Bank of Nova Scotia (TSE:BNS) has struck an agreement to sell its banking operations in nine Caribbean countries as it looks to pare back its presence in certain parts of the globe.
The countries where Canada’s third-biggest lender will offload its banking operations to Trinidad & Tobago-based Republic Financial Holdings Limited are Anguilla, Antigua, Dominica, Grenada, Guyana, St. Kitts & Nevis, St Lucia, St Maarten and St Vincent & the Grenadines. The sale price is C$123 million.
On top of this, Scotiabank said on Tuesday that its subsidiaries in Jamaica and Trinidad and Tobago will enter into a 20-year distribution agreement with Sagicor Financial Corporation through which a suite of insurance products underwritten by Sagicor will be offered to Scotiabank customers in Jamaica and Trinidad & Tobago.
As part of this partnership, Scotiabank Jamaica and Scotiabank Trinidad & Tobago will sell their respective insurance subsidiaries, Scotia Jamaica Life Insurance Company and ScotiaLife Trinidad and Tobago to Sagicor.
“Due to increasing regulatory complexity and the need for continued investment in technology to support our regulatory requirements, we made the decision to focus the Bank's efforts on those markets with significant scale in which we can make the greatest difference for our customers," said Ignacio (Nacho) Deschamps, Group Head of International Banking at Scotiabank.
Earnings boost
News of Scotiabank’s move out of the Caribbean came as the bank reported a jump in fiscal fourth-quarter earnings on the back of the robust performance of its international business.
For the quarter ended October 31, the bank posted adjusted earnings of C$1.77 per share, up from $1.65 in the year-ago quarter, but just missing analysts’ estimate of $1.79 per share.
Stripping out items, the bank’s profits jumped to $2.35 million, compared to $2.084 million in the year-ago quarter.
For the full 2018 fiscal year, Scotiabank posted profits of $8.72 billion, up from earnings of $8.24 billion in 2017.
The results from its international banking division were particularly robust as the unit’s profits jumped by more than 21% to $804 million in the quarter from $660 million in the corresponding period last year.
Scotiabank’s shares held steady on Tuesday at C$70.13.
Contact Ellen Kelleher at ellen@proactiveinvestors.com