Business Management - Standard Level

To what extent is teleworking sustainable for BBVA

in the post-Covid era?

May 2022

Word count: 1499

 To what extent is teleworking sustainable for BBVA in the post-Covid era?

Table of Contents
Introduction 2

Methodology 3

Analysis and discussion 4

SWOT analysis for BBVA teleworking 4
Market growth and market share analysis 6
Profit and Loss account analysis 8

Conclusion 10

References 11
Supporting Documents 11
Other Sources: 11

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 To what extent is teleworking sustainable for BBVA in the post-Covid era?

Introduction

BBVA is a global financial group, headquartered in Bilbao, who offers to nearly 79,8mill customers a

full range of financial and non-financial services (Supporting Document 2). After being founded in

1999 (El País, 1999), BBVA has reached the 42nd position in the largest bank (Ali Z., 2020). The

company mission statement is to generate confidence by offering products of the highest quality, to

support social welfare; always with transparency and integrity (BBVA, 2012).

BVA had a downward trend in its global growth from -2.4% to around -3.1% in 2020 due to

the unexpected pandemic. However, the 2021 prognosis foresees a growth from 4.8% to 5.1%

(BBVA, 2020a). This suggests that the strategies BBVA is applying at the moment succeed in

adapting to the current situation. From these strategies, the one that stands out the most is

teleworking. This is why it would be beneficial to investigate:

To what extent is teleworking sustainable for BBVA in the post-Covid era?

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 To what extent is teleworking sustainable for BBVA in the post-Covid era?

Methodology

This assessment will evaluate whether BBVA teleworking strategy, due to COVID-19, is

advantageous. The evaluation is centered on BBVA’s 2020 annual report as the first supporting

document, which summarizes BBVA’s activities in 2020. The Factsheet from 2020, which explains

the general services of BBVA. Two articles, one from Luis Casal, mastered in politics, who analyses

the change in Spanish banks online customers, and another one, from the CincoDías newspaper, that

compares the profit and loss accounts of the same banks. Finally, a report of the finance performance

of BBVA in 2020. Counting with other sources, such as the supporting methodology of Agile.

The commentary will use different business tools, including the SWOT analysis, very

effective for assessing a strategy at the present time; an analysis of the market growth and share, in

order to see how the firm’s portion of the sales has increased, thanks to telework; finally, the

comparison between the profit and loss accounts of 2019 and 2020 is going to show how the telework

strategy has resulted in saving costs, the draw back of this tool is that it involves the whole company

service and not the telework area, so a generalization will be done.

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 To what extent is teleworking sustainable for BBVA in the post-Covid era?

Analysis and discussion

SWOT analysis for BBVA teleworking
Table 1:
SWOT Analysis for telework in BBVA.
Strengths Weaknesses
● Great experience with teleworking, since 2011 ● Demotivating employees.
(Monge P., 2011). ● Cost of equipment (ECD, 2020d).
● Better management of time and space (BBVA, 2019). ● Worse communication (BBVA,
2020e).
● Great security.
● Better productivity (BBVA, 2020b).
● Empower employees.
● New ways of leadership (BBVA, 2020c).
● Reach more clients. (Supporting Document 1).
● Electricity and gas savings (BBVA, 2021a).
Opportunities Threats
● Increasing demand for online services. ● Cyber attacks.
● Customers are becoming more accustomed to online
services.
● Improve its environmental performance (Supporting
Document 1).
● Support from different methodological archetypes
BBVA, 2020c).
● Beating major competitors. (Supporting Document 1).

Telework is a tool with a wide range of strengths, on the premise that BBVA was the first bank that

started betting on teleworking, in 2011. It is a strategy that lets employees manage their own time and

space, which raises their level of motivation and well-being. Furthermore, a research done by the

Stanford University has shown that telework makes employees 13% more productive as it empowers

them (Bloom N, Liang J, Roberts J, Jenny Z, 2012). Also, as BBVA has said, they are creating new

ways of leadership that focus on the employees “so the employee feels like a leader in his/her own

space” (BBVA, 2019) thanks to the Agile methodology. Ending with the strengths, BBVA operates

largely online as 59% of their customers contact them by phone.

Telework also comes with some really flattering opportunities. The first one is the ongoing

trend of customers using online services. In general, BBVA has gained 2.5mill online customers,

which benefits the development of teleworking as an online tool. Moving on, BBVA relies on several

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 To what extent is teleworking sustainable for BBVA in the post-Covid era?

methodological archetypes, Agile, Scrum and Kanban, that support the development of teleworking in

BBVA and facilitate employee organization. Also, BBVA reports that they have reduced their CO 2

emission by 58%, which gives them a more eco-friendly image. Furthermore, BBVA is cutting

expenses on electricity and gas in their offices as employees are in their domiciles, the average annual

energy costs of a consumer in Spain is 1400€. Finally, for all of the above, BBVA continues to lead in

terms of efficiency and profitability compared to their European peers. In fact, BBVA has been

recognised for being the second bank more sustainable in the entire world (Supporting Document 1).

In spite of these advantages, telework presents some weaknesses, surrounding the

demotivation of employees. BBVA has to take into account that their employees' residences have

turned into their workplace, which makes the productivity higher, but can result in employees

resigning. Secondly, BBVA had to cover all the technological material that its workers needed in

order to telework, and, in some cases, BBVA compensated employees with 200€ for teleworking

expenses.

Although BBVA has provided the material needed for the best communication possible,

telework lacks the proximity of an on-site talk, as a consequence there may be some

misunderstandings. Luckily, as technology advances the communication problems will decrease.

Finally, telework counts with an important thread which is cyber attacks. However, BBVA

has established a security governance model carried out by the Computer Emergency Response Team

(Supporting Document 1).

To sum up, in the SWOT analysis it can be seen that teleworking is a tool that comes by the

hand of many benefits and opportunities, while its weaknesses and threats are little and easy to

manage. From this starting point, that teleworking is a positive tool in BBVA, now it will be analyzed

how it has affected the company, from a marketing and financial point of view.

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 To what extent is teleworking sustainable for BBVA in the post-Covid era?

Market growth and market share analysis

In the middle of the pandemic, a total of 86000 employees out of 122021 were working remotely in

response (Gascueña D., 2020). So it can be said that teleworking was an imperative for BBVA during

this crisis.

According to its annual report, BBVA started the year having a 27,2% of capital below the

previous year, seen in the graph below. For example, in Spain there were 56,3% of losses.

Figure 1:
Graph of Total Active possessed (in billions) per semester of BBVA.

Source: Graph of total active done by BBVA (Supporting Document 2).

However, the market growth potential for BBVA is increasing. The company established that its net

margin increased in its main business areas, apart from having the highest hedge rate in Spain, 11,7%

(Supporting Document 1). Thanks to this BBVA expects “a strong recovery in the markets they

operate in” (Supporting Document 1).

The banking industry has suffered a recession due to the pandemic. But thanks to the

strategies of BBVA its market share in customers has also increased during this year. Being the

second bank with the highest growth in online customers. As shown in the SWOT analysis, BBVA

has passed from possessing a global mark of 31,8mill. online clients, from which 5,3mill. belong to

Spain; to have 34,3mill. clients globally, being 5,8mill. Spanish (Supporting Document 3). As a

result, BBVA market share has risen from 20,9% in 2019, to possessing 21,2% in 2020 (Supporting

Document 3):

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 To what extent is teleworking sustainable for BBVA in the post-Covid era?

Figure 2:
Graph of Market share of Customers online in Spain from the main banks, in 2019.

Source: Data obtained from Supporting Document 3.

Figure 3:
Graph of Market share of Customers online in Spain from the main banks, in 2020.

Source: Data obtained from Supporting Document 3.

So, it is clear that between these two years BBVA has had a substantial improvement in its

marketing function, while most of its workers were teleworking. This growth in marketing

can be directly reflected in the financial analysis of the profit and loss accounts change in

BBVA, between these two years.

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 To what extent is teleworking sustainable for BBVA in the post-Covid era?

Profit and Loss account analysis

Firstly, BBVA ended 2019 with a starting revenue of 4727mill€ (BBVA, 2021b). However, the final

revenue in 2020 was 4038mill€ (Supporting Document 5).

It is true that the income from selling its services has decreased a 14,6% between the two

years, but, in contrast, BBVA has gotten a higher retained profit in the 4Q2020 than in the 4Q2019.

The company passed from having a negative retained profit of 155mill€ in 2019 (BBVA, 2021b), to a

positive retained profit of 1320mill€ at the end of 2020 (Supporting Document 5). This is because,

among others, the operating expenses were reduced by a 13,2% and provisioning losses were reduced

by a 38,6%. Also, as said in the SWOT analysis, BBVA has reduced its CO 2 emissions by 58%,

which means it has less machines and buildings consuming.

Table 2:
Profit and Loss Account change of BBVA from 4Q2018 to 4Q2019.

Source: Profit and Loss Account comparison done by BBVA (2021)

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 To what extent is teleworking sustainable for BBVA in the post-Covid era?

Table 3:
Profit and Loss Account change of BBVA from 4Q2019 to 4Q2020.

Source: Profit and Loss Account comparison done by BBVA (2021)

In comparison to other banks, BBVA has had a low decrease in the sales revenue but a high decrease

in the general expenses between 2019 and 2020. For example, Santander had a decrease of 82% in the

attributable profit (Santander, 2020), due to the excessive expenses and worsening of its services that

rose to 12039mill€ in 2020 (Supporting Document 4). This shows that despite being the bank with the

highest market growth, the costs of adapting to the pandemic resulted in having losses. Or the Europe

Central Bank, which had a negative result of 1285mill€ (Supporting Document 4). Finally, BBVA is

the only Spanish bank who has escaped from reducing its dividends paid to shareholders (Supporting

Document 4).

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 To what extent is teleworking sustainable for BBVA in the post-Covid era?

Conclusion

Based on the results obtained and answering the initial question: To what extent is teleworking

sustainable for BBVA in the post-Covid era? It can be concluded that telework is a sustainable

strategy for BBVA after the pandemic. Firstly, the SWOT analysis has shown the higher level of

strengths and opportunities compared to his weaknesses and threats, which by the way pose little

menace to BBVA. Secondly, in the market share and growth analysis, it has been seen that as

teleworking was a main strategy for BBVA during the pandemic, it has contributed to BBVA being

the second bank in Spain with the highest number of online customers and second in marketing

growth above all banks in Spain. Finally, analyzing the profit and loss account it has been appreciated

that a decrease in the general expenses of the company has caused BBVA to increase its net

attributable profit from 2019 to 2020. In comparison with its peer banks, BBVA has gotten out of the

pandemic in outstanding good terms.

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 To what extent is teleworking sustainable for BBVA in the post-Covid era?

References

Supporting Documents

Supporting Document 1: BBVA. Annual Report 2020. 19/02/2021. Retrieved from:

https://accionistaseinversores.bbva.com/wp-content/uploads/2021/02/Informe-Anual-2020_ESP.pdf

[Accessed: March 3, 2021]

Supporting Document 2: BBVA. Factsheet. 31/12/20. Retrieved from:

https://accionistaseinversores.bbva.com/grupo-bbva/bbva-en-resumen/ [Accessed: March 3, 2021]

Supporting Document 3: El País. Large banks gain 6.5 million digital customers by 2020, boosted by

Covid. 12/09/20. Retrieved from:

https://cincodias.elpais.com/cincodias/2020/09/04/companias/1599252280_451113.html#:~:text=A

%20nivel%20global%20cuenta%20con,a%20ra%C3%ADz%20del%20Covid%2D19. [Accessed:

March 9,2021]

Supporting Document 4: Translation from: CincoDías. Spanish banks would earn just 660 million

until 2020 in the adverse economic scenario. Retrieved from:

https://cincodias.elpais.com/cincodias/2018/11/02/companias/1541160254_362257.html [Accessed:

June 13,2021]

Supporting Document 5: BBVA. BBVA earns €1.32 billion in 4Q20, its best quarterly result in two

years. 29/01/20. Retrieved from: https://www.bbva.com/en/results-4q20/ [Accessed: June 8,2021]

Other Sources:

Ali. Z. The world's 100 largest banks, 2020. 07/04/20 Retrieved form:

https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/the-world-s-

100-largest-banks-2020-57854079 [Accessed: March 4, 2021]

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 To what extent is teleworking sustainable for BBVA in the post-Covid era?

BBVA. Agile methodologies contribute to BBVA 's organizational adaptation to COVID-19.

23/04/20 Retrieved from: https://www.bbva.com/es/es/las-metodologias-agiles-contribuyen-a-la-

adaptacion-organizativa-de-bbva-ante-el-covid-19/ [Accessed: March 6, 2021

BBVA. Agile transformation 2.0: creating a new leadership style. 03/07/2019. Retrieved from:

https://www.bbva.com/es/transformacion-agile-2-0-crear-un-nuevo-estilo-de-liderazgo/ [Accessed:

March 6, 2021]

BBVA. BBVA profit ex items reaches €4.83 billion in 2019 - the highest in 10 years. 31/01/20.

Retrieved from: https://www.bbva.com/en/results-4q19/ [Accessed: June 8,2021]BBVA. Changing

scenarios: the arrival of teleworking. Antonio and María José, from SECOT and David from BBVA.

16/07/20. Retrieved from. https://compartiendoconocimiento.elnortedecastilla.es/la-voz-del-experto/

teletrabajo-o-presencial-es-hora-de-planificar-como-trabajaremos-en-el-futuro/ [Accessed: March 6,

2021]

BBVA. Mission Statement. 2012. Retrieved from: https://investors.bbva.mx/es/mision/#:~:text=La

%20misi%C3%B3n%20del%20Grupo%20Financiero,de%20la%20m%C3%A1s%20alta%20calidad

[Accessed: March 5, 2021]

BBVA. Report 2Q 2020. 30/07/2020. Retrieved from:

https://accionistaseinversores.bbva.com/microsites/resultados2020/Q2/en/index.html [Accessed:

March 5, 2021]

BBVA. The seven keys to face teleworking. 13/03/20. Retrieved from: https://www.bbva.com/es/7-

claves-afrontar-trabajar-casa/ [Accessed: March 6, 2021]

Bloom N, Liang J, Roberts J, Jenny Z. Does Working from Home work? July, 2012. Retrieved from:

https://www.comunicarseweb.com/sites/default/files/biblioteca/pdf//1346851909_teletrabajo.pdf

[Accessed: March 28, 2022]

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 To what extent is teleworking sustainable for BBVA in the post-Covid era?

ECD. BBVA compensates 3,000 employees with 200 euros for teleworking expenses. 02/07/20,

Retrieved from: https://www.elconfidencialdigital.com/articulo/dinero/bbva-compensa-200-euros-

3000-empleados-gastos-teletrabajo/20200701192250147604.html [Accessed: March 6, 2021]

El País. The Boards of BBV and Argentaria approve their merger today. 18/12/1999. Retrieved from:

https://elpais.com/diario/1999/12/18/economia/945471621_850215.html [Accessed: March 4, 2021]

Gascueña. D. Teleworking: the new normality post COVID-19? 27/10/20. Retrieved from:

https://www.bbva.com/es/el-teletrabajo-la-nueva-normalidad-pos-covid-19/ [Accessed: March 7,

2021]

Gonzalo.A. BBVA launches teleworking. 20/06/2011 Retrieved from:

https://cincodias.elpais.com/cincodias/2011/06/20/mercados/1308664035_850215.html [Accessed:

March 6, 2021]

Santander. Form 6-K Banco Santander, S.a. 28/04/20. Retrieved from:

https://sec.report/Document/0000950103-20-008197/ [Accessed: June 8,2021]

Translation from: BBVA. BBVA helps customers save on gas and electricity bills thanks to data

analytics. 17/02/21. Retrieved from: https://www.bbva.com/es/es/bbva-ayuda-a-ahorrar-en-los-

recibos-del-gas-y-la-luz-a-sus-clientes-gracias-a-la-analitica-de-datos/ [Accessed: March 9, 2021]

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