR 70 billion in financing related to climate change and inclusive growth. Thanks to all this activity, our profit surpassed EUR 8 billion for the first time.

These results allow us to extend our positive impact on society throughout our footprint and to create value for all of our stakeholders, clients, shareholders, employees and society as a whole. We allocate EUR 4 billion, which is 1/3 of our pretax profit to corporate income tax, a direct contribution to the well-being of society. Another EUR 4 billion to significantly increase our distributions to our shareholders, almost 800,000 shareholders, many of them small savers through a EUR 0.55 dividend per share and a new share buyback program of EUR 781 million.

And the remaining EUR 4 billion of pretax profit is reinvested in the business so we can increase lending in the future. We expect 2024 to be once again a year of growth for BBVA, thanks to the strength of our franchises and the progress in the execution of our strategy, focused on innovation, digitization and sustainability. This growth will allow us to have a greater impact on people's lives.