SAO PAULO (Reuters) - Bank of Nova Scotia (BNS.TO) plans to tap growth in Brazil by ramping up lending to fast-growing sectors including oil and mining, the Canadian bank’s top executive in the South American nation said on Monday.
Scotiabank, as the lender is known, will seek to lure clients and win investment-banking business in those areas by extending loans to companies and investors, Armando Mariante, the bank’s chief executive in Brazil, told Reuters. Other areas include infrastructure and agribusiness, he added.
“Brazil is a very competitive market although it is rather big and has a lot of potential,” he said.
Scotiabank’s tack contrasts with that of other global players, which are spending heavily on investment banking and asset management to win capital market and mergers and acquisitions mandates. Loans usually require deploying massive amounts of capital and often win banks fees smaller than those in capital markets deals.
Toronto-based Scotiabank has $150 million in capital for its Brazil operations, Mariante said. The bank recently paid about $1 billion for a controlling stake in Grupo Colpatria of Colombia, and $705 million for 20 percent of China’s Bank of Guangzhou.
JPMorgan Chase & Co (JPM.N) and Standard Bank of South Africa (SBKJ.J) are among securities firms that have recently been beefing up staff and scaling up activities in Brazil’s highly lucrative investment banking industry.
Commercial and investment relations between Brazil and Canada thrived for years but cooled over the past two decades partly because of trade and legal disputes and the growing share of U.S. and European investments in the South American giants. Canada and Brazil are competing exporters of aircraft, agricultural products, oil and minerals.
Scotiabank’s purchases of credit portfolios and assets around the world could continue, executives say, as banks around the globe reel from a sovereign debt crisis in Europe and the impact of the financial crisis in late 2008 -- probably the worst since the Great Depression in the 1930s.
Other activities in which the lender has interest in Brazil include asset management and securities brokerage, although the main goal “is to have a very robust balance sheet in Brazil,” the executive said.
Reporting by Aluisio Alves, editing by Guillermo Parra-Bernal and Matthew Lewis