Bank of Nova Scotia has agreed to purchase a majority stake in Banco Colpatria in a transaction valued at approximately $1 billion. It is Scotiabank’s largest international bank purchase ever and a sign of its growing emphasis on foreign banking business. Fully 27 percent of Scotiabank’s profits from the third quarter came from international banking profit.
Canada’s third largest bank is paying US$500 million in cash and US$10 million in common shares for the Banco Colpatria. The transaction is subject to regulatory approval and is expected to close by the end of the year.
Scotiabank said the merger represents the start of a long-term partnership with Mercantil Colpatria and will provide major growth opportunities in Colombia. Scotiabank, which first entered the Colombian market last year with the acquisition of RBS wholesale banking operations, plans to merge its wholesale business in Colombia into Colpatria’s existing operations.
“We are pleased to be partnering with Mercantil Colpatria a well-established and well-regarded Colombian conglomerate that has successfully led the growth of Banco Colpatria for more than 40 years,” said Scotiabank President and CEO Rick Waugh.
Colombia’s fifth largest financial institution and second largest credit card issuer, Banco Colpatria has assets of US$4.2 billion.
“With this alliance, we bring together our strengths and Scotiabank’s expertise in risk and capital management, wholesale banking operations and solid network in Central and South America,” said Eduardo Pacheco, President of Mercantil Colpatria.
Scotiabank has had a presence in South and Central America for more than 40 years and currently has more than 22,000 employees and 820 branches in the region.