Wednesday 14 November 2018

BBVA pulls out of Ireland in overhaul of bank giant

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Gavin McLoughlin

Gavin McLoughlin

Spanish banking giant BBVA is pulling out of Ireland after a corporate reorganisation.

The bank has an operation based out of Dublin that lends to BBVA clients.

The most recently filed accounts for the Dublin business say it is "primarily engaged in syndicated lending to corporate clients of the BBVA Group in the form of revolving and term loan credit facilities".

It also provides management and administration services to insurance activities the group has here.

"The directors are satisfied with the results for the financial year," the accounts note.

"Notwithstanding, in September 2017 the board of the company were made aware that BBVA senior management is considering options to wind down its operations in Ireland, including those of the company, following a BBVA group review of its business models throughout its operations in Europe and Asia.

"A timetable for the transfer of the corporate lending portfolio has not been finalised and the board and management of BBVA Ireland plc expect the company to continue operating for a minimum of 12 months from the date of this report." The report is dated May 17, 2018. A spokesman for BBVA said the company's activities were limited here with just four employees. "It can be done from Spain," he said.

The accounts, covering the year to the end of December 2017, put the Irish operation's net income at €9.5m for the year, compared to €5.7m the prior year. "This was considered a good result given the decrease in corporate lending activity the company has experienced in 2017," the accounts state.

Almost €470m had been advanced to third parties in loans.

The decision was taken before the plunge in the Turkish lira, which helped pull BBVA's share price lower on fears about its exposure to the country.

According to Deutsche Bank, the five European banks with a significant presence or relationship with Turkey are BBVA, Unicredit, ING, BNP Paribas and HSBC.

Separately, a senior Barclays trader has faced losses of about £15m (€16.8m) on Turkish bonds over the past few days, according to people familiar with the matter.

London-based credit trader Tolga Kirbay was caught on the wrong side of a wager over three trading days starting from Thursday, said the people, who asked not to be identified as the details aren't public.

Barclays generally makes up to $100m (€88.4m) in revenue each year trading emerging-market corporate bonds in Europe, the Middle East and Africa, according to the people.

While the trade is relatively modest for the British bank overall - and while the lira has recovered some of its plunge in the past few days - it does highlight the growing appetite for risk at Barclays' securities unit.

It's unclear whether the positions have been hedged and whether the trader recovered the losses. (Additional reporting Bloomberg)

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