The Globe and Mail reports in its Saturday edition that Bank of Nova Scotia has struck a deal to sell its banking and insurance operations in El Salvador as the lender continues to concentrate its international footprint.
The Globe's James Bradshaw writes that the agreement announced Friday will see Scotiabank El Salvador and its subsidiaries sold to Imperia Intercontinental, which is the main shareholder of Banco Cuscatlan SA and Seguros e Inversiones SA in El Salvador. Scotiabank expects to take an after-tax loss of $170-million on the sale, most of which represents a writedown on goodwill. The loss will be recorded in the bank's second fiscal quarter this year.
For years, Scotiabank has been shedding businesses it considered non-core. The divestitures aim to focus the bank's international operations on its core Latin American markets of Mexico, Peru, Chile and Colombia, and to free up capital after the bank spent nearly $7-billion on major acquisitions last year. Scotiabank bulked up in Chile, taking a majority stake in Banco Bilbao Vizcaya Argentaria SA's retail-banking business for $2.9-billion, then bought Canadian money managers M.D. Financial Management and Jarislowsky Fraser for a combined $3.5-billion.
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