From Toronto, Scotiabank opened the door to exiting markets like Colombia

From Toronto, Scotiabank opened the door to exiting markets like Colombia

Important news of global impact for the financial sector has just been announced through statements by Scott Thomson, CEO of The Bank of Nova Scotia, known worldwide as the Canadian multinational financial services company, Scotiabank. In Colombia, the conglomerate operates with its Scotiabank Colpatria bank, which, among other things, is the second largest issuer of debit and credit cards in the Colombian banking business..

Thomson, according to statements recorded by Reuters, said that bank plans to reallocate capital from developing to ‘more developed’ markets to ensure profits are less volatile and more sustainable. According to the agency, “Thomson mentioned that the bank could exit Central America and Colombia, two of its underperforming businesses, or turn around the business.”

For the moment, Scotiabank Colpatria sent a document to LR in which they say that “the management team in Canada announced the bank’s global strategy for the coming years, where they invite us to improve the bank’s profitability and turn around the results.” . It is a challenge that in Colombia we assume with leadership and immense responsibility, always thinking about our people, our clients and our shareholders.“.

According to what is known, the global bank will also allocate around 90% of the incremental capital to prioritize businesses in North America. “We are accelerating the growth of our Canadian franchise and increasingly allocating capital toward stable, high-performing markets in North America,” Thomson said from Toronto.

The weight of the group in Colombia

Since 2012, Scotiabank has been gaining weight in the Colombian financial sector. That year it acquired a majority stake in Banco Colpatria, which at that time was the sixth most important financial group in the country.

Today the Canadians operate as a foreign bank in Colombia under Scotiabank Colpatria, thus being one of the main financial institutions in the country. In light of the reports from the Financial Superintendency with cut-off until September, the entity is the second with the highest placement of debit and credit cards. The balance sheets show that they accumulate just over 2 million cards, only surpassed by Bancolombia which has 2.5 million cards.

In fact, Scotiabank Colpatria is one of the main franchise channels such as Visa and Mastercard in Colombia; Regarding the first, there are 890,396 plastics in force; while with the second it adds another 489,585.

In the same Superfinanciera reports, until the ninth month of the year, Scotiabank Colpatria accumulated a gross portfolio in Colombia of $30.7 billion, but for that same period the losses recorded $244.89 billion.

The international and regional panorama

Reuters reports indicated that Thomson, who spoke to investors and market operators for the first time since taking office in February, surprised with the program changes he proposes for the future.

“We are going to go through a period of transformation between 2024 and 2025,” said Francisco Aristeguieta, the bank’s director of international banking. Reuters also reported that Aristeguieta, who was hired earlier this year to head the unit, said the focus would be Mexico, making the most of the North American corridor and increasing revenue for Scotiabank clients in the region with operations in Canada and the United States. Joined.

To the question that some asked the executives about “Why Mexico?”, they responded: “Mexico first, because for us Mexico is the pillar of growth in the strategy,” said Aristeguieta., and highlighted, according to the agency, that “the region would contribute 50% of the incremental profits of its commercial banking and wealth segment.”

The reports also say that “its Latin American unit, affected by economic challenges and political instability, has shown some signs of weakness. For fiscal 2023, Scotiabank’s adjusted earnings growth from international banking was around 3 “, compared to 32% the previous year.” “If they want to grow, they have to explore international opportunities,” Colin White, chief executive of Verecan Capital Management, told Reuters.

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