Manolo Sanchez, the new president and chief executive of Banco Bilbao Vizcaya Argentaria SA's U.S. unit, BBVA Compass, says he will look to accelerate technology development at the Birmingham, Ala., banking company, while expanding its reach into new business lines such as syndicated lending.
In an interview Monday after Madrid-based BBVA announced his appointment, Mr. Sanchez said that BBVA Compass sees opportunities as others retreat and plans to expand into syndicated lending, trade finance, and infrastructure finance in the next month, while working on technology initiatives such as mobile banking.
"We are operating under a very Darwinian concept," Mr. Sanchez said in the interview. "This process is about the survival of the fittest. We have a lot going on … , but it is also a great environment for people like us who are focused on building rather than putting out fires."
Mr. Sanchez, 43, previously headed community banking at BBVA Compass.
On Monday he said that technology initiatives are easier now that the BBVA has all 579 of its U.S. branches on the same platform, a process completed last week.
Meanwhile, though the greatest opportunities are likely to come on the commercial side, BBVA Compass has introduced consumer products, he said. Last summer it started offering a bi-national mortgage that lets U.S. and Canadian citizens buy homes in Mexico and a foreign national mortgage that helps international clients buy U.S. real estate.
BBVA Compass, like other U.S. banks, has seen profits decline as the economy has slowed. Excluding amortization and merger-related charges, net income in the third quarter fell 67.2% from the second quarter and 62.5% from the end of last year, to $57 million. Core revenue at BBVA Compass fell 1.5% from the second quarter but rose 1.5% from the fourth quarter of last year, to $664 million.
Mr. Sanchez succeeded Garret Hegel, a former chief financial officer at Compass Bancshares Inc. who had been BBVA Compass' chief executive since January. A spokesman for the $62 billion-asset unit said that Mr. Hegel, 58, retired after completing "a charge to get us through the integration" process.
With the latest managerial change, the Spanish company has installed long-time insiders in the three key roles at BBVA Compass just 14 months after closing the purchase of the Alabama company. Jose Maria Garcia Meyer, who oversees BBVA's U.S. operations, became the unit's chairman after the December retirement of long-time Compass chairman and chief executive D. Paul Jones Jr. Isabel Goiri succeeded Mr. Hegel as the chief financial officer in January.
Dory Wiley, the president and chief executive of Commerce Street Capital LLC in Dallas, said the changes came quickly and could be a reaction to the struggling U.S. economy. "They may see a need to put their people in and fix things as a way of protecting their investment," he said in an interview. "They may have a competitive advantage, but what will this mean to Compass employees? They are at a crossroads."
Mr. Sanchez said BBVA Compass continues to perform relatively well, given that most of its U.S. operations, including those in Texas and Alabama, were in line with or better than the national economy overall. The company has said that its credit-quality issues have been largely isolated to Jacksonville, Fla., where it is seeing delinquencies spike in its commercial real estate portfolio. Mr. Sanchez, who has spent years in several management posts at BBVA, has experience in risk management and at one point was chief risk officer at BBVA Bancomer, the company's Mexican unit.
Several former Compass employees remain in key roles at the unit, including chief credit officer James Mustin and the executives in charge of corporate lending, retail banking, and wealth management. BBVA Compass has yet to name a successor to Mr. Sanchez as executive vice president of community banking, the spokesman said.
Mr. Meyer said in the conference call with Mr. Sanchez Monday that other benchmarks show integration progress despite the challenging economy. The unit has cut costs by $130 million and added revenues from Compass, putting it ahead of schedule on securing $330 million of bottom-line improvements by 2010. The unit's 53.8% efficiency ratio improved from 57.6% a year earlier. The balance sheet has also grown. Deposits in the third quarter rose 0.8% from the second quarter, to $36.7 billion, and the U.S. loan portfolio grew 4.9% from a quarter earlier, to $42.7 billion. Comparisons with a year earlier were complicated because BBVA had included its Mexican unit in balance-sheet disclosures.
Curtis Carpenter, a managing director at Sheshunoff & Co. Investment Banking in Austin, said BBVA has an "opportunity to make bold, franchise-transforming moves."
Mr. Meyer did not rule out more U.S. bank acquisitions. "Moving forward, I am sure we will have some opportunities over the next year," he said. "But our real focus is the next phase of our integration."
