Scotiabank says might consider raising CI stake
(Reuters) - Bank of Nova Scotia (BNS.TO: Quote) has no plans now to tamper with its 36 percent equity stake in Canadian mutual fund company CI Financial Corp (CIX.TO: Quote), but it might consider raising its stake if the opportunity arises, the head of the bank's global wealth management division said on Wednesday.
"We like the asset management business, so clearly if we had an opportunity and the metrics could work out over a period of time, that would be appealing to us," Chris Hodgson told the Morgan Stanley Financials Conference in New York.
"We like the fact that if we were to do something that we would have a strong No. 1 position in our home market... the bottom line is we're very happy with the CI investment."
Hodgson also suggested that the often frosty relationship between the two companies has improved, saying that the fund company has accepted Scotiabank's recommendations on board appointments over the past year.
"I think we've had more of an influence from a governance perspective than we had previously," he said.
Scotiabank's plans for the CI stake have been under the microscope since the bank, Canada's third largest, bought out Canadian fund company DundeeWealth last year.
Some analysts have speculated Scotiabank would dispose of CI to focus on Dundee, but Hodgson threw cold water on that notion, at least for now.
"In terms of the disposition of the asset, that's not something we're seriously looking at this point in time," he said.
Indeed, Hodgson said he expects the bank's wealth management presence to continue to grow, predicting that net income from the domestic and international wealth business will account for 30-35 percent of the bank's profit within about five years. Continued...