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Spanish bank BBVA sees profits rise on cost-cutting

Spain's second-biggest bank BBVA on Wednesday said that solid revenues and a cost-cutting drive helped lift profits by more than 30 percent last year.

Spanish bank BBVA sees profits rise on cost-cutting

Hit by a severe crisis several years ago, Spain's banking sector has recovered but at a cost as thousands are laid off and it struggles to get rid of toxic assets.

BBVA said net profit jumped by 31.5 percent to €3.47 billion ($4.0 billion) last year, beating analysts' expectations.

“Solid performance of recurring revenues, moderation in operating expenses, and a drop in impairment losses on financial assets are the key drivers of this growth,” the bank said in a statement.

BBVA said that the number of customers using its online banking services rose by 20 percent to 18.4 million.   

At the same time, BBVA cut the number of high street branches by more than five percent with the number of employees falling by two percent.   

In the fourth quarter alone, however, net profit shrank by nearly a third to €678 million, as the bank set aside €404 million in provisions to cover reimbursements in so-called mortgage “floor clauses.”

In December, the European Court of Justice ruled Spanish banks must reimburse clients who signed mortgage contracts that prevented them benefiting from a steady drop in interest rates.

The so-called mortgage “floor clauses” imposed a limit on how far mortgage interest rates could fall in line with a benchmark rate, but were ruled unfair as consumers had not been properly informed of the consequences.   

Around 1.5 million Spaniards are believed to be affected.    

BBVA said it was also hit by exchange rate developments last year and that net interest income, which rose by 3.9 percent, would have expanded by as much as 14.9 percent without those effects.

Net interest income slightly beat expectations to come in at €17 billion.

Gross income grew by 4.1 percent to €24.6 billion.

BBVA said it had managed to reduce the ratio of non-performaing or risky loans to 4.9 percent from 5.4 percent.   

Since the crisis, Spanish banks have sought to bolster their liquidity and capital to face any potential problems down the road.   

As such, in the last resistance tests done by European authorities, Spain's large banks fared well.

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Cashless Switzerland: What is Twint and how does it work?

If you live in Switzerland, you are likely no stranger to Twint and maybe even use it regularly to make and receive payments. But if you are not familiar with this app, this is what you should know.

Twint app can be installed on a mobile phone.
“Twinting” money with a smartphone is easy and convenient. Photo by Andrea Piacquadio from Pexels

In Switzerland, the word “Twint” is used both as a noun and a verb.

As a noun, it describes the mobile application which allows you to pay for various goods and services practically everywhere in the country.

As a verb, (“to twint”), it means to send someone money, or receive it, via the same app.

So what exactly is Twint?

Simply put, it is digital cash (not to be confused with bitcoin, which is digital currency) that was first introduced in Switzerland in 2014 and has become very popular since then.

Twint logo. Image by Twint.ch

People like it because it is an easy and quick way to make instantaneous payments, especially in situations when credit cards or physical cash can’t be used.

A big part of its convenience is that it can be used at cash registers, vending machines and parking meters, as well as in online shops — pretty much everywhere in Switzerland, even in places that don’t accept credit cards.

The only similar mode of payment would be your maestro debit card issued by your bank.

This video explains exactly how the process works.

Another advantage of Twint is that you can use it to send money to someone else’s mobile phone — as long as they also have Twint. And you can receive money the same way.

And there are no fees or charges for this service.

How does Twint work?

Anyone can use Twint, but you need a Swiss bank account or a credit card and, of course, a smartphone.

According to Twint website, you need a smartphone with either an iOS (from version 12.2 and upwards) or Android (from version 7 and upwards) operating system and Bluetooth capability (from version 4.0 and upwards).

“It is generally not possible for Twint to be used on Apple devices with an operating system older than “iOS 12.2” or on Android devices with an operating system older than “Android 7”. On Android devices without access to the Google Play Store (e.g. on certain HUAWEI models), the use of Twint app is also not possible”.

But If you have a compatible phone, installing Twint is easy.

Swiss banks offer their own version of the app, and you can download it directly from your bank’s website.

Then, when you use Twint to make a payment, the amount is debited directly from your bank account or credit card.

By the same token, if you receive payment from another Twint user, the money is automatically deposited in your account.

And you are not limited to just one Twint app.

If you have accounts is several banks, or have more than one credit card, you can install and use all of them.

READ MORE: How to open a bank account in Switzerland

Can Twint be used to make payments and receive money from abroad?

For the moment, Twint can be used solely in Switzerland and payments can be made only in Swiss francs – although this may change in future. 

“We are, however, working closely with providers in other countries to develop an international and multi-currency solution”, according to Twint website.

You can find more information about Twint here.

READ MORE: Which bank is best for Americans in Switzerland?

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