Exclusive: Scotia in talks to sell part of commercial financing portfolio - sources
By Euan Rocha and John Tilak
TORONTO (Reuters) - Bank of Nova Scotia (BNS.TO: Quote), Canada's third biggest lender, is in discussions to sell a C$1 billion ($715 million) vendor and equipment financing portfolio, according to four sources familiar with the matter.
Scotiabank, which began the sale process a few weeks ago, is in talks with several parties including Toronto-based Element Financial EFN.TO, said three of the sources.
Two of the sources said the assets that Scotia is looking to sell are housed within its Roynat unit, which the bank acquired about 20 years ago.
Roynat provides funding between C$250,000 and C$50 million to small and medium-sized businesses. It mainly offers financing options like term loans, asset based lending and leasing to more than 1,000 companies across Canada.
All four sources, who declined to be named as they are not authorized to publicly discuss the matter, said that discussions are ongoing and there is no guarantee a deal will be reached.
Scotia's sale, coupled with commercial lender CIT Group's (CIT.N: Quote) recently outlined plans to sell its similar Canadian business, have given Element reason to rethink the planned sale of its own Canadian commercial and vendor (C&V) financing operations, said three of the sources.
Scotiabank declined to comment on the matter. A spokesman for Element said the firm's strategic review around its Canadian C&V business remains ongoing.
Element, Scotia and CIT all compete against one another in the C&V market in Canada, servicing and financing mainly small and medium-sized businesses. Continued...