BBVA Provincial rejects rumor that it's for sale

Monday, November 29, 2010

Venezuela's BBVA Provincial has rejected a televised statement by a well-known ally of President Hugo Chavez that the bank is for sale for US$2bn.

Jose Vicente Rangel, who served as Chavez's vice president from 2002 to 2007, made his comment in a brief non sequitur of a segment called "Confidenciales" during his show on private sector television network Televen.

"The board of directors of Spanish bank BBVA [NYSE: BBVA] are offering to sell Banco Provincial, in Venezuela, for an estimated US$2bn," he said in his comment.

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BBVA Provincial executive president Pedro Rodriguez reacted with a heated statement denying the rumor.

"The board of directors of BBVA Banco Provincial emphatically rejects [this] information, [which was] broadcast irresponsibly and without being [fact] checked," he said in the written statement.

He added that the bank "urges its employees, customers, associates and the public in general to not repeat this false information that seeks to put the stability of the banking sector at risk."


In the past, the Chavez government has reacted swiftly and severely to rumors about the banking system, at one point arresting a Twitter user for a message implying that Banesco, the largest private sector bank in the system, was about to collapse.

In 2009, when it came to light that Spain's Santander (NYSE: STD) was preparing to sell Venezuelan holding Banco de Venezuela to Banco Occidental de Descuento, the government stepped in and bought the bank itself for US$1.05bn.

BBVA Provincial is the second largest bank in the Venezuelan system, with total assets worth 43.9bn bolivares (US$10.2bn) through the end of October, according to the latest available figures from banking regulator Sudeban.

Starting with the coerced sale of Banco de Venezuela in 2009, the Venezuelan government has been ramping up pressure on the sector, shutting down more than a dozen banks and financial institutions in a wave of interventions in December.

The government also took over mid-sized Banco Federal in June. The national assembly is preparing to pass new banking sector regulations that will make expropriations easier and faster.