BBVXF - Banco Bilbao Vizcaya Argentaria S.A. (BBVA) Q4 2023 Earnings Call Transcript

2024-01-30 16:18:03 ET

Banco Bilbao Vizcaya Argentaria, S.A. (BBVA)

Q4 2023 Earnings Conference Call

January 30, 2024 3:30 AM ET

Company Participants

Patricia Bueno - Investor Relations

Onur Genc - Chief Executive Officer

Luisa Gomez Bravo - Group Chief Financial Officer

Conference Call Participants

Maks Mishyn - JB Capital

Antonio Reale - Bank of America

Benjamin Toms - RBC Capital Markets

Sofie Peterzens - J.P. Morgan

Ignacio Ulargui - BNP Paribas Exane

Francisco Riquel - Alantra

Alvaro Serrano - Morgan Stanley

Carlos Cobo - Societe Generale

Britta Schmidt - Autonomous Research

Andrea Filtri - Mediobanca

Ignacio Cerezo - UBS

Marta Sanchez Romero - Citi

Fernando Gil - Bestinver

Carlos Peixoto - CaixaBank

Hugo Cruz - KBW

Presentation

Operator

Good morning. Welcome, and thank you for joining BBVA's Fourth Quarter Earnings Conference Call. With us today are Onur Genc, our CEO; and Luisa Gomez Bravo, the Group CFO. After the speaker's remarks on the Group's results and our expectations for 2024, we will open a live Q&A session.

Now, I turn the call over to Onur.

Onur Genc

Thank you, Patricia. Good morning to everyone. I will start, I'll jump into it right away, starting with page number three, by highlighting the acceleration of our profitable growth strategy in the year, as the title says. First, I want to highlight that the best way that we can contribute to our stakeholders and the society in general is through our activity of lending, our activity of banking business, and through growing our business. In that sense, we have increased our loan portfolio by 7.6% this year, and we have acquired more than 11 million new customers.

Second, from the top, the financial results that we see today are the outcome of the significant progress in the execution of our strategy. In 2023, 79% obviously, a record of our unit sales were done digitally, and we also continue at the frontline of the industry in sustainability. In 2023, we channeled EUR70 billion in sustainable business, again, an all-time high.

Third, we have achieved the highest annual net attributable profit ever, over EUR8 billion, an increase of 22% versus 2022, which translates into a 27% increase in earnings per share. Fourth, we continue delivering on our commitment to value creation for our shareholders with return on tangible equity at 17% and an exceptional 20.2% increase of tangible book value per share plus dividends. All of this is allowing us to significantly increase distributions to our shareholders for a total amount of EUR4 billion, which is equivalent to EUR0.68 per share, increasing payout, while at the same time our CET1 ratio remains comfortably above our target.

These highlights are what I would be expanding upon in the coming pages. But just to reiterate, the common theme in my view of all the numbers in this page is that we continue growing, and we are growing in a profitable way.

Moving to slide number four, our positive impact on society, we continue to help our customers achieve their life and financial goals. We have increased our loan book, as I mentioned by 7.6% in the last year. It's a very high-level number at the top, but this implies, for example, that during 2023 we have helped more than 140,000 families buy their homes. We have supported more than 550,000 SMEs, self-employed individuals, and around 70,000 larger corporates in financing their growth, financing their business. And in terms of transactionality, we have more than 20 million payrolls collected by our clients on a monthly basis. As we grow our activity, we promote employment, we promote investment and we promote welfare in the society.

Moving to page number five, new customer acquisition, one of our important pages. And as we keep reiterating, expanding our customer base will allow us to continue growing our business in a healthy way, in a profitable and healthy way. And with 11 million gross new active clients in 2023, we have grown to more than 71 million active clients in 2023. And even more impressive is the share of those customers acquired through digital channels, which increased to a new record of 65% in 2023. And I do think that this is our key difference, the way that we acquire customers through digital channels is our key difference versus most of our competitors out there.

On slide number six, our leadership in digital, it has proven to be essential and differential in serving our customer base as well. On the left-hand side of the slide, we have surpassed 52 million mobile customers, a figure more than twice of that in 2018 and a record high 74% penetration rate. And at the same time, our digital sales, it has reached 79% in terms of units and 63% in terms of value, again, one of the best, if not the best in our industry. This leadership in digital, it has also translated into a higher client satisfaction. As you can see in the right-hand side of the slide, the net promoter score, it continues improving in the group with clear leadership positions across the main countries of our footprint.

Slide number seven, a message that again defines 2023. We continue growing, outperforming our peers. Our competitive advantages, like our digital strategy and our globality, it has supported our loan growth as you see on this page, and as you see in the bubbled numbers, in every single country, we have gained market share in total loans. And if you observe the trends over the last few years, because we have five years in this chart, we are gaining market share, especially in those highly profitable segments that we wanted to grow, I mean, consumer credit cards and businesses, private businesses, across our footprint....

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