The purchase widens Scotiabank’s footprint in Latin America, making it the second-largest issuer of credit cards in Peru.
Banco Cencosud has more than 315,000 active clients and around CAD$240 million (US$186 million) in outstanding loans.
The terms of the deal also include a 15-year partnership to manage the credit card business and provide other products and services, similar to an arrangement Scotiabank and Cencosud already have in Chile and Colombia,
“Building on our existing partnership with Cencosud enables us to increase Scotiabank’s market share and presence in Peru and provides us with a larger base of customers to offer our leading financial products and services,” said Ignacio Deschamps, the group head of international banking at Scotiabank.
Scotiabank has often described Pacific Alliance countries as “an attractive and growing market,” with the bank’s executives hoping it to account for 30% of the lender’s revenue in the near future.
The bank also bought Citibank’s consumer and small and medium enterprise business in Colombia earlier this year. A month prior to that acquisition, Scotiabank made a bid for a majority stake in BBVA Chile.
The Pacific Alliance region accounted for 19% of the bank’s 2017 earnings, with Peru representing approximately 7% of that, according to Credit rating agency DBRS.
Scotiabank operates in 11 countries across Latin America. In Peru, it has close to 10,500 employees, 310 branches, 975 ATMs across the country and 3.5 million retail, corporate, commercial, and institutional customers.