Adapting to U.S. Banking

How Abanca bank successfully landed in Miami

How Abanca bank successfully landed in Miami

After the global financial crisis in 2008, the U.S. Federal Reserve Bank was picky about which international banks it would allow to start a branch in the U.S. to serve clients overseas. The first one it licensed in 10 years was Abanca, now Spain’s seventh-largest bank with some $120 billion in assets, growing fast under the helm of Spanish-Venezuelan entrepreneur Juan Carlos Escotet Rodriguez. 

Abanca USA opened in Miami’s Brickell district in 2019, aiming to serve families and businesses mainly from Latin America and Europe, including many who were investing in U.S. real estate. Today, it has some 20 employees in Brickell, with nearly $1 billion in assets managed there. 

Doing business in the U.S. has proven very different than in Abanca’s Spanish homeland, starting with regulation and compliance. The United States is “the most regulated banking market in the world,” with about twice the level of regulation as in Europe, says Monica Vazquez, the experienced Spanish banker who leads the U.S. operation. And regulators have a different approach, too. In Spain, regulation tends to come after the fact, more like an audit. In the U.S., regulators play a more preventive role, working with banks from the outset to help them understand and meet the requirements. 

“I was very pleased by the support from the U.S. regulators, who really assisted us in developing the bank and are always available for consultations,” says Vazquez, who had 15 years’ previous experience in banking in Spain. “And I was surprised by the legal differences. A loan contract in Spain is often two or three pages. Here, it can be 100 pages or more.” 

Starting up in Miami just a year before the COVID-19 pandemic hit was a “trial by fire,” for Abanca, Vazquez admits. Thankfully, the Spanish bank group has a strong in-house tech team that could quickly adapt systems and meet clients’ needs for greater remote access. But Vazquez also took a bold decision then: to keep the Miami bank open for in-person sessions and lend for new projects, seizing the moment as what she calls “a super opportunity for growth.” 

Today, Abanca USA accepts deposits from overseas clients and offers personal and corporate banking services. Its real estate lending ranges from single-family homes to office towers and hotels, from construction to purchases. Loans typically run from $1 million to $50 million. Some clients choose the bank not only for funding U.S. real estate projects but also projects in Spain and Portugal, taking ad- vantage of its online platform that allows access to the bank in Iberia. 

Next up for the U.S. branch: expanding trade finance, especially for imports and exports from Latin America and Iberia. That should further build a Miami clientele that now often hails from Mexico, Spain, Chile, and Peru, says Vazquez. 

Abanca has been accelerating growth under chairman Escotet Rodriguez, who was born in Spain, raised in Venezuela, and studied at University of Miami. Escotet began his career with Banco Union in Caracas, founded Venezuela’s Banesco financial group, and grew that group in Panama, Puerto Rico, the Dominican Republic, Spain, and the U.S. In 2015, he bought a majority stake in Spain’s NCG Banco, which was later re-named Abanca. Since then, his team has roughly doubled Abanca’s operations, with some 6,000 employees in 800 offices in 11 countries in Europe and the Americas. Growth has come partly through bank acquisitions. 

To start up in the U.S., Abanca had considered a branch in New York City, the American financial capital. But Escotet’s team opted for Miami because of greater opportunities to attract clients from nearby Latin America, offering personalized service in Spanish and English. From Miami, Vazquez says, plans call for financing projects across the United States as well. 

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