BBVA Extends US Spanish Network With Texas Takeover

MADRID (AFP) - Spain`s banking giant BBVA said it was extending its reach into the Spanish-speaking US market with the acquisition of Texan bank Laredo National Bancshares for 850 million dollars (694.6 million euros).
Banco Bilbao Vizcaya Argentaria (BBVA), the second-biggest Spanish bank, said the LNB acquisition was the cornerstone of its US strategy.
"It is a key sector in our strategy and a way to reinforce our position in the United States," Vitalino Nafria, the director of BBVA America, told AFP.
Nafria said it was the largest transaction the bank had undertaken in the US.
"We are counting on our experience in Mexico to solidify our position on the Spanish-speaking market," he said.
BBVA is the leading foreign bank in Mexico through its subsidiary BBVA Bancomer. Just last week BBVA Bancomer announced it was buying Hipotecaria Nacional, Mexico`s leading mortgage lender, for 376 million dollars.
The deal is likely to be seen as further evidence that Spanish banks are giving themselves an increasingly high profile in foreign markets. The biggest Spanish bank Santander Central Hispano has launched an aggressive march into the British market with a bid for mortgage lender Abbey National.
BBVA said in a statement Tuesday that its takeover of LNB was expected to create value from the first year of the acquisition. The bank said it would pay for the acquisition with its own funds.
LNB, with 1,800 employees and 110,000 clients, 85 percent of them Spanish speakers, has deposits of 2.8 billion dollars.
Present in 49 US states, the Texan bank holds 23 percent of the US-Mexican border market.
BBVA noted that Spanish speakers, representing 13 percent of the US population, were the country`s fastest-growing group.
It added that LNB operated in areas with a more than five-million-strong Hispanic community.
LNB is a holding with assets worth 3.4 billion dollars. Its main owners are banks The Laredo National Bank and South National Bank, and a mortgage lender company, Homeowners Loan Corporation.
BBVA said it planned to integrate LNB into its new US unit with a focus on money transfers to Latin American countries, along with Valley Bank, Bancomer Transfer Services and BBVA Puerto Rico.
"We are very satisfied with this operation because it gives us a leading position in a key region in our plan for the US," BBVA chairman Francisco Gonzalez said.
"Over 38 percent of business resulting from the free-trade agreement (between the US and Mexico) passes through Laredo, which is a niche in the market in which LNB is a clear leader," he added.
Shares in BBVA were flat at 11.19 euros around midday on the Madrid stock exchange after trading lower in the morning on fears that the bank is overpaying for LNB, dealers said.
"The feeling is that BBVA is paying a big price for a small bank," a dealer at a leading European bank said.
"The move is in line with BBVA`s strategy, but let`s face it... BBVA isn`t going to teach Americans how to do banking," he added.