Spanish banker BBVA to exit U.S. market, sell holdings to PNC
Spanish banking giant BBVA has decided to exit the U.S. market. It remains the owner of BBVA Bancomer, the largest bank in Mexico.
Why it matters: In the 2000s, BBVA went on something of a spending spree in Texas and other border states, buying up a series of banks culminating in the $9.6 billion acquisition of Compass Bancshares in 2007.
- It was the high point of North American globalization, and it was reasonable to envisage the continent's economies converging, much like Europe's, especially near the border.
- BBVA is no longer as optimistic, has now agreed to sell all of its U.S. holdings to PNC for $11.6 billion.
Among the casualties of BBVA's strategic retreat from the U.S.: Tuyyo, an innovative mobile app that allowed Mexicans in the U.S. to send money back to their families for free.
- The funds could be withdrawn any time at any Bancomer ATM, just with a code — no ATM card needed.
- Tuyyo was quietly shuttered last year.
The bottom line: The net flow of migrants from Mexico to the U.S. — part of the reason for BBVA to expand from Mexico to Texas — turned negative about 15 years ago, and has remained that way ever since.
- Strong supply chains still bind the two countries. But if you want to find a part of the world where regional integration is getting visibly stronger, then you would not look first to North America or Europe. Asia and Africa are much better bets on that front.