If the context in which banks and companies interacted last year was already complicated due to the political and economic uncertainty, combined with the low interest rate scenario, the arrival of the COVID-19 pandemic last March further complicated this context by forcing nearly everyone into lockdown. Investment banks were a key component for the survival of large corporations. Jose Ramón Vizmanos, the Head of Global Client Coverage at BBVA Corporate & Investment Banking, explained this to the financial newspaper Cinco Días in an interview this summer.
“We have gone through three phases. The first was to ensure functionality; preventing a break in relations with our clients; and developing contingency plans,” explained José Ramón Vizmanos, the Head of Global Client Coverage at BBVA, in an interview. At BBVA, clients are the cornerstone of our everyday work, strategy and activity. Once functionality was ensured, it was time to remain close to our corporate and institutional clients and financial sponsors, and make solutions available to them that allowed them to maintain their business in such an extraordinary situation.
“The next step was to ensure the financial stability of our clients. We received large liquidity requests. The way we work is very much geared toward our client base. This phase was also a success. It is vital to establish relationships built on trust, and we have been very proactive when it comes to helping companies,” Vizmanos explained. BBVA was one of the most active banks in financing during these months and also acted as a facilitator in the government’s different aid programs for companies.
Jose Ramón Vizmanos, Head of Global Client Coverage at BBVA Corporate & Investment Banking - BBVA
One of the strategic priorities in BBVA’s investment banking area is being the leading partner for large clients. That’s why the BBVA’s investment banker model is underpinned by much more profound knowledge of the client, the sector, its regulation and the platforms on which it operates. For this reason, it is just as important to help companies optimize their financial program. If the priority was to cover large clients’ liquidity needs in the second phase, the third has been to repay the liquidity that was given up to that time, refinancing bond issues and offering wholesale banking solutions that can come in the form of debt, equity, selling assets or capital increases. “The sectors most likely to take part in these operations will be those hit the hardest by COVID. In particular, tourism, airlines, automobiles and parts.”
"We have been very proactive when it comes to helping companies"
Vizmanos stresses that if promoting advisory services was already significant, now it has become essential: “In this context, it is a priority to raise the strategic dialogue with our clients and participate in all those operations that also allow us to offer an added value in our proposals.” Sustainability is a good example - BBVA’s strategic priority that is reflected in its progress in its Pledge 2025. The bank has the capacity, knowledge and experience to provide its customers superior advice on sustainable finance solutions in all types of formats, and is playing a key role in developing this market.
It is also the time for advice on debt issuances. Large companies are exploring issuing bonds in the fourth quarter of 2020 and first quarter of 2021, a period when these placements are traditionally common. “There will be more operations. There are companies that have not issued anything since the pandemic. And there are others that have and are going to try to improve. They will refinance issues, extend terms and improve conditions,” he told Cinco Días.
In terms of mergers and acquisitions, or M&A, Vizmanos is predicting an upswing in the coming months, with large companies in stable sectors leading the way. BBVA’s geographic presence is one of its biggest competitive advantages in this area - a key driver to continue maximizing profitability for the bank and for clients.