Scotiabank fija nuevos pasos a bancos
Written by Édgar Delgado Montoya
Scotiabank has bought eight entities in Latin America in the last three years for US$1,100 million.
The purchase of Interfin on the part of Scotiabank can be interpreted in two ways: as a continuation and as a beginning.
Without a doubt, it is the continuation of the growing interest that the big financial conglomerates of the world to acquire banks with operations in all Central America are demonstrating. But it is also a beginning because it is a fact that this decision will motivate other groups of the same caliber to follow its steps.
Scotiabank is the second multinational financial group that enters powerfully to the Central American region. In May 2005, GE Consumer Finance almost acquired 50% of the Financial Net BAC, which has operations in seven countries. Before that time, GE had presence only in Mexico, Argentina and Brazil.
On the contrary, Scotiabank already had a great presence in Latin American level - with a good distribution of offices in the Caribbean -, but of smaller level in the isthmus. One week ago, this Canadian conglomerate had operations in 10 Latin American countries and in 21 in the Caribbean, and there were seven nation in which this company was among the first six places of the market: Mexico, El Salvador, Costa Rica, Venezuela, Peru, Dominican Republic and Jamaica.
Today, after the purchase of Interfin, this has not only reinforced their presence in Costa Rica but also in El Salvador and Panama, and it enters for the first time Guatemala and Nicaragua thanks to the leasing network that Interfin has in these four countries.
Scotiabank has demonstrated a voracious appetite for bank acquisitions and in the last three years it has invested more than US$1,100 million in eight operations.
Between March 2005 and June of the same year, Scotiabank acquired most of the stocks of Bancomer in El Salvador for US$178 million. It also invested US$330 million to invest in majority control of Wiese Sudameris and South American banks in Peru; in April it acquired the operations of personal banking of Citibank in Dominican Republic, and now Scotiabank has offered US$293.5 million for 100% of Interfin's stocks.
Their main operations in Latin America, for credit volume, are in Mexico, Peru, Puerto Rico, El Salvador and Costa Rica.
The Next Step ...
Nowadays, it is not necessary to have business operations in Mexico, Brazil and Argentina to conquer the Latin American market, due to the fact the consolidation of this business will have a presence throughout Central America.
Therefore the regional groups focus on this small region of 40 million inhabitants which has become desirable for big conglomerates.
We have already seen what GE did to BAC. More than one year ago, the Popular Bank of Puerto Rico wanted to buy part of the Corporation International UBC (Cuscatlán, with presence in six countries), but the agreement was not followed through.
Some months ago, there was a rumor that the English HSBC wanted to acquire Banistmo of Panama (with presence in seven countries). This group also wanted to buy Interfin, but it lost the bid to Scotiabank.
There are also other smaller groups that have been taken into account, but they have good regional presence: Lafise, Promérica and One. But who else could have more interest in these groups?
It has always been said it is only a matter of timethat before the arrival of the big Spanish conglomerates. The Bilbao Biscaya Argentaria Bank (BBVA) and the Santander Central Hispano Bank have important presence in Mexico and several other countries of South America, but very little in Central America and the Caribbean.
Seen otherwise, Scotiabank is present in 25 nations of within these two regions (31 in all Latin America) and Citibank (the other big competitor) in 13 countries, BBVA in 5, the Santander in 7 and the HSBC in 5.
Luis Liberman, manager of Interfin, said "The financial systems of the consolidation process is not only happening in Costa Rica but also in Latin America and in the rest of the world."
Without a doubt that is the direction markets are going to take and it is a fact that this will be a continuing trend. "We want to be number one in the region," said Brian Brady, manager of Scotiabank.
Read the history of the negotiation between Interfin and Scotiabank in capitalfinanciero.com
Taken from El Financiero (Finance Section) week commencing June 19th 2006
