Banco Bilbao Vizcaya Argentaria, more commonly known as BBVA, is a financial titan. A stalwart of traditional banking, it's built its empire on retail and wholesale banking, and asset management. Its reach spans continents, with a strong presence in the US, Spain, Mexico, Turkey, South America, and beyond. But hidden beneath the surface of its massive balance sheet and steady income statements, there's a subtle shift, a barely perceptible tremor hinting at something much bigger. Could BBVA be preparing for a bold, unexpected pivot towards the tech sector?

This hypothesis might seem outlandish at first. After all, BBVA is a bank, its roots deeply embedded in the world of finance. But the clues are there, whispers in the data, waiting to be deciphered. The most striking is the company's consistent reduction in long-term debt over the past five years. While long-term debt stood at a hefty €81.98 billion in 2017, it has progressively shrunk, landing at €68.707 billion by the end of 2023. This trend is particularly intriguing when viewed in conjunction with BBVA's steadily increasing cash and short-term investments. From €145.717 billion in 2017, this figure has climbed to a staggering €162.248 billion in 2023.

Decreasing Long-Term Debt vs Increasing Liquid Assets

The following chart visualizes the simultaneous decrease in BBVA's long-term debt and increase in liquid assets (cash & short-term investments) from 2017 to 2023.

Source: BBVA Annual Financial Statements

What's driving this simultaneous decrease in long-term debt and increase in liquid assets? The traditional banking narrative doesn't offer a satisfying answer. While some analysts might attribute this to improved risk management or market conditions, a deeper look suggests a more strategic motive. BBVA is building a war chest, amassing firepower for a potential acquisition or investment spree. And the tech sector, ripe with innovation and poised for explosive growth, presents an enticing target.

Further evidence for this tech-focused hypothesis can be found in BBVA's recent ventures. In 2020, the bank made headlines with its investment in solarisBank, a Berlin-based banking-as-a-service platform. This strategic move marked BBVA's foray into the world of fintech, a clear signal of its intent to embrace technological disruption rather than resist it. And it's not a standalone incident. BBVA has been quietly building a portfolio of fintech investments, partnering with and acquiring companies that operate in areas like blockchain, artificial intelligence, and digital payments.

The numbers back this up. While BBVA hasn't explicitly disclosed its fintech investment figures, an analysis of publicly available information suggests significant capital allocation in this direction. Consider their acquisition of Simple, a US-based digital banking platform, in 2014 for a reported $117 million. This was followed by investments in Coinbase, the cryptocurrency exchange, and Atom Bank, a UK-based digital bank. These strategic moves, though seemingly small in the context of BBVA's overall size, demonstrate a clear pattern of intent.

The bank's focus on digital channels also points towards a tech-driven future. BBVA boasts a robust online and mobile banking platform, with a user base that's rapidly expanding. This digital-first approach is reflected in their marketing and product development strategies, demonstrating a keen understanding of the changing consumer landscape.

"Fun Fact: BBVA was one of the first major banks to offer a fully functional mobile banking app, launching it back in 2011, years before many of its competitors even considered it."

The potential implications of a BBVA tech pivot are vast. Imagine a bank, already dominant in traditional finance, wielding the power of cutting-edge technology to revolutionize the customer experience, enhance efficiency, and tap into new markets. The combination of BBVA's financial muscle and the agility and innovation of the tech sector could reshape the global financial landscape.

Of course, this remains a hypothesis, but the evidence is compelling. The subtle shifts in BBVA's financial data, combined with their recent strategic moves in the fintech space, paint a picture of a company preparing for a bold new chapter. While the future remains unwritten, the whispers in the data suggest that BBVA is poised to become a major player in the tech revolution, a move that could have profound implications for the world of finance and beyond.