Bloomberg, Sean B. Pasternak, 29 January 2007
Bank of Nova Scotia, Canada's third-largest bank, offered to buy First BanCorp of Puerto Rico, UBS Canada analyst Jason Bilodeau said, citing an article in the Caribbean Business weekly newspaper.
First BanCorp has 138 branches through its FirstBank subsidiary, including 11 in Florida, Bilodeau said today in a research note to investors. An acquisition would increase Scotiabank's share of loans in the country to 13 percent from 3 percent, the analyst said.
Scotiabank, which has operations in about 50 countries, has said it will make acquisitions in regions where it already does business. The bank has invested more than C$1 billion ($845 million) on international purchases in the past year, buying banks in countries including Peru and the Dominican Republic.
``Adding to its presence in Puerto Rico could be a favorable move,'' Bilodeau wrote. First BanCorp, based in Santurce, has a market value of $842 million.
The stock had declined 25 percent in the past 12 months before today. The bank restated earnings from 2000 to 2004 following an accounting review of some mortgage-related transactions.
Scotiabank spokesman Frank Switzer declined to comment. First BanCorp spokesman Alan Cohen didn't return a phone call seeking comment.
First Bancorp shares rose 89 cents, or 9.3 percent, to $10.42 at 4:01 p.m. in trading on the New York Stock Exchange, the biggest gain in 18 months. Bank of Nova Scotia fell 46 cents to C$50.82 on the Toronto Stock Exchange.
Bank of Nova Scotia, Canada's third-largest bank, offered to buy First BanCorp of Puerto Rico, UBS Canada analyst Jason Bilodeau said, citing an article in the Caribbean Business weekly newspaper.
First BanCorp has 138 branches through its FirstBank subsidiary, including 11 in Florida, Bilodeau said today in a research note to investors. An acquisition would increase Scotiabank's share of loans in the country to 13 percent from 3 percent, the analyst said.
Scotiabank, which has operations in about 50 countries, has said it will make acquisitions in regions where it already does business. The bank has invested more than C$1 billion ($845 million) on international purchases in the past year, buying banks in countries including Peru and the Dominican Republic.
``Adding to its presence in Puerto Rico could be a favorable move,'' Bilodeau wrote. First BanCorp, based in Santurce, has a market value of $842 million.
The stock had declined 25 percent in the past 12 months before today. The bank restated earnings from 2000 to 2004 following an accounting review of some mortgage-related transactions.
Scotiabank spokesman Frank Switzer declined to comment. First BanCorp spokesman Alan Cohen didn't return a phone call seeking comment.
First Bancorp shares rose 89 cents, or 9.3 percent, to $10.42 at 4:01 p.m. in trading on the New York Stock Exchange, the biggest gain in 18 months. Bank of Nova Scotia fell 46 cents to C$50.82 on the Toronto Stock Exchange.
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Business News Americas, 29 January 2007
Canada's Scotiabank has made a written offer to acquire Puerto Rico's third biggest bank FirstBank, an analyst said on Monday, citing Puerto Rican daily Caribbean Business.
First BanCorp, FirstBank's parent, would have a market value of some US$770mn, UBS analyst Jason Bilodeau said in a report.
A Scotiabank spokesperson declined to comment when contacted by BNamericas.
Scotiabank already operates in Puerto Rico through 20 branches and commands a roughly 3% loan market share.
The deal would add 139 branches, including 11 in Florida, making Scotiabank one of the top three lenders on the island with a foothold in the mortgage market, Bilodeau said.
"There are, however, still some outstanding shareholder lawsuits at First BanCorp," he said.
First Bancorp is one of several banks on the island that over the last 18 months have run into serious accounting problems, elated to mortgage loans and consequently lost market share.
Last September, the bank restated financial results for the 2000-04 period, resulting in a US$17.1mn decrease in retained earnings and legal surplus, 3.4% lower than previously reported.
First BanCorp has said it expects to file the quarterly and annual reports for the year ended December 31, 2005, in 1Q07 and its quarterly reports for the corresponding quarters of 2006 thereafter.
Analysts believe the Puerto Rican banking market is ripe for consolidation as most stocks in the sector are near 52-week lows as the financial system suffers from a sluggish loan market due to an economy on the verge of a recession as well as an inverted yield curve.
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Canada's Scotiabank has made a written offer to acquire Puerto Rico's third biggest bank FirstBank, an analyst said on Monday, citing Puerto Rican daily Caribbean Business.
First BanCorp, FirstBank's parent, would have a market value of some US$770mn, UBS analyst Jason Bilodeau said in a report.
A Scotiabank spokesperson declined to comment when contacted by BNamericas.
Scotiabank already operates in Puerto Rico through 20 branches and commands a roughly 3% loan market share.
The deal would add 139 branches, including 11 in Florida, making Scotiabank one of the top three lenders on the island with a foothold in the mortgage market, Bilodeau said.
"There are, however, still some outstanding shareholder lawsuits at First BanCorp," he said.
First Bancorp is one of several banks on the island that over the last 18 months have run into serious accounting problems, elated to mortgage loans and consequently lost market share.
Last September, the bank restated financial results for the 2000-04 period, resulting in a US$17.1mn decrease in retained earnings and legal surplus, 3.4% lower than previously reported.
First BanCorp has said it expects to file the quarterly and annual reports for the year ended December 31, 2005, in 1Q07 and its quarterly reports for the corresponding quarters of 2006 thereafter.
Analysts believe the Puerto Rican banking market is ripe for consolidation as most stocks in the sector are near 52-week lows as the financial system suffers from a sluggish loan market due to an economy on the verge of a recession as well as an inverted yield curve.
