Scotiabank says could sell stakes in Mexico, Chile ops (Photo : Reuters)
Bank of Nova Scotia (BNS.TO) may consider selling minority stakes in its operations in countries such as Mexico or Chile to shore up its capital levels or fund an acquisition, the bank's chief risk officer said on Tuesday.
Speaking at the Barclays Financial Services Conference in New York, Rob Pitfield also said the bank was not concerned about the delays in closing its purchase of a 20 percent stake in China' Bank of Guangzhou, which it entered a year ago.
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The bank, known widely as Scotiabank, is Canada's No. 3 lender and also has operations in Latin America and Asia.
Earlier this year, it sold the building that houses its corporate headquarters in Toronto for C$1.3 billion in a move that strengthened its capital position, and Pitfield said certain minority stakes could also be sold.
"That's certainly a possibility that would probably tie into either things that we want to do from an acquisition initiative perspective that would require us to have a chunk of capital," he said.
Pitfield said such sales could be similar to moves made by Spain's Banco Santander (SAN.MC), which has sold or plans to sell minority stakes in some of its business units.
Scotiabank and its Canadian rivals must meet strict new Basel III capital requirements starting last year. The bank has been lagging its rivals in building up capital, but says it is currently in a position to meet the standards.
The bank is hardly looking to downsize, though, as just two weeks ago it agreed to buy ING Groep's (ING.AS) Canadian online bank for C$3.1 billion.
On the C$719 million Guangzhou stake purchase, which Scotiabank first announced a year ago, Pitfield said the bank was prepared to take a slow approach to get the deal done.
"China moves at its own pace, and it can be slow and it can be infuriating and I think the Chinese themselves are trying to figure out how they want to balance foreign acquisitions versus their own organic growth funded by their own country," he said.
"I think it's natural to a degree that it goes slow, for us we're comfortable with that. We'll do the deal when it comes up."