BBVA Bullish on Simple’s Growth Despite $60 Million Writedown

  • Philip Ryan
  • February 3, 2017
  • 2

© Can Stock Photo / dotshockBBVA Compass, the U.S. subsidiary of the Spanish banking giant BBVA, purchased the neobank Simple almost three years ago for $117 million. Since then, it has written down $89.5 million of that investment.

$60 million of that came in a “goodwill impairment” in 4Q 2016. BBVA Compass held an earnings call Wednesday and continued to speak positively about the neobank:

New business models, we own Simple as you know. Simple is growing very well, acquiring customers now, more than 30,000 per month with very low cost of acquisition, with rising NPS, over 50%, it’s 54%, their NPS.

NPS, or net promoter score, is what you talk about when you don’t have anything else to talk about. As Ron Shevlin, now director of research at Cornerstone Advisors, put it succinctly in 2013, “Financial institutions should stop wasting their time with the net promoter score, and start tracking and measuring actual referrals.”

But 30,000 customers a month is no joke. Simple claimed around 100,000 customers at the time of its acquisition, but a leaked email obtained by Quartz put the number of active users at just 33,000. Simple disputed this in a blogpost claiming that, to the contrary, Simple’s customer base was large and growing, and claimed 330% growth for 2013 from word of mouth alone. Simple seems to always be growing, and yet the bank that bought the service continues to write down its purchase price.

It is confounding, because Simple is, well, better than most other bank accounts out there. It is “customer-obsessed,” which is what you’re supposed to be. It offers joint accounts. It pioneered the widely copied “safe to spend” feature. It removed (almost) all fees.

Other neobanks face similar challenges. Even the high-flying BankMobile is being sold by Customers Bank, purportedly to free it from Durbin restrictions. BankMobile opened 600,000 new accounts in the last six months of 2016, with 130,000 more soon to come, but still had a net loss of $4.8 million.

No matter how much people want neobank accounts, the institutions themselves don’t seem able to make much money. Except, perhaps, abroad? U.K.-based Atom bank announced plans to raise another £100 million — $125 million U.S — with help from “current investors.” One of those investors? BBVA.

To learn more about neobanks, join us in San Jose on March 6-7 for Bank Innovation 2017, where the best conversations in fintech take place. Click here to register.

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Philip Ryan is Senior Editor of Bank Innovation and Senior Director of INV Fintech. He began covering financial services in 2012 and has more than 15 years' experience in online journalism. He can be reached at

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