Banco Bilbao Vizcaya Argentaria has taken its first steps toward establishing a sales and trading presence in Asia for interest-rate and foreign-exchange swaps, structured investments and equity derivatives. The Spanish firm, which has more than EUR400 billion in assets, has hired Stephen Withers, general manager and treasurer at WestLB, as head of trading in Hong Kong.
The plan is to take on approximately 50 staff by the middle of next year from a base of zero, split evenly between trading and sales. The hiring will start in February or March with the aim of having the desk up and running by mid-2007. "[BBVA is] putting big money into this--they are not messing around," Withers noted. Credit and commodity derivatives are not yet on the agenda, though this may be revisited after the firm has established itself. Juan Carmena, a senior staffer in BBVA's Paris office, has also transferred to Hong Kong as head of sales.
Hong Kong will serve as BBVA's Asian base for derivatives with small numbers of the sales staff to be based in Tokyo and Singapore.
The attraction for BBVA is local growth and it also felt not being a player in the region was a coverage gap. At the corporate level, the firm has pumped EUR989 million into acquiring stakes in CITIC Group--5% in China CITIC Bank and 15% in CITIC International Financial Holdings, which may be increased further. Through the arrangement, BBVA gains access to CITIC customers, giving it a foothold in Asia, in addition to its banking presence via branches in Hong Kong, Singapore and Tokyo, and offices in Beijing, Shanghai, Seoul, Taipei and Sydney.
One official at an established local bank noted the market in Hong Kong is particularly competitive. "Here you really need to compete on pricing and have quick response times." He added that CITIC will help, but noted, "Other banks have good channels [too]." Asked if there are other ways BBVA might set itself apart or gain access to customers in the region Withers said simply, "Watch this space."
WestLB officials declined to comment on Withers' departure.
