Canadian Press, David Friend, 28 November 2006
Bank of Nova Scotia is looking to carve out more business and push its brand in India after more than two decades of a marginal banking presence in the world's second most populated country.
A stepping stone to that expansion will be the opening of Scotiabank's latest Chinese commercial branch in Shanghai, executive vice-president Rob Pitfield said yesterday. "Those are two fantastic countries which we're very interested in, so we're continually working with the government to see what they'd be willing to permit us to do."
The move could also help Canada's most international bank establish a strong relationship with regulators in India, a country with more than 1.1 billion people, which could open the door to future expansion opportunities.
"Just by the fact that you're there and you're taking these opportunities, clearly your competitors can't," he said. "In India it's quite regulated so it's difficult for a foreign company to invest, but on the other hand it's a fantastic partner."
The bank already has five branches serving retail and commercial customers in India but Mr. Pitfield said Scotiabank is exploring opportunities to make bigger acquisitions that could include banks or financial service companies in the country.
In China, where regulators have not yet allowed the bank to establish retail locations, Scotiabank is building a relationship with regulators that it hopes will open doors.
"They decide how they want to see their financial services industry expand, and we think it's natural that when you decide to expand you do it with proven entities that have stood the test of time and that you trust," Mr. Pitfield said. "We'll work with the regulators and we'll work with authorities and whatever services they choose to bestow to us we're thankful for."
Most major Canadian banks have been tiptoeing through international expansion, with Bank of Montreal, Royal Bank of Canada and Toronto-Dominion Bank opting to head to the United States to fulfill their global aspirations.
Scotiabank has taken an alternative route, pushing into markets such as Latin America, which it refers to as its main focus outside Canada, and now Asia. With the addition of the Shanghai branch, the bank will have six branches in China.
Each location must be individually approved by the local government, which puts a wrench in the cogs of any plans for vast expansion.
"You're not going to see an announcement where a foreign bank says they're going to open 100 branches," Scotiabank's Robin Hibberd, senior vice-president of corporate development, said in an interview. "They're going to have to be one at a time."
And so the process has stretched on for decades, with Scotiabank first establishing itself in China and India during the early 1980s, and setting up a new operation once every few years.
It isn't the sole Canadian bank sniffing out opportunities in the region. Last month, RBC entered China's market by announcing a joint venture with China Minsheng Banking Corp. Ltd. to launch a fund management company based in Shanghai.
Minsheng Bank is the first major national commercial bank in China without state ownership.
Regulators aren't the only challenge to Canadian banks hoping to carve out a presence in Asia, according to Ian Nakamoto, director of research at MacDougall MacDougall and MacTier Inc. in Toronto.
He says well-known U.S. and European banks are also making headway in the market, buying stakes in well-known local banks and putting themselves at an advantage compared with the smaller Canadian players who haven't built a strong reputation overseas.
"For any Canadian bank to go into places where their brand name is not known, it tends to be different than if you're selling them a shirt," Mr. Nakamoto said. "But you've got to start somewhere."
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Bank of Nova Scotia is looking to carve out more business and push its brand in India after more than two decades of a marginal banking presence in the world's second most populated country.
A stepping stone to that expansion will be the opening of Scotiabank's latest Chinese commercial branch in Shanghai, executive vice-president Rob Pitfield said yesterday. "Those are two fantastic countries which we're very interested in, so we're continually working with the government to see what they'd be willing to permit us to do."
The move could also help Canada's most international bank establish a strong relationship with regulators in India, a country with more than 1.1 billion people, which could open the door to future expansion opportunities.
"Just by the fact that you're there and you're taking these opportunities, clearly your competitors can't," he said. "In India it's quite regulated so it's difficult for a foreign company to invest, but on the other hand it's a fantastic partner."
The bank already has five branches serving retail and commercial customers in India but Mr. Pitfield said Scotiabank is exploring opportunities to make bigger acquisitions that could include banks or financial service companies in the country.
In China, where regulators have not yet allowed the bank to establish retail locations, Scotiabank is building a relationship with regulators that it hopes will open doors.
"They decide how they want to see their financial services industry expand, and we think it's natural that when you decide to expand you do it with proven entities that have stood the test of time and that you trust," Mr. Pitfield said. "We'll work with the regulators and we'll work with authorities and whatever services they choose to bestow to us we're thankful for."
Most major Canadian banks have been tiptoeing through international expansion, with Bank of Montreal, Royal Bank of Canada and Toronto-Dominion Bank opting to head to the United States to fulfill their global aspirations.
Scotiabank has taken an alternative route, pushing into markets such as Latin America, which it refers to as its main focus outside Canada, and now Asia. With the addition of the Shanghai branch, the bank will have six branches in China.
Each location must be individually approved by the local government, which puts a wrench in the cogs of any plans for vast expansion.
"You're not going to see an announcement where a foreign bank says they're going to open 100 branches," Scotiabank's Robin Hibberd, senior vice-president of corporate development, said in an interview. "They're going to have to be one at a time."
And so the process has stretched on for decades, with Scotiabank first establishing itself in China and India during the early 1980s, and setting up a new operation once every few years.
It isn't the sole Canadian bank sniffing out opportunities in the region. Last month, RBC entered China's market by announcing a joint venture with China Minsheng Banking Corp. Ltd. to launch a fund management company based in Shanghai.
Minsheng Bank is the first major national commercial bank in China without state ownership.
Regulators aren't the only challenge to Canadian banks hoping to carve out a presence in Asia, according to Ian Nakamoto, director of research at MacDougall MacDougall and MacTier Inc. in Toronto.
He says well-known U.S. and European banks are also making headway in the market, buying stakes in well-known local banks and putting themselves at an advantage compared with the smaller Canadian players who haven't built a strong reputation overseas.
"For any Canadian bank to go into places where their brand name is not known, it tends to be different than if you're selling them a shirt," Mr. Nakamoto said. "But you've got to start somewhere."
