Scotiabank appears to be shifting its focus away from Asia and toward emerging economies south of the US border, as the Canadian financial services firm modifies its growth strategy for the new fiscal year.
A statement on the company’s website reveals it plans to reinforce its presence in Peru, Colombia, Mexico and Chile, although it does not talk of expanding to other countries in the region. Instead of directly expanding all across Latin America, the bank wants to “export expertise” to other countries from its existing bases in the four aforementioned countries.
“Going forward, the bank will focus on the longer term and on fewer areas,” said President and CEO Brian Porter, who addressed the bank’s annual meeting earlier this week.
“Despite some volatility over the past few months, not all emerging markets are equal,” Porter said, referring to Latin America. “We have chosen well. We’re comfortable with our footprint in Latin America.”
Porter said that Latin American countries have attractive economic fundamentals, disciplined fiscal management and a sound banking and regulatory system. Moreover, a strong presence in Latin America will position the bank to capitalize on the growing number of Canadian companies doing business in the region.
“We’ve had good success following our Canadian customers as they’ve expanded in the region,” Porter added.
A futile attempt to buy a 20% stake in China’s Bank of Guangzhou might have caused Scotiabank to shift its attention away from Asia. Analysts say Latin America’s expanding middle class is the main draw for global financial service firms.
The bank, which operates in more than 50 countries, grew bigger in 2012, when it purchased the Canadian online arm of Dutch lender ING Groep and a controlling stake in Colombia’s Banco Colpatria.