Scotiabank to exit Caribbean after 129 years
The Bank of Nova Scotia, also known at Scotiabank, reported fourth-quarter earnings that flew a little below market expectations. The company then said they were planning to exit nine Caribbean countries as “part of a shake-up of that business”.
Scotiabank has operated in the region since 1889 according to Financial Post. The company said it would change its focus across the nine countries by selling some of its insurance operations located in Trinidad & Tobago and Jamaica to Sagicor Financial Corporation, who will then partner with Scotiabank to offer insurance services.
Republic Financial Holdings, another long-standing financial institution, is the intended buyer of Scotiabank’s assets in Anguilla, Antigua, Dominica, Grenada, Guyana, St Kitts & Nevis, St Lucia, St Maarten, St Vincent & the Grenadines.
“Due to increasing regulatory complexity and the need for continued investment in technology to support our regulatory requirements, we made the decision to focus the bank’s efforts on those markets with significant scale in which we can make the greatest difference for our customers, “ said Ignacio Deschamps, Scotiabank’s head of international banking.
When the deals close on the asset sale in the Caribbean, Scotiabank’s “tier 1 capital ratio” will increase by 10 basis points.
The Canadian multinational bank reported an adjusted value of $1.77 per share in the third quarter, just two cents shy of their expected analyst forecast. Their cost per share was actually up 8% while the bank’s net income rose 13% to $2.35 billion.
Over the whole year, its Canadian wing increased earnings 7% and was helped by improved margins thanks to a succession of interest rate hikes from Bank of Canada.
Internationally, the bank saw 18% growth, owing to their operations in the “Pacific Alliance trading bloc which comprises Peru, Mexico, Chile and Columbia and accounts for around a quarter of its revenues.”
Royal Bank of Canada and TD are expected to report their fourth-quarter earnings this week.