North of the border, down Mexico way

IT WAS EASY to miss the progress Spanish bank BBVA made last year. With its longstanding rival Banco Santander hogging the limelight with an eye-catching acquisition of UK banking group Abbey National, any attention BBVA did get tended to focus on its own fruitless search for a European acquisition to match Santander's.

But those looking for BBVA's big European gambit were missing an important shift. For the first time since they were formed in the 1990s, Spain's two dominant banks began to head in different directions.

Santander continues to build a global franchise with a presence in most major European and Latin American markets. BBVA has opted for a more focused model. At the start of 2004 its foreign business was concentrated in Mexico. By the end, it had made an important addition. It now has a foothold in the US too. And its unusual strategy has raised...