Scotiabank poised to buy a bigger stake in Colombian bankLouie Palu/The Globe and Mail
Bank of Nova Scotia could be poised to expand its Colombian holdings, just over a year after making its first foray into the Latin American country.
Canada's third-largest bank is considering a deal to buy a stake in Colombia's seventh-biggest retail bank, Banco Colpatria Red Multibanca Colpatria SA, reports out of the country suggest. The deal, which is said to be worth about $1-billion, would give Scotiabank part ownership of a network of retail branches in the country.
A report in Semana, a Bogota-based newsweekly magazine, said Banco Colpatria's largest shareholder is negotiating a deal to sell 51 per cent stake in the retail bank to Bank of Nova Scotia.
However, Bloomberg reported that privately held Colpatria disclosed in regulatory filings this week that it has not been told by its largest shareholder if a deal is in place with the Canadian bank. Bank of Nova Scotia spokeswoman Ann De Rabbie said the bank could not comment on the Colombian report.
Scotiabank expanded into Colombia in March, 2010 with the purchase of Royal Bank of Scotland's wholesale lending operations, giving it a foothold in financing for the country's vibrant energy and mining sectors. The assets came up for sale when RBS began selling off assets to shore up its balance sheet.
Given Scotiabank's ambitions for the Latin American market – it has operations in a wide range of countries from Mexico, Belize and El Salvador to Panama, Costa Rica, Peru and Chile – the bank's initial Colombian investment is viewed by some analysts as a small first step towards bigger expansion there.
With operations in roughly 50 countries around the world, Scotiabank is Canada's most international bank, and has targeted Latin America and Asia as key regions for its growth.
Rick Waugh, the bank's chief executive officer, has said Scotiabank wants to pursue acquisitions in high-growth markets where the bank anticipates increasing demand for financial services in the coming years.
The head of privately held Banco Colpatria also said recently that his bank has been looking for a strategic partner. Eduardo Pacheco, chairman of the bank, told La Republica newspaper that Colpatria wanted to find an international partner, and expected to do so by the end of this year.
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