Bank of Nova Scotia (TSX:BNS) has sealed a couple of deals in South America, finalizing a planned strategic alliance in Chile, and completing a small acquisition in Peru.
The bank said Friday it has completed the US$280 million acquisition of 51% of the financial services businesses of Chilean retailer, Cencosud S.A., as part of a planned 15-year strategic alliance between the firms in Chile. The partnership includes managing Cencosud’s credit card portfolio, selling products and services to each firm’s clients, and a commitment by the bank to fund 100% of the loan portfolio. The deal makes Scotia the third largest credit card provider in Chile.
“We are happy to complete this acquisition and begin to provide our customers with more credit card options, attract new customers and build scale in Chile,” said Dieter Jentsch, group head of international banking at Scotia. “This partnership is in line with our strategy to increase market share across all of our priority markets, including Chile.”
Also Friday, the bank announced that it has closed its deal to acquire the retail and commercial banking operations of Citibank in Peru. Those operations include eight branches which serve more than 130,000 retail and commercial customers.
“This acquisition aligns with our strategy of increasing market share in credit cards and personal loans while deepening our relationships with customers in Peru,” said Jentsch. “This transaction is consistent with the Bank’s focus on increasing scale in Peru, Mexico, Colombia and Chile.”
Scotia says that the Citi transaction is not material to the bank, and that its common equity tier one capital ratio will be impacted by less than 10 basis points.