Banco de Venezuela
Encyclopedia
Banco de Venezuela is an international universal bank
based in Caracas. It was the market leader in Venezuela
until 2007, when it fell to third place, with an 11.3% market share for deposits; its major competitors are Banesco
, Banco Mercantil
and BBVA Banco Provincial
. As of June 2008, it had 285 branches in Venezuela.
and taxation financial institution for the Venezuelan government
. In 1920, it had already established 10 branches in the country, and due to the lack of a central bank
, the Banco de Venezuela became one of the six financial institutions with the right to issue banknote
s, until the creation of the Banco Central de Venezuela in 1940.
In 1976, BDV inaugurated its hundredth branch nationwide. In 1978 the bank introduced 24 hour customer service
, credit card
s and new point of sales terminals. The bank opened branches in New York and Curaçao
in 1977 and 1979 respectively, and two years later founded a subsidiary, Banco de Venezuela International, to offer a better service outside the country. In 1984, the bank inaugurated its new headquarters in the center of Caracas
.
On 6 October 2000, BDV purchased 100% of Banco Caracas, becoming the largest bank in the country.
. Following the closure, BDV suffered financial problems in the context of the national financial crisis. On 9 August 1994, BDV became the tenth bank bailed out by the Venezuelan government during the crisis, with the government taking a majority stake for an estimated at US$294m. In 1996 the bank was reprivatised, with Grupo Santander
purchasing 93,38%% of its share
s, for around US$350m.
In June 2008, Grupo Santander began discussion with Venezuelan banker Victor Vargas, regarding a possible acquisition of BDV, but the Venezuelan government stopped the negotiations. On 31 July of the same year, Venezuelan President Hugo Chávez
stated: "I'm interested in the purchase (by the government) and we going to nationalize it". However by March 2009 negotiations with Grupo Santander had still not been completed, and Finance Minister Ali Rodriguez
said it was possible the takeover could be abandoned. A final agreement for a $1.05bn purchase price was signed in May 2009.
Universal bank
A universal bank participates in many kinds of banking activities and is both a commercial bank and an investment bank.The concept is most relevant in the United Kingdom and the United States, where historically there was a distinction drawn between pure investment banks and commercial banks. In...
based in Caracas. It was the market leader in Venezuela
Venezuela
Venezuela , officially called the Bolivarian Republic of Venezuela , is a tropical country on the northern coast of South America. It borders Colombia to the west, Guyana to the east, and Brazil to the south...
until 2007, when it fell to third place, with an 11.3% market share for deposits; its major competitors are Banesco
Banesco
Banesco is a bank based in Caracas, Venezuela. it is the country's largest bank, with a market share of 14.2%. It has 440 branches in all parts of Venezuela...
, Banco Mercantil
Banco Mercantil
Banco Mercantil or simply Mercantil is a Venezuelan financial institution based in Caracas, the second largest bank in the country. At the end of 2007, it owned 321 agencies, 313 of them established in Venezuela.- History :...
and BBVA Banco Provincial
BBVA Banco Provincial
BBVA Banco Provincial is a financial institution in Venezuela.-History:Founded on October 15, 1953, in Caracas, Venezuela, as Banco Provincial with a capital of Bs. 15,000,000. In November 1996, Banco Provincial became the first universal bank in Venezuela by expanding its business objectives to...
. As of June 2008, it had 285 branches in Venezuela.
History
The bank was founded in 1883 as Banco Comercial, which on 2 September 1890 changed its name to Banco de Venezuela. It was initially a loanLoan
A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the lender and the borrower....
and taxation financial institution for the Venezuelan government
Government of Venezuela
|Venezuela is a federal presidential republic governed by a constitution. There are five branches of government: Executive, Legislative, Judicial, Citizen, and Electoral....
. In 1920, it had already established 10 branches in the country, and due to the lack of a central bank
Central bank
A central bank, reserve bank, or monetary authority is a public institution that usually issues the currency, regulates the money supply, and controls the interest rates in a country. Central banks often also oversee the commercial banking system of their respective countries...
, the Banco de Venezuela became one of the six financial institutions with the right to issue banknote
Banknote
A banknote is a kind of negotiable instrument, a promissory note made by a bank payable to the bearer on demand, used as money, and in many jurisdictions is legal tender. In addition to coins, banknotes make up the cash or bearer forms of all modern fiat money...
s, until the creation of the Banco Central de Venezuela in 1940.
In 1976, BDV inaugurated its hundredth branch nationwide. In 1978 the bank introduced 24 hour customer service
Customer service
Customer service is the provision of service to customers before, during and after a purchase.According to Turban et al. , “Customer service is a series of activities designed to enhance the level of customer satisfaction – that is, the feeling that a product or service has met the customer...
, credit card
Credit card
A credit card is a small plastic card issued to users as a system of payment. It allows its holder to buy goods and services based on the holder's promise to pay for these goods and services...
s and new point of sales terminals. The bank opened branches in New York and Curaçao
Curaçao
Curaçao is an island in the southern Caribbean Sea, off the Venezuelan coast. The Country of Curaçao , which includes the main island plus the small, uninhabited island of Klein Curaçao , is a constituent country of the Kingdom of the Netherlands...
in 1977 and 1979 respectively, and two years later founded a subsidiary, Banco de Venezuela International, to offer a better service outside the country. In 1984, the bank inaugurated its new headquarters in the center of Caracas
Caracas
Caracas , officially Santiago de León de Caracas, is the capital and largest city of Venezuela; natives or residents are known as Caraquenians in English . It is located in the northern part of the country, following the contours of the narrow Caracas Valley on the Venezuelan coastal mountain range...
.
On 6 October 2000, BDV purchased 100% of Banco Caracas, becoming the largest bank in the country.
State involvement
In 1993, after three years struggle for shareholder control, Banco de Venezuela was taken over by Banco Consolidado to form Banco de Venezuela y Consolidado. However, Banco Consolidado was closed during the Venezuelan banking crisis of 1994Venezuelan banking crisis of 1994
The 1994 banking crisis occurred in Venezuela when a number of the banks of Venezuela had to be taken over by the government. The first to fail, in January 1994, was Banco Latino, the country's second-largest bank. Later, two banks accounting for 18% of total deposits also failed...
. Following the closure, BDV suffered financial problems in the context of the national financial crisis. On 9 August 1994, BDV became the tenth bank bailed out by the Venezuelan government during the crisis, with the government taking a majority stake for an estimated at US$294m. In 1996 the bank was reprivatised, with Grupo Santander
Grupo Santander
The Santander Group is a banking group centered on Banco Santander, S.A., the largest bank in the Eurozone and one of the largest banks in the world in terms of market capitalisation. According to Forbes Magazine Global 2000, it is the 13th largest public company in the world...
purchasing 93,38%% of its share
Share (finance)
A joint stock company divides its capital into units of equal denomination. Each unit is called a share. These units are offered for sale to raise capital. This is termed as issuing shares. A person who buys share/shares of the company is called a shareholder, and by acquiring share or shares in...
s, for around US$350m.
In June 2008, Grupo Santander began discussion with Venezuelan banker Victor Vargas, regarding a possible acquisition of BDV, but the Venezuelan government stopped the negotiations. On 31 July of the same year, Venezuelan President Hugo Chávez
Hugo Chávez
Hugo Rafael Chávez Frías is the 56th and current President of Venezuela, having held that position since 1999. He was formerly the leader of the Fifth Republic Movement political party from its foundation in 1997 until 2007, when he became the leader of the United Socialist Party of Venezuela...
stated: "I'm interested in the purchase (by the government) and we going to nationalize it". However by March 2009 negotiations with Grupo Santander had still not been completed, and Finance Minister Ali Rodriguez
Alí Rodríguez
Alí Rodríguez Araque is a Venezuelan politician, lawyer, and diplomat.- Biography :He is the leader of the party Patria Para Todos and has occupied various positions in the government of President Hugo Chávez, such as oil advisor, General Secretary of OPEC, President of Petróleos de Venezuela ,...
said it was possible the takeover could be abandoned. A final agreement for a $1.05bn purchase price was signed in May 2009.