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Banking update: Scotiabank expanding in Mexico

Monday, April 13, 2015

Scotiabank is interested in buying HSBC Mexico, the country’s fifth largest bank, with assets of close to $40 billion, according to a report published last week in Bloomberg.

Scotiabank Inverlat is Mexico’s seventh-biggest bank, with assets worth $15 billion.

It’s all rumor so far, along with the possibility that Panamanian magnate Stanley Motta will buy the commercial operations of Citi (only in Spanish) in Costa Rica and Panama.

As far as Scotiabank is concerned, integrating its operations with HSBC would be a big job.

On the other hand, Scotia has done well in Latin America, with operations in Colombia, Peru, Chile, Central America and the Caribbean.

Depending on the price, the parent company could afford to buy HSBC's Mexican business.

Based in Toronto, Scotiabank Canada in 2014 had assets of close to $700 billion.

HSBC has already sold its Central American operations, while Citi is selling its commercial bank in the region.

Honduras' Ficohsa (only in Spanish) last month bought Citi’s commercial business – mainly credit cards – in Honduras and Nicaragua.

The rumor of a purchase by Motta comes after reports that one of Miami-based Banca Promerica, Banco Popular (only in Spanish) of Spain, and Grupo Aval (only in Spanish) of Colombia would buy Citi’s commercial accounts in Costa Rica and Panama.

Banco Popular last month announced that it was not interested in acquiring the business.

Motta is a principal shareholder of Banco General (only in Spanish), one of Panama's biggest with 2013 assets of $12 billion, and which also operates in Costa Rica.

Motta is likewise a principal shareholder of Copa Airlines.

Based at Panama’s Tocumen Airport, Copa has more direct flights to North, Central and South America than any other airline.

Meanwhile, Citi is retaining its corporate bank in the region.

Citi's Mexican subsidiary Banamex is the country's second biggest bank, with 2013 assets of $100 billion.