Gearing up to do battle with U.S. banks in Latin America, Banco Bilbao Vizcaya, one of Spain's largest banks, has applied to the Fed to open a section 20 securities unit.
Banco Bilbao, or BBV as the bank is known, recently acquired Latinvest, a Latin American investment bank partly owned by Mexico's InverMexico. It is now seeking to turn New York-based BBV Latinvest into its section 20 unit to underwrite both debt and equity.
"With this new strong geographical presence in Latin America, we want to do exactly the same type of activities as we do in our core market," said Alvaro Vazquez, a director general of BBV in Spain. "That's why we acquired Latinvest."
Latinvest currently competes in some U.S. securities markets under the North American Free Trade Agreement. But because BBV is a member of the Federal Reserve System, it must obtain section 20 approval to own and operate Latinvest in the United States, a spokeswoman said.
It filed its section 20 application in late February.
BBV, which competes and both a commercial and investment bank in its home country, has been expanding substantially in Latin America. It invested $1.56 billion in the region over the last two years and has acquired large or majority shares of five prominent banks in Mexico, Peru, Colombia, Argentina, and Venezuela.
BBV is now looking to battle with U.S. banks that already have a strong presence in Latin America, such as Bank of Boston Corp., and other European banks, for the region's growing corporate finance business.
In Spain, BBV's brokerage and equity underwriting subsidiary, BBV Interactivos, had an 11.8% market share with $21.4 billion in volume last year, said a spokeswoman.
Latinvest has had an office in London for six years, and is still developing its two-year-old New York office. It will leverage the investment bank activities of its affiliate banks in Latin America, tapping them for equity research and local relationship management.
Banco Bilbao hopes go gain stronger access to clients in the region through BBV Latinvest, while giving its commercial bank clients greater access to financial resources, Mr. Vazquez said.
The group has plans to underwrite equity in the United States, he added, but "not at this stage."