{"id":191563,"date":"2018-11-28T05:17:30","date_gmt":"2018-11-28T10:17:30","guid":{"rendered":"https:\/\/canadianinquirer.net\/v1\/?p=191563"},"modified":"2018-11-28T05:17:30","modified_gmt":"2018-11-28T10:17:30","slug":"scotiabank-to-sell-operations-in-nine-caribbean-countries-more-moves-expected","status":"publish","type":"post","link":"https:\/\/canadianinquirer.net\/v1\/2018\/11\/28\/scotiabank-to-sell-operations-in-nine-caribbean-countries-more-moves-expected\/","title":{"rendered":"Scotiabank to sell operations in nine Caribbean countries, more moves expected"},"content":{"rendered":"
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Scotiabank earned $2.27 billion or $1.71 per diluted share for the three months ended Oct. 31, up from $2.07 billion or $1.64 per diluted share in net income during the same time last year. (File Photo By Verne Equinox at the English language Wikipedia, CC BY-SA 3.0<\/a>)<\/figcaption><\/figure>\n

TORONTO \u2014 The Bank of Nova Scotia plans to sell its banking operations in nine Caribbean countries and its insurance operations in two other regional markets \u2014 and its chief executive expects more international divestments in the pipeline.<\/p>\n

Scotiabank said Tuesday it has signed an agreement to sell its banking operations in nine \u201cnon-core\u201d markets \u2014 including Grenada, St. Maarten and St. Lucia \u2014 to Republic Financial Holdings Ltd. for an undisclosed amount.<\/p>\n

The bank also said its subsidiaries in Jamaica and Trinidad and Tobago will sell their insurance operations to and partner with Sagicor Financial Corp. Ltd. to provide products and services in the two countries, for an undisclosed amount.<\/p>\n

These exits are part of Scotiabank’s broader strategy to \u201csharpen our focus, increase scale in core geographies and businesses, improve earnings quality and reduce risk to the bank,\u201d said its chief executive Brian Porter.<\/p>\n

The bank intends to remain in its core Caribbean markets as well as the Pacific Alliance countries of Peru, Chile, Colombia and Mexico, but there are more divestitures on the horizon, he told analysts on a conference call.<\/p>\n

\u201cWe’ve got a couple more to go and you’ll hear more from us in 2019, but they don’t pertain to Latin America or the Pacific Alliance,\u201d Porter said.<\/p>\n

The divestitures were announced as the Toronto-based lender reported its earnings for the three months ended Oct. 31, capping off its 2018 financial year with a nearly 10 per cent increase in its fourth-quarter profit compared with a year ago, but falling just short of market expectations.<\/p>\n

Scotiabank earned $2.27 billion or $1.71 per diluted share for the three months ended Oct. 31, up from $2.07 billion or $1.64 per diluted share in net income during the same time last year.<\/p>\n

On an adjusted basis, the bank reported earnings per share of $1.77 compared with $1.65 a year ago. Analysts on average had expected adjusted diluted earnings per share of $1.79 during the bank’s fourth quarter, according to Thomson Reuters Eikon.<\/p>\n

Scotiabank is the first of its peers to report its quarterly and full 2018 financial year earnings. Royal Bank of Canada, Toronto-Dominion Bank and the Canadian Imperial Bank of Commerce report later this week.<\/p>\n

For its full 2018 financial year, Scotiabank says it earned $8.72 billion or $6.82 per diluted share, compared with a profit of $8.24 billion or $6.49 per diluted share in 2017.<\/p>\n

The bank’s recent acquisitions \u2014 including a majority stake in a Chilean bank \u2014 weighed heavier on the bottom line than anticipated, said John Aiken, an analyst with Barclays in Toronto.<\/p>\n

\u201cFurther, Scotia could not escape the capital markets weakness in the quarter, despite a lower relative exposure,\u201d he said in note to clients. \u201cDespite the miss, we believe that there are significant reasons for optimism going forward, including likely operating leverage improvements as the acquisitions are integrated and an improving sentiment with the disposal of certain operations in the Caribbean deemed as non-core.\u201d<\/p>\n

The Toronto-based bank’s latest results were fuelled by its international banking division which saw quarterly net income rise more than 21 per cent to $804 million. For the full financial year, the bank’s international operations saw adjusted earnings growth of 18 per cent on a constant currency basis, Porter said.<\/p>\n

This was driven by Scotiabank’s operations in the Pacific Alliance trading bloc, which saw double digit loan and deposit growth, partly reflecting the lender’s recent acquisitions in the region, said Porter.<\/p>\n

The bank has been on a buying spree at home and abroad over the past year, including completing its purchase of a majority stake in Chilean Bank BBVA Chile in July. The lender also earlier this year announced deals to buy Citibank’s consumer and small and medium enterprise operations in Colombia for an undisclosed amount and buy Banco Dominicano del Progreso, which has operations in the Dominican Republic, in August.<\/p>\n

The next year will be focused on integrating Scotiabank’s recent acquisitions in Chile, Peru, Colombia and the Dominican Republic, Porter said.<\/p>\n

Scotiabank has the most international footprint among its peers and has been targeting Latin America for its strong growth prospects as activity in Canada slows.<\/p>\n

The refocusing of its Caribbean strategy stemmed from \u201cincreasing regulatory complexity and the need for continued investment in technology to support our regulatory requirements,\u201d said Ignacio Deschamps, Scotiabank’s group head of international banking, in a statement.<\/p>\n

The bank’s decisions in were guided, in part, by size. Jamaica, for example, has a population of roughly 2.8 million people while the Dominican Republic \u2014 where Scotiabank expects to be the number three bank \u2014 has roughly 11 million, said Porter. The other markets where Scotiabank’s operations will be sold to Republic Financial Holdings are Anguilla, Antigua, Dominica, Guyana, St. Kitts & Nevis, and St. Vincent and the Grenadines.<\/p>\n

\u201cWhen you look at what we’ve retained in the Caribbean, that’s 90 per cent of the population,\u201d Porter said. \u201cThis strikes at the core of our strategy to bulk up and get scale in markets and geographies and businesses that we deem important, where we can turn the dial for our customers and shareholders.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

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