1.1 Highlights
Banco Bilbao Vizcaya Argentaria, S.A. (the “Bank” or “BBVA”) is a private-law entity governed by the rules and regulations applicable to banks operating in Spain and is the parent company of the financial group whose object is to engage directly or indirectly in activities, transactions, agreements and services relating to the banking business. The Bank conducts its business through branches and offices located throughout Spain and abroad.
The Banco Bilbao Vizcaya Argentaria Group (the “Group” or “BBVA Group”) is an internationally diversified financial group with a significant presence in traditional retail banking, asset management and wholesale banking.
The financial information included in this management report is presented in accordance with the criteria established by the International Financial Reporting Standards approved by the European Union (EU-IFRS) and taking into account Bank of Spain Circular 4/2004, and its subsequent amendments, as well as other provisions of the regulatory framework on financial reporting applicable to the Group.
The most relevant data and ratios of the BBVA Group as of December 31, 2014 and 2013 are as follows:
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| BBVA Group Highlights | Millions of Euros | ||
|---|---|---|---|
| December 2014 |
December 2013 |
% Change | |
| Balance sheet (Millions Euros) |
|
|
|
| Total assets | 631,942 | 582,697 | 8.5 |
| Total lending (gross) | 350,822 | 336,759 | 4.2 |
| Customer deposits | 319,060 | 300,490 | 6.2 |
| Other customer funds | 72,191 | 74,676 | (3.3) |
| Total equity | 51,609 | 44,565 | 15.8 |
| Income statement |
|
|
|
| Net interest income | 14,382 | 13,900 | 3.5 |
| Gross income | 20,725 | 20,752 | (0.1) |
| Income before tax | 3,980 | 954 | 317.2 |
| Net attributable profit | 2,618 | 2,084 | 25.6 |
| Data per share and share performance ratios |
|
|
|
| Share price (euros) | 7.85 | 8.95 | (12.3) |
| Market capitalization (Millions Euros) | 48,470 | 51,773 | (6.4) |
| Net attributable profit per share (euros) | 0.44 | 0.36 | 22.2 |
| Book value per share (euros) | 8.01 | 8.00 | 0.1 |
| P/BV (Price/book value; times) | 1.0 | 1.09 | (8.3) |
| Capital adequacy ratios (%) |
|
|
|
| BIS Ratio | 15.1 | 14.9 | 1.3 |
| Tier I | 12.0 | 12.2 | (1.6) |
| Core capital | 12.0 | 11.6 | 3.4 |
| Other information |
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|
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| Number of shares (millions) | 6,171 | 5,786 | 6.7 |
| Number of shareholders | 960,397 | 974,395 | (1.4) |
| Number of employees | 108,770 | 109,305 | (0.5) |
| Number of branches | 7,371 | 7,420 | (0.7) |
| Number of ATMs | 22,104 | 20,415 | 8.3 |
1.2 Business model
BBVA Group's mission is "to provide the best solutions, products and financial services to our customers. "The banking model of BBVA Group relies on four pillars:
- Leadership and Diversification: diversification is essential to withstand in any environment. The Group's structure is very balanced in terms of geographical areas, businesses and segments, which allow to keep a high level of recurring revenues, despite of the environmental conditions and economic cycles.
The Group's strategy is based on managing strong franchises, with a large customer base and leadership positions in their respective markets. The Group is continuously analyzing the market in order to identify attractive and profitable investment opportunities, within its policy of active portfolio management that seeks to generate maximum value to the shareholders. The implementation of this strategy in the medium and long term has led BBVA to carry out several transactions in 2014 (see Note 3 to the Consolidated Financial Statements attached).
- Anticipatory and prudent management: the decision-making process to conduct business management is based on prudence and anticipation. Prudent management essentially with regards to credit and structural risk management, capital and corporate operations. To be proactive is key in regard to anticipating events, along with the flexibility to swiftly adapt to them.
- Principles adjusted returns: the current environment is, undoubtedly, a challenge for the financial sector. The financial industry has suffered a social legitimacy deficit of global reach. Additionally, the sector is under regulatory pressure, especially in terms of customer protection. In this context, it is clear to the BBVA Group that pursuing profitability under any means is not the correct approach. Therefore BBVA has chosen a banking model closely tied to the principles of integrity, prudence and transparency, also referred to as profitability adjusted by principles and places people at the core of the business.
- Customer focus: The BBVA business model is focused on the customer and aims to build stronger, solid and lasting relationships with over 50 million customers worldwide.
New technologies and the universal use of mobile internet are changing the behaviors and expectations of customers, which is giving way to new competitors and transforming the financial industry. Thus, the BBVA Group has spent several years working in the transformation of its business model towards an increasingly digital one, to achieve a business model focused on customers and be able to better compete in the new environment. To do this, the Bank are betting on technology and innovation as key levers to provide a differential customer experience that significantly improves productivity, efficiency, profitability and shareholder value creation. In this regard, the Group has set an ambitious goal: be a leader in customer satisfaction in all geographies in which BBVA operates.