BBVA says will invest additional cash from US sale to cut costs

MADRID: The chairman of Spain's BBVA Carlos Torres on Tuesday said any extra capital the bank would earn from the sale of its US business in 2020 would be deployed to cut costs and invest in profitable growth.

In November last year, BBVA sold its US unit to PNC generating around 8.5 billion euros and the market has been expecting the lender to partly use the cash to finance cost cutting in Spain and to buy back as much as 10% of its outstanding shares.

"This additional capital opens the door to profitable growth, and allows us to invest in further cost reduction, and to become more efficient in the markets in which we operate, strengthening our leadership position," Torres told a remotely held shareholders' meeting.

BBVA has started talks to cut staff in Spain to better cope with stubbornly low interest rates and a shift towards online banking.

Other lenders, such as competitors Santander and Caixabank, are following the same path.

On Tuesday, union Comisiones Obreras (CCOO) said that Caixabank was planning to cut around 19% of its workforce in Spain and more than a quarter of its branches.

BBVA, which has so far declined to disclose the number of jobs likely to be affected, has said that layoffs would take place both at its corporate centre in Madrid and across its retail network in Spain, where 23,300 employees are working.

Unions took to the centre stage on Tuesday at the shareholders' meeting fearing thousands of job cuts.

"It is hard to accept that, after a particularly difficult year for BBVA staff, who have excelled as essential personnel during the pandemic, their efforts are being paid back with massive lay-offs," Isabel Gil Delgado, representative of CCOO said in statement that was read out loud by BBVA staff during the meeting.

Beside from the approval of the share-buy back programme, shareholders are also expected to sign off on the announced dividend policy for 2020 and 2021. Reuters