OFG Bancorp Shares Rise 13% Following Scotiabank Deal
June 27 2019 - 1:50PM
Dow Jones News
By Patrick Thomas
Shares of OFG Bancorp. (OFG) are up about 13% at $23.40 after it
said Wednesday that its subsidiary, Oriental Bank, would acquire
Scotiabank's (BNS, BNS.T) operations in Puerto Rico and the U.S.
Virgin Islands.
OFG said it would pay $550 million in cash for the Puerto Rico
operations, and a $10 million deposit premium for the U.S. Virgin
Island branches.
OFG said the deal would boost 2020 earnings by 40%, and that it
would fund the deal with excess capital. Scotiabank's Puerto Rico
and U.S. Virgin Island operations had $2.5 billion in net loans,
$3.2 billion in deposits, 21 branches and about 1,000 employees as
of March 31, OFG said.
"Oriental will be the second-largest bank in Puerto Rico in
terms of core deposit, branches mortgage servicing and in terms of
ATM network," OFG Chief Executive Jose Rafael Fernandez said on a
conference call with analysts Thursday.
Fitch Ratings said Thursday that there could be more
consolidation in the coming years in the Puerto Rican banking
sector as a number of nondomestic banks have been decreasing their
footprints on the island over the last several years.
"The benefits will likely accrue to the second- and
third-largest domestic banks, First BanCorp. and OFG Bancorp as
they continue to build out their franchises," Fitch said.
Write to Patrick Thomas at patrick.thomas@wsj.com
(END) Dow Jones Newswires
June 27, 2019 13:35 ET (17:35 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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