Scotiabank is ramping up its Latin American reach.
Scotia’s Colombian subsidiary Banco Colpatria is to acquire the consumer (retail and credit cards) and small and medium enterprise operations of Citibank in Colombia.
Citi’s operations in Colombia include 47 branches and 424 self-service access points across the country.
Nacho Deschamps, Group Head of International Banking and Digital Transformation at Scotiabank says of the deal, that is subject to regulatory approval:
“We’re excited about this acquisition because it will allow us to serve new customers in Colombia and it is in line with Scotiabank’s strategy to increase scale within the Colombian banking sector, as well as the other Pacific Alliance economies of Mexico, Chile and Peru,”
Scotiabank and Mercantil Colpatria will invest proportionately to maintain their existing ownership levels in Banco Colpatria.
Eduardo Pacheco, President and CEO of Mercantil Colpatria, adds that the transaction implies “…a sign of confidence that foreign investors have in Colombia; additionally, we have a great opportunity to continue growing our market share in the local financial industry”.
The agreement also includes the assumption by Banco Colpatria of Citibank’s workforce. This acquisition will enhance Banco Colpatria’s strategic position by making it the market-leader in credit cards, increasing its scale in Colombia through the addition of more than 500,000 new customers and expanding its ability to greater serve the country’s premium banking segments supported by Scotiabank’s Global Wealth Management network.
“We believe that this transaction with Scotiabank and Banco Colpatria is in the best interest of our consumer clients, employees and shareholders”, says Alvaro Jaramillo, Citi Country Head, Colombia and Latin America North Cluster Head.
Citi will retain its presence in the country with all of its current corporate and investment bank product offerings – Cash Management, International trade, Custody Service, Treasury, Markets and Investment Banking.
Jaramillo adds: “We will sharpen our focus on our Corporate and Institutional clients, where we can continue to add unique value and leverage our global footprint.”
Scotiabank acquired 51% of Banco Colpatria in 2012; it currently serves more than 1.5 million retail, corporate, and commercial customers.
Banco Colpatria is Colombia’s fifth largest banking group (consumer loans, home loans, and companies and SMEs) and sixth in deposits (savings, current and CDT accounts). It serves individuals and the business sector with its presence in 38 cities, $13bn in assets, a network of 175 offices and more than 370 ATMs.
Scotia’s Colombian acquisition comes hot on the heels of news last November that it had agreed to buy BBVA’S stake in BBVA Chile for around $2.2bn.
Scotia said that that Chilean deal would double its share of the local market to around 14%.