Scotiabank’s key focus this year will increasing its presence in Latin America and growing its customer base, the bank’s chief executive said Tuesday.
CEO Brian Porter, who was addressing an annual meeting of shareholders for the first time since taking over as chief executive from Rick Waugh in November, said the Bank of Nova Scotia (TSX:BNS) wants to sharpen its focus on its chosen markets of Peru, Colombia, Mexico and Chile.
Those markets, he said, have similar macro-economic fundamentals and disciplined fiscal management, as well as a strong banking and regulatory system.
They also have a growing middle class as well as a young, increasingly well-educated populations.
“As this middle class grows, more people will require financing for their homes and auto purchases,” Porter said. “They will save more and want to make prudent investments.”
Many other Canadian companies, he noted, have also been drawn by the region’s potential.
“Our international operations are a key differentiator for us,” he said. “It started in the Caribbean and that gave us, really, the knowledge, the experience to move on.”
Scotiabank is Canada’s most international bank, with operations in South America, the Caribbean and Central America as well as Asia.
When he was tapped for the chief executive job last year, Porter had suggested he would look within the bank’s existing footprint in Latin America and Asia when looking for acquisitions and not expand into places like Africa or Europe.
But there was no talk Tuesday of a focus on Asia, where Scotiabank had been building operations. It had previously announced a fund management venture with the Bank of Beijing to operate in China, and pursued a deal with the Bank of Guangzhou — a deal that eventually fell through.
At the shareholder meeting in Kelowna, B.C., on Tuesday, Porter also restated the bank’s push to focus on credit cards.
“In an increasingly competitive environment, credit cards allow us to better serve existing customers — and attract new ones,” Porter said. “They also provide us with an attractive risk-adjusted return.”
He said the bank has issued more than 250,000 Scotiabank American Express cards in the past 18 months and says more growth is expected over the next several years.
Other priorities for the bank include employee and leadership training and recruiting, as well as a move to reduce structural costs.
When it comes to Canadian operations, Porter pointed to the bank’s mortgage and automotive lending businesses as two areas of strength, as well as Tangerine, the online bank formerly called ING DIRECT, which Scotiabank purchased from Dutch-based ING Groep N.V. for $3.1-billion in 2012.
Concerns have been raised about the future growth of banking operations in Canada because of an expected slowdown of the housing market as well as high consumer debt. However, first-quarter results were generally positive across the industry.
Scotiabank, for example, earned $1.71 billion in its first quarter, up 6.5 per cent from a year earlier, and raised its dividend. Revenue, boosted by domestic banking and wealth management, grew to $5.65 billion from just over $5.2 billion a year earlier.
The bank later announced the appointment of Thomas O’Neill as non-executive chairman of its board of directors, succeeding John Mayberry, who retired as board chairman.
O’Neill, currently chair of BCE Inc. (TSX:BCE) and a director of Loblaw Companies Limited (TSX:L) and Adecco S.A., has been a Scotiabank director since 2008 and is the retired chairman of PwC Consulting, where he was formerly chief executive officer.
On the Toronto Stock Exchange, Scotiabank shares closed up 23 cents at $64.89.