BBVA, Spain’s second biggest bank, on Monday joined the growing list of private investors, fund managers and banks which have fallen victim to the alleged fraud committed by Bernard Madoff, saying it might have lost up to € - BBVA Spain's Second largest Bank-Madoff Victim

BBVA may lose €300m from Madoff
ByVictor Mallet in Madrid

Published: December 15 2008 10:50 | Last updated: December 15 2008 10:50

BBVA, Spain’s second biggest bank, on Monday joined the growing list of private investors, fund managers and banks which have fallen victim to the alleged fraud committed by Bernard Madoff, saying it might have lost up to €300m.

In a regulatory filing, BBVA said its international clients had a total of €30m at risk through investment funds with positions in Bernard L. Madoff Investment Securities.
Dec-15BBVA’s own €300m exposure arose from its role in creating structured products for other financial institutions and institutional investors. These products were indexed on third-party investment funds – including Pioneer Alternative Investment’s Primeo Fund, Fairfield Sentry and Kingate Global Fund – that placed money with Mr Madoff’s operation.

“If as a consequence of the fraud alleged by the SEC [the US Securities and Exchange Commission] the value of these funds were to be zero, the net maximum loss for BBVA arising from this activity would be in the region of €300m,” BBVA said.

Spanish regulators, as well as banks and investors, have launched investigations into the Madoff affair and worked with their lawyers over the weekend to assess likely losses.

Santander, BBVA’s larger Spanish rival and the biggest bank in the eurozone, announced over the weekend that its clients were exposed to the tune of €2.33bn through Optimal, its wholly-owned hedge funds management arm.

Santander said it had a proprietary exposure of €17m through an unnamed investment fund, but would not comment immediately on whether it was further exposed indirectly, for example through loans to its institutional or private clients.

Natixis added its name to the growing list of those institutions exposed. the French investment bank said its indirect exposure could total €450m and Unicredit said its exposure could total €75m through Pioneer Investment, its Dublin-based asset manager.