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EuroWire – November 2009
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EuroWire – January 20 6
Transat lant ic
Cable
Tesla said that the proceeds from the government loan, awarded
in June, did not contribute in any way to the sterling results
achieved by its Roadster in July.
Banking
Washington, which has its reasons, helps a
Spanish company to buy a Texas bank
In one of the largest US government-assisted deals involving a
foreign company, Guaranty Bank (Austin, Texas) was sold on
22
nd
August to Banco Bilbao Vizcaya Argentaria SA (BBVA),
of Spain.
Federal regulators seized the deeply troubled Texas lender and
simultaneously brokered the sale of its branches as well as most
of its deposits and assets to BBVA Compass, the Spanish bank’s
American subsidiary.
The US government will absorb most of the losses on
$9.7 billion – more than 80% – of the Guaranty assets included in
the transaction. Washington also agreed to take the bulk of the
losses on all of Guaranty’s loans.
While the US Federal Deposit Insurance Corporation (FDIC) has
been known to employ loss sharing as a deal sweetener, the
offer to cover quite so much of a failed bank’s obligations is
extraordinary, and such agreements are seldom made available
to overseas buyers.
Washington clearly had a strong interest in the resolution of the
Guaranty Bank failure (the tenth largest in US history and the
fourth largest since the financial crisis began last year) and in a
smooth orchestration of the BBVA takeover, with its intimation
of returning confidence in the financial system.
Eric Dash, who covers banking for the
International Herald
Tribune
, wrote that analysts say the BBVA deal may signal that
the FDIC will henceforward be more open to bids from foreign
banks. In the meantime, Banco Bilbao Vizcaya Argentaria is as full
of plans for its acquisition as any triumphant winning bidder.
Guaranty Bank is to add another 103 branches in Texas and
59 in California, where BBVA has been trying to establish itself.
That will bring the total of locations to 767 in seven Sun Belt
states and make Guaranty the 15
th
largest commercial bank in
the nation, with some $49 billion in deposits. (“US Helps Spanish
Company to Buy Texas Bank,” 21
st
August)
Along with its Spanish rival Banco Santander, BBVA has been
expanding in fast-growing markets that have strong ties to Latin
America.
José Maria Garcia Meyer, the head of BBVA’s American operations,
said in a statement that the Guaranty Bank transaction further
demonstrates “BBVA’s clear commitment to building its
US franchise.”