BBVA achieved impressive momentum in Latin America during 2023, winning individual best bank awards in Colombia and Mexico, and coming close in Peru. Its bank in Argentina also posted respectable growth and is poised to take advantage of a potentially more benign economic outlook. The Spanish firm also capitalized on its market leading position in Mexico to win the award for the country’s best investment bank and is also Latin America’s best bank for transaction services – a landmark win in an sector that has traditionally been dominated by US banks.
It would be an exaggeration to attribute this performance solely to the digital innovations that BBVA has been integrating throughout its regional network in recent years – but not too much of an exaggeration. The bank won more than 11 million new customers in 2023, with 65% of these captured through digital channels. It introduced a range of innovations, from pure digital onboarding for business clients in Mexico, Colombia and Peru to new savings and retail banking modelling tools.
The bank also introduced new ‘one-click’ loan financing for clients in Mexico, Peru, Argentina and Colombia, as well as pre-approved financing for merchants using the bank’s point-of-sale transaction products.
BBVA leveraged this digital innovation to grow its market share in loans in these markets, with a 38-basis point increase in Mexico for a 24.7% share, 50bp in Colombia to 11.6% and 90bp in Peru, taking it to 21.2%.
BBVA has also advanced its open banking and digitization project by launching real-time, multi-bank account verification through application programming interfaces, as well as integrating digital assets into its investment platform to differentiate the bank from its local competitors. Across its retail client network, BBVA now has 58 million individual users, representing 76% of active users, and the bank’s app increased the number of its monthly logins by 26%, while the number of monthly transactions surged by 44% to 335 million.
BBVA won more than 11 million new customers in 2023 – 65% of them captured through digital channels
The strengthening of its regional platform helped the bank post very strong financial results for 2023. BBVA accelerated profit growth to distribute €5 billion while ending the year with a solid common equity tier-1 ratio of 12.67% – well above the upper part of its stated target capital range of 11.5% to 12.0% – and so shareholders can expect 2023’s strong performance to lead to higher dividend payouts this year.
BBVA’S improved profitability was, in large part, generated by improved efficiency. The bank’s cost-to-income ratio benefits from 30% higher gross income while costs rose by a lower (though still high) 19.7%. The efficiency ratio therefore improved by 370bp during the year to 41.7% and the bank’s senior management in Latin America – under the watchful eye of Jorge Sáenz-Azcúnaga, BBVA’s global head of country monitoring – expects further improvement during 2024, thanks to continuing advances in both the cost control and income sides of the equation.
