Scotiabank has reached an agreement to transfer its banking operations in Colombia, Costa Rica, and Panama to Davivienda in exchange for an equity stake of approximately 20 per cent in the combined entity through a mixture of common and preferred shares. The transaction was announced on 6 January 2025.
Scotiabank has indicated it expects to record an after-tax impairment loss of approximately C$1.4 billion in the first quarter of its fiscal year 2025, with a further loss of about C$0.3 billion, mainly cumulative foreign-currency translation losses, expected at closing. Scotiabank said the transaction strengthens its strategic focus on building a connected value proposition focused on client primacy across its growth markets in the North American corridor and Latin America.
STRATEGIC FOCUS
The bank has in recent years prioritised the North American corridor, with Mexico at its centre, while continuing to operate in Peru and Chile.
Scotiabank will hold an approximately 20 per cent shareholding in the enlarged Davivienda.
TIMELINE AND REGULATORY CONDITIONS
The transaction is expected to close approximately 12 months from signing, subject to regulatory approvals and customary closing conditions.