The bank said it plans to reallocate capital from developing to developed markets to ensure earnings are less volatile and more sustainable. — Reuters
TORONTO: Bank of Nova Scotia CEO Scott Thomson unveiled a new strategy for the Canadian lender, focusing on growth at its Canadian, Mexican and Caribbean units while it could exit underperforming regions such as Colombia.
The bank said it plans to reallocate capital from developing to developed markets to ensure earnings are less volatile and more sustainable.
Thomson said the bank could either exit Central America and Colombia, two of its underperforming businesses, or turn around the business. The bank will also allocate about 90% of incremental capital to prioritise businesses in North America.“We are accelerating growth in our Canadian franchise and allocating capital increasingly towards stable, high-return markets in North America,” Thomson told analysts and investors.
Thomson, addressing investors for the first time since taking charge in February, is tasked with reinvigorating Scotiabank’s Latin American operations, where the lender was expected to take advantage of the largely under-banked landscape.
As for its international banking segment, Scotiabank said it was focused on improving returns as it prioritises capital consumption, while favouring high-return businesses in Mexico and the Caribbean.
“We’re going to go through a transformational period between 2024 and 2025,” Francisco Aristeguieta, the bank’s head of international banking, said.
He said the focus would be Mexico, making the most of the North American corridor and increasing revenue from Scotiabank’s clients in the region with operations in Canada and the United States. — Reuters
