Canadian financial sector giant Bank of Nova Scotia, better known as Scotiabank, has unveiled a $241 million plan to expand operations in four Latin American countries, including Mexico, Chile, Colombia, and Peru.
With millions of people in the region still lacking bank accounts, Latin America offers great growth prospects, said Dieter Jentsch, the firm’s group head of international banking, at an investor conference in Mexico. By contrast, the Canadian banking market is almost saturated, reaching a point where banks are shutting down rural branches as mobile banking continues to grow in popularity.
Over the past two years, the Toronto-based lender has made several acquisitions in the region, including the purchase of credit cards and consumer loans in Chile and Citigroup’s retail bank branches in Peru, Panama, and Costa Rica. In 2012, it picked up a 51% stake in Colombia’s Banco Colpatria.
The bank has also set aside a large sum of money to revitalize its banking platforms and offer digital banking services, particularly in Mexico, a country where Scotiabank already controls nearly 6% of the market share.
For the entire Pacific Alliance region, the company is targeting 9%–11% earnings growth on a compound annual growth rate basis over the next three to five years, according to Reuters. The four Latin American countries contributed $761 million to the bank’s earnings in 2015.
Going by Jentsch’s speech, Scotiabank wants to become number-one lender in Mexico. The bank is hopeful that Peru will accelerate its credit cards and payments business and add millions of customers to its roaster of clients in the years to come. In Colombia, the bank wants to sign up new customers by offering a wide verity of financial services.
This is not the first time Scotiabank has talked of expanding operations in Latin America. The bank expressed the same desire last year, and independent analysts have heralded the region’s expanding middle class as the main draw for global financial service firms.
The bank already employs thousands of people across Latin America. In Chile alone, there are more than 4,000 people working for Scotiabank.