In 2013
In terms of business in Europe, in 2013 the area focused its efforts on managing prices and the liquidity gap, prioritizing both the relationship with customers and cross-selling over volume growth.
In Turkey, BBVA continued to focus its attention on managing the relationship with Garanti in 2013. Garanti and the Group have continued to exchange know-how and work closely in order to gain a better understanding of each other and increase the exchange of information. One aspect worth noting is the collaboration between BBVA Global Markets and Garanti for the distribution of Turkish assets to international institutional customers. Garanti has also set up a new Consumer Finance unit according to the new strategy defined by BBVA Consumer Finance. In addition, Garanti Payment Systems is carrying out many payment projects together with various Group banks, BBVA Bancomer being one of the most important. Garanti has also handled many local relationships of BBVA CIB corporate customers and launched in Luxembourg several mutual funds that invest in Turkey under the BBVA Asset Management platform. Lastly, Garanti has been involved in the global campaign conducted by BBVA to promote its alternative distribution channels, with the participation of top players from the Spanish soccer league (sponsored by BBVA) and the U.S. (BBVA Compass) and Turkish (Garanti) basketball leagues.
The main challenge faced by Garanti has been managing the profitability of its balance sheet in a scenario of high market volatility and complexity, especially in the second half of the year. The Turkish bank has continued to be at the forefront of new technologies and committed to launching new products aimed at integrating the social networks, in order to maintain its leadership position in these media in Turkey.
Lastly, as regards BBVA’s stake in CNCB, a new collaboration agreement has been signed with CITIC Group in the fourth quarter of 2013, which included the sale of part of BBVA’s stake in CNCB to its main partner, CITIC Limited. Specifically, 5.1% of the capital held by BBVA was sold. After this sale, the Group remains a large shareholder in CNCB, with a 9.9% stake, and continues to be committed to China. However, this transaction enables the Bank to anticipate future regulatory requirements and adequately and efficiently manage a relatively scarce resource such as capital.
In 2014
Management priorities in 2014 will continue to be focused on:
- In Europe, the focus in terms of lending growth will continue to be selective in specific portfolios and customers. On the liabilities side, customer fund gathering will continue to be boosted. The aim is to properly manage the area’s liquidity. Price management will also be important, as well as promoting cross-selling and controlling costs, in order to maintain the value of the franchise.
- In Turkey, managing the BBVA-Garanti relationship will continue to be critical, particularly in those fields where they have an extensive knowledge base and/or a leadership position. On the technological front, BBVA will continue leveraging on Garanti’s technological platform in different areas. Collaboration among the work teams of the various units will also continue to be encouraged.
- As regards Garanti, the focus will be on price management, particularly the optimization of the interest-rate spread and customer spreads. In line with the commitment to organic growth announced in 2013, attracting business through alternative channels will be a fundamental instrument for increasing efficiency in retail banking. Combined with a more rigorous cost policy, Garanti will continue to monitor the NPA flows in order to maintain the levels of asset quality. Lastly, in payment systems, the key will be to maintain profitability and adapt the business model to the new regulations approved at the end of 2013.
