Scotiabank sees growth in Chile, Peru despite commodity weakness
By John Tilak and Tomás Sarmiento
TORONTO/MEXICO CITY (Reuters) - Bank of Nova Scotia (BNS.TO: Quote), Canada's third-largest bank, will push ahead with its plans in the high-growth focus markets of Peru and Chile despite their exposure to the commodities sectors, one of its top executives said on Tuesday.
With domestic growth slowing and the oil-price collapse weighing on the economy, Canadian banks have been focusing on growing their international businesses.
The risks by being exposed to the materials and energy sectors in those countries mirrors the volatile Canadian market.
"Our job is not to avoid risk but to manage the risk," said Dieter Jentsch, group head, international banking, at Scotiabank on a conference call with reporters following the lender’s international investor day event in Mexico City.
"Our growth rates are in line with what central banks are forecasting,” he added, noting that though growth has moderated from historical levels, the company has enough levers to operate successfully in those countries.
Scotiabank has been aggressively expanding in the Pacific Alliance countries of Mexico, Peru, Chile and Colombia in recent years.
The region contributed C$1.1 billion to the bank’s earnings in 2015. Overall, Scotiabank reported C$7.2 billion in net income last year.
For the entire Pacific Alliance region, the company is targeting 9 percent to 11 percent earnings growth on a compound annual growth rate basis over the next 3 to 5 years. Continued...