Victor Vargas

Victor Vargas (born 28 March 1952) is a Venezuelan banker and businessman, best known for being the former owner and president of the now defunct 14th largest private bank in Venezuela, Banco Occidental de Descuento.

Victor Vargas was born into a middle class family in the municipality of Chacao, city of Caracas, Venezuela.

His mother was the first woman to serve on the Supreme Court of Venezuela.

His father was a doctor.

He earned his law degree at Andrés Bello Catholic University.

Vargas started his career as a lawyer.

In the 1980s, he acquired 2% of CapitalBanc Corp., a bank based in New York City.

The bank was closed down in the early 1990s after authorities discovered fraud involving Vargas.

He was charged and accused of fraud.

He is quoted describing the venture as "the worst business" of his life.

In 1992 he sold a small bank he founded and owned.

He used those funds a year later, in 1993, to buy Banco Occidental de Descuento, based in the oil-rich state of Zulia.

Many of his clients are oil investors.

Another form of revenue comes from purchasing sovereign debt bonds and re-selling them for profit to investors.

He shared his experience in October 2007 when he moderated a panel on corporate governance at a Miami conference of the Florida International Bankers Association and the Latin American Banks Federation.

In 2008, Vargas' bank, Banco Occidental de Descuento (BOD), agreed to buy Banco de Venezuela from its then-owner, Spanish bank Banco Santander.

Vargas and his bank officials met with the appropriate finance officials in the Venezuelan government, and the officials approved the purchase.

Vargas's BOD then put a $700 million down payment toward the purchase.

Soon after, President Hugo Chavez went on national TV and announced he was pushing BOD aside and buying the bank himself, on behalf of the Venezuelan government.

BOD lost the $700 million deposit.

Banco Santander refused to refund it.

A Spanish court ordered the refund, but Spain's equivalent of the Supreme Court overturned that order.

Through it all, a 2008 Wall Street Journal article characterized Vargas and Venezuela's other wealthy elites as having "durability...no matter who is in power."

Vargas was later assisted by the Venezuelan government for abiding by their policies during the Venezuelan banking crisis of 2009–10, when more than a half-dozen competing private banking institutions were closed.

Vargas's survival strategy, he says, is to remain "agnostic about politics": "A businessman has to deal with his government, no matter how far to the right or left it is".

In 2010, overall profitability on bank assets in Venezuela fell to 9.7 percent from 20.5 percent in 2009.

Venezuelan bankers were concerned that the Venezuelan Central Bank had not changed commission tariffs in over five years.

Vargas served as the leader of the National Bank Board and led discussions with the Superintendencia de Bancos.

Vargas proposed that the Central Bank create new requirements for giving loans to strategic sectors as opposed to the then-current law requiring compulsory loan portfolios.

Vargas and his bank were not successful before Chavez became president of Venezuela.

He later helped the Chávez administration raise funds to finance Venezuela's budget.

According to the United States Department of State, Vargas was "said to have made a profit off those negotiations" and was described as "a banker whose star has risen greatly during the Chávez presidency".

Vargas is alleged to have made background deals with the Chávez government, those close to Vargas denied that he had received special treatment from Chávez.

Vargas and BOD’s goal was to expand the American Express card to 300,000 cardholders with access to 46,000 businesses by 2013.

The card would offer a 4-year rotating term financing option.

In May 2013, it was alleged that Vargas purchased Cadena Capriles, with its criticism of the Venezuelan government declining afterward.

In 2014, Vargas and BOD partnered with American Express to provide a new credit product for microentrepreneurs.

Microentrepreneurs provide for 15 percent of the Venezuelan economy.

As of 2015, it was the 14th largest private bank in Venezuela.

He serves as its Vice-President.