Scotiabank to exit nine countries in Caribbean shakeup
TORONTO The Bank of Nova Scotia said Tuesday that it has struck a deal to sell banking businesses in nine of the smaller countries in the Caribbean, including Antigua and Dominica, as the lender continues to narrow the number of global markets in which it operates.
The move comes as Scotiabank, which has said larger markets in Latin America are still very much part of its plans, reported that adjusted profit from its international banking unit grew at a greater rate than that of its Canadian business over the past year.
“Exiting these non-core operations is consistent with a strategy that began five years ago to sharpen our focus, increase scale in core geographies and businesses, improve earnings quality and reduce risk to the bank,” Scotiabank president and CEO Brian Porter said on a conference call Tuesday, adding the bank has now either exited or announced its intentions to exit more than 20 countries or businesses over that period.
Scotiabank plans to sell the Caribbean businesses to Trinidad and Tobago-based Republic Financial Holdings Ltd. Republic Financial said in a release that the purchase price is US$123 million.
Additionally, Scotiabank announced that its subsidiaries in Jamaica and Trinidad and Tobago have agreed to sell their insurance operations to Barbados-based Sagicor Financial Corporation Ltd., which would also underwrite insurance products for Scotia’s banking units through a 20-year distribution pact.
That deal is contingent on Sagicor being acquired by a Toronto-based special purpose acquisition corporation.
Scotiabank said these transactions would not be material, but that they would increase its common equity tier one capital ratio, a measure of financial strength, by around 10 basis points when they close.