14ymedio, Havana, May 1, 2024 — Two resolutions adopted by the Central Bank of Cuba (BCC) have become a symbol of the financial future towards which Havana seems to be moving. In a announcement published on Tuesday in the “Official Gazette,” the bank indicated that it has accepted a request by Spain’s Banco Bilbao Vizcaya Argentaria (BBVA) to close its branch in Havana and is allowing the Russian bank Novikombank to open an office in the Cuban capital.
According to international agencies, BBVA is exploring a possible merger with Banco de Sabadell, another important Spanish financial institution. Sabadell itself has had an office in Cuba since 1995.
The Cuban nwebsite “Proyecto Inventorio” reported that BBVA asked to close its office shortly after the death of Eduardo Pellicer Ramírez, its sole employee in Havana. It claims, “The shuttered office, which officially had only one employee until 2023, oversaw BBVA’s interests in Cuba. These include actions on behalf of Aurea S.A. (49%), the leasing agency which collects the rent (in the millions) from GAESA’s Lonja de Commercio office building.” The rest of its business is with Havana’s Office of the Historian
According to international agencies, BBVA is exploring a possible merger with Banco de Sabadell
As for the agreement with Novikombank, it is not without political implications. Not only does it represent a step towards closer relations between Havana and Moscow, the bank is also under sanctions imposed by the United States after Vladimir Putin’s invasion of Ukraine.
Four members of its board have been placed on a sanctions list and the institution itself was disconnected from the Swift banking system by the European Union and the United Kingdom. The U.K. also froze its assets in Britain, claiming it would be benefitting from or even supporting the Kremlin through its involvement in businesses with ties to industries strategically important to the Russian government.
Under the supervision of BCC, it will operate as a “correspondence office” with Russian entities authorized to do business with Cuba. However, it will be “prohibited from directly engaging, either actively or passively, in banking or financial operations of any kind,” the document states. Among its functions will be “managing, promoting or coordinating the business operations of its parent company, in freely convertible currency (MLC) with entities established within the country’s borders.”
The resolution also notes that the Novikombank office in Havana will have to “submit its books along with any documents and other information that [BCC] official might request.”
Novikombank’s office in Havana will also have to “present its books for review”
Spain as well as Russia have both enjoyed privileged banking relationships with Havana. In July 2023 the BCC took the unprecedented step of approving an application submitted by Alto Cedro Finanzas Internacionales, a Madrid-based company which had been operating on the island since 2020, to become a cooperative bank.
At that time, Alto Cedro was prohibited from providing its services to the then recently legalized micro, small and medium-sized businesses (MSMEs) without expressed authorization by the BCC. Founded in 2020 with 3.5 million euros in assets by the Spanish magnate Javier Botín — a member of the family that manages the prestigious Banco Santande, for which he serves as an “outside consultant” — the company operated in Cuba as an international non-banking institution. In 2023, its directors asked Havana for a license to broaden its scope.
The corporation received authorization to open accounts in hard currency and Cuban pesos, receive and grant loans, manage risk and even “monitor its debtors.” It was also allowed to provide financing using the various existing modalities, export and import operations of goods or services and investments.”
The high-level Cuban official responsible for facilitating the 2002 conversation with Alto Cedro was Ricardo Cabrisas, then vice-president of the Council of Ministers. The atmosphere for talks was ideal since Spanish prime minister Pedro Sanchez had travelled to Havana in 2018 for several reasons, among them to open doors to more investors from the Iberian peninsula.
As for Russia, financial rapprochement was always a substantial component of Havana’s alliance with Moscow. In December the BCC officially adopted the Russian payment system Mir, an alternative to Visa and Mastercard, that the Kremlin launched in 2016 to avoid economic sanctions.
“This move is an indication of the good financial relations between the two countries, which contribute to the economic development of the nation,” Prensa Latina said at the time. Since the tightening of sanctions against Russia, Cuba has encouraged the use of Mir banking cards and a increasing reliance on Russian banks.
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