BBVA justifies the implementation of the ERE: “There is no choice but to do it”

The entity hopes to reach an agreement that “minimizes the impact”.

Onur Genç, CEO of BBVA.

BBVA considers that the Record of employment regulation (ERE) is required. The entity has again justified this Friday the implementation of the collective dismissal, given that, in the words of Onur Young, its CEO, “there is no other remedy”.

“We have to do it, it is necessary to guarantee the sustainability of employment in the future,” said the banker during the presentation of the entity’s results, which in the first quarter managed to return to the pre-pandemic benefit.

The bank has presented to the unions a collective dismissal that will affect 3,448 employees after lowering the figure by 350 workers, whom it has announced that it will relocate to remote management positions.

minimize the impact

Genç has stated the bank’s intention to reach an agreement with the unions “to minimize the impact” of the ERE. Not surprisingly, the company has already announced the hiring of Randstad to carry out the relocation plan for workers affected by the ERE and its commitment to relocate 100%.

The banker explained that the entity does not yet have any estimate of the impact on capital that this process will have and explained that “we have to focus on what needs to be done now”, refusing to advance if the bank expects new adjustments after this collective dismissal. “If it is necessary to act, it will be acted, but we are focused on the current situation,” he said.

Genç explained that these job cuts are becoming a trend throughout the sector, as reflected in the process being carried out at CaixaBank, and explained that at BBVA transactionality in branches has fallen by 50% in two years, also taking into account pre-pandemic data to eliminate the effect of lockdowns.

Asked if he believes that the implementation of this adjustment will affect the bank’s reputation, Genç pointed out that “all banks must focus on improving reputation”, although the sector during the pandemic “has taken a step forward and It has helped families.” However, the banker has recognized that the reputation of banks is worse in Spain than in other countries.

Coinbase

Genç has also been asked about the IPO a few days ago of Coinbase, a company in which BBVA had previously invested through its vehicle Propel Venture Capital. This IPO was carried out through a listing, that is to say, that it was not a sale for use of the titles by its previous shareholders nor were new shares put into circulation.

VC propellant still holding his share in the capital of the cryptocurrency trading platform, so in the accounts of the second quarter the bank will have to update the value of this investment, as well as others.

As a result of this update, as revealed by Genç, it will be recorded in the result of financial operations (ROF) and, therefore, in the gross margin, an increase of between 200 and 250 million euros, which will correspond mainly to the new valuation of Coinbase, but also of the rest of Propel’s investments.