Reuters: Mergers News: Scotiabank seeks growth in Asia, Brazil, Chile

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Scotiabank seeks growth in Asia, Brazil, Chile Apr 4th 2012, 11:48 Wed Apr 4, 2012 7:48am EDT * Eyeing new Asian markets, larger Latam presence * Basel capital requirements not a concern * Still waiting to close Guangzhou acquisition By Cameron French SASKATOON, Saskatchewan, April 4 (Reuters) - Bank of Nova Scotia could enter new markets in Asia as it expands its international footprint, and will not be held back by concerns about its capital levels, the bank's head of international banking told Reuters. "There's a couple of countries in Asia that may be appealing," Brian Porter said in an interview. "We want to be bigger in Brazil, we want to be a bigger bank in Chile. If there was another round of consolidation in Mexico, we'd definitely want to participate." With foreign operations that span more than 50 countries, Porter oversees a personal and commercial banking network that all but blankets Latin America and is growing quickly in Asia, bringing truth to Scotiabank's claim as being "Canada's most international bank". Most recently, Scotiabank has added assets in China and Colombia, and has been helped by the financial crises in the United States and Europe, which have shaken loose assets from lenders eager to bulk up capital levels. The bank recently closed its $1 billion acquisition of a 51-percent stake in Colombia's Banco Colpatria, and is in the process of closing a C$719 million ($72 million) purchase of a 20-percent stake in China's Bank of Guangzhou. CAPITAL PRESSURES Canada's banks weathered the financial storms of the last four years in strong shape, but they also are having to watch capital levels to make sure they meet strict new Basel III capital requirements that are expected to be implemented starting next year. Scotiabank has said it expects to meet the standards, but it is believed to be skating closer to the line than its rivals, prompting some analysts to question whether the bank may curtail acquisitions in the near term to preserve capital. Nonsense, said Porter, who said if an attractive deal emerges this year, the bank would move on it. "If they make sense for us... absolutely," he said. However, while potential targets have been plentiful with foreign banks in distress, he said the pipeline may be starting to dry up as the effects of the European debt crisis subside. "I would say the window's still open, but my view is the peak of the crisis is probably over in Europe," he said. He ruled out acquisitions of Europe-based retail bank assets, and also said the bank would not go into the United States, despite Toronto-Dominion's successful foray into U.S. retail banking market over the past seven years. "I can't see that happening," he said, adding that Scotiabank briefly considered doing so when U.S. banks became cheap during the U.S. crisis. "For the first time it was advantageous for us to look, so that's all we did was look," he said. Granted, a U.S. plan would not fit the pattern of Scotiabank's Latin America and Asia strategy, which focuses on countries with young and underbanked populations, and clear organic growth opportunities. However, the strategy comes with its hiccups, as the bank wades through foreign red tape and gets familiar with the approvals framework in a foreign country. The bank had initially expected the Bank of Guangzhou deal to close last year. Porter said the deal is not in danger. "We were probably a little bit optimistic in terms of timeframe," he admitted. "Things take longer in China in some regards. It's nothing untoward." Link this Share this Digg this Email Reprints

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