Scotiabank has announced that its subsidiary in South America has acquired the retail and commercial banking operations of Citibank in Peru. The news comes almost five months after Scotiabank agreed to replace Citibank as American Airlines’ co-branded credit card partner in the Andean country.
“This acquisition aligns with our strategy of increasing market share in credit cards and personal loans,” said Dieter Jentsch, Scotiabank’s Head of International Banking. Known as Canada international bank, Scotiabank appears to be focusing on increasing its scale in Peru, Mexico, Colombia and Chile.
Citibank’s Peruvian operation includes eight branches that serve more than 130,000 retail and commercial banking customers. Over the coming months, both the banks will work together to ensure a smooth transition for customers and employees.
Citigroup is in talks with several financial firms around the world as part of its plan to spin off dozens of its overseas assets to shore up its finances. Five of the 11 markets that Citi said it would exit are in Latin America, but there was no indication that Citi would sell its Peruvian operation. Most of the analysts were of the belief that the U.S. banking giant would leave the less lucrative Central American countries.
“We believe that this transaction is the best option for our consumer clients, shareholders and employees. Citi has been committed to Peru since 1920 and we will continue investing and growing our Corporate and Institutional Business in Peru,” said Julio Figueroa, head of Citibank in Peru.
Citi is looking for different buyers for its units, as its vast assets are too big to be taken over by a single financial firm. In March this year, Honduran banking firm Grupo Financiero Ficohsa acquired Citi’s operation in Nicaragaua.
In a separate statement, Scotiabank said it has acquired a 51% stake in Cencosud’s financial services business. This deal also includes managing Cencosud’s credit card portfolio. Cencosud’s financial services business includes about 2.5 million credit cards and close to US$1 billion in outstanding balances in Chile.