Juan Carlos Escotet is a tenacious and self-made Spanish-Venezuelan billionaire banker who knew how to hedge his exposure to the humanitarian crisis unfolding today in his home country. Born in Spain to Spanish parents who emigrated to Venezuela in the early 1960s, he began his financial career working as a messenger at a commercial bank delivering mail after finishing high school while taking college classes at night in Caracas. Furthermore, obtaining an undergraduate degree in Economics after spending about a handful of years working for Banco Unión Banco Comercial S.A., he became a trusted lieutenant at an organization spearheaded by the late Orlando Castro Llanes, a Cuban-Venezuelan banking magnate whose empire collapsed after having been convicted of embezzlement in Venezuela and grand larceny at his subsidiary in Puerto Rico. Nevertheless, although Juan Carlos Escotet quickly climbed through the ranks at this organization that was widely informally known then as “Grupo Latinoamericana”, he got out in time long before the irregularities with authorities came to surface in the mid-1990s by founding his own stock broker-dealer organization known as Escotet Valores Casa de Bolsa C.A. back in 1986. Soon after being successful in this operation becoming an expert in Venezuelan financial stocks while trading on them also, Juan Carlos Escotet initiated his expansion in financial services by buying a medium-sized commercial bank and renaming it as Banesco Organización Financiera S.A. in 1992. Similarly, he added insurance activities by founding Banesco Seguros C.A. in 1993. Shortly thereafter, he deepened his foray in financial services by buying the assets of a failed bank under liquidation proceedings known then as Banco Latino S.A.C.A. and soon later merging seven saving institutions in 1995 while renaming them as Caja Familia E.A.P. The latter then merged in 2001 with Banco Unión where he started his successful financial career. Moreover, the big push of his growing financial empire took place in 2002 when he integrated his numerous listed financial holdings in Venezuela covering commercial banking, insurance and thrift institutions by merging them into Banesco Banco Universal S.A. This merger is responsible for the pronounced growth of the group leading the industry today in distressed Venezuela. Likewise, his business plan for growth consisted in the spending on marketing to solidify the brand and more importantly expanding abroad including incursion in the American mainland market when the group opened an office along with a banking branch in Miami, Florida by the mid-2000s.
Today, Banesco is a powerful banking organization with tentacles dispersed widely throughout the Americas and Europe. In fact, the smartest move the company implemented was acquiring beneficial control of a small but solid commercial bank in Spain known as Banco Echeverría S.A. in 2012. By the same token and shortly afterwards, Banesco participated in the auction through its newly controlled subsidiary in Spain of another financial institution operating in the autonomous communities of Galicia, Asturias and Castilla-León known as NCG Banco S.A. The latter operated under the brand “Novagalicia Banco” and the transaction was approved by state authorities letting Banesco absorb a sizable saving institution under receivership in Spain and thus complementing its commercial banking activities at Banco Echeverría. Accordingly, a complex web of transactions involving intracompany transfers by the parent company in Venezuela to bolster the balance sheet of Banco Echeverría went ahead and overall, a total disbursement of 903 million Euros took place in three stages over the course of one year to gain the entire shareholding of Novagalicia Banco. Furthermore, the new listed concern in Spain that was formed through the merging of complementing activities was renamed and rebranded as ABANCA Corporación Bancaria S.A. The latter is active in Portugal as well after having grabbed a foothold there under the brand “ABANCA”.
To conclude, Banesco has built prominence over two decades of existence after holding tentacles overseas making it an outstanding Venezuelan multinational. Currently, having a total reaching over 900 banking branches in the Americas and Europe, only around 300 of them are located in Venezuela alone. In fact, the Venezuelan operation today represents a tiny fraction of the total in terms of deposits and assets. The latter reaches more than $ 20 billion now having reached a peak of more than $ 30 billion during its heyday before the turmoil in Venezuela. Moreover, although the home market of the organization is Venezuela, the company is not longer formally domiciled there. Accordingly, the organization has its base office in Caracas comprising the biggest banking headquarters anywhere in Latin America and known as “Ciudad Banesco” but its strong tentacles are scattered widely in several countries besides Venezuela. These countries are Panama, the Dominican Republic, America, Spain and Portugal. Likewise, the organization operates under the brand “Banesco” in the Americas and the brand “ABANCA” in Spain, Portugal and just since recently the US as well. As a result, this amalgam constitutes the story of an exceptional self-made and talented banker who has withstood adversity by means of hedging exposures in a very remarkable way. Mr. Escotet is a very good example of business success in the region inspiring others to study and emulate his notorious achievements.