The decision by Bank of Nova Scotia to sell its Caribbean banking and insurance operations is among a series of international divestments planned by the financial giant.
Chief executive Brian Porter said it is part of a broader strategy to “sharpen our focus, increase scale in core geographies and businesses, improve earnings quality and reduce risk to the bank.”
In a conference call with analysts on Tuesday, Porter said Scotiabank intends to remain in its core Caribbean markets as well as the Pacific Alliance countries of Peru, Chile, Colombia and Mexico. However, there are more divestitures on the horizon.
“We’ve got a couple more to go and you’ll hear more from us in 2019, but they don’t pertain to Latin America or the Pacific Alliance,” he said.
In a statement, Ignacio Deschamps, Scotiabank’s group head of international banking, said the refocusing of its Caribbean strategy stemmed from “increasing regulatory complexity and the need for continued investment in technology to support our regulatory requirements.”
The bank’s decisions in were guided, in part, by size. Jamaica, for example, has a population of roughly 2.8 million people while the Dominican Republic—where Scotiabank expects to be the number three bank—has roughly 11 million.
“When you look at what we’ve retained in the Caribbean, that’s 90 per cent of the population,” Porter said. “This strikes at the core of our strategy to bulk up and get scale in markets and geographies and businesses that we deem important, where we can turn the dial for our customers and shareholders.”
This was the first time a Canadian bank had opened a branch outside the UK or the US Scotiabank had a branch in Kingston before the Bank opened a branch in Toronto, Canada, where the Bank’s Executive Offices are now located.
The announcement of the Caribbean divestments coincided with the release of Scotia’s financial results for the three months ended October 31, which show earnings of earned Can$2.27 billion or Can$1.71 per diluted share, up from Can$2.07 billion or Can$1.64 per diluted share in net income in the corresponding period last year.
Scotiabank achieved an increase of almost ten per cent increase in its fourth-quarter profit compared from a year ago
These results were driven by a rise in quarterly net income rise of more than 21 per cent to Can$804 million in its international banking divisions.
The bank has had a presence in the Caribbean for more than 120 years. The bank opened its first Caribbean office in 1889 in Kingston, Jamaica, to support the trade of rum, sugar and fish. It opened its first T&T branch in Port-of-Spain in 1906 but shut down those operations after an epidemic of yellow fever claimed the life of its manager that same year. The bank resumed operations in 1954 and by the late 1960s had 13 branches across the country.
At present Scotiabank has 1,350 employees, more 96 automated teller machines, 24 branches and five sales centres in T&T. In the Caribbean, the bank has some 7,765 employees and more than two million customers with 294 branches and more than 655 ATMs.