OTTAWA (Reuters) - Bank of Nova Scotia (BNS.TO) expects strong growth this year in the Pacific Alliance markets of Mexico, Peru, Chile and Colombia, and could make acquisitions to bolster its position there, a top executive said on Thursday.
“We’re seeing momentum in the international division,” Scotiabank Chief Financial Officer Sean McGuckin said in an interview. “We’re seeing good, top-line volume growth in the Pacific Alliance countries. We’re projecting out stronger growth in our international banking segment as the year progresses.”
McGuckin said Scotiabank, the most international of Canada’s big banks, is seeing particular strength in Mexico, with a pickup in the U.S. economy driving investment in its southern neighbor.
“We continue to grab market share in retail and also commercial banking (in Mexico),” he said.
Analysts expect Scotiabank, Canada’s No. 3 lender, to make acquisitions to further its strategy in the region, something McGuckin said management was open to.
“If acquisitions come along and they are on strategy, provide a bit more scale, more opportunity in some of those markets, we’ll definitely look at those,” McGuckin said.
“The Pacific Alliance region has got very good, promising economic and demographic shifts that will provide great banking opportunities.”
Last year, Scotiabank signed agreements to buy a majority stake in retailer Cencosud SA’s (CEN.SN) retail credit card business in Chile and Citibank’s (C.N) retail and commercial banking operations in Peru.
In a media briefing after the company’s annual meeting in Ottawa, Chief Executive Brian Porter said he was positive about the Pacific Alliance’s economic fundamentals and how the countries are managed on a macroeconomic basis.
“The long-term potential is fabulous,” he said.
Investors in Canadian bank stocks have been focused on a slump in oil prices, which began in the middle of last year, hitting both energy companies and Canada’s near-term growth prospects.
McGuckin said, however, that he was quite comfortable with Scotiabank’s exposure to the energy industry.
“We haven’t seen any cracks at this point,” he said. “Our retail exposure in Alberta is only 15 percent of our overall portfolio. So it’s very manageable.”
He also said he expects Scotiabank to invest “significantly more” in technology over the next three years.
Editing by Jeffrey Hodgson Editing by Andre Grenon