Yolanda Díaz asks to freeze mortgages and BBVA tells her not to "misinterpret" her results

The Minister of Labor, Yolanda Díaz, has defended today a freeze on mortgages in response to BBVA's record profits, to which the bank's president, Carlos Torres Vila, has replied asking that "do not misinterpret" the accounts of the entity and criticizing the "catastrophic" economic models in which entrepreneurship is not promoted.

Thomas Osborne
Thomas Osborne
01 February 2023 Wednesday 09:44
29 Reads
Yolanda Díaz asks to freeze mortgages and BBVA tells her not to "misinterpret" her results

The Minister of Labor, Yolanda Díaz, has defended today a freeze on mortgages in response to BBVA's record profits, to which the bank's president, Carlos Torres Vila, has replied asking that "do not misinterpret" the accounts of the entity and criticizing the "catastrophic" economic models in which entrepreneurship is not promoted.

"While the rise in the Euribor will make the average mortgage more expensive by 250 euros per month, BBVA's profits grow 38% to reach 6,420 million, the highest in its history. The crisis cannot be an excuse to earn more. Freeze mortgages, moderate benefits," Díaz said on Twitter.

Díaz's idea has also had its reply in the Government through the Minister of Industry, Reyes Maroto, who has shown herself willing to analyze it. "We will study our partner's proposal," she said from Morocco.

During the press conference presentation of the bank's annual results, Torres Vila responded to both Díaz and the Prime Minister, Pedro Sánchez, who yesterday considered that workers lose purchasing power at the expense of large companies.

"Having results with such a good evolution can be misinterpreted", but "in Spain we have not yet reached the cost of capital in profitability", since "we are in a process of interest rate normalization", he affirmed in response to Díaz.

Faced with the bank's growth of almost 40%, business in Spain has improved by 8% "on a very low basis." "We have had years of losses and now what we have is a rate normalization process that leads to a sustainable business recovery."

Regarding Sánchez's comments, he assured that "the interests of the companies coincide with those of the market society, which rests on the private initiative for the correct allocation of resources." "The work that companies do is irreplaceable and history is littered with companies that abandoned entrepreneurship for models with catastrophic results," he added.

Torres also said that banks continue to trade below their book value and that the markets "still do not reflect their value." In the case of Spain, its contribution is 23% of the business, despite the fact that the value of the assets in the country exceeds 50% of the bank as a whole.

The new government tax on banks and energy companies will have an impact of 225 million euros on the accounts of BBVA, which is awaiting the ministerial order on its liquidation to decide whether to appeal it.

"The tax is counterproductive in a sector as essential as the economy. Putting a tax hinders economic activity, making credit flow more easily," said the president of the bank.

The business in Spain, which is the one to which the tax is applied, generated recurring income of 5,940 million euros, 4.3% more, and an attributable result of 1,678 million. BBVA specifies that the 225 million tax is applied to the income of the banking business in Spain, so that other services such as insurance are excluded.

BBVA obtained a profit of 6,420 million euros, representing an increase of 38% over the previous year and the best result in its history. The result would have been higher, 6,621 million, if 201 million were not included for the purchase of offices in Spain from Merlin and 461 million for uninterrupted operations in the United States.

After the improvement in profit, the bank has decided to distribute 47% of the profits among the shareholders, which is equivalent to 43 cents per share, 39% more than the remuneration charged to the 2021 financial year. It will allocate 3,000 million euros to dividends and, in addition, another 442 million to a share repurchase plan.