The Structured and Corporate Finance Department of the IDB announced today that BBVA subsidiaries Banco Bilbao Vizcaya Argentaria Paraguay S.A. (BBVA Paraguay) and Banco Continental (Peru) are joining the IDB’s Trade Finance Facilitation Program (TFFP) as Issuing Banks.
In a signing ceremony last Saturday, BBVA President and COO José Ignacio Goirigolzarri and IDB Executive Vice-President Daniel M. Zelikow signed and formalized the contracts, bringing to four the number of Latin American subsidiaries of the BBVA group who participate in the TFFP as Issuing Banks (after Argentinean BBVA Banco Francés and Colombian BBVA Colombia).
The BBVA group has also been very active on the Confirming Bank side: Since the integration of BBVA's Latin American subsidiaries in fall 2007 into the TFFP as Confirming Banks, several of them have been active in supporting intra-regional trade finance flows with the help of TFFP guarantees. A recent example is a US$13.7 million TFFP-supported import of steel from Mexico to Ecuador involving Mexican BBVA Bancomer as Confirming Bank.
“The BBVA group recognizes the importance of IDB's Trade Finance Facilitation Program for Latin America and for our trade activities in the region, especially during these volatile times”, said Gema Sacristan, BBVA Director Export & Agency Finance-Americas. “All of our group's Latin American subsidiaries are already participating in the program as Confirming Banks, and we are glad to see that after Argentina and Colombia, our subsidiaries in Paraguay and Peru are now being integrated as Issuing Banks. We hope to see other BBVA Latin American subsidiaries also joining the program as Issuing Banks in the near future”, she added.
"The TFFP is an example of how the IDB, in partnership with the international banking community, can contribute to mitigate the effects of volatility in international trade finance flows to our LAC region. The program, launched in April 2005, is already present in 14 of our 26 Borrowing Member Countries, supporting 35 LAC Issuing Banks" said Daniel M. Zelikow, IDB Executive Vice President. "The TFFP has established partnerships with banks in 46 countries worldwide. We are expecting this Program to cover all our 26 Borrowing Member Countries within the next years, and are confident that its international network will grow even further", he added.
Under the TFFP, the IDB extends guarantees to cover letters of credit, promissory notes, bid bonds, performance bonds, advance payment bonds and other instruments used in international trade transactions. BBVA Paraguay as well as BBVA Continental are already Confirming Banks for the TFFP, under BBVA Spain’s Confirming Bank Agreement. Joining as a TFFP issuing bank will enable both banks to benefit from opportunities arising in intraregional trade finance transactions.
Launched and rolled out in 2005, the TFFP is an effective tool for the IDB to support economic reactivation and growth through the expansion of financing available for international trade activities in Latin American and Caribbean countries. The TFFP currently consists of a network of 180 confirming banks belonging to 70 different international banking groups in over 44 countries, and 35 Issuing Banks in 14 Latin American and Caribbean countries, with $662 million in approved credit lines. To date, the IDB has issued guarantees for over $383 million in support of 491 individual international trade transactions totaling $508 million.
Banco Bilbao Vizcaya Argentaria Paraguay S.A. (BBVA Paraguay)
Banco Bilbao Vizcaya Argentaria Paraguay S.A. is a subsidiary of the Spanish banking group Banco Bilbao Vizcaya Argentaria. BBVA Paraguay is the largest financial institution by loans in Paraguay, catering to large corporations, institutions and small and medium-sized companies, as well as individuals. Its services include transactional solutions, saving, credit, and investment support. Trade finance plays an increasingly important role in the banks strategy, as the bank reports trade finance activities in excess of USD100 million on a yearly basis.
Banco Continental is Peru's second largest commercial bank, holding around one-quarter of the market share of loans and deposits in the local financial system. Banco Continental operates through a network consisting of 239 branches and 435 ATMs, and employees over 3,600 people. Its major shareholders are the Spanish financial group BBVA and the Brescia business group of Peru. Continental is a multiple service banking institution with strong participation in all business segments. Activities within Banco Continental's trade finance portfolio are reported to amount to over US$ 700 million.
- Christina MacCulloch