International Banking in Coral Gables

With trade through Greater Miami on the rise, and more foreign nationals moving here, global banking takes on a new meaning.

Walk past the sprawling new The Plaza Coral Gables complex, and you might easily miss the headquarters of a multi-billion dollar bank based inside. The bank has no first-floor branch for local customers to come in and out. Indeed, it has no branch network, just one hub inside occupying two floors.

Coral Gables-based Bradesco Bank (assets: roughly $3.5 billion) moved into its new penthouse home in March from its long-time offices on Miracle Mile (which also drew little attention). That’s because the bank does not target walk-in customers, but rather focuses on clients overseas, increasingly in Brazil.

Long owned by a group from Central America and formerly known as BAC, it was acquired in 2020 by Brazil’s heavyweight Bradesco Bank (assets: roughly $345 billion), partly to help its clients in Brazil safeguard money in the United States in U.S. dollars and U.S. investments.

“We capture the deposits of foreign nationals here, so we don’t need branches,” says CEO and President Henrique Lima, 48, the longtime Brazilian banker who led the acquisition and then moved to Florida in 2020 to helm the digitally-reliant Gables bank. “In the last year, we’ve brought in over $1.5 billion in new money from Brazil.”

Bradesco is not alone in banking internationally in the City Beautiful. There’s an international side to nearly every bank in the area. Consider the largest Gables-based bank Amerant (assets: roughly $9 billion), formerly known as Mercantil Bank, which has roots in Venezuela and holds some $2 billion in deposits from Venezuelans. Miami-based City National Bank of Florida (assets: roughly $23 billion), which keeps executive offices in the Gables, has been owned since 2015 by Chile’s Banco de Credito e Inversiones (BCI). Pittsburgh-based giant PNC (assets: roughly $557 billion) is expanding its PNC Private Bank in the Gables to serve more overseas clients. And Illinois-based First American Bank (assets: roughly $6 billion) set up shop in the Gables to finance international trade.

“Here in South Florida, we’re really a three-in-one banking community, with retail banking, wealth management, and trade finance, and each has a strong international component,” says Ken Thomas, a banking analyst in Miami and longtime faculty member at The Wharton School in Pennsylvania. “Many people think of banks as that place on the first floor, but upstairs are the other banks: the ones dealing with overseas customers, corporate clients, and international transactions.”

Indeed, South Florida ranks second nationwide for international banking, trailing only after New York, says David Schwartz, president of the Financial and International Business Association (FIBA), known until 2022 as the Florida International Bankers Association. Most international activity in South Florida focuses on Latin America and the Caribbean: holding deposits for customers from the region, lending to non-residents to buy real estate here, investing their money in U.S. stocks and bonds, or financing trade.

Nowadays, the banks are welcoming an influx of money because of a shift to the left in many South American countries, including Brazil. “Whenever there’s political instability in Latin America, there’s a flight to safety here,” says Schwartz. To bring in that money, many Miami area banks are expanding their units for wealth management and increasing staff who speak Portuguese or Spanish.

That’s where Pedro Parra comes in. He’s just been named Amerant’s head of international banking, charged with attracting more wealth from clients abroad, especially from countries other than Venezuela. Amerant now relies on Venezuelans for nearly all of its overseas cash, including about 80 percent of its $2.5 billion in deposits from abroad, says Jerry Plush, CEO since 2021.

“International banking is part of our DNA. For many years, it was the singular purpose of this bank to serve overseas clients [from Venezuela], offering deposit and wealth management accounts with the strength and safety of the dollar. Now, we see international as a great opportunity for growth, building on our infrastructure and expertise.”

Jerry Plush, CEO of Amerant

Part of the international push involves opening a new Amerant branch this year in Key Biscayne, where many wealthy Latin Americans have second homes. In all, Amerant plans four new branches in 2023: Key Biscayne, Met Square in Downtown Miami, Las Olas in Fort Lauderdale, and one in Tampa, boosting its branch count to 27 across Florida and greater Houston.

Challenges of International Banking: Language, Culture, Regulations

Yet serving overseas clients is not the same as catering to U.S. ones. For starters, their primary needs tend to differ, says Venezuela-born Parra, 48, who’s worked 22 years in Florida with what’s now Amerant.

“International clients tend to look more to the U.S. for safekeeping of their money longer-term, while domestic customers have more day-to-day or full-service needs,” he says.

Language and culture vary too. People tend to feel more comfortable entrusting cash for safekeeping with someone who knows their language and even their dialect — a Mexican with a Mexican, for instance. They also appreciate when bankers know their customs, offering Latin Americans a coffee and conversing first about family before jumping into hard talk about business.

Then, there’s the question of compliance with U.S. regulations. To meet “Know Your Customer” rules, for example, international bankers must know how to navigate databases and registries across different countries. Finding information abroad may not be as easy as pulling a credit report from a big U.S. credit bureau or checking for company registration in Florida’s Sunbiz website.

Also tricky is managing the risk associated with each country, from its political and economic stability to foreign exchange rates. Some banks limit how much they’ll lend to any one nation overseas, and they check if clients aim to pay with income from businesses in unstable countries.

Lloyd DeVaux, CEO of Palmetto Bay-based Sunstate Bank (assets: roughly $500 million, with the largest of its three branches in Coral Gables), says Sunstate won’t offer new loans nowadays to clients who rely on income for repayment from Venezuela because of instability there. It will lend to a Venezuelan, however, who buys property in Florida and rents it out, deriving income to repay from the more secure United States.

“International banking is specialized. You need an understanding of how to evaluate risks and opportunities,” DeVaux says. “We’re seeing a lot of Brazilians who want to get their money out of Brazil, and this creates opportunity.” His bank, an affiliate of Brazil’s Banco Sofisa, is now rolling out a digital platform in Brazil that will let Brazilians open Sunstate accounts online or invest through a U.S. brokerage in U.S. stocks or other U.S. investments.

How international clients keep their money in South Florida keeps evolving too. Overseas customers used to park dollars mainly in deposit accounts and conservative investments such as government bonds. But they’re becoming more sophisticated, using more financial planning services and varied investment options, including mutual funds, says Fidelma Leonor Fariñas-Cobas, the newly-appointed international market leader in greater Miami for PNC Private Bank, PNC’s wealth management arm.

“There’s more of a strategic view and more asset-allocation talk with our international clients now,” says Fariñas-Cobas, who has nearly 20 years of experience in international banking in South Florida. “The approach is more thought out, not so transactional.”

Financing Trade, Especially Exports to Latin America

Of course, international banking encompasses more than deposits and investments. Also significant is trade finance, a growing focus for Coral Gables-based Intercredit Bank (assets: $550 million), which also lends to non-resident aliens for home purchases.

“Right now, the bank’s activities are increasingly focused on the trade finance side” with a concentration on Latin America, says bank president and CEO Simon Cruz. “With interest rates rising, trade finance is perfect because it’s a 180-day loan, so we can keep up with fluctuations up or down. It is becoming increasingly important in our portfolio.”

“In terms of banking, there are a limited number of banks involved in trade finance,” a function usually left to large financial firms such as Hemcorp and Expo Tech. But, says Cruz, “My sense is that trade has been rising, and there is a ton of business out there. This is a function of [our] bank that is right now about 20 percent of our business — and growing.” At present, Intercredit will lend up to $8 million for a trade deal.

Trade finance is also a specialty for First American Bank (assets: $6 billion). The Illinois bank has been helping small and mid-size family businesses in Greater Miami for decades to finance their imports and exports, mainly with Latin America. In 2014, it bought The Bank of Coral Gables to expand in the state. It now has one location in Tampa and six branches in South Florida, including its Florida headquarters near Gables City Hall.

With interest rates rising in recent years, First American has been working with customers on ways to affordably extend the time to pay for imports or exports. It’s been issuing more letters of credit — essentially, a note that assures the bank will pay later — so that vendors can feel more secure they’ll get paid as specified, perhaps in 60 or 120 days, says Brian Hagan, First American’s president for Florida. And it’s been securing credit insurance for clients when possible.

“International banking and finance is everywhere in Miami. If you’re not a business buying or selling overseas, chances are you are dealing with someone who is. Or your neighbors may be working with a company that’s owned overseas or sells overseas. Housing prices here are inflated by demand for real estate coming from overseas. International really touches everything here.”

Brian Hagan, Florida Market President at First American Bank

To serve customers with needs beyond trade, First American has also been financing construction projects in Florida. It manages that risk by requiring non-resident clients to keep enough cash in the bank to finish the project, says Hagan, who works with some 15 lending specialists at his Gables hub.

How Greater Miami Differs in International Banking

Still, the way international banking works in Miami often differs from other global hubs. In New York, there’s a stronger focus on big corporate clients doing business across the U.S., says FIBA’s Schwartz.

In Brazil, there’s a more holistic approach to customers, with banks often offering retail, investment, and wealth management services from the same locale, says Bradesco’s Lima. That explains why Bradesco’s Gables offices provide not only banking but also the services of Bradesco’s affiliated broker-dealer and its wealth management or Registered Investment Advisor (RIA) unit. All three units together employ more than 240 people at the bank hub.

“Different from other shops in South Florida, we try to treat clients as single individuals, so they don’t feel a difference between the bank, broker-dealer, and RIA,” explains Lima. European banks also tend to integrate banking and investment services more so than U.S. banks do.

From Coral Gables, Bradesco even handles overseas business for banks themselves. It regularly holds deposits for Central American banks that keep dollars in the U.S. to make U.S. payments. That all adds up to lots of international banking that you might never imagine walking down a local street.