"BBVA combines deep local roots and global reach knowledge that predestines us as a natural partner of choice" January 31, 2013
"BBVA combines deep local roots and global reach knowledge that predestines us as a natural partner of choice"
Frank Hoefnagels, head of Corporate & Investment Banking at BBVA Germany, analyses the business prospects for the investment banking in this country. BBVA, being an Iberian and Latin American expert, enjoys a prominent position to support the growing activities of German investors in these markets and to act as a natural partner that covers all their needs with sustainable long term solutions.
Q: How does the 2013 look like for the corporate and investment banking business in Germany?
The volatile market environment makes difficult to make a general forecast for 2013. On one hand we are experiencing the positive momentum of a greatly improved overall sentiment within and towards the Eurozone, on the other hand there are plenty of ongoing challenges out there affecting the industry as a whole and the bank in particular. Though Germany is surely not immune to these circumstances, the frame conditions for the German Corporate and Investment banking business are fundamentally positive. As a matter of fact, the broad and structurally healthy, export-oriented German economy traditionally represents a large and profound playground for the financial industry, which holds true even in years that are not characterised by exponential growth. Whereas we might not see a big international consolidation triggered by the German corporate community in 2013, the accelerating trend of increased investment diversity, also into so-called emerging and peripherical markets, is expected to continue and will drive the investment banking agenda in the months to come. For BBVA the conditions are certainly not unfavourable as they will allow us to play our strengths and to benefit from the reputation and dialogue we have been able to elaborate with our clients over the past years.
Q: What is BBVA's presence in the country?
BBVA Germany is represented in two locations: Frankfurt and Düsseldorf. Whilst the Frankfurt office primarily meets BBVA corporate clients needs and provides support services to the branch, our colleagues in Düsseldorf assume responsibility for the Global Markets franchise, covering our Financial Institutions customer base and providing treasury services to our corporate clients. In total, the German team counts in 50 professionals attending around 200 corporate and institutional customers that are widely spread across the country, a circumstance that differentiates us from the other European countries in which BBVA maintains presence and where customer concentration is typically higher around the main economic centres.
Q: Who are our clients in Germany and what kind of services do we offer them?
Our focus lies on those names for which we have a distinct added value and which meet the economic and risk related prerequisites defined by the bank. On the corporate end these currently include the so-called top-tier market players, mostly listed, rated and leaders in their industries. With these clients we typically enjoy core bank status which enables us to share in their traditional Investment Banking wallets and which earmarks us as a qualified Commercial Banking partner. We thereby offer the entire range of products and services the bank is providing, from M&A advice in Chile for instance to Cash Management support in Spain. Occasionally our offering even goes beyond the CIB product suite, like in the case where our automotive team is pitching retail financing for automotive dealers or off-takers in Latin America. For our institutional clients we clearly assume the role of provider of choice for Iberian assets, in which we have managed to build an excellent reputation and equally successful franchise during the past couple of years. It's our stated goal to expand this position towards Latam going forward, something on what we have been working on intensively.
Q: Does BBVA CIB have any competitive advantages when comparing with our competitors?
In terms of Corporate & Investment Banking, the German market is equally rich in business potential as it is in competitiveness. As a result the German banking landscape is large and colourful, hosting many national and international institutions, many of which are targeting those client and market segments BBVA is focussing on as well. Unlike many of its peers though, BBVA does not only have a meaningful and competitive international corporate and investment banking franchise, but it rather distinguishes itself by a so-called Unique Selling Proposition (USP) that is of great value to our clients, both for corporate and for the institutional ones. Being the expert for Iberia, Latam and - going forward also Turkey - the Bank enjoys a prominent position to support the growing activities of German investors in these markets and to act as natural partner for the implementation of their respective endeavours. Our role thereby includes - but is not limited to - plain balance sheet support measures. Far more, it allows us to play off our expertise in valuation and risk mitigating solutions required to secure the sustainability of these investments. In combination with our central access to capital markets resources and instruments, this qualifies the Bank as a very powerful partner for clients that are looking for long term sustainable solutions.
Q: What aspects of the BBVA Group are the most valued by German clients?
The Bank incorporates a number of values and characteristics that are traditionally sought and valued by German firms. Strategic stability and consistency are of equal significance as the Bank's international expertise in those markets our clients are planning to invest and / or grow in, be it organically or inorganically. The fact that the BBVA group by origin combines deep local roots and global reach knowledge, predestines us as a natural partner of choice, especially for those matters where being either just global or only local is not sufficient.
Q: What business perspectives are there for 2013?
Our current strategy is based on a distinct product offering delivered to a select client base, combining traditional investment banking services with an Iberian and Latam niche USP - a strategy that has proven largely resilient and successful even under the downgrades scenario we have suffered in 2012. Looking ahead and backed by the developments described earlier we see substantial room for growth both in a further intensified elaboration of our existing client base but also by the exploitation of new market segments that meet the Bank's profile and match the criteria set. The German corporate and institutional universe is full of attractive potential candidates that are yet to be explored.