September 26, 2018, BBVA issued a press release in which it announced that, from 1 January 2019, Carlos Torres Vila, “current ceo, will replace Francisco González as executive chairman”. Then, Gonzalez described the relay as “an orderly transition and well-planned. The council works with dedication in order to give continuity to the great project of transformation of BBVA”.
it Is difficult to know how you planned the change, but according to the facts, has not been very orderly. These first twelve months of Torres —who has hardly been changed by the council and the board structure inherited— have become a roller coaster that has turned around the documents published on Cenyt, the company of the curator retired, Jose Manuel Villarejo, and the payments made by the BBVA. Supposedly, Cenyt was given the task of spying on businessmen, politicians, and journalists to the bank.
Revaluation of stock
Data in euros per share
8
Bankinter
from 7.02
6,53
6
at 4.98
BBVA
4,63
4
Santander
3,97
3,73
CaixaBank
3,16
2,80
Bankia
2,56
2
1,90
1,04
Sabadell
1,00
0
31-12-18
31-12-19
percentage change
-6,98
Bankinter
+7,56
BBVA
-6,05
Santander
-11,39
CaixaBank
-25,78
Bankia
Sabadell
+4,00
-30
-25
-20
-15
-10
-5
0
5
10
Source: Infobolsa.
THE COUNTRY
Revaluation of stock
Data in euros per share
8
Bankinter
from 7.02
6,53
6
at 4.98
BBVA
4,63
4
Santander
3,97
3,73
3,16
CaixaBank
2,80
Bankia
2,56
2
1,90
1,04
Sabadell
1,00
0
31-12-18
31-12-19
percentage change
-6,98
Bankinter
+7,56
BBVA
-6,05
Santander
-11,39
CaixaBank
-25,78
Bankia
Sabadell
+4,00
-30
-25
-20
-15
-10
-5
0
5
10
Source: Infobolsa.
THE COUNTRY
Revaluation of stock
Data in euros per share
7
Bankinter
from 7.02
percentage change
6,53
6
-6,98
Bankinter
5
at 4.98
+7,56
BBVA
BBVA
4,63
4
Santander
3,97
3,73
-6,05
Santander
3
CaixaBank
3,16
2,80
-11,39
CaixaBank
Bankia
2,56
2
1,90
-25,78
Bankia
1
1,04
Sabadell
1,00
Sabadell
+4,00
0
-30
-20
-15
-5
0
10
31-12-18
31-12-19
Source: Infobolsa.
THE COUNTRY
The mandate of Towers began with a great shock: on the 9th of January Moncloa.com and The Confidential report that “the BBVA paid half a million to Villarejo to thwart the assault of Sacyr and the PSOE to the bank” in 2004. The news was not new for the managers, because in may of 2018 had already been given to know the first bills of Villarejo paid by the bank in a Public journal.
A day later, on 10 January 2019, Torres emitio, the first of the 14 statements that is presented in the web page of the entity on this matter. The president said that “to be certain” information “would be of a certain gravity” and that if “there are these irregularities, the bank shall take the internal measures which they come”. Four days after, sent a letter to employees in which he stated that the bank had been investigating this matter since June 2018, without find “any documentation showing the tracking and intervention of private communications”. However, something had to fear Towers because that same day he decided to “expand the scope of the investigation” “a profound and exhaustive”. Garrigues, as is customary in the defense of the bank and dump it in this work from mid of 2018, he decided to hire the auditor, PwC, to conduct a report on forensic (or forensic) that rastreara emails, documents, and messages for mobile with suspicious words between 2004 and 2018. Also joined Uría Menéndez to the defense of the bank. Although the entity maintains that the report is practically finished, the fact is that the investigation has not been closed, in theory, if the National court makes more requests for data to the bank.
The February 1, Torres made bold statements, saying that he defended the innocence of his predecessor: “I believe in Francisco Gonzalez,” he said after the former president will insure that he had “the good conscience” on this issue.
Months later, the list of defendants includes the own González, BBVA as a legal person, and to 12 directors and exdirectivos. The bank is accused of bribery, disclosure of secrets and corruption in business. However, the BBVA ensures that “the facts at issue does not derive liability for the BBVA”.
however, not all have been disappointments for Towers: after strong declines in the previous years, the BBVA is the bank with the best performance on Bag during this year of the Ibex 35. Has risen meanwhile, 7.55%, compared to the fall of Shares of 11.4% and the Santander 6%. Sources of the bank highlighted this achievement as the most important of the year, because it demonstrates that the large investors have not been swept up in the problems that can cause the case Villarejo.
“The big savers are more concerned about the challenges of the sector, the strategy and financial results. This case has not transcended far beyond our borders for now,” says Juan Prieto, director general of Corporance Advisors, a firm that advises investors about companies listed on the Ibex.
According to Javier Molina, a spokesman for the investment platform of e-Toro, the analysts have been set in the evolution of the results “that has not been bad and prospects for 2020, which envisage a slight rise in the benefit, as well as in the advances in the digitization, field in which BBVA is ahead of its competitors. I don’t think that the case Villarejo has been losing business to BBVA; perhaps there has been amarillismo and exaggeration in the press on this topic. The share price already reflects what is known about this issue.” In terms of business, the bank has earned up to September 3.667 million, 1.2% more, although to the end of the year you will be faced with a loss of 1,500 million dollars by the depreciation of the local branch of the united States, although this setback will not affect its dividend. Since 2009, the BBVA has depreciated the value of its u.s. subsidiary in 5.100 million dollars.
Torres knows that the European Central Bank (ECB) is concerned and aware of what makes the judge (and the bank). Until now, the single entity has decided to do away with two employees: Eduardo Arbizu, that was the chief legal and internal control (that has been collecting pension and pay variable) and Antonio Béjar, fired without compensation or pension. Bejar was the maximum responsible of the Operation Chamartín and head of Risks of the BBVA Spain, when recruited to Villarejo to, in theory, to recover the debt. The version of this exdirectivo before the Hearing is not consistent with the bank or with the data in the report offered by the examiner. The prosecutors and the judge must decide whether the research has been done correctly, a key issue in this case, as failure to do so, the responsibility would be of Torres.
The ECB is aware of this issue and has asked for the forensic report to the judge. The supervisor wants to know if the current officers or board members they knew who I was Villarejo, which has sales of more than 10 million in the bank, and has already published articles that showed his dark frame since at least April of 2015, some of them in this journal. For months, the ECB, by the mouth of the vice president, Luis de Guindos, has asked BBVA to address this issue “quickly and with the maximum depth”. This is not the first time that the ECB is heading to Torres. His arrival to the presidency was controversial because the supervisor would rather not out executive. However, Torres remained firm and now controls key areas, such as Strategy, Legal, Audit and Communication. “The appointment of Torres was seen with suspicion by the european supervisors. The issue has improved with the appointment of Onur Genç as ceo, but the ECB and the Single Supervisory Mechanism still view it with suspicion; changes to council planned for march can be a good thermometer to assess in which stage is your relationship”, states Gonzalo Lardiés, manager of the variable income of A&G Private Banking.
In his opinion, the case Villarejo “has not helped to generate sufficient confidence in the regulators at the time of debug of the possible responsibilities and build a corporate structure that avoid this poor institutional practices can play”.
Among bankers and experts is assessing how it has managed this crisis; that is to say, if Towers have been taken in by the events or has gone ahead of them. “I should have acted more quickly, diligence and transparency. We have missed a performance, and more effective response to an issue that is so relevant that it affects the government and the reputation of the entity. Changes have occurred due to external factors, such as the pressure of the media and the regulators”, indicates Prieto from Corporance Advisors.
Javier Molina, e-Toro, agrees that Torres “has been behind events. Have reacted in some occasions, especially by the employees, that have experienced this issue so intense, but it is a very complex issue, and have to wait to see what it is”.
Impact on the reputation
there is No doubt that the issue has impacted on the reputation of the BBVA, something admitted by the bank itself, even after you tried to take away iron. The data supports him. “BBVA is having a problem is reputational. In 2018 occupying the 4th position of the ranking of business reputation and in 2019 it went to the tenth place,” says Manuel Sevillano, managing director of the company analysis of reputation Merco. This firm thrives on opinions of business executives, employees, experts, journalists and consumers.
Seville believed that Torres “has turned in to manage the short, the consumer and the conversation networks that is relatively simple to handle; but that the problem is going to end up imposing, because the groups most informed yes they are criminalised. That’s not handled with investments in communication, or with statements from the ceo but with a change credible of behaviors, something that in my opinion are not doing”. In the ranking of the leading most reputable, Carlos Torres occupies the position 30 and a year ago was at 35. On the contrary, Francisco González, former president, has presented one of the greatest decreases, while passing the post fifth in the 56 in 2019.
The BBVA ended the year declaring for 14 hours before the anti-Corruption Office and the judge José Manuel García-Castellón, by the doubts that exist about their performance in this case. The first year Torres has ended as it began, with the case Villarejo, a thorny issue that threatens to drag on and wear down the president for a long time.
History of three Agents: Torres, Pizarro and Gonzalez
Carlos Torres Diz, the father of Carlos Torres Vila, president of the BBVA, he was sworn in as an Agent of Change and exchange in October of 1976. In the following decade, Manuel Pizarro, and Francisco Gonzalez, approved the opposition of Agents. Directors of the Madrid Stock exchange in those years, asking for anonymity, remember that the three maintained a friendship despite the age difference that existed between them, as noted Five Days ago in a report published in 2015. These sources have also clarified that they were not close friends, but I saw them together the three of us in the parquet of madrid. Pizarro and Gonzalez yes supported by its close relationship that was forged in those days and maintained until now, even though minimizing the relationship with Torres Diz.
Some financial sources recalled this relationship between the three agents when Carlos Torres son joined Endesa in 2002, the same year that Pizarro won the presidency executive power. Torres, who had been a partner of McKinsey, was appointed director of strategy and member of the steering committee; in 2007, he took the Corporate Direction and Financial Control of Endesa, where he played an important supporting role to Pizarro in the TAKEOVER bid of Gas Natural, E. On and Enel on the electric.
After his departure from Endesa, financial sources point out that Pizarro spoke with Gonzalez to recommend the incorporation of Towers in the BBVA. However, this bet by the president of Isofoton, a small company specialised in the production of cells and photovoltaic panels. Seven months later, in September 2008, Torres changed his mind and he was signed by BBVA as head of strategy, a charge that depended directly on the president. In December 2008, Towers entered into by the management committee and took on the responsibility of Expanding Corporate BBVA, from where he directed the purchase of the Turkish Garanti, an organization in which I worked Onur Genç, current ceo of the group. Ten years later, Torres was proposed as president.
Sources of the entity’s comment that Carlos Torres is not met Gonzalez until he was interviewed to go to the BBVA. However, these sources themselves admit that it is likely that Gonzalez knew the father of Carlos Torres, as well as to ask for references to Pizarro before you sign him.
