Local time on April 13, according to Spanish newspaper La Nación, Spanish banking giant BBVA announced that it intends to lay off upwards of 3,000 employees, accounting for about 10% of the total workforce, and the cuts will affect the bank’s core business units and major outlets. BBVA said the move is to ensure future competitiveness by effectively reducing costs and is the inevitable result of the bank’s digital transformation.
BBVA Bank’s net income in 2020 was $1.305 billion, down 62.9% compared to the previous year, due to the impact of the new crown pneumonia (CCP virus) outbreak.
Banks are struggling too! Spanish banking giant to lay off 3,000 employees
According to foreign media reports, on April 13, Spain’s BBVA Bank has launched negotiations on the ERE (Employment Regulation Document), which will take place in the next few weeks. The bank informed employees on that it will hold its first meeting with union and company representatives on April 16 to present an adjustment plan. The company currently employs 30,338 people in Spain and expects that more than 3,000 jobs will be affected, representing about 10% of the total workforce.
Due to the impact of the new crown epidemic, BBVA Bank’s net income in 2020 was $1.305 billion, down 62.9 percent compared to the previous year. for its part, BBVA said the job cuts are intended to reduce costs and ensure the bank’s future competitiveness.
In BBVA’s letter to employees, it reads, “Today (April 13), we have informed the employees’ legal representatives that we will initiate collective dismissal proceedings. This will affect both the core business units and major branches of BBVA Bank, but it will not affect our entire national labor market, but only within the company.”
Against the backdrop of low interest rates and accelerated digital channel transformation, BBAV is facing significant competitive pressure, and BBVA emphasizes the importance of digital management entering the industry in the future, and that the layoffs are a natural consequence of the bank’s digital transformation. In a statement sent to employees, BBVA also noted that “the adjustment is necessary to ensure the competitiveness of financial institutions and the sustainability of future employment.”
The BBVA’s layoff process should not take too long and is expected to be concluded in the first half of this year, sources said. The 3,000 departures will mean a reduction in expenses of up to 350 million euros and a 6 percent increase in profits.
Public information shows that BBVA, as the second largest financial investment group in Latin America, has branches in 11 countries in Latin America and holds 6% of the market share in Latin America. The total assets under management in Latin America have exceeded 7 trillion pesetas, with 13.5 million basic customers and 2,369 offices. In the pension market, BBVA is the largest investor in Latin America, with a 31% market share and 10 million clients.
US$11.6 billion sale of subsidiaries for cash flow
The Spanish financial system was hit hard due to the impact of the new crown epidemic. At the end of last year, BBVA Bank had no choice but to sell its U.S. subsidiary in exchange for cash flow.
According to foreign media reports, BBVA Bank sold its U.S. subsidiary to PNC for 9.7 billion euros ($11.6 billion), a price that was 19.7 times the company’s earnings last year and equivalent to nearly 50% of BBVA’s market capitalization at the time. pnc has more than $100 billion in assets, 737 offices and is a leader in Texas, Alabama and Arizona. leading position. When the sale is completed, it will be the fifth largest bank by assets in the United States. The transaction will close in mid-2021.
The sale gives the bank about 300 basis points of prime capital, equivalent to about €8.5 billion. bBVA said, “The sale benefits the bank’s financial position and gives the bank the flexibility to invest profitably in the market.”
BBVA Bank’s expansion in the United States began with the acquisition of Valley Bank in 2004. It was followed by the acquisition of Laredo in the same year, Texas Regional Bancshares in 2006, Compass Bank in 2007, Guaranty Bank in 2009 and finally Simple in 2014.
Spain cuts GDP growth and introduces 4-day work week as Europe’s new crown death toll exceeds 1 million
The impact of the third wave of the new crown epidemic on the Spanish economy and the delay in European aid funding have forced the Spanish government to cut its GDP forecast for this year from 7.2% to 6.5%, and the economy may grow by 7% by the end of 2022.
On April 13, Nadia Calvio, Spain’s second deputy prime minister and minister of economic affairs, said: “The first quarter was lower than we expected in October, also due to the Filomena storm, which “delayed the recovery in the first quarter. Regarding unemployment, the government pegged the rate at 15.2% this year, down from the previous forecast of 16.9%, with 14.1% expected in 2022.
In addition, Spain will pilot a four-day work week, which proponents say will have many benefits, helping employees become more efficient and alleviating unemployment, while increasing the weekend to three days will bring more spending, especially to the entertainment and tourism industry, the mainstay of the Spanish economy.
The introduction of the four-day work week is tied to the epidemic, which crossed a dark milestone on April 12, with the cumulative death toll in Europe exceeding one million. The World Health Organization (WHO) warned that the number of infections is growing exponentially despite tremendous efforts to halt the spread of the epidemic. According to AFP, the latest available data show that nearly 60 percent of the deaths in Europe occurred in these six countries: Britain, with 127,100 deaths; Italy, with 114,612 deaths; Russia, with 103,263 deaths; France, with 99,163 deaths; Germany, with 78,452 deaths; and Spain, with 76,525 deaths.
Recent Comments