Growth Strategies Case Study

Banco Bilbao Vizcaya Argentaria’s Growth Plans

OR

Abstract:

Banco Bilbao Vizcaya Argentaria (BBVA), Spain’s second largest bank was formed through a merger of Banco Bilbao Vizcaya and Argentaria in 1999 with it’s long history since 1857, to provide a wide range of financial products and services to the customers. BBVA adopted high growth and low risk acquisition strategy for the international expansion. On February 16th 2007, BBVA announced to acquire 100% Compass Bancshares Inc. (Compass) for $9.6 billion for further expansion in US, especially in the ‘Sunbelt’ area. The product-driven US banking industry remained fragmented and provided further scope for consolidation. Spanish banks entered US because the US banks failed to acknowledge and trust the growing ethnic immigrant population in the US. BBVA planned to target the Hispanic market, where Hispanics, the largest minority group were geographically dispersed and had potential - three times more ‘unbanked’ than the average US adult.

Pedagogical Objectives:

• To understand merger and acquisition as an expansion strategy
• To analyse the structure, trends and segmentation of the US banking industry
• To discuss the factors that define the attractiveness of foreign banks towards the US Hispanic market
• To analyse the growth strategy of BBVA
• To discuss the impact of BBVA’s acquisition of Compass Bancshares Inc. on the US banking industry.

Keywords : Banking Industry in US; Banco Bilbao Vizcaya Argentaria; Spanish Banks; Growth Strategies Case Study; Foreign Banks; Hispanic Market; Fragmented market; Acquisition; Compass Bancshares Inc; Ethnic Immigrant Population; Financial Institutions; Consolidation; BBVA

Contents: 
The BBVA Group: Brief History
BBVA’s International Acquisitions 1993 - 2007
BBVA Growth Comparison
Banking Industry in US
Rising Ethnic Groups in US
Purchasing Power of Ethnic Groups in US
The Compass Acquisition
Transaction Multiplies
Synergies of acquisition – The Road Ahead
BBVA Consolidated Figures 2005-2006