Scotiabank looks to Pacific Alliance countries for future growth: CEO

MEXICO CITY – Scotiabank is expecting earnings from its operations in Latin America to grow steadily over the next few years as the region’s expanding middle class increases its appetite for financial services.

Dieter Jentsch, Scotiabank’s group head of international banking, says he expects the bank’s annual earnings from Pacific Alliance countries to grow by an average of nine to 11 per cent a year over the next three to five years.

Jentsch made his comments during the bank’s (TSX:BNS) international banking investor day event held in Mexico City on Monday.

The Pacific Alliance is a trade bloc made up of Mexico, Peru, Chile and Columbia — all countries in which Scotiabank has operations.

During its presentation, the bank noted that only around 40 per cent of those living in Pacific Alliance countries currently have a bank account, representing a good growth opportunity for the bank.

Roughly a quarter of Scotiabank’s earnings come from its international banking segment, which is heavily concentrated in the Pacific Alliance region.

“While Scotiabank’s international roots started in the Caribbean, our future, internationally, is very much in the Pacific Alliance region,” Scotiabank CEO Brian Porter said.

“Mexico, Peru, Colombia and Chile are attractive for several reasons … The macro fundamentals and demographics are very compelling. For instance, young and rapidly growing underbanked populations in each of these countries have an increasing need for financial services.”

Although Scotiabank isn’t relying on acquisitions to meet its growth targets in Latin America, Porter noted that it would consider any attractive opportunities within its target markets.

“At some juncture we’re going to see a deal that doesn’t come along very often, and we’re going to be in the position to react,” Porter said.

—By Alexandra Posadzki in Toronto.

Follow @alexposadzki on Twitter.