Banco Bilbao Vizcaya Argentaria, S.A.

BBVA headquarters in Bilbao
Type	Sociedad Anónima
Traded as	BMAD: BBVA, NYSE: BBVA
Industry	Financial services
Founded	1999
Headquarters	Bilbao, Spain
Key people	Francisco González (Executive chairman), Ángel Cano Fernández (President and COO)
Products	Banking, insurance, asset management
Revenue	€20.91 billion (2010)[1]
Operating income	€11.94 billion (2010)[1]
Profit	€4.606 billion (2010)[1]
Total assets	€552.7 billion (end 2010)[1]
Total equity	€37.48 billion (end 2010)[1]
Employees	106,980 (end 2010)[1]
Website	www.bbva.com

BBVA headoffice building in Bilbao.

BBVA offices in Bilbao.

BBVA building in Madrid.

Banco Bilbao Vizcaya Argentaria, S.A. (Spanish pronunciation: [ˈbaŋko βilˈβao βiθˈkaʝa arxenˈtaɾja], or BBVA, is a multinational Spanish banking group. It was formed in 1999 from the merger of Banco Bilbao Vizcaya and Argentaria, both of which in turn had previously amalgamated three important banks in Spain, namely Banco de Bilbao, Banco de Vizcaya, Banco Exterior de España and the state-owned Caja Postal de Ahorros, with other minor entities.

BBVA is the second largest bank in Spain and 7th largest financial institution in the Western world with a market capitalization of over 61 billion Euros. The bank has recently focused on overseas expansion, and now operates in 40 countries. Like many other Spanish companies, it enjoys a dominant position in Spanish-speaking Latin American countries. It also has a strong presence in southern European countries, especially Portugal and Italy, and has expanded into the United States and in Asia.

History[link]

BBVA’s story began in 1857 when the Spanish Board of Trade sponsored the creation of Banco de Bilbao as a currency-issuing and discount bank. Until the 1890s it was practically the only bank in the Basque Country. In the second half of the 19th century Banco de Bilbao played a leading role in operations involving infrastructure projects and development of the steel industry. In 1878, it lost the right to issue currency and reorganised as lending and discount bank.

Banco de Vizcaya was set up in 1901. It carried out its first operations in Bilbao and gradually extended throughout Spain. Apart from its activities as a commercial and general purpose bank, it intervened in the creation and development of a large part of Spanish industry. In 1902, Banco de Bilbao merged with Banco del Comercio although both continued to operate as separate entities. In 1909, Caja Postal de Ahorros was set up as a public entity and started operations in 1916, based on savings books.

A consortium of bankers and manufacturers founded Banco de Crédito Industrial (BCI) in 1920 with the express aim of boosting the installation and consolidation of industry through long-term lending. Both Banco de Bilbao and Banco de Vizcaya formed part of this consortium. In 1923, the Servicio Nacional de Crédito Agrícola was created under the ministry of agriculture to provide loans to agricultural associations against the joint and several liability of their members.

A combination of public and private interests set up Banco de Crédito Local (BCL) in 1925 in the form of a joint-stock company. Its purpose was to finance local authorities and other public institutions. Banco Exterior de España (BEX) was created in 1929 to encourage foreign trade, to seek new markets for Spanish products and to help local companies with imports and exports.

1960s[link]

Banco de Bilbao grew further, absorbing other banks. At the same time Banco de Vizcaya also expanded and began to emerge as an important financial group. Greater flexibility by the authorities regarding new branches allowed it to extend its network. Caja Postal added current accounts, securities and specific credit lines to its existing services. The Banking Sector Reform Act 1962 nationalised BCI, BHE and BCL and converted the Servicio Nacional de Crédito Agrícola into Banco de Crédito Agrícola (BCA). All four thus became public entities. However in 1971 they were recast as joint stock companies and became official loan entities (under the Official Credit System Act).

1980s[link]

During the 1980s, Banco de Bilbao’s strategy was to attain sufficient size in order to participate in financial operations generated by advances in technology, deregulation, securitisation and the interrelationship between domestic and international markets. Banco de Vizcaya contributed to the refloating of banks affected by the economic crisis and pursued a policy of strong growth through acquisitions. This turned it into a large banking group. The most important operation was the acquisition of Banca Catalana in 1984.

In the meantime, the official credit entities expanded their business through market operations. In 1982, BEX lost the exclusive right to provide export finance. It refocused its goals on becoming a universal bank and on building a financial group. During this process it acquired Banco de Alicante in 1983. In 1988, Banco de Bilbao and Banco de Vizcaya merged to form Banco Bilbao Vizcaya (BBV).

Corporación Bancaria de España (CBE) was set up in 1991 as a government corporation and credit entity with bank status. Argentaria started out with a federated banking model. However, in 1998, Corporación Bancaria de España (already privatised via IPOs), BEX (which had merged with BCI), BHE and Caja Postal were merged into a single bank, Argentaria.

Merger (1999)[link]

BBV and Argentaria announced their planned merger on October 19, 1999. The new group had the advantages of significant size, a strong capital base, a considerable financial structure and appropriate geographic diversification of its business and risks. As a result there was a greater profit potential.

Customers now had access to a larger network and a wider range of products. They also enjoyed easier access to new channels and a considerable international presence. Employees also had more opportunity for career advancement.

The integration process was given an important boost in January 2000 by the roll-out of the single BBVA brand. This helped the group generate an image that was strongly positioned in terms of identity and distinguishing characteristics.

The integration of the group's retail businesses in Spain (BBV, Argentaria, Banca Catalana, Banco del Comercio and Banco de Alicante) led to the creation of a significant branch network under the BBVA banner. The efficiency of the BBVA integration was recognised by top financial publications. In 2000 it was chosen World’s Best Bank (Forbes) and Best Bank in Spain (The Banker). In 2001, it was Best Bank in Latin America (Forbes) and Best European Bank (Lafferty).

U.S. market issues[link]

Top BBVA executives have commented that they dove into the U.S. retail-banking business at the worst possible time. It bought Compass Bancshares in early 2007 for $9.5 billion, just before the crisis hit. The business's diminished value prompted BBVA to take a roughly $1.3 billion write-down.

In 2005, BBVA Group acquired Laredo National Bank, based in Laredo, Texas. In 2006, it acquired Texas Regional Bancshares of McAllen, Texas, and State National Bancshares to become the fourth biggest bank in Texas after Wells Fargo, Bank of America and JPMorgan Chase.

On February 16, 2007, BBVA announced a definitive agreement to acquire Compass Bancshares Inc. based in Birmingham, Alabama. BBVA plans to create the biggest bank in the Sun Belt by consolidating all those banks to create BBVA Compass.^[2] The deal was completed on Friday, September 7, 2007, when Compass Bancshares became a wholly owned subsidiary of BBVA. The transaction gave BBVA a substantial stakehold in the US banking sector by creating the second largest financial institution in the Sun Belt region. BBVA plans to integrate banks previously acquired in the US with the current Compass technology and management platforms.

BBVA Compass is a Southeastern and Southwestern financial holding company with US$65 billion in assets and primarily located in Alabama, Arizona, California, Colorado, Florida, New Mexico, and Texas. With headquarters in the Daniel Building in downtown Birmingham, Alabama, BBVA Compass is one of the nation’s 25 largest banks, and was previously a member of the S&P 500 Index and the Dow Jones Select Dividend Index. Birmingham is also the location of all BBVA Compass's administrative and operational functions.

On August 21, 2009, in an FDIC-supervised transaction, BBVA Compass acquired the deposits and other core assets of the failed Guaranty Bank of Austin, Texas. The deal gives BBVA Compass a first-time presence in California and expands an existing presence in Texas.[1]

BBVA sponsors the BBVA Compass Bowl, a post season college football game played in Birmingham, Alabama. The game matches teams from the Big East Conference and Southeastern Conference.

On September 13, 2010 BBVA became an official sponsor of the NBA.^[3]

On May 12, 2012 the BBVA Compass Stadium opened in downtown Houston, Texas. It the home of the Houston Dynamo football (soccer) team.

Troubled move into Asia and United States[link]

In the year 2006, BBVA outbid Banco Santander Central Hispano, Bank of America, and formed an alliance with China CITIC Bank, one of the biggest banks in China by acquiring a stake in the bank and in CITIC International Financial Holdings Limited (CIFH), China Citic Group’s main international arm.

Today, BBVA's investments and position in China are as follows:

• The BBVA Group invested about € 3bn into China CITIC Bank and CITIC International Financial Holdings Limited, the biggest outlay by a Spanish company in mainland China and Hong Kong so far
• BBVA holds a 15% stake in China CITIC Bank (CNCB)
• It owns a 30% stake in CITIC International Financial Holdings (CIFH)
• The alliance between BBVA and CITIC covers the development of retail and corporate banking in mainland China and Hong Kong, one of the fastest growing markets in the world, via CNCB and/or CIFH
• BBVA and CIFH (CITIC Group’s international arm) conduct corporate banking, investment banking and treasury business across the Asia region
• BBVA has directora on CNCB’s and CIFG's boards
• CNCB, whose head office is in Beijing, has assets of €62.2 billion, 13,485 employees (as of June 2006) and 416 branches, distributed throughout mainland China
• CIFH, whose headquarters are in Hong Kong, has assets of €9.3 billion, 1,711 staff and 38 branches
• BBVA aid off around a third of its global-markets staff in Asia in its first cutback in the region since expanding via through a 2007 purchase of a stake in China Citic Bank Corp. (0998.HK). The layoffs were part of global cutbacks by the bank that have reduced wholesale banking staff by 150.
• The cuts amount to 4 percent of BBVA's wholesale banking workforce globally and are a response declining demand.
• The latest manpower cuts reverse BBVA's earlier plan to expand investment banking in Latin America, Asia and the U.S. In 2010, its director of wholesale banking and asset management, Jose Barreiro, said BBVA would hire about 1,000 people in investment-banking, sales trading and asset management over a three-year period, bolstering its businesses like fixed income, commodities and merger advice, particularly in deals between Latin America and Asia.

ECB Bailout[link]

Dec 22, 2011 - Spanish bank BBVA took around 11 billion euros ($14.4 billion) in the European Central Bank's offer of cheap long-term cash, in order to cover 2012 debt maturities. Spain's second-biggest bank will not buy sovereign debt with the proceeds, the source said, due to the European banking regulator forcing banks to mark down their sovereign holdings. "BBVA has used the auction to cover its 2012 debt maturities, and not for carry-trade operations."

Feb 24, 2012 - Banco Bilbao Vizcaya Argentaria SA (BBVA), CaixaBank SA (CABK.MC) and Banca Civica SA (BCIV.MC) were among a slew of Spanish banks that participated in the European Central Bank's long-term refinancing operations, the lenders said Wednesday. BBVA, Spain's second-largest bank by market value, took a "similar amount" to the EUR11 billion it had borrowed in the first 3-year LTRO tender, a spokesman said. Much smaller Banca Civica took EUR6.1 billion, more than the EUR3.7 billion it had borrowed in the first tender in December, Chief Financial Officer Roberto Rey told a conference call.

Ratings Downgraded to S&P BBB from A-[link]

Standard & Poor’s cut its credit ratings to BBB for Banco Bilbao Vizcaya Argentaria SA, citing “potentially negative exposure to Spain.” Spain’s economy shrank 0.3 percent in the first quarter from the fourth quarter of 2011. Spain’s sovereign rating was cut on April 26 for the second time this year by S&P, which cited concern that the country will have to provide further fiscal support to banks as the economy contracts. Spain’s downgrade by two levels to BBB+ from A, with a negative outlook, has “direct negative rating implications” for BBVA. “The factors behind the downgrade of Spain could have potentially negative implications for our view of the economic risk and the industry risk affecting the Spanish banking industry,” S&P indicated. Prime Minister Mariano Rajoy is struggling to convince investors his government can narrow Spain’s budget deficit by 3.2 percentage points of gross domestic product this year as the economy shrinks and unemployment approaches 25 percent.

BBVA Foundation[link]

The BBVA Foundation runs the annual BBVA Foundation Frontiers of Knowledge and Culture Awards in order to recognize and encourage world-class research and artistic creation, prizing contributions of broad impact for their originality and theoretical significance. The name of the scheme is intended to encapsulate both work that successfully enlarges the scope of our current knowledge – pushing forward the frontiers of the known world – and the meeting of different disciplinary areas.

The BBVA Foundation Frontiers of Knowledge Awards take in eight prize categories: Basic Sciences (Physics, Chemistry, Mathematics), Biomedicine, Ecology and Conservation Biology, Information and Communication Technologies, Economics, Finance and Management, Contemporary Music, Climate Change and Development Cooperation.

See also[link]

Companies portal

• BBVA Bancomer
• BBVA Banco Francés
• BBVA Banco Provincial
• BBVA Banco Continental           
• BBVA Compass
• BBVA Compass Bowl
• BBVA Compass Stadium
• European Financial Services Roundtable
• Liga BBVA

Spanish banking:

• Savings bank (Spain)

References[link]

Notes

External links[link]

Wikimedia Commons has media related to: BBVA

• Official website
• BBVA Foundation
• Banco Bilbao Vizcaya Argentaria companies grouped at OpenCorporates
• Yahoo! - Banco Bilbao Vizcaya Argentaria, SA Company Profile

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