Scotiabank, one of Canada’s leading banking institutions, has been making waves lately with its strategic focus and business activities across Latin America, particularly through its operations in Peru and Costa Rica. Since taking the helm last July, Scotiabank Perú’s CEO, Sebastián Arcuri, has been vocal about the bank’s plans to fine-tune its business approach for 2024, realigning its strategies around targeted client services.
According to Arcuri, the bank is shifting its focus toward corporate and wealth management banking, which has produced notable results. "It was a very good year for the bank. Our net profit increased by 30%, revenue rose, and all indicators are positive, which satisfies us,” he stated. This positive performance follows 2023, which experienced lower results. He emphasized the bank's transition from operating as independent entities within various countries to functioning as a global banking network, allowing clients access to its resources across borders.
"We are standardizing services for multinational companies with specific benefits. If you are the treasurer or CFO of a company operating across several jurisdictions in Latin America, we are gearing up to expand our capabilities to offer treasury services, products, and visibility of all your finances through what we call Global Transactional Banking," Arcuri noted, highlighting this initiative as one of the primary investment focuses for 2025.
By mid-2024, Scotiabank's credit portfolio showed contraction, primarily within non-prioritized sectors. "We have moved from a volume strategy to one of value. We are now concentrating on primary clients and aiming to be their go-to bank,” Arcuri underscored, indicating the bank's intent to be more selective with its customer base. While this may reduce market share for some credit products, it is expected to augment the 'share of wallet' from key customer segments, continuing to grow by about 10% for prioritized clients.
Despite some projections predicting reduced placement levels due to economic conditions anticipated for 2025, the bank remains optimistic about the future. Arcuri pointed out, "We view these matters as cyclical. Those of us who have worked in emergent markets understand we are always subject to fluctuations. Big projects will carry on regardless of the current atmosphere." This outlook extends to the bank’s efforts to manage delinquency levels, with Scotiabank’s delinquency ratio dropping to 4.26% as of December 2024, reflecting improved performance over previous months.
On the digital front, the bank has earmarked significant investments toward technology and cybersecurity over the next several years to cater to its growing digital clientele. By enhancing the depth of services available through their digital platforms, Scotiabank aims to provide users with more options, including investing in mutual funds directly through their app.
Further rumors surrounding Scotiabank's future have emerged around its recent sale of operations in Colombia to Davivienda. This move was strategic, as Arcuri emphasized, allowing the bank to focus on operations where it can achieve scale and remain competitive. "The transaction with Colombia addressed key issues of scale. The banks flourishing globally are those with substantial scale. We couldn't achieve this scale alone, so we entered this agreement with Davivienda, creating Colombia's second-largest bank after merging their operations with ours, where we retain 20% shareholding," he explained.
Scotiabank has been active across the region, and its Costa Rican operations received accolades as the "Best Trade Finance Provider 2025" from Global Finance. This recognition reinforces Scotiabank’s commitment to delivering exceptional financial services. Robert Williams, the Senior Vice President for Central America, stated, "Our professional team’s commitment to providing innovative foreign trade solutions is ever-present, helping regional businesses meet their goals." This award was based on criteria such as transaction volume and customer service quality.
Scotiabank, having established itself strongly for over 29 years within the Costa Rican market, contributes prominently to the local corporate banking sector. Their offerings are centered around five strategic pillars to optimize the financial management of companies, which includes trade-related services like letters of credit and guarantees. Joanna Crooks, Director of Corporate and Commercial Banking at Scotiabank, reiterated this commitment, stating, "Our products and services empower businesses to thrive within increasingly globalized economies."
Meanwhile, as Colombia braces for the integration of Scotiabank’s operations with Davivienda, the latter announced plans for its upcoming shareholders' meeting on March 20, 2025. This meeting will be the first since the integration agreement was formalized, to discuss how both banks will align their operations going forward and leverage their combined assets summing over $179 billion. The expectation is to push through the necessary regulatory approvals by the second half of 2025, with both banks optimistic about their future collaborations.
Throughout this period, Scotiabank has demonstrated resilience through its strategic realignment, focusing on targeted client relationships, consolidations within the region, and accolades for its services. These initiatives have positioned the bank favorably within the competitive banking atmosphere across Latin America as they continue to expand their influence and presence.