Banco Bilbao Vizcaya Argentaria, S.A. (BBVA) Earnings Call Transcript & Summary

Hello. Good morning, and thank you for joining us for today's discussion with Mr. Onur Genc, CEO of BBVA. Before we start, I would like to remind you there's an option to submit questions. Mr. Genc, thank you for taking the time to speak to us today.

My first block of questions is related to strategy and the future of BBVA. What are your strategic priorities following the successful disposal of the U.S.? Could you please remind investors how do you plan to prioritize the allocation of your excess capital? And how do you see BBVA in 3 to 5 years down the line?

Perfect. So first of all, Marta, thank you for the invitation, and thank you to everyone joining in and listening to us. So the first bucket around strategy. We have launched our strategic plan 2 years ago. We called it internally 2 plus 2 plus 2. So very quickly, maybe I'll remind you of that -- it was public, but let me remind you of that. And let me maybe comment on that a little bit. So the 2 plus 2 plus 2, the first 2 is around differentiation. How do we differentiate ourselves as a bank? I do think that we have done that differentiation in recent years through digitalization. But the 2 things that we put on the table in terms of differentiation is, number one, making sure that we provide financial advice to our clients through digitalization and through using our power of people, our people in the role of advisory. This implies that we should be even better than others in digitalization. It has been a journey. We have pioneered this transformation of digitalization many years ago. So we want to continue on that path. We want to couple that with the power of our people and make sure that we provide financial advice to our people, to our customers so that we don't lose them. The retention is not an issue. So that we acquire new customers and so on. So number one, using digitalization, using our people to provide financial advice. Number two, sustainability, a huge trend we want to be pioneering even that trend as we have done with digitalization. Those first 2 are differentiation strategies. Then, the second block of 2 is about how do we create more value for our stakeholders, shareholders and stakeholders. On that one, we put 2 on the table as well, reaching more customers, growing our customer base, number one. Number two, operational excellence. Operational excellence in terms of cost attentiveness, in terms of capital discipline. That's the 2 around creating value, creating more value for our stakeholders. And then the last 2 of the 2 plus 2 plus 2 is around the enablers making sure that we have the best people and the most engaged people. And number two, using data and technology, using data and technology. That strategy has proven to be serving us really well. During COVID, we have seen that the digitalization strategy has paid off, is paying off. We have seen the sustainability trend is clearly there. So the differentiation angles are there. The growth angles are also there. I mean last year, we have acquired, despite COVID, 7.5 million customers. This year, we are expecting that number to surpass 8 million customers, 8 million, 8.5 million customers. A good part of this, Marta, is coming from digitalization. I mean 37% in the first half of the year, 37% of that customers acquired is they're acquired digitally. That percentage, 37 percentage was basically 0, 5 years ago. Five years ago, that 8 million to 8.5 million customers that we would be acquiring this year was around 3.5 million. So we are acquiring new customers using the capabilities that we have. And then people and data and technology, obviously, will be the enablers. That's on the strategic side. You asked about how do we see the bank in some years? On that one, what I would say is, I see the bank as a larger bank. So I see growth in our businesses. And without compromising profitability and without compromising capital discipline. I hope we have shown to the market and to everybody out there that we are very disciplined in capital after the sale of the U.S., after the sale of some other businesses and so on. So as long as we observe that capital discipline, as long as we are attentive on profitability, I see the bank as a larger bank in 3 to 5 years. Regarding capital allocation, the pieces that you were asking and what do we do with the excess capital? I think if you ask me, the equity story of BBVA different than other banks, different than other European banks, at least, is that we operate in a diversified portfolio. So we have multiple countries just than a pure European country. But more importantly, in the countries that we are present, numbers clearly justify this statement, our ROE is higher than the average ROE of the industry in the countries that we are in. So we have to isolate for this mix effect of countries. If you go into the country and look into the country, our ROE is, in general, higher than the average of the industry. To me, that's very important. That gives you the ticket to grow even more. So in terms of the allocation of capital, the excess capital, first of all, as long as we are disciplined in capital, we'll continue to grow, leveraging that strength that I mentioned, which is being better than the average of the industry, continue to grow in the markets that we are in. Then, we have launched this program and this discussion of the share buyback program. Hopefully, we will be starting it in the fourth quarter as we originally have mentioned, subject to regulatory approvals, but that process is moving as we were expecting. So in the fourth quarter, we will be starting the share buyback program. So continue to grow profitably and continue to reward our shareholders through different mechanisms. The dividend policy, we are going back to normal dividend policy starting this quarter, the fourth quarter, and also execute on the share buyback program. So those are kind of the high-level ideas.

Excellent. Very clear. So moving on to Spain's top line. How are you working to boost your revenues in Spain? Has your risk appetite increased as a result of your strong capital position, where do you see opportunities for lending growth? And how do you see lending prices progressing? Because despite Spain becoming a more concentrated market, we have not seen price discipline, particularly mortgages and consumer lending, would you agree?

Yes. Let's go 1 by 1 again. So multiple questions in the block. So first of all, how are we increasing our revenues in Spain? I would say 3 levers, 3 very clear levers. First of all, as it is the strategy for the bank, increase the customer base, increase the customer base using the capabilities that we have also in digital. I mean it's -- to me, it's amazing numbers. In a mature market like Spain, in 2020, even in the time of COVID, we have grown our customer base by 520,000. This year, in the first half of the year, it was public, obviously, in the discussions that we've had at the end of the second quarter. In the first half, we have acquired 360,000. So close to 80% more versus the same period of last year. And then we do these surveys every month, basically asking the customers, asking the public, have you changed your bank recently? Did you start the new banking relationship recently? And if so, which bank have you done that with? In that survey, we have been gaining market share every single month, every single month. So first of all, how are we boosting the revenue growth? Grow the customer base, as we are doing for the rest of the bank, even in Spain, we are growing our customer base. And I would highlight again the digitalization, the role of digitalization in that customer growth. I gave you a percentage, 37% of the customers acquired [Audio Gap] BBVA in the first half of this year, 37% globally was acquired digitally. That same percentage, that 37% is even higher in Spain. It's close to 50%, 48% to be precise. So grow the customer base, number one. Number two, change the mix of lending, so grow in portfolios where we can deliver better returns on capital. We have been doing that. If you have looked into the second quarter results, you have seen that in the areas, if we wanted to grow, we are growing very nicely. What are those areas? Consumer loan portfolio, you want to grow in that one. Return on capital is very robust. We are typically doing that consumer loans with our salary payroll customers, which is, again, the cost of risk is also very much contained even at the time of COVID. So grow in the consumer loan portfolio. I mean if you look into the past 5 years, we have grown our market share in consumer loans 4 percentage points. And in banking, 4 percentage points increase in 5 years is not a bad figure in our view. So we keep growing in that portfolio. Number two, credit cards, payments in general, but credit card lending within that. And if you look into the second quarter results, it's in front of me, the consumer plus credit cards have grown 9% year-over-year in terms of loan book in Spain in a relatively mature market. So consumer loans, credit cards, very small businesses, as we call them, peanuts. We are growing very nicely on that one, the same percentage year-over-year growth at the end of June was 3% on that book. And commercial loans, commercial loans towards the lower end of the Enterprise segment. We are growing there very nicely as well. Again, in the quarterly presentation, you would see that we grew 5% on that year-over-year. So on portfolios of higher returns, we wanted to gain market share, and we are gaining market share in all those portfolios that I mentioned to you. That's the second piece. So number one, grow the customers. Number two, grow in lending where we see better returns. And number three, obviously, the highlight in my view of Spain this year is growth in fees, which is again leading to revenue growth. Fees, as you would see in the second quarter results, 16% growth year-over-year, 16.5% to be precise. And we are growing big time in asset management, we are growing big time in insurance. When you sum them up, growth in customers, growth in more profitable lending, growth in fees. In a mature market, a relatively stable market like Spain, we are seeing some decent, in my view and better than competitors', revenue growth. That was the first piece of your question. The second piece, let me pick up some speed. Are we changing our risk profile because we have higher -- more capital? The answer is absolutely no. Meaning, the capital prevalence or the capital situation should not be changing our risk appetite. If there is value, there is a return in the portfolios that we want to grow independent of your capital position, you are delivering good returns and you can always accumulate capital, and you can always ask our capital for those portfolios. So we don't see that as an ingredient into, let's change our risk appetite. I'm very proud of the mechanism that we established at BBVA, and we improved that over years, and it's even better now, which is for retail and SMEs, we have portfolios and for enterprises, for commercial and corporate, we do it by client. So every single capital that we deploy to a certain client, what every single capital that we deploy to our portfolio, retail, credit cards, has to pass a certain threshold. For clients, you might choose to invest in a certain client, but then our systems track that and make sure that after the period of investment, you still deliver that capital return. It's a very micro capital planning process, which -- and I'm explaining this because independent of our capital position, this planning process is enabling us to make sure that whenever we put the capital, we deliver decent returns, we deliver decent returns. And we don't change our risk appetite or the threshold just because we have more capital and so on. And then the last one you asked about the competition and the fact that you feel that the pricing in certain portfolios like consumer and mortgages is maybe overdone in the industry. I mean the mortgages is very competitive. In consumer, we don't see that competition that you are referring to. But in mortgages, we do see that. But the same policy of that micro capital planning process holds there. If we see value in the portfolio. And as you know, mortgages is a better long-term product in Spain, and it typically comes with other products. So it's not just a pure mortgage. If you have the mortgages, you establish a very long-term relationship with the customer. Looking at those returns, obviously, client-by-client pricing is very different, so we have these ranges and bands. But in general, the portfolio still makes money, still delivers good -- decent returns. So as long as that's the case, we continue to invest. If that's not the case, we move the capital to other portfolios. But so far, there is competition, but we can live with it.

Perfect. So now on to Mexico, the jewel of the crown. What are your strategic priorities in the country? What are your key concerns? [ Our commentary ROE ] has fallen to 18% post-pandemic, how long will it take you to rebuild the pre-pandemic returns of close to 25%?

Close to 25%. Very soon. Let me start with the last one. I think our expectation is clearly that next year we'll be back to normal. And this year, the second half is actually proving to be very positive. I mean we have guided the market the very positive tune -- for all the markets actually, but also for Mexico in the second quarter. And that guidance is very much confirmed. So we are also expecting a very good second half. But also coming back to your question, the ROE levels of pre-COVID is coming back very soon. But you mentioned something, you said jewel of the crown, I agree. It's an amazing, amazing asset. I mean if any one of listeners are out there and if they go to our investors, if they go to Mexico, I would encourage them to really -- and we do organize these visits, I would encourage them to go to BBVA Mexico and meet with the team. It's an amazing team, the best talent in my country, the best brand in the country. We do measure this, obviously. The best franchise in the country. It has been built over years. We do have now 24% market share in total lending. And the second largest bank is around 14%. So we do have this amazing franchise in the country. That's why it's the jewel of the crown. And that's why, as I did mention before, the best example of what I was saying about BBVA in all the countries that we are in, we are delivering better returns than the average of the industry. It's clearly more visible in a country like Mexico. That's why I agree with your statement that it's the jewel of the crown. And what is our strategy there, you were asking. Growth, profitable growth. It's easier to do it in Mexico to be fair. Those thresholds and capital discipline, it is easier to grow profitably in Mexico, and that's what we have been doing. The same levers more or less, I mean, there are nuances, but the same levers in the sense that we are growing our customers. I mean our target customers, as we call them, which is the really linked primary customers that we have -- in the past 4.5 years, we have grown our target customers by 66% in Mexico. The country -- the bancarization is growing, and we are growing with it. So the customer franchise is growing. But again, nuances in the sense that, for example, in Spain, given that growth is not like that because the bancarization is already established in Spain, we are reducing our number of branches in Spain. In Mexico, we only reduced it -- in that 4.5 years, we only reduced it by 6%. So it's basically flat, the number of branches, but we have grown our target customers, primary customers by 66%. So we are serving a much larger customer base with the same infrastructure and with a similar cost base. That's how the nuances is taking shape. So we are still efficiency focused, cost focused. But in the case of Mexico, where the bancarization keeps increasing, we don't need to close branches and do restructurings, but rather keep that infrastructure to serve more customers. But coming back, what is our growth in Mexico? Growth, profitable growth. Grow the customer base, similar to Spain. Grow in portfolios where we have very good returns. Grow in the cash management. Banking business is all about cash management. You can lend to clients, but you have to be in the cash flow of that customer, either retail or enterprise doesn't matter. You have to be in the cash management. I'll give you 1 number, the payroll loans in Mexico, BBVA Mexico has 37% -- 38% actually, to be precise with the latest figure, 38% market share. So we are in the cash flow. Be in the cash flow. Lend to those clients in high-return portfolios, grow the customer franchise. And Mexico as a country is helping on the strategy. I mean the best news about Mexico is the fact that, again, very low bancarization. I mean the credit over GDP is the lowest among the emerging markets in Mexico, lowest. It's lower than Peru. It's lower than Nicaragua. So there is room for leverage. There's room for growth in the banking system, a healthy growth potential, number one. Number two, the macro fundamentals are doing really well, really well. I mean one of the best things about Mexico, it's very close to U.S. So the tailwind of the U.S. growth is clearly trickling down to Mexico. All of that growth is helping the country. All of that growth is helping the bancarization. And we, the best bank in the country, is benefiting from it. So the tailwinds are also reaching us. So second half of this year, next year, I'm seeing very positive picture.

Just quickly as a follow-up, since you've mentioned a market share of 25%, a big gap compared to the next in line, the next competitor in line 14%, do you think there's room to keep increasing? Or is there a focus to keep increasing market share as you've been doing over the past 18 months? Or it's not a priority for the bank, and hence, you will preserve margins over market share going forward?

It's a priority. It still is a priority. I mean last -- year-over-year, June '21, we have gained 61 basis points in market share. So we can still gain very profitably. And we will continue on that trend because again, we have the capabilities and all the basics to be able to grow very profitably in the country, and that's what we'll do. So there's -- there is always this trade-off. But in large portfolios, especially in retail and SMEs, scale is helping the profitability of the whole portfolio. So the marginal cost of serving the extra customer is very little, which means that the trade-off between profitability and growth is less visible, is less critical in portfolio segments. And for those segments, we will continue to grow, for sure. I mean in credit cards, we now have 31% market share, and we have been growing quarter after quarter, quarter after quarter without compromising on profitability. So I think we can continue to do that.

Very clear. Turkey, I have asked this question many times in the past, and it's a recurrent one in the debate with investors, but I'm afraid I have to ask again. Is the strategic rationale of holding a 50% stake in Garanti. And where do you see your presence in the country in 3 to 5 years?

Yes. Again, we have repeated the answer. So it's going to be a repetition for you, too. So apologies, Marta, but we are long-term investors in wherever we are. And we do have this principle of look at the long-term fundamentals of the country, number one, and also look at the asset that you have in that respective country. And the second component is very important to us. It's one of the key reasons, despite the fact that the market is an amazing one in the U.S. market, that second component, the fact that we lacked scale, the fact that our ROE unlike any other country that we are in is lower than the ROE of the industry, we felt we don't -- we didn't have the right asset. In the case of Turkey, that's completely the other way around. So first of all, on the 2 dimensions of the market and our position in the market. On the market, we all know the fragilities the vulnerabilities of the country, so I'm not going to repeat them to the audience. But we do also see that in the long term, there is the potential. The same dynamics that we see that I talked to you about in Mexico, holds for Turkey as well. I mean demographics, the domestic demand part is very positive, like in Mexico. So the average age is 31 versus the average age of Europe being 44, no? I mean -- so the demographic dividend is clearly there. Number two, the tailwind of a large market. In the case of Mexico, it was the U.S. So we are in Mexico getting the benefit of being very close to U.S. The same thing for Turkey. I mean, Turkey is the sixth largest partner of Europe. If you exclude energy, the trade balance is such that Turkey is like #5 to Europe. So Europe, Turkey is a manufacturing hub for Europe. That's the second component that I would put on the table. And the third component that I would put on the table is still the same, the leverage situation. There is room, especially on the households, there's room for leverage. I mean the household debt over GDP is 15%, 16% in Turkey, 16% to be precise. The same percentage is 39% in the average of emerging economies. So there's room for leverage on the household side as well, creating room for growth for banks like us. So the market, for long-term reasons, have the potential in our clear view. Then number two, which is very important, our position in the market. And I go back to the same metric, and I would encourage the audience to check out these numbers because I think they are important. Our ROE, Garanti-BBVA, our bank in Turkey, versus the ROE of the industry. We do have a clear gap not this year, not last year, consistently, if you take the past 10 years, that is the case. And we do believe that, that positive gap is -- and it's a very sizable gap in the case of Mexico, in the case of Turkey, it's very important because the banking industry in general over the long term has to deliver a decent ROE. Otherwise, the industry cannot function. And if you do have this meaningful sizable gap with the rest of the industry, it implies that in the long term we would deliver really good returns. Having said that, we are also aware, as I said, over the vulnerabilities, the balance of payments topic -- that are main topics, again, the audience, I'm sure, is very much aware of all of that. So there are vulnerabilities and we don't discount those vulnerabilities. As such, we have been saying for long that to your usual question, I always reply we are comfortable with our close to 50% share, and we will -- we are very optimistic for the long term.

So now digital. Could you briefly explain the areas of focus, your action points in your digital strategy? And how much do you think will help with your revenues and reduce your expenses?

Perfect. So I kind of touched upon it, but I see it -- it's not what we call a [ MECE ] framework, so mutually exclusive and exhaustive framework. But I do see digitalization as a journey of 4 different things. It's not precisely as such, but it's like a series of 4 different stages, 1 after another. And it continues to get tougher as you advance on this journey. There are 4 steps in the journey. The first one is digitizing servicing. So you want to send money to another bank account in another bank or within the same bank doesn't matter. It's servicing. You just need to send the money. Nothing -- it's an IT transaction, debit-credit, debit-credit. That was the first part of digitalization journey. Now everyone does it. It's a commodity. It's a hygiene, everyone does it. So there is no room to create differentiation through digitizing servicing, but it was the first step that everyone did. And I think we started that early so that we can move to the second and third and fourth stages. The second stage after servicing is digitizing sales. So you want to buy -- get a loan from the bank, you don't need to go to anywhere. You can go just to your mobile app and you get the loan. That's digitizing the sales. On that one also, it's tougher than servicing, but many banks have evolved, and I think it also has become relatively hygiene, relatively -- everyone does it kind of a way. We still do it, in our belief, much better than others because there is a capability there as well, what we call, funnel management. I do think that this funnel management in digital, meaning at every stage, how many customers do you drop out from the funnel is going to be a course in MBAs in the future or if it's not already there, it's so important, there are capabilities, doing it for more products than less products. There are multiple things there. As such, we do think that we are better than others. But again, everyone kind of does it. Now the key differentiation in my view, and again, that can be replicated as well, but it's tougher as compared to the first 2 stages. The number 3 stage is what we call new customer acquisition. It's one form of sales, but giving that loan, giving that credit card to a noncustomer of yours so that you increase your customer base. That number 3 stage new customer acquisition is tougher. And on that one, because the journey is different and the funnel is much tougher and so on. And the way to get to the customer is very different, very different. I mean People don't wake up and they say, "I want to change my bank today." They have to have a major problem. There is a bias of status quo. There's a bias -- there's -- people don't want to have that transition cost basically. So how do you get to that customer? How do you trigger that motive for the customer to change the bank? So that number three, the stage, we are doing really well as compared to others because there are much more capabilities needed in that stage. And then the fourth one is it links back to the strategy. I was mentioning the 2 plus 2 plus 2. The first one was about financial advice. How do you use digital, the fourth stage, so that the customer says, "I trust these guys. They help me with my money. They help me with the financial advice that they give to me, and they're not short-term focused just to optimize the profit, but they care for me as a customer." I mean, it's very -- I did mention it in one other public interactions. We ask the customers in every single country, and it doesn't change the percentages too much. 65% of people in different countries basically say that the key problem that they have in life, in life, it can be many other things, but 65% with a far -- with a huge majority as compared to the other potential answers, they say their key issue in life is money. So the banks have to do something with this. And it's also self-serving, which is if we do this well, if we help the customer, what we see is that, that customer never leaves you. Today, because of that number, the first stage and the second stage servicing and sales and given the fact that many banks have evolved on this, our customers tell us that your app is really, really great, but also for the things that I do, servicing and sales. Other banks can serve me well. To cut a long story short, I'm giving you these 4 stages, but our focus in this digitalization journey is to make sure that beyond servicing and sales, which we are doing in our view as far as we can see much better than others. We also excel in this stage #3 new customer acquisition and stage #4, helping customers with their money, so their connection with the bank is much, much, much better. And on the third one, especially, there are numbers I gave you, we were acquiring, once again, I will repeat that, 3.5 million customers, 2016 total, and only 3% of that customer base was acquired digitally in 2016, 5 years ago. This year, our expectation is close to 8.5 million customers, so 3.5 million have become 8.5 million. And the 3% digital acquisition ratio has become, in the first half, 37%, and it's increasing. So we are acquiring additional customers through these digital means. So it's helping us on growth, number one. And then it's helping us given the fact that servicing is very cost heavy, it's helping us in optimizing our costs, the restructuring program that we have done in Spain, the numbers that I gave you for Mexico, we have grown our customers, target customers by 66%, while we're decreasing the branches by 6%. So all of that is also helping us on costs. To cut the long story short, I mean sometimes there is a perception, I see it in the investors, the traditional banks are kind of a melting iceberg and fintechs are going to come and they're going to kill the banks, they will kill the banks if banks don't respond to it or if they don't create the journey that I was talking to you about. I mean the things that we can do with technology, with data and with digitalization is enormous. And if you do that well, I think we will continue to thrive as we have been doing in the past few years.

Perfect. Related to that, we've got a question from the audience. It's a complex one. But if you briefly could answer to it. In the fintech area, where do you see the real threat? Or what is your key concern at the moment from new entrants? Is it international transfers, [ with Visa ], is it buy now, pay later, the Klarna's of this world. Could you share quickly what is your main concern today related to it?

It's not a concern, but where do I see fintechs, again, thriving also in the industry is those areas where we see relatively high margins, so very profitable. So there is room to be able to use the pricing lever to pull out the customer from the franchises. And those are, in general, again, the international transfers, you mentioned them all, payments, where the margins are also very nice. Crypto, I do see -- and some of those great names that come out when you look into their numbers, one of the reasons that they are thriving is also enabling crypto and customers do have some affinity or increasing affinity to those type of products. So where you see new things or where you see high margins is where we will see them. And they will succeed because they are very focused. And I see -- our business is all about talent, people, and I see very good talent being pulled into fintech. But I also do see that there's room to collaborate on such opportunities. I mean the focus and the dedication and the talent base of fintech, coupled with the customer franchise of the bank, especially banks like us who really think that the success will come from the long-term optimization of the customer rather than the short term, immediate revenue on a certain product and so on. I do think that the best way forward is actually to combine both. So fintechs partnering with banks is a better way out than fintechs attacking a certain thing because the banks do have the capability and the muscle to counter some of those threats.

I'm conscious of the time, and we are seeing few incoming questions related to this. So would it be possible to do a brief recap on your approach to M&A and bolt-on acquisitions, for example, you buy back the minorities in your LatAm subsidiaries?

Marta, I mentioned it multiple times in previous kind of quarterly calls also, our approach to M&A is the approach of a very simple one and people tell me that -- and I'm a very tangible numbers-oriented person. So it stays at the philosophical level, but it's really how it works. It goes back to the strategic mindset, for sure, but also whether the numbers play out, if numbers play out, the capital discipline, why did we sell BBVA USA? I was the CEO of that business before I assumed this job. You cannot imagine the emotional aspect of taking that decision, but we had to. We had to because it was our fiduciary duty. The same applies to every other opportunity that we look into. The numbers have to come out. So in that sense, what is our approach to M&A? And maybe a related question, which is the most asked question of the fact that we do have excess capital now will it lead to an M&A frenzy at BBVA and so on, the answer is a very simple one. We don't look into M&A as something that we will be using to amortize our excess capital. We don't. The numbers have to work out. And on that one, as I keep saying to everyone, if you have a -- an M&A is a project. And if that M&A project is value accretive, if you create value with that project, you don't even need the excess capital. Obviously, there are the -- there is the convenience of having the excess capital right next to you. So there's -- they are not naive. There is that convenience benefit. But the project has to make sense. If the project makes sense, even though you might not have capital, you can call for a capital. That's how the markets work, that's how the markets should work in our view. To cut the long story short, our approach to M&A is the approach of we have to see the clear value and capital -- the capital -- I mean, the IRR has to be there. The tangible book value accretion has to be there. The earnings accretion has to be there. And if the numbers don't come out, we don't do M&A. And the excess capital doesn't change this perspective on how we look into it. You also asked about bolt-on, for sure, because we like certain areas, again, payments, asset management, those areas, we like a lot because the returns are much more attractive in those businesses. As such, we are growing like crazy in all those areas. I mean, payments we are growing much better than the industry, growing our market share in every single market that we are in. So we'll continue to grow organically. And then M&A, if the numbers work out, why not? The only thing is, given the attractiveness of those areas, when we look into those -- some of those opportunities, given the base value of the valuations are being so high, we don't see very clear opportunities. Again, I answered bits and pieces here and there, but my basic message is we are very numbers focused on these opportunities. Obviously, the strategic component is important, but the numbers have to work out for M&A to happen.

And just generally, it doesn't need to involve BBVA, of course. But do you think we will see further consolidation in Spain? Do you think there are banks that are not making the cost of capital, they won't make it and probably they won't have an alternative back to...

Most probably, yes. I don't know the time frame. But yes, because the Spanish banking industry, if you account also for the corporate center costs and so on, still, as an industry, doesn't deliver the cost of capital. The best way to -- either the rate situation will change, which we don't expect to happen in the near term or the industry will continue to focus on costs. And one of the levers to trigger that cost effort is consolidation. So might happen, can happen. My perspective is it will happen in some time frame. But if you ask our -- if you are indirectly asking our role in that process, the numbers have to work out. I go back to my previous answer.

Right. And before we finish, very quickly, we've got 2 minutes. But we've got an investor asking for a clarification on your mortgage strategy because you didn't mention it in the 4 books that you talked about with the books that you are focusing on for growth in Spain. Are mortgages attractive in your view at current prices? Are you willing -- you have been gaining market share lately? Are you willing to keep gaining market share and offer cheaper prices? Are you going to be competing in that market? Or is not an area of focus?

It is an area of focus because it does create value. It is about cost of capital that capital planning process that I did mention, it implies that we should and we can grow in mortgages. The only point I was making is, I didn't list it in the priorities because it is tougher to gain market share in that portfolio without compromising profitability, which implies that we will continue to grow, we will be very aggressive, obviously, but we will not be part of this price war because if you are, you can gain market share in everything but then you would be below the threshold that you would be seeking for that portfolio. So we will continue to grow. Don't take me wrong at all. But the aggressive positioning and aggressive market share gain that we have done in consumer, 4% market share gain in the last 5 years, as I said, probably is, in any case, they are tough to achieve because of the nature of the portfolio, but that's not the positioning that we will have.

Very clear. Well, I'm afraid we've run out of time. It's been an absolute pleasure to have you with us here this morning, Onur. I wish you the best of luck in implementing all -- or implementing your strategy all you've been talking about today, and we hope to see you soon.

It's always great to talk to you, and thank you to audience for listening in. So thank you so much.