TORONTO and SAN SALVADOR, El
Salvador, Feb. 8, 2019 /CNW/ -
Scotiabank announced today that it has reached an agreement under
which Scotiabank will sell its banking and insurance operations in
El Salvador, including Scotiabank
El Salvador, its subsidiaries and Scotia Seguros, to Imperia
Intercontinental Inc. ("Imperia"), subject to regulatory approval
and customary closing conditions. Imperia is the main shareholder
of Banco Cuscatlán S.A and Seguros e Inversiones S.A ("SISA") in
El Salvador.
The decision is driven by the bank's strategy to focus on key
markets which can generate greater scale for Scotiabank.
"We are pleased to announce this important agreement, with which
we intend to enhance opportunities for the clients of both banks.
We are confident this acquisition represents an exciting new
development for our institutions, employees and for the country. We
have a long-term commitment to invest in El Salvador and our main objective is to
continue serving our customers in the best possible way," said
Eduardo Montenegro, Chairman of the
Board of Directors of Banco Cuscatlán and SISA Insurance.
"This transaction with Imperia is in the best interest of our
customers, employees and shareholders. We are confident that
Imperia, with the support of a talented team, will be well
positioned to continue to grow the businesses and provide a high
level of service to customers in El
Salvador," said Ignacio (Nacho) Deschamps, Group Head of
International Banking and Digital Transformation at Scotiabank.
This transaction is expected to result in an after-tax loss of
approximately $170 million that
primarily represents the carrying value of goodwill relating to
this business and will be recorded in Q2 2019. Upon closing,
Scotiabank's common equity Tier 1 (CET1) ratio will increase by
approximately 6 basis points.
This follows the announced sales of Scotiabank's operations in
nine Caribbean countries and its
life insurance businesses in Jamaica and Trinidad
and Tobago in November 2018,
and of its pension administration and related insurance businesses
in the Dominican Republic in
December 2018.
The cumulative impact of these transactions, including the loss
on sale of the operations in El
Salvador, are expected to result in a net after-tax gain of
$250 million and increase the
Scotiabank's common equity Tier 1 (CET1) ratio by approximately 25
basis points.
Until regulatory approvals are obtained and the transaction
closes, all operations, branches and products will continue to
operate as usual. Scotiabank and Imperia will work together to
ensure a smooth transition for both employees and
customers.
About Scotiabank
Scotiabank is Canada's
international bank and a leading financial services provider in the
Americas. We are dedicated to helping our more than 25 million
customers become better off through a broad range of advice,
products and services, including personal and commercial banking,
wealth management and private banking, corporate and investment
banking, and capital markets. With a team of more than 97,000
employees and assets of $998 billion
(as at October 31, 2018), Scotiabank
trades on the Toronto Stock Exchange (TSX: BNS) and New York Stock
Exchange (NYSE: BNS). For more information, please visit
www.scotiabank.com and follow us on Twitter
@ScotiabankViews.
About Banco Cuscatlán
Banco Cuscatlán is one of the principal Banks in El Salvador. It operates 54 points of service
with 1,700 employees throughout El
Salvador. Banco Cuscatlán is investing to have a leading
digital strategy and has been recognized by Global Finance for its
currency exchange services. For more information, please visit
www.bancocuscatlan.com
About SISA Seguros e Inversiones, S.A.
The leading insurance company in El
Salvador, SISA was founded in 1962, has 56 years of
experience and for 25 years has maintained market share leadership
in the Salvadorian market. SISA has a AA + risk rating, issued by
Fitch Ratings on April 12, 2018. For
more information, please visit www.sisa.com.sv
SOURCE Scotiabank