A Bank of Nova Scotia location in Toronto, on Feb. 11, 2021.Fred Lum/The Globe and Mail
Bank of Nova Scotia BNS-T is paying $1.3-billion to buy nearly full ownership of its Chilean division, acquiring a family-held 16.8-per-cent stake.
The shares Scotiabank is purchasing are owned by Grupo Said, a company controlled by Chile’s Said family. The Saids remained minority shareholders after Scotiabank’s 2018 deal to acquire control of BBVA Chile, a subsidiary of Banco Bilbao Vizcaya Argentaria SA.
Since then, Scotiabank has gradually increased its ownership stake, including the purchase of 7 per cent of shares for $500-million from the Said family last May.
When this latest transaction closes, Scotiabank will own 99.8 per cent of its Chilean unit. The bank plans to pay $650-million in cash and issue seven million shares to Grupo Said, and the deal is expected to add about $35-million per quarter to Scotiabank’s profits.
“We believe this transaction makes sense for [Scotiabank] and is a good use of capital for the bank,” said Darko Mihelic, an analyst at RBC Dominion Securities, in a note to clients.
Under chief executive officer Brian Porter, Scotiabank has spent years concentrating its international operations in four Latin American markets – Mexico, Peru, Chile and Colombia – while selling assets in smaller, high-risk jurisdictions.
Chile contributed 42 per cent of Scotiabank’s $445-million in profit from those four countries in the three months that ended Oct. 31, according to company disclosures.
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