Growth in operating expenses has been restricted in year-on-year terms, with a rise under that of gross income (up 4.0% at constant exchange rates). This trend is the result of adapting management to the needs of each geographical area: a policy of cost rationalization in developed countries and execution of transformation and expansion plans in emerging regions, mainly Mexico and South America. Investment in these countries is focused on three core areas:
Breakdown of operating expenses and efficiency calculation
(Million euros)
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1Q14 | Δ % | 1Q13 | 2013 |
|---|---|---|---|---|
| Personnel expenses | 1,375 | (5.7) | 1,458 | 5,788 |
| Wages and salaries | 1,039 | (5.5) | 1,100 | 4,392 |
| Employee welfare expenses | 221 | (5.4) | 234 | 866 |
| Training expenses and other | 114 | (7.9) | 124 | 530 |
| General and administrative expenses | 959 | (6.4) | 1,025 | 4,280 |
| Premises | 228 | (1.7) | 232 | 966 |
| IT | 188 | 0.8 | 187 | 801 |
| Communications | 68 | (16.1) | 81 | 313 |
| Advertising and publicity | 84 | (15.9) | 100 | 391 |
| Corporate expenses | 20 | (11.1) | 23 | 106 |
| Other expenses | 274 | (6.4) | 293 | 1,268 |
| Levies and taxes | 96 | (11.8) | 109 | 437 |
| Administration expenses | 2,334 | (6.0) | 2,482 | 10,068 |
| Depreciation and amortization | 279 | 1.1 | 276 | 1,133 |
| Operating expenses | 2,613 | (5.3) | 2,758 | 11,201 |
| Gross income | 5,051 | (6.8) | 5,419 | 21,397 |
| Efficiency ratio (Operating expenses/gross income, in %) | 51.7 |
|
50.9 | 52.3 |
Operating expenses(Million euros)  (1) At constant exchange rates: +4.0% |
Efficiency
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- Implementation of a segmented and specialized management with the aim of improving customer insight.
- Extension and modernization of the distribution network and a boost to digital channels.
- An ongoing transformation process to make procedures more speedy, secure and reliable through digitization and automation.
When comparing the number of employees, branches and ATMs in year-on-year terms, it is important to take into account the sale of BBVA Panama and the pension business in Latin America in 2013, as well as the investment resulting from the transformation and expansion plans, implemented above all in Latin America (with increases above all in ATMs).
Number of employees (1)
(1) Excluding Garanti. |
Number of branches(1)
(1) Excluding Garanti. |
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Number of ATMs (1)
As a result of this performance of revenue and expenses, the Group’s operating income grows 6.0% in the last 12 months at constant exchange rates, after a number of quarters in which the year-on-year rates were negative. The efficiency ratio has improved with respect to the close of 2013 (51.7% compared with 52.3%, respectively).
Operating income
(Million euros)
