Peru: banking industry to undergo restructuring if Scotiabank exits country
Bank of China or the Industrial and Commercial Bank of China (ICBC) want to buy the branches.
The market assumes that the Canadian firm will sell its operation in Peru, amid weak performance.
In mid-December 2023, Scotiabank’s President, Scott Thomson, described the firm’s situation in Latin America with the words ‘There are clear realities that have impacted our relative performance.’ At that time, he stated that the bank would be ‘prioritizing the integration of the North American corridor to become the leaders connecting Canada, Mexico, and the United States,’ a signal that they would be shifting their focus away from Chile, Peru, and Colombia.
His statement raised doubts about the firm’s future, prompting the executive to address them with personal visits to the countries, where he reaffirmed the financial institution’s commitment and assured that they are pursuing, among other things, increasing the bank’s returns.
However, according to sector analysts, the firm’s performance does not seem to align with those plans.
According to the financial statements, Scotiabank in Peru saw a 33.97% decrease in profit in the first nine months of 2023, while net income dropped by 34.95% year-on-year (in local currency).”
In Colombia, the outlook appears more complex, as in 2023, all lines of operation recorded losses compared to 2022. Because of this, the market assumes that the institution will put up the “for sale” sign in both countries, with only the question remaining as to whether it will be done separately or as part of the same package.
In the industry, there seems to be a consensus. Sources pointed to Chinese banks – Bank of China or the Industrial and Commercial Bank of China (ICBC) – considering that Beijing has been gaining ground in the region, especially in strategic industries in Peru, such as electric distribution, ports, and mining.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
Related Articles
Comments
Sidebar rates
Related Posts
Save
Join 350 000+ traders receiving Free Trading Signals
Alerts
Rates
Calendar
Signals