Canadian bank Scotiabank is in talks with BBVA to acquire the Spanish banking group’s Chilean operations.
Confirming the talks in a statement, Scotiabank said it would always look for opportunities to bolster operations in member countries of the Pacific Alliance, a Latin American trade bloc comprising Mexico, Peru, Chile, and Colombia.
“At this time, no formal agreement is in place and there can be no assurance that this process will result in a final agreement,” said Scotiabank in a statement
Reports says BBVA will only agree to spin off its retail banking business, while retaining its consumer finance unit in the South American country.
BBVA has a 68% stake in BBVA Chile, while 29% belongs to the Chilean family Said and the rest of the shares are in free float, Reuters reported.
These days, BBVA is heavily reliant on Mexico for new growth, with record low interest rates and strict banking laws hurting its profits in Europe. Currently, the bank earns about 40% of its profit from operations in Mexico.
Nevertheless, analysts say simplifying the operational structure could be the main reason behind the plan to sell the Chilean unit.
Over the past two years, Scotiabank has increasingly been stockpiling fintech solutions and expanding operations into developing countries. It is now the owner of Citigroup’s retail and commercial banking operations in Peru, Costa Rica, and Panama.
These acquisitions, including 21 branches and 4 service centers in Panama and Costa Rica, increased its customer base from approximately 137,000 to 387,000.