BBVA has carried out a devaluation of two of its main subsidiaries in the last quarter of last year more than 4.5% due to the uncertainties of the US and Turkey, two of the markets in which it maintains a firm commitment and of which expects a recovery of business in the medium and long term.
The Spanish group, in particular, has lowered the book value of the North American division (former Compass) by 500 million, that is, 6%. The adjustment comes after he has reduced the goodwill by some 1,318 million from the results of 2019, which led him to earn 35% less compared to 2018. In addition, these deteriorations take place in full speculation of the Investors regarding the maintenance of the franchise based in Texas.
The firm Alantra recommended in November to BBVA to detach itself from the US subsidiary because it represented a “weak point” and consumed a fifth of its capital. An operation that would allow him to take advantage of the possible purchase opportunities that could arise in Spain, with Bankia among the main favorites for the wave of mergers that does not end up coming despite the pressure of regulators.
Three days ago, the president of the bank, Carlos Torres, made it clear that there are no plans to get rid of this franchise due to future projections and the possibilities of growth for the group in the southern United States, where the former Compass operates. He pointed out, in this regard, that Texas is even bigger than France and that there the entity is one of the main financial agents (the fourth with the highest share of activity, with almost 5% of customer deposits). In Alabama its position is much more prominent, since it controls 15% of the impositions and is the second most important bank.
As for the Turkish division, the value cut has been 4.6%, from 4,400 million to 4,200 million. Where appropriate, the adjustment is due to the depreciation of the lira and the dollar against the euro. The first has fallen by 8%, while the second, by 3%.
Experts have long monitored the evolution of Garanti before the uncertainty of the country since the summer of 2018. The bank is playing an investment of about 7,000 million euros. It controls almost 50% of its capital and some analysts consider that it should also get rid of this participation because of the risks, although there are some who believe that it should reinforce this position due to the possibilities that the economy presents once the pothole is left behind because it is going through
The sovereign fund of Norway is already the second largest partner of the banking entity
In recent months, those responsible for BBVA, with CEO Onur Genç at the helm, have been more optimistic about the franchise, to the point of pointing out that it was the big surprise of 2019. By 2020, the bank relies on a improvement thanks to a decrease in the delinquency rate after the rebound to 7%.
On the other hand, the investment arm of the sovereign fund of Norway, Norges Bank, has emerged 3,066% of BBVA, a package of securities has an approximate value of 947.6 million. The bulk of the position is direct investment. With this, he becomes the second largest partner of the Spanish group, behind BlackRock, which has 5.92%.
