Finance and sport. Born in Puerto Rico in 1952, Richard Carrión has been working in highest echelons of the banking sector for more than 40 years and a member of the International Olympic Committee for 30 years. Partner of JC Flowers (JCF), he is the second president of Vall Banc since 2017.
What attracted JCF to such a small financial market as Andorra?
We looked at business opportunities all over the world, America, Asia, Europe, and we treated Andorra as such.
Is it what you expected? Does it still hold your interest?
Yes, but to be frank, it has been a bit more complicated than we expected, although now we are quite satisfied.
More complicated, how so?
For a number of issues, such as the blocking of equity in Credit Suisse, which had a big impact on customers. And it was also hard to consolidate a management team, as we had two changes in command that caused us to lose time. Now, however, we have a good team that is able to take us to the next level.
75,000 inhabitants, five financial entities and the end of banking secrecy. Is Andorra the platform for accessing the European market, evidenced by the purchase of Argenta Patrimonios?
We believe so and that is why we did it. At the same time, Andorra is going through a transition in which the ability to manage wealth will be increasingly important.
Vall Banc is the heir of BPA, a bank that had to be taken over due to complaints from FinCEN. What is the image of Andorra in the US as a financial centre six years later?
Neither good nor bad, because there is a great lack of information in the United States. Few people I talk to know about Andorra as a financial centre. Only those very well versed in this world may know this, but in general there is a total lack of awareness in the country.
And Vall Banc, is it known?
Has the stigma of BPA definitely faded inside and outside Andorra?
I think so. We have given a new personality to the bank, a new name, and we have strived to equip ourselves in the human and technological field with people and tools that have brought a very different character to the entity.
The core profit for 2020 was 1.7 million and the accelerated depreciation of the technology platform has left a negative result of 16 million. Is JCF satisfied?
It is never completely satisfied, but, if we stick to the three-year plan we drew up, yes, we are. This is not what worries us. We care about growing in terms of customers, having the most advanced technology in all areas and giving the best possible service.
Regaining customer confidence and capturing new ones was a priority goal of the entity. Has it been met?
It has in the sense that the decline in those affected by the blockade in Credit Suisse has been low and we now have cutting-edge technology to manage customers and estates that no one else in Andorra has, in order to attract new ones.
'Wealth management' and digitalisation are Vall Banc's offer to grow and improve profits. Where does the competitive advantage over other entities lie?
Everyone is heading in that direction but some products are better than others. With the Aladdin and Iris platforms, we have the most competitive tools that will allow us to offer the best products that are most suitable at each point in a person's life. For us, digitisation is as important as our relationship with the customer.
Even in a fairly stagnant market?
Yes, and we will continue to look for growth opportunities. The Wealth management industry will inevitably consolidate around the world, because there will be more and more regulations that involve higher costs, which will have to be distributed across a large universe of customers.
Where should Andorran banking go to survive in the face of unstoppable globalisation?
The future lies in significantly raising the bar in wealth management. We are competing against many other important financial centres and need to focus on particular markets. The proximity and fluidity of relations with the people of Spain and France helps a great deal and these are the most logical markets to expand in.
Is joining the IMF the guarantee that Andorra was lacking in consolidating its financial position?
Yes, because of the reputation and because it gives additional security from the moment in which there is a will to intervene in the event of a problem.
Is the way of doing banking as we know it over? What will be the new business model?
It will change but the banking function will be the same as it has been through the centuries. What remains to be seen is how the revolution will be integrated into communications and digitisation. Three aspects. It will change as regards to payments: how they are made and who will control them, and it is not clear that it will be the banks. The same goes for loans. We are seeing an increase in FinTechs dedicated to lending to individuals and to small companies, which are now unprofitable but will be. And mobiles, already a basic, will be the main tool in banking and financial services. We will realise the magnitude of the changes not year by year, but when we compare it in ten years.
JCF is a private equity. So, when are they waiting for the 'right time' to sell Vall Banc?
This varies in each case. The period we take at JCF to mature investments is three to five years, but, for example, until recently, we had a bank in Holland where we spent fifteen years. As for Vall Banc, there are a few years left to think about selling it because we have not taken the entity where we want and we believe it has the capacity to get there.
Have you received offers from banks?
Yes, we often get offers from groups we haven't even heard of, but we've received some serious ones in the past.
Any from a bank in the country?
We have talked to Andorran banks and there were advanced talks, but they did not close due to a price issue, obviously, and because we decided to go our own way. We have the human team and a good plan.