By Rita Trichur
The Bank of Nova Scotia, Canada's third-largest bank by assets,
plans to acquire Citigroup's consumer and commercial banking
operations in Peru, a move that will bolster its position as a
major lender in the South American country.
Toronto-based Scotiabank announced late Friday that its Peruvian
subsidiary had reached a deal to acquire Citigroup's consumer
banking business, which was put up for sale by the U.S. banking
giant in October.
Financial terms of the agreement weren't disclosed because the
transaction wasn't considered material, Scotiabank said in its
release, adding the transaction would have a minimal impact on its
regulatory capital ratio.
For months, Scotiabank was considered the front-runner in the
auction process. Not only has Scotiabank identified Peru as a key
growth market, it already has a bigger market share in that country
than Citigroup. Analysts have previously suggested that such a
takeover would solidify Scotiabank's ranking as a top three player
in the region.
Citibank's Peruvian operations comprise eight branches that have
more than 130,000 retail and commercial banking customers.
"We're excited about this acquisition because it will allow us
to deepen existing customer relationships, serve new customers and
increase our market share in credit cards and personal loans in
Peru," said Dieter Jentsch, head of Scotiabank's international
banking division, in a news release.
"This acquisition is in line with our strategy to increase our
scale within the Peruvian banking sector, as well as the other
Pacific Alliance economies of Mexico, Colombia and Chile."
Scotiabank has operated in Peru since 1997. Its operations there
include C$15.7 billion in assets and 306 branches.
The terms of the deal preserve jobs for Citibank employees who
will be transferred to Scotiabank Peru, the bank added. Citibank
plans to continue operating in Peru with a much narrower focus on
corporate and institutional banking along with international
private banking.
Write to Rita Trichur at rita.trichur@wsj.com
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