Q&A: Fred Reinhardt, leads Espirito Santo Bank in Miami — which is now for sale

Espirito Santo Bank’s chairman and chief executive in Miami shares his views about the latest circumstances of his bank, which is for sale.

08/17/2014 4:51 PM

08/17/2014 4:52 PM

The son of an American diplomat, G. Frederick “Fred” Reinhardt grew up all over the world, in France, Vietnam, Egypt, Italy and Switzerland. As a banker, his career has led him to New York, London — and most recently, Miami.

Reinhardt joined Espirito Santo Bank in Miami as chairman and chief executive in September 2012. Operating from an exquisitely decorated office on the Brickell tower’s fifth floor, he presides over a bank with 125 employees and $750 million in assets, and a broker-dealer with $700 million under management.

Now, in light of recent events in Portugal, the Miami bank is for sale, and so is its headquarters on Brickell Avenue. Sources say a buyer for the building is now completing due diligence. Reinhardt said there is also much interest in buying the Miami bank.

We met Reinhardt at his bank’s offices on Brickell Avenue to discuss Espirito Santo and his background as events were unfolding. We then emailed him these questions, to which he responded.

Q. Please tell us about Espirito Santo Bank (ESB) and its ownership.

A. ESB is a wholly owned subsidiary of the Legacy Bank headquartered in Lisbon, Portugal. ESB’s original charter was issued in 1973 as Biscayne Bank and the Espirito Santo group purchased the bank in 1975. It is a Florida chartered bank regulated by the Florida Office of Financial Regulation and the FDIC.

Q. The bank in Portugal has been in the news recently, first for accounting irregularities, and then as it sought protection from creditors. Tell us about the latest developments in Portugal.

A. Yes, there has been a great amount of news coverage in the last few months regarding the Portuguese bank (now known as Novo Bank) and affiliated companies.

Much of the coverage revolves around the fact that a number of companies controlled by the Espirito Santo family have sought court protection from creditors. There have been mentions of accounting irregularities and fraudulent transactions.

Until recently, the family had a controlling interest in Banco Espirito Santo, but that is no longer the case and the family is no longer in any executive position at the Lisbon bank. The family is no longer on our board, as well.

Most recently, the Bank of Portugal took the steps to segregate the assets and liabilities of its future strategic elements into the Novo Bank and those assets, which are no longer deemed strategic, into a Legacy Bank.

ESB in Miami has been deemed to be in the group to be sold. Indeed there has been much interest in the financial community around the possibility of acquiring ESB and its franchise.

Q. The bank has a significant international presence. Can you tell us about that?

A. Banco Espirito Santo, its branches and subsidiaries are located throughout the world, in many places where there have been traditional and historic Portuguese communities such as Brazil, Angola, Mozambique and Macau; and it is also present in the money centers such as London and New York.

Q. What is the bank’s history in Miami?

A. As I mentioned before the Miami bank was acquired in 1975, with the purpose of developing a private banking operation to service for the most part individuals and families in Latin America wanting to have investments in the United States.

True to form, the success early on came from the Portuguese communities in Brazil and Venezuela and thereafter has expanded to represent a number of other countries.

Q. What does Espirito Santo focus on in Miami?

A. Today our Wealth Management group advises our growing client base throughout Latin and Central America and the Caribbean. We have a very successful Export Finance group, which facilitates the financing of imports into Latin America and Mexico using the credits and guarantees available through the Export-Import Bank of the U.S.A. and other foreign export credit agencies. In addition, we have a very strong residential finance group that caters particularly to foreigners purchasing properties in the Miami area.

Q. What will happen to the bank’s lease when the building, owned by Estoril, a unit of the Espirito Santo Group, is sold?

A. We do not have an answer for this at this time.

Q. Are there buyers for ESB at this time?

A. There are many interested parties.

Q. Are you finding that Miami is attracting more international clients, and if so, from where?

A. Yes, I think Miami continues to attract an ever-growing cast of international clients. For obvious geographical reasons, most clients come from Latin and Central America. However, today we find more and more clients coming from Europe, who perhaps in previous times would have gravitated to New York, but for linguistic and cultural reasons, if not also for the weather, now come to Miami for their U.S. dollar investment and banking needs.

Q. You have a very interesting international background.

A. Well, I grew up in a family of four children whose father was a Foreign Service officer and mother a devoted parent and wife. I was born in Paris and at the age of 3 moved to Saigon, South Vietnam, when my father was appointed ambassador following the Geneva Conference of 1955.

Two years later we moved to Washington, D.C., and then to Cairo, Egypt in 1960 where he was appointed Ambassador to the United Arab Republic which was a loose confederation of Egypt, Syria, and Yemen. In 1961, he was appointed ambassador to Italy and we moved to Rome. My family spent many years in Italy and, to me, Italy remains, of all the countries I have lived or visited, the dearest in my heart.

Q. Why — and how — did you first get into banking?

A. When I graduated from Kenyon College I knew I wanted to work in the international arena and in the mid 1970s, banking was a growth area and I chose that over a career in diplomacy.

Q. What other banks did you work for and where?

A. I began my career at Chemical Bank in New York and went through its training program and several years later was transferred to Rome when we opened a branch.

Five years later, I returned to New York to work in the multinational division. In 1988, I joined Merrill Lynch International Bank and moved to London. I spent 20 years at Merrill followed by three years leading a de novo bank in Connecticut. In 2012, I joined ESB in Miami.

Q. What areas of banking have you been involved in and what part of each have you enjoyed the most?

A. What I have most enjoyed about my career is the opportunity to have been involved at different times in correspondent banking, wholesale banking, investment banking, private banking and community banking. I could not have asked for a better apprenticeship.

Q. How have you seen the industry change over the years?

A. Certainly much has changed over my 40-year career. When I started, we communicated with other banks by telex! Well you know what it is like today … mobile apps and a brilliant technological future.

Q. What is your outlook for Miami's international banking community in the future?

A. I think the future for Miami’s international banking is boundless. Miami will continue to grow as the most important city for access to and from Latin America. Miami will increasingly be the most important linchpin for wealth management connecting our northern and southern hemispheres.

G. Frederick Reinhardt

Title: Chairman and CEO, Espirito Santo Bank, Miami

Born: Paris

Age: 62

Education: Bachelor of arts degree in political science from Kenyon College, Gambier, Ohio.

Personal: Married, four adult children, three grandchildren.

Lives in: Coconut Grove. Also has a home in Connecticut.

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