Expansion in the United States formed an important part of BCCI’s development as an international bank. This expansion was not confined to the proposed acquisition of an interest in an existing US banking group. BCCI was also establishing and developing its own direct presence in the United States through branches, agencies and representative offices serving the international business generated by its worldwide network and customers.
BCCI entered the United States directly with a representative office in New York in 1978. This was followed by an agency in San Francisco in 1981, Miami in 1982 and, as the network developed, further offices in locations including Los Angeles, New York and Washington, D.C. Other US offices were subsequently established as BCCI expanded its American operations.
These offices formed part of BCCI’s normal international banking network. They were particularly relevant to trade and commercial banking, international transactions and customers whose business extended between the United States and the countries in which BCCI already had an established presence. Miami also became an important centre for BCCI’s business relating to Latin America and the Caribbean.
BCCI’s strategy in the United States therefore developed along two parallel lines. One was the establishment and expansion of BCCI’s own US offices and banking operations. The other was the possibility of participating, through investors, in a substantial locally incorporated American banking organisation with an established domestic customer and branch network.
From late 1977, a group of Middle Eastern investors associated with BCCI sought to acquire Financial General Bankshares, a Washington-based bank holding company with subsidiary banks in several US states. The Federal Reserve approved the acquisition in August 1981, and it was completed in April 1982. Financial General Bankshares was renamed First American Bankshares in August 1982.
First American was therefore only one part of BCCI’s broader US expansion strategy. BCCI was already building its own presence in important American financial and commercial centres while First American provided access to a much wider domestic US banking network.
The relationship between BCCI and First American subsequently became one of the most controversial aspects of BCCI’s history. US regulators later alleged that BCCI had exercised undisclosed ownership and influence over the acquiring shareholder structure, despite representations during the regulatory approval process that BCCI would act only as an adviser to the investors.
Those subsequent allegations and regulatory findings need to be considered separately from the broader history of BCCI’s direct banking activities in the United States. For the purposes of BCCI’s development, the First American transaction should therefore be understood within the wider context of the Bank’s ambition to establish a substantial presence in the United States, both through its own network and through association with a significant domestic banking institution.