Luisa Gómez Bravo, global head of BBVA Corporate & Investment Banking, speaks to Global Finance about the bank’s uniqueness and how it handled Covid-19’s changes.
Global Finance: What are the qualities that differentiate BBVA?
Luisa Gómez Bravo: First, I would highlight the BBVA relationship model, which is focused on client needs and seeks to build strong and long-term relationships as well as leverage the bank’s capabilities in different areas and geographies. This model combines a global approach with a local presence and is based on four pillars: being close to our clients, allowing us to have a cross-cutting view of them and their entire value chain; turning the globality into a competitive advantage and source of value generation; elevating our strategic dialogue with clients and putting our entire organization at their service; and leveraging the deep industry knowledge of our specialists to identify opportunities and strengthen advisory capabilities.
Secondly, in our mission to add value for clients and anticipate their needs, BBVA is a recognized partner in sustainable transformation. It is a pioneer in sustainable finance. In fact, we are one of the banks—also known as Katowice banks—that have committed themselves to finance and design the financial services needed to support clients as they transition to a low-carbon economy. And in April 2021, BBVA joined the net zero emission banking alliance promoted by the United Nations in April 2021.
At BBVA, we actively accompany our clients in their transformation, supporting them with financing and advising them in their transition to more sustainable business models. I would like to point out the great anticipation of our teams, their commitment to service excellence and the responsiveness fueled by the client relationship platforms and new technologies in place.
GF: What has BBVA done to support its larger customers during the pandemic?
Gómez Bravo: In a new and difficult situation, BBVA was able to adapt in record time to the new environment. The first step was to ensure functionality, especially with regards to transactionality with our clients, while moving our employees to their homes. I can proudly say that in just one week we had all our Corporate & Investment Banking workforce working remotely, with no interruptions even in our trading floor. This was possible thanks to the investment in technology and to the lead of BBVA in digital transformation.
This investment proved to be more valuable than ever, preventing a break in relations with our clients and allowing us to develop the necessary contingency plans. It was time to remain close to our corporate and institutional clients and bring them the solutions they needed to maintain their business in such an extraordinary situation. Bankers have proactively been very close to their clients, demonstrating the bank’s support and commitment and covering their needs with the best solutions.
The next step was to ensure the financial stability of our clients, and here our priority was to cover corporate clients’ liquidity needs. Our clients sought liquidity buffers in order to cover the adverse scenario that could limit their ability to generate cash.Through active liquidity monitoring of our balance sheet, and due to our strong liquidity position in BBVA during the crisis, we were able to be very proactive from day one in helping our clients in their needs. Just one week after the lockdown, we had made available to clients the amount of €15 billion.
BBVA was one of the most active banks in financing during the pandemic and also proactively collaborated with multilateral entities in our footprint regions—EIB, ICO, MIGA, IDB, CABEI, CAF—to accelerate the access to guarantees and additional funding in Covid-19 programs. We were able to support different public, semipublic and private entities in Spain, Turkey, Mexico, Colombia and Peru.
As we move toward a more normal business environment, we continue helping clients in the post-pandemic era. We are promoting advisory services and execution of investment banking products to refinance, restructure and recapitalize our clients.
The current situation is characterized by abundant liquidity and pressure on prices and covenants, and it is extremely important to ensure that leverage levels are appropriate for the sector and the context. Especially in the sectors that have been most affected by Covid-19, such as transportation, leisure and retail, we make sure that clients get through with our support, in the form of extension of their debt maturities and liquidity raising via capital markets or bank financing. Moreover, as the crisis ends, the need for these companies to accelerate digitalization and sustainable transformation allows us to accompany them as a strategic partner in advisory functions.
GF: What about smaller clients in the same context?
Gómez Bravo: The smaller clients have been particularly impacted by Covid-19. BBVA was firmly committed to be an essential part of the solution to the Covid-19 crisis. We rolled out a series of support initiatives for companies, SMEs [small and midsize enterprises] and the self-employed, including moratoria on mortgage and consumer loan installments. In Spain, we immediately announced a €25 billion line of credit available to SMEs and the self-employed to mitigate the economic impact of coronavirus. BBVA also backed the Official Credit Institute’s (ICO) first €400 million line of credit to help companies in the tourism, transportation and hospitality industries. We have firmly supported the government-backed loan program—the so-called ICO Lines—providing even more financing than pledged in the initially assigned quota. In the Latin American region, we rolled out a comprehensive plan to financially support our retail clients and contribute to society. Since the beginning of the pandemic, BBVA activated specific programs for businesses, SMEs and the self-employed. One of the most noteworthy aspects was the approved moratoria, which resulted in the rescheduling of more than 25% of the loan portfolio in Colombia, Peru and Mexico. Over €20 billion were rescheduled. In addition, BBVA continued granting loans and taking part in different government support programs for companies to prevent cash-flow disruptions from escalating into default situations.
GF: How does the bank envision its role in the Next Gen fund European program?
Gómez Bravo: BBVA is focusing its efforts on capitalizing Next Gen funds to support a real economy recovery while closely following our clients’ needs and promoting the role of the banking industry in the program execution.
We are working on two different fronts with our clients: We are focusing our dialogue with clients on climate change and helping our clients in the transition and digitalization of SMEs, where we feel we can add value for our clients.
Our aim is to be a very active player and to keep the current continuous and open dialogue with our clients, so as to have more visibility on how these funds are going to be allocated by governments in Europe. The Next Gen EU program is a key lever to transform productive models and the industrial fabric itself. Industries, and even sectors, will be affected by this transformation and we at BBVA want to accompany our clients in that journey.