Banco Bilbao Vizcaya Argentaria SA May Have Won Bid for Guaranty Bank

Bids for the assets of Texas-based Guaranty Bank have been received during August by the Federal Deposit Insurance Corp., and the probable but unconfirmed news that the huge Spanish bank Banco Bilbao Vizcaya Argentaria SA has won that bid would effectively put an end to Guaranty Bank.

Of course whether it’s Banco Bilbao Vizcaya Argentaria or another financial institution, Guaranty is finished.

Other groups involved in the bidding were Toronto-Dominion Bank, J.P. Morgan Chase & Co. and a consortium representing private equity funds which was let by Gerald Ford, a billionaire based in Dallas, TX, who has been in the banking business for some time.

As for Guaranty Bank, they had their backing from another Dallas billionaire, Robert Rowling, as well as well-known billionaire Carl Icahn from New York.

Assuming this is accurate information, this would really strengthen BBVA in California and Texas, with the stronger position advancing in California. At this time BBVA has around 100 Texas branches and 60 California bank branches.
 
The reason it’s yet to be seen how much it helps BBVA in Texas is because there are a number of branches which overlap in numerous locations, so it’ll have to be seen how many are closed or consolidated to get the number that will be left after the deal is closed.

Areas most affected by consolidation would be in the larger metro areas of Texas.

The $13.5 billion in assets under Guaranty Bank’s umbrella will make it the second-largest bank failure this year, after Colonial BancGroup, which had assets worth approximately $25 billion.

Carl Icahn’s interest in all of this came from being a shareholder of Temple-Inland company, which had owned Guaranty Bank for a number of years.

Wisely, Icahn pressured for Guaranty to be spun off from Temple-Inland, and that came about near the end of 2007, preventing the disaster he saw coming from spreading across Temple-Inland, which was invested in real estate, forest products and currugated  packaging.

What this deal would do for BBVA would bring their presence across the South coast to coast, which would also include existing branches in Colorado.

On the BBVA Web site, they claim to serve 47 million customers in over 30 countries, while employing 112,000 people. They hold about $750 billion in assets and are also Mexico’s largest bank.