“We want a strong franchise on the Texas frontier and Southern California,” said chief executive José Ignacio Goirigolzarri in an interview with The Banker.
BBVA owns Valley Bank in California and Laredo National Bancshares in Texas. Research firm Keete, Brugette and Woods said it believed that Texas Regional and Sterling Bancshares were two possible local bid targets.
The US is the source of only 2% of BBVA’s profits but the aim is to increase that to 15% in five years. The bank is primarily targeting Hispanics in Texas and California – 31% of Hispanics in the US live in the two states – and providing them with services ranging from remittances to higher value-added products, including services for more than two million small and medium-sized enterprises in the US that are owned by Hispanics.
BBVA said it was also seeking a boost in profits from the huge growth in Spanish immigration. About 9% of the population are newcomers, compared with only 1.6% in 1998, and the flow shows little signs of stopping. The bank has pioneered Dinero Express, a separate brand with simple shop-front offices in immigrant neighbourhoods, staffed by immigrants, providing remittance and other basic services.
BBVA did not comment on rumoured mergers with UK bank Lloyds TSB. It said it was trying to get better terms through a court case for its 15% stake in Italian bank BNL, having failed to buy it.
Deutsche heads into Asia:
Deutsche Bank is launching retail banking operations in India, tapping into the country’s increased spending capacity and expansion of consumer goods markets. The German bank plans to open branches in eight cities, including Mumbai, Delhi and Kolkata. Running alongside the usual product offerings, Deutsche Bank will also provide investment and financial planning services.
In its current expansion run, Deutsche Bank has also acquired a 9.9% stake in China’s Huaxia, the country’s forth-largest listed bank, for around $241m. The deal makes the German bank the biggest foreign shareholder in Huaxia.
Bids are in for the long-awaited sale of 61.9% of Romania’s largest bank, Banca Comerciala Romana (BCR), the last major bank in central Europe to be privatised. The seven banks that lodged sealed bids with the state asset agency were Deutsche Bank, BNP Paribas, Italy’s Banca Intesa, Belgium’s Dexia, National Bank of Greece, Austria’s Erste Bank and Banco Comercial Portugues. Bids for the stake could reach as high as €3.5bn, valuing BCR at €5.6bn. A short list is expected by the beginning of November and a winner may be declared before the end of the month.
BBVA battles bid for BNL:
BBVA is launching a legal challenge to insurance firm Unipol’s takeover bid for Italian bank BNL. Spain’s BBVA, which has a 14.75% stake in BNL, withdrew its bid for BNL in July when Unipol’s stake reached 51%. BBVA is reported to have said that it does not want to start a bidding war with Unipol, whose offer values BNL at €2.70 per share. The legal challenge is based on the accusation of pro-Italian discrimination against BBVA and other minority shareholders.
Macquarie Bank has approached several European stock exchanges, including Euronext, about a joint bid for the London Stock Exchange. The Australian bank had also been in talks with Computershare, which has ruled out its participation in the bid. Although Macquarie has the financial strength to acquire the LSE – Deutsche Börse’s rejected bid offered LSE’s shareholders 530p per share – only a partnership with another exchange or technical provider would allow for improvements in profitability.
Goldman Sachs and Lehman Brothers have taken on a €1bn portfolio of industrial financing loans from AMB Generali, the German subsidiary of Italian insurer Generali. Goldman has taken on the non-performing part of the portfolio, amounting to half the total value, while Lehman has acquired the rest. It is understood that the banks fought off competition from Morgan Stanley and Deutsche Bank.
The merger of Credit Agricole’s two wholly owned factoring subsidiaries, Eurofactor and Transfact, into a new combined entity called Eurofactor has been approved by shareholders. The new Eurofactor becomes the largest factoring company in France, with a 24% market share.
The Dutch co-operative financial services group Rabobank has agreed to pay $371m in cash for Central Coast Bancorp, the holding company of Community Bank of Central California. The acquisition, at a 29% premium, strengthens Rabobank’s California franchise following the purchase of Valley Independent Bank in 2002.
Refco to sell futures arm:
Refco, the securities and futures broker on the verge of collapse, may auction its futures arm, and several bidders have already emerged. Refco’s former CEO, Philip Bennett, was recently charged with securities fraud following allegations that a firm he controlled was involved in shuffling about $430m in debt on and off Refco’s books – Mr Bennett’s lawyers deny the claim. The uncertainty caused by the allegation led to suspended trading of Refco’s shares, the suspension of some of its operations and plummeting market values for its bonds. At the time of its highly successful IPO, Refco had a market value of $3.6bn.
Chicago IPO well received:
The Chicago Board of Trade (CBOT), the second largest futures and derivatives exchange in the US, has launched its IPO on the New York Stock Exchange. The flotation priced about 3.2 million shares – representing 6% of the total – at $54 per share, well above the initial indicative price range of $45-$49. Market sentiment is reported to be very positive about the offering.
Swiss bank UBS is investing Rmb1.7bn ($210m) in the restructuring of Beijing Securities, the Chinese broker, obtaining in return management control and a 20% stake in the restructured operations.
Morgan Stanley has received informal approval by Chinese authorities to acquire interests in a Chinese securities house, alongside its existing stake in China International Capital Corp. If formally taken, this decision would signal increased openness to foreign institutions helping to solve local brokerage problems. It follows a regulatory change to allow overseas companies to have greater access to the local market.
Merrill Lynch has signed an agreement with a group comprising Mitsubishi Tokyo Financial Group, the Bank of Tokyo-Mitsubishi and Mitsubishi Securities to form a 50:50 private banking and wealth management joint venture in Japan. It is expected to start operating in the first half of 2006. The US bank has also published a fund managers survey, forecasting Japanese assets to perform well over the next year. US assets were predicted to be the worst performers.
