Scotiabank buys Greek bank’s branches
Will consolidate Canadian operations Employees to be offered other positions
The Bank of Nova Scotia, which recently urged the federal government to move ahead with its long- awaited merger policy, has bought the 10 Canadian branches of the National Bank of Greece for an undisclosed sum.
Scotiabank spokesman Frank Switzer said the bank will now look at consolidating operations, including NBG and Scotia branches at the corner of Pape and Danforth avenues. He said employees at closed branches will all be offered work at Scotia branches.
“ They all have jobs,” he said. Some non-branch bank employees, such as those at head office, might not be able to find work with Scotiabank, he said, and they will get severance packages. It is too early to say how many of the bank’s 250 employees might be affected, he said.
“ They will be treated fairly.” The move comes a few months after the Scotiabank made a submission to the federal government as part of Ottawa’s ongoing review of Canadian banking laws, in which Scotiabank said Canadian lenders should be allowed to merge so they can compete with foreign banks abroad and in Canada.
“Providing Canadian banks with more flexibility to seize opportunities to grow and to improve their competitive strengths in their home market is essential for them to succeed internationally,” the bank said in its submission.
Scotiabank was the only lender to discuss mergers in submissions on Bank Act changes to be brought in next year. Finance Minister Ralph Goodale has delayed several times releasing a federal policy on bank mergers, effectively putting the issue on hold in Canada.
“ The guidelines need to be finalized to give banks greater flexibility in domestic and international markets,” Scotiabank said in its submission. NBG has said the sale of its operations in the United States and Canada would allow it to focus on expanding its presence in the emerging economies of Eastern Europe, and yesterday announced the purchase of a leasing and insurance business in Romania. Last month, NBG sold its 17- branch Atlantic Bank of New York unit for $400 million ( U. S.) to New York Community Bancorp. NBG Canada has $570 million ( Canadian) in assets, deposits of $500 million and reported profit of $ 4.4 million last year, making it smaller than Atlantic, which had $3 billion ( U. S.) in assets and $ 1.8 billion in deposits.
Besides the Danforth branch, NBG has branches in Scarborough, Mississauga, Hamilton and Vancouver. The rest are in Quebec, where NBG Canada is based. NBG is closing offices in Paris, Frankfurt and Amsterdam, while scaling back its London operations to save about $ 11 million euros, or $ 15.4 million ( Canadian), per year, to be funnelled into the bank’s Eastern Europe strategy.