Having recently reviewed the JP Morgan annual letter to shareholders, I thought it would be useful to see what other banks were saying in their annual letters to their shareholders. I went through the Top Payment News Stories in March 2015 and noticed BBVA’s Chief, Francisco Gonzalez, “plans to build the first and best digital global bank of the 21st century”. Well blow me, that’s quite a bold statement! This sounded pretty dramatic compared with the fairly conservative JP Morgan annual letter, so I thought I’d take a further peek. There are some stark differences (which makes it interesting!) in the BBVA approach and style compared with the JP Morgan letter – following are the top 5 themes that emerged from the BBVA annual letter to shareholders:
1. BBVA had a good 2014:
So, Francisco sets the tone right from the beginning. Francisco states that while earnings were good (€2,618m new profit in 2014) BBVA looked forward at its growth potential and at the banks desire to become the worlds best bank through its digital transformation strategy.
2. BBVA Growth:
Three important growth areas include:
- Further growth in Spain through the acquisition of Catalunya Banc, becoming Spain’s main loans and customer funds bank
- A 39.9% stake in Garanti Bank, one of the leading banks in Turkey, a bank making significant technology investments
- Divestments in China which will boost the coffers
- Spain, Latin America, Turkey and the US continue to be key focus areas for BBVA…
3. BBVA and Technology:
Francisco recognises that technology is changing banking, and as such BBVA is embarking on a digital transformation to become the worlds best bank. He goes on to say that customer demands are changing and new digital providers are emerging — as a result, banks need to change fast, and that is exactly what BBVA is doing.
BBVA started the development of a digital platform 8 years ago, and is now accelerating its digital presence through the creation of a Digital Banking area.
The transformation into a digital business is happening through investments and acquisitions.
4. BBVA and Europe:
Francisco describes the healthy credentials of BBVA as one of the leading European banks – a status underlined following stress tests from which BBVA emerged as one of the top 3 banks in Europe
5. BBVA Investments:
I’m sure you’re getting the vibe here, its all about being digital and Francisco shares the following investments:
- BBVS Ventures – this is the BBVA group that looks into the disruptive innovation happening in Silicon Valley, investing in companies such as:
- Docusign – a digital transaction management company
- Taulia – a cloud based invoice and payment solution company
- Personal Capital – a digital wealth management company
- Coinbase – a bitcoin wallet company
- Start up acquisitions include:
- Simple – enabling web and mobile payments
- Madiva Soluciones – a big data and cloud computing company
Ok, I get it – BBVA is going Digital
I must say I quite like the BBVA annual letter, its short (just over 2 pages) and sweet and is forward looking. In the (38 page) JP Morgan annual letter, Jamie Dimon speaks of a moat around JP Morgan and the JP Morgan fortress — while in the BBVA annual letter Francisco speaks about a complete digital transformation and exactly what BBVA has and is doing to make this happen. Now clearly they are 2 very different banks both in terms of size, regional presence and culture — but that makes this all the more interesting. At the annual BBVA shareholders meeting, Francisco’s states that they are “building the best digital bank of the 21st century”. The message is all about the BBVA digital transformation journey and that sends a clear message to both employees and BBVA’s global audience that this is a bank intent on merging the banking and technology domains. Clearly all banks recognise the importance of fintech, based on this digital strategy let’s see how BBVA fair both within Europe and in the key regions it is targeting outside of Europe.
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