The Spanish Acquisition - Brief Article - Statistical Data Included

ACROSS LATIN AMERICA, THE MAKINGS OF A major bank crisis blossomed this year-soaring interest rates, flagging economic growth and wobbling exchange rates. When the Brazilian currency finally collapsed, all eyes turned to watch Banco Santander Central Hispano (BSCH) and Banco Bilbao Vizcaya (BBV), Spain's number-one and-two banks, take a major haircut in the region.

After all, Emilio Boton and Emilio Ybarra, chairmen of BSCH and BBV, respectively, have brashly led their banks on the largest Spanish invasion of the New.

World since the Conquest. In five short years, each bank has spent more than US$4 billion to acquire more than $40 billion in financial assets. But if the conquistadores are in trouble, they are showing no signs of retreat. Just listen to Pedro L. Uriarte, vice chairman and CEO of Banco Bilbao Vizcaya: "We are not missionaries, we're bankers and we believe that if things are done right in the region, our investments will be profitable."

So far, so good. In the first quarter of this year, when devaluation pain should have started to show, both banks remained firmly in the black. Santander's Latin American operations posted almost $143 million in profit-more than a third of the group's total profits and well on its way toward its year-end goal of $500 million. Compared with the same quarter last year, Bilbao Vizcaya's regional profits fell 6% to $92 million, which still represents more than a third of the financial institution's total net income worldwide.

Both institutions continue to make major acquisitions. As well as the added oomph from its merger with Central Hispano's operations in Latin America, Santander bought Banco O'Higgins to secure almost a third of the Chilean market-unless local authorities modify the deal. For its part, BBV spent another $250 million to buy Chilean pension fund group Provida, becoming the largest administrator of funds in the region.

Nonetheless, as the following survey shows, the Spaniards' onslaught is far from over.

                                                  98 DEPOSIT
COUNTRY     BANCO SANTANDER (STAKE)               MKT. SHARE
ARGENTINA   Banco Rio de la Plata (51%)                  6.5
            Banco de Galicia y Buenos Aires (10%)        8.6
            Banco Tornquist (50%) [*]                    0.8
BOLIVIA     Banco Santa Cruz (90%)                      22.0
BRAZIL      Banco Santander Brasil (100%)                1.3
            Banco Noroeste (76%)                         1.1
COLOMBIA    Banco Santander Colombia (60%)               5.4
CHILE       Banco Santiago (22%) [*]                    14.9
            Banco Santander Chile (85%)                 11.9
MEXICO      Banco Santander de Mexico (71%)              6.4
            Banco Bital (8%)                             9.3
PANAMA      Banco Santander Panama (100%)                1.1

PARAGUAY    Banco Asuncion (39%) [*]                     4.4
PERU        Bancosur (45%) [*]                           3.4
            Banco Santander Peru (100%)                  2.8
PUERTO RICO Banco Santander Puerto Rico (78%)           15.7
URUGUAY     Banco Santander Uruguay (100%)               6.5
VENEZUELA   Banco de Venezuela (98%)                     9.8


                                          98 DEPOSIT
COUNTRY     BANCO BILBAO VIZCAYA (STAKE)   MKT.SHARE
ARGENTINA   BBV Banco Fances (59.7%)             6.8
            Corp Banca (100%)                    0.3

BOLIVIA
BRAZIL      BBV Brasil (100%)                    0.9

COLOMBIA    BBV Banco Ganadero (56.2%)          10.0
CHILE       Banco BHIF (44%)                     4.2

MEXICO      BBV Mexico (67.3%)                   7.2

PANAMA      BBV Panama (100%)                    0.1
            Banco Ganadero Panama (39.2%)        0.6
PARAGUAY
PERU        Banco Continental (38.7%)           17.3

PUERTO RICO BBV Puerto Rico (100%)              13.9
URUGUAY
VENEZUELA   BBV Banco Provincial (51.4%)        22.0


(*.)After the acquisition of OHCH in April 99. The stake is:
Tornquist (100%) Santiago (44%), Banco Asundon (78%) and Bancosur (90%).
SOURCES: Salomon Smith Barney, company reports, LATIN TRADE

COPYRIGHT 1999 Freedom Magazines, Inc.
COPYRIGHT 2000 Gale Group