Thursday, September 27, 2007

Scotiabank to Buy 3 Banks from Altas Cumbres

BN Americas, Maria Alejandra Moreno, 27 September 2007

Scotiabank is about to buy three banks from Chile's Grupo Altas Cumbres for US$200mn, Chilean newspaper Diario Financiero reported.

The three are Banco del Trabajo in Peru, Banco de Antigua in Guatemala and Banco de Ahorro y Crédito Altas Cumbres in the Dominican Republic, according to the report.

All are small players. Banco del Trabajo has a loan market share of 2% and Banco de Antigua around 1%.

The acquisitions would fit Scotiabank's strategy as Latin America has been a key driver of overall earnings growth for the Canadian group, Joseph Scott, senior director at Fitch's Financial Institutions Group, told BNamericas.

With Canadian law currently prohibiting mergers among major banks, Scotiabank is looking to expand in markets offering better growth opportunities and wider spreads than its domestic market, Scott said.

Scotiabank's Mexican unit, with Cnd$21.1bn in earning assets at end-September last year, generated 15% of overall net income. By contrast, the group's US operations, with Cnd$41.9bn in earning assets, generated 9% of total net income.

Executives from Altas Cumbres were unable to comment as they are traveling abroad. A Scotiabank's spokesperson said the bank does not comment on speculation.

Last August, Scotiabank agreed to buy Chile's seventh largest bank Banco del Desarrollo for some US$1.03bn. This month the company said it would pay US$50mn for Spain's BBVA pension and insurance units in the Dominican Republic.