Cross-border business is a strategic pillar of BBVA CIB

BBVA Group's geographical reach is at the service of wholesale clients, where global expertise meets local knowledge to offer an excellent service. Juan Garat, member of the BBVA Corporate & Investment Banking Management Committee and Head of CIB Geographies and Global Cross Border, explains how the area offers a differential and integrating value proposition for wholesale clients, backed by BBVA's leading franchises around the world and a network of specialists in CIB's key markets: United States, Latin America, Europe and part of Asia.

• BBVA CIB is a global franchise serving clients in 24 countries around the world, with an extensive network of financial experts, investment banking specialists in different industries and specific sectors. Collaboration between regions and market integration are key elements. How does BBVA CIB's value proposition differ from its competitors? And why is cross-border activity one of its strategic pillars?

The differential value of BBVA CIB's business lies in its widely diverse products and countries combined with the proximity to and knowledge of clients and the geographies in which it operates. This gives us a cross-cutting vision of clients and their entire value chain. 

BBVA CIB is a global investment bank with local presence and experience, which offers institutions and companies tailor-made, innovative and sophisticated advisory and financial solutions to optimize their investment and financing operations. We turn this globality into a competitive advantage and source of value generation. The group's geographical reach is at the service of wholesale clients, where global expertise meets local knowledge to offer an excellent service.  

The cross-border business is a strategic pillar of BBVA Corporate & Investment Banking, which currently accounts for 37% of our business.

• The global capacity of a group like BBVA enables us to be pioneers in providing cross-border solutions to clients in all the countries where we operate. How is this managed internally?

We have a client-centric approach and our setup is like our clients', with a global approach and value proposition. More than 70% of the business groups we manage from CIB generate cross-border results, and approximately 60% have a presence in at least two geographies other than their home geography. 

We have a team of 86 global bankers with portfolios spread across our main geographies, and we serve the needs of our clients with a model that includes local and global client and product teams, thus maximizing financial programs and offering the best solutions with a product and geography agnostic approach. This globality is reinforced by a cross-border unit with specialists present in each geography, who promote connectivity between teams and clients and boost cross-border business with ad-hoc solutions. 

At BBVA CIB, we work with a relationship model that seeks to follow our clients and establish solid and long-term relationships. Our global service model is essential for this, and achieved through a global approach to technology for example, which seeks to reuse the best platforms on the market in all geographies. This integrated view of technology enables cost-effective and efficient scaling of business with clients and delivers an integrated view of our products and services to clients across geographies. 

BBVA works continuously to improve technical and product capabilities through global platforms such as Pivot Net or our Supply Chain Finance solution, with which we meet the needs of our clients locally, regionally and globally, and which allow us to compete at the forefront of the market.

• There seems to be a change in the weights of contribution in some geographies, particularly the Mexican market. What is the reason for this change in trend? The weight of emerging geographies is undoubtedly surpassing the weight of developed markets.

That's indeed the case, and in a way it's normal. This change in trend also reflects market maturity. Europe is experiencing a time of slowdown and prudence, while other younger economies show greater dynamism. The markets are changing, or cyclical. After years of low interest rates, we are currently in an inflationary global environment with high interest rates, which means we're looking for opportunities in our global footprint, assisting our clients where they are and where they need us or where they seek growth and investment. We adapt to them and the markets in which they operate. 

That said, in our case we are indeed seeing a significant boost in our business in Mexico, which at the end of 2022 accounted for 28% of the net attributable profit. This is also the result of the effort and investment we have made in increasing the capabilities of our team in this region. Led by Álvaro Vaqueiro, we have managed to be the best investment bank in Mexico in 2022 according to LatinFinance magazine. This reaffirms the excellent work done, which has also been recognized by another leading regional publication, Global Finance. In its raking of the World's Best Investment Banks 2023, it named us the best investment bank for 2023 in Mexico.

Global Finance has also elected us as best investment bank in Spain and the best investment bank in Argentina in 2023. These are recognitions of which we are very proud and that show our capabilities in our core geographies. In particular, we are very satisfied with our activity in the Latin American region. These days we are celebrating the first anniversary of our representative office in Chile, where in just one year we have doubled the volume of initially estimated transactions and for which we have a solid business pipeline for the coming months.

Europe is experiencing a time of slowdown and prudence, while other younger economies show greater dynamism.

• What are the goals for the cross-border business in 2023? Do you have specific plans for any geography?

The presence in the U.S. represents an important growth opportunity for BBVA: it's a developed market and complements our presence in emerging markets. The U.S. market is key to growing with both corporate and institutional clients. Firstly, a large part of our multinationals have some kind of presence in the United States. Secondly, there is enormous potential to grow with new U.S. corporate and institutional clients meeting CIB's criteria.  

In addition, the United States is a key geography in our goal of maximizing cross-border activity through the Latam corridor, harnessing the synergies provided by our presence in nearby regions. Many of our clients have interests in one region or another, especially multinationals, so continuing to expand our activity in this country is one of our priority goals. 

Another very relevant axis for business promotion is Asia toward Latin America, Mexico and Spain. The flows from China, Japan and Southeast Asia are of particular relevance. 

Also, we are always exploring new geographies that help us continue to grow and that allow us to follow our clients wherever they need it.

• How relevant is sustainability globally? Does client appetite behave equally across geographies?

Sustainability is a priority on the social agenda and also in the agenda of the public and private sectors. The financial industry must help achieve the sustainable development goals set by the United Nations, and so the corporates of all geographies, both developed and developing, are approaching those entities that can help them with this. 

And institutional investors continue to work toward a greater integration of sustainable criteria in their investment policies and a broadening of their range of products that support achieving sustainable goals. So everything points to a growing appetite. 

In our case, we set ourselves the challenge of mobilizing 300 billion euros to face climate change and promote sustainable development. This is our 2025 Goal. In 2022, BBVA channeled 50 billion euros into sustainable business, 41% more than the previous year, and 67% was from BBVA CIB activity. 

As for the behavior in the geographies, it is true that sustainability happens at different speeds. Regionally, Europe is much more advanced than Latin America, for example. However, since it is strategic priority for us, with our presence in Latin America and our reach with clients, we believe that we are in a privileged leadership situation to continue promoting sustainability in its three dimensions (environmental, social and governance) in the region.