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Scotiabank sees growth in Chile, Peru despite commodity weakness

Published 2016-01-19, 02:13 p/m
© Reuters. Scotiabank sees growth in Chile, Peru despite commodity weakness
BNS
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By John Tilak and Tomás Sarmiento
TORONTO/MEXICO CITY, Jan 19 (Reuters) - Bank of Nova Scotia
BNS.TO , Canada's third-largest bank, will push ahead with its
plans in the high-growth focus markets of Peru and Chile despite
their exposure to the commodities sectors, one of its top
executives said on Tuesday.
With domestic growth slowing and the oil-price collapse
weighing on the economy, Canadian banks have been focusing on
growing their international businesses.
The risks by being exposed to the materials and energy
sectors in those countries mirrors the volatile Canadian market.
"Our job is not to avoid risk but to manage the risk," said
Dieter Jentsch, group head, international banking, at Scotiabank
on a conference call with reporters following the lender's
international investor day event in Mexico City.
"Our growth rates are in line with what central banks are
forecasting," he added, noting that though growth has moderated
from historical levels, the company has enough levers to operate
successfully in those countries.
Scotiabank has been aggressively expanding in the Pacific
Alliance countries of Mexico, Peru, Chile and Colombia in recent
years.
The region contributed C$1.1 billion to the bank's earnings
in 2015. Overall, Scotiabank reported C$7.2 billion in net
income last year.
For the entire Pacific Alliance region, the company is
targeting 9 percent to 11 percent earnings growth on a compound
annual growth rate basis over the next 3 to 5 years.
It expects annual earnings of 10 percent to 12 percent in
Peru and 11 percent to 13 percent in Chile.
In Mexico, the bank looks to improve on its small business
and personal loan portfolios to build upon its already strong
position on mortgage and auto loans.

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