Bank of Nova Scotia to Buy Citigroup Retail, Commercial Operations in Peru

By Rita Trichur 

The Bank of Nova Scotia, Canada's third-largest bank by assets, plans to acquire Citigroup's consumer and commercial banking operations in Peru, a move that will bolster its position as a major lender in the South American country.

Toronto-based Scotiabank announced late Friday that its Peruvian subsidiary had reached a deal to acquire Citigroup's consumer banking business, which was put up for sale by the U.S. banking giant in October.

Financial terms of the agreement weren't disclosed because the transaction wasn't considered material, Scotiabank said in its release, adding the transaction would have a minimal impact on its regulatory capital ratio.

For months, Scotiabank was considered the front-runner in the auction process. Not only has Scotiabank identified Peru as a key growth market, it already has a bigger market share in that country than Citigroup. Analysts have previously suggested that such a takeover would solidify Scotiabank's ranking as a top three player in the region.

Citibank's Peruvian operations comprise eight branches that have more than 130,000 retail and commercial banking customers.

"We're excited about this acquisition because it will allow us to deepen existing customer relationships, serve new customers and increase our market share in credit cards and personal loans in Peru," said Dieter Jentsch, head of Scotiabank's international banking division, in a news release.

"This acquisition is in line with our strategy to increase our scale within the Peruvian banking sector, as well as the other Pacific Alliance economies of Mexico, Colombia and Chile."

Scotiabank has operated in Peru since 1997. Its operations there include C$15.7 billion in assets and 306 branches.

The terms of the deal preserve jobs for Citibank employees who will be transferred to Scotiabank Peru, the bank added. Citibank plans to continue operating in Peru with a much narrower focus on corporate and institutional banking along with international private banking.

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