Scotia Bank (BNS) to Divest British Virgin Island Business
As part of its efforts to improve operating efficiency, The Bank of Nova Scotia BNS has inked a deal to sell 100% stake in Scotiabank (British Virgin Islands) Limited to Trinidad & Tobago-based Republic Financial Holdings Limited. The financial terms of the deal or the date of completion were not disclosed.
The transaction is still subject to regulatory approval and customary closing conditions.
In a statement, Scotia Bank management said, “This transaction supports the Bank's strategic decision to focus on operations across its footprint where it can achieve greater scale and deliver the best value for customers.”
Past Restructuring Efforts
Over the past year, Scotia Bank has undertaken several strategic measures to overcome the challenging operating backdrop. Earlier this month, the bank completed sale of its banking operations in seven Caribbean countries.
Moreover, the company has announced plans to lower stake/move away from several non-strategic markets, including Thailand, Colombia, Puerto Rico, the U.S. Virgin Islands, Dominican Republic and El Salvado. All these efforts are expected to help the bank increase share in its key markets.
Further, Scotia Bank has established Global Wealth Management (“GWM”) as a separate business division, “given its significant scale, double-digit asset growth over the last few years.” The bank expects GWM to further support its profitability.
Additionally, in July, Scotia Bank entered into a long-term bancassurance strategic alliance with BNP Paribas Cardif, the insurance unit of BNP Paribas SA BNPQY. Earlier in March, it acquired 97.44% of Banco Dominicano del Progreso in the Dominican Republic and 51% stake in Banco Cencosud in Peru.
The company faces heightening competition from other Canadian banks, including The Toronto-Dominion Bank TD, Bank of Montreal, Canadian Imperial Bank of Commerce CM and Royal Bank of Canada. Thus, the above-mentioned initiatives are expected to continue supporting Scotia Bank’s financials.
Shares of Scotia Bank have rallied 13.1% so far this year, outperforming the industry’s growth of 4.2%.
Currently, Scotia Bank carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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