Dec 2010 Financial News

Scotiabank enters Uruguay

Dec 08, 2010

SCOTIABANK on Monday announced a transaction to acquire 100 per cent of the common shares in Nuevo Banco Comercial (NBC), Uruguay's fourth-largest private bank in terms of loans and deposits, as well as Pronto!, the country's third-largest consumer finance company.

Terms of the agreement with an investor group led by global private equity firm Advent International are not financially material to Scotiabank Group and were not disclosed, Scotiabank announced in a press release on Monday.

The transactions are subject to regulatory approvals.

Scotiabank would be the first Canadian bank with a retail network in Uruguay.

"Scotiabank has deep roots and a long history in the Americas and we are proud to again grow our operations in Latin America," said president and chief executive officer Rick Waugh.

"Scotiabank's contribution of sales and risk management capabilities, plus our broader range of products, strengthens a transaction that aligns with the Bank's strategy of investing in growth markets where we anticipate increased demand for financial services," he added.

With the largest retail banking network in Uruguay and the only private bank with a presence in all 19 provinces, NBC has 49 branches, 710 employees and 85 automated banking machines (ABMs), in addition to a three-branch, full-banking subsidiary in Brazil.

Among private banks, NBC has an 11 per cent share of the nation's loan and deposits market, with a particularly significant portion of the $1.2 billion in total deposits being stable core funding. The bank is also regarded as a market leader by small and medium-sized business clients and is Uruguay's premier credit card provider.

With 480 employees, 600 retail points of sale and 37 branches, Pronto! has some 200,000 clients and is the market leader in personal loans.

The agreement to acquire NBC and Pronto! will be accretive to Scotiabank earnings in the first year.

"Latin America continues to be an important part of Scotiabank's international strategy and we have built a strong and unique franchise by delivering superior service," said Brian Porter, Scotiabank Group head, International Banking.

"Scotiabank has ambitious plans for the Uruguay market and that is what makes this an exciting opportunity for our customers," added Porter. "Our introduction to the Uruguay market will enhance an already unique Latin American footprint."

Juan Pablo Zucchini, a managing director at Advent International, said, "We are very proud of the many accomplishments that both NBC and Pronto! have made under our ownership. In just a few years, we have worked with management to transform the businesses into successful, market-leading companies. Both are well-positioned for continued growth as part of Scotiabank, a world-class financial institution."

With a population of 3.4 million people and a Gross Domestic Product of about US$44 billion, Uruguay has traditionally demonstrated more economic stability than many other countries in South America and is acknowledged for having advanced education, legal and social security systems. It was one of few countries in the region to demonstrate GDP growth during the 2009 crisis.

Scotiabank's Latin American footprint also includes operations in Peru, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, El Salvador, Guatemala, Mexico, Panama, Puerto Rico and Venezuela. Scotiabank has been in the Dominican Republic for more than 90 years, and in Puerto Rico since 1910. Scotiabank has also operated in Peru since 1997, where it is now the third-largest bank; El Salvador since 1997, where it is the fourth-largest bank; Mexico since 1967, where it is the sixth-largest bank; and Chile since 1990, where it is the seventh-largest bank. Scotiabank already has more than 32,000 employees, 2,605 ABMs and 1,889 branches, kiosks and other offices in the region, including affiliates.


Source:
Jamaica Observer
Wednesday December 8, 2010

http://www.jamaicaobserver.com/business/Scotiabank-enters-Uruguay_8218934#ixzz17X595j9j