89.3 F
San Fernando
Tuesday, Jun 6, 2023

Latin American Banks Targeting Valley

Flush with double-digit profit growth in their home countries, Latin American banks are moving aggressively into the U.S. market, with several expected to open in the San Fernando Valley. They won’t be the only banks catering to the Hispanic market. Several different groups are organizing new banks to cater to Latinos in the Los Angeles area, and at least one of those is expected to land in the Valley as well. “It’s what I call the Latin American conquest of the U.S.,” said Daniel Ayala, who heads Wells Fargo Cross Border Payments. “The demand for services provided by Latin American companies is increasing at a double and triple digit rate, so everybody is trying to move in.” The Wells unit, which provides remittance products and services, in May expanded its money wire services to El Salvador and Guatemala through an association with three Latin American banks: Banco Industrial S.A. and Banco De Desarollo Rural S.A. in Guatemala and Banco Agricola S.A. in El Salvador. But Banco Agricola, Central America’s largest bank with assets of $2.9 billion, is also moving directly into the L.A. market. The bank will open a location in Van Nuys to cater to the Salvadoran community sometime within the first quarter of 2006, according to Eric Marchena, a broker with CBM Properties which handled the leasing arrangements. Meanwhile, Bank Bilbao Biscay Argentaria (BBVA), a Madrid-based financial powerhouse that also owns Bancomer in Mexico, has been actively opening full-service banks in the U.S. since it acquired Valley Bank of California last year. In July BBVA received approval to open 12 California branches, including four in L.A. County. In October, BBVA Bancomer USA opened branches in Huntington Park and Baldwin Park. The bank has also been scouting a location in Panorama City. BBVA Bancomer’s expansion has been fueled by several factors, including double-digit profit growth in Mexico and a strong performance in its lending division. Population shifts in California, rising household income among Hispanics and the success of other ethnic banks are attracting new players to the market as well. “There are some home-grown Hispanic banks forming that will be based in Los Angeles County,” said Ed Carpenter, chairman and CEO of Carpenter & Co., an Irvine-based investment bank that specializes in financial institutions and handles many of the de novo bank formations that take place here. “I can tell you all of the several groups that are farthest along the path have organizers from the San Fernando Valley,” Carpenter added. Much like corporations preparing to file public offerings, newly forming banks cannot discuss their plans until they make formal application to the agencies that oversee the industry, and Carpenter declined to provide many details on the clients he is working with. The recent uptick in new formations by independent banks of all types is due to the bank consolidation of the 1990s which left a void in the Southern California marketplace. But the number of Hispanic banks forming is also due to the shift that’s taken place in the banking industry in L.A. “What has happened is the majority of banks in L.A. County are now ethnic banks,” Carpenter said. “They are ethnic Chinese and Korean banks and those banks have been enormously successful. With that level of success it was logical that equity investors in small banks begin to look at the largest ethnic concentration in the community, and that’s the Hispanic community.”

Featured Articles

Related Articles