Bank of Scotland opens in Madrid

Bank of Scotland Corporate Banking (BSCB) is set to begin its operations in Madrid in Q1 2002. This move marks a continuation of BSCB’s European strategy after the successful establishment of offices in Paris, Frankfurt and Amsterdam.

As in the rest of Europe, BSCB will rely on its private equity expertise in order to penetrate the market. The bank will also leverage its historic relations with strong private equity players in the mid-to-large-sized market such as 3i, CVC Capital Partners, and Bridgepoint Capital. According to Stewart Livingston, head of European corporate finance, these players are very receptive to BSCB opening its office in Spain. The bank will also benefit from its recent merger with Halifax. In fact, the new office will open from Halifax’s Spanish branch.

The group has decided to target the Spanish market because it is a good source of dealflow, particularly in the buyout market, due to the high number of family-owned companies. Competition in the debt market is also limited as there are relatively few debt players in the Spanish market, compared to the UK.

Until now, the buyout market in Spain has been too small to be of great interest to domestic banks, which have been very in their lending activities, with the exception of transactions involving well-known brands such as San Miguel. In Livingston’s opinion, however, domestic banks are likely to change their investment focus as the private equity market develops.

The Madrid team is currently being recruited and will consist of UK employees and Spanish nationals with experience in structuring LBOs.

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• Southern Europe