September 26, 2018 / 3:11 PM / 21 days ago

UPDATE 2-BBVA names CEO Carlos Torres as new executive chairman

* BBVA expects to name new CEO in the fourth quarter

* Wants to end year with more than 27 million digital clients (Adds details on the bank’s digital transformation)

By Jesús Aguado

MADRID, Sept 26 (Reuters) - BBVA has appointed chief executive Carlos Torres to replace Francisco Gonzalez as the bank’s executive chairman, a move that confirms the group’s emphasis on digital banking.

The appointment, which has long been flagged, will mean Spain’s second biggest bank will continue its shift from traditional retail banking towards a more digital-oriented lender, competing with fintech startups on new, original banking services.

Torres joined BBVA in 2008 as head of strategy and corporate development, becoming head of digital banking in March 2014.

Since his appointment as CEO in May 2015, the transformation process has accelerated. Digital customers at BBVA stand above 25.1 million and the bank wants to finish the year with 27.2 million digital customers.

But there is also uncertainty over whether digital services can generate the sort of healthy profits the bank has enjoyed for the last two decades, especially at a time when one of its main markets, Turkey, is struggling.

Shares in BBVA are down 22 percent so far this year. A jump in the bank’s second-quarter profit was mainly the result of a strong performance in Mexico, which has overtaken Spain as the BBVA’s biggest business.

Torres, a former consultant, will take over as chairman on January 1, 2019.

BBVA will name a new CEO by the end of the year, the bank said in a statement.

BBVA’s announcement comes just a day after its main rival, Banco Santander, named former investment banker Andrea Orcel as its new CEO, who is also expected to put more emphasis on digital banking.

Reporting By Jesús Aguado Editing by Julien Toyer; Editing by Kirsten Donovan and Jane Merriman

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