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Customer growth, Latin American expansion key priorities for Scotiabank

Customer growth, Latin American expansion key priorities for Scotiabank

Posted by Juan Gavasa on April 09, 2014

Scotiabank's key focus this year will be growing its customer base and increasing its presence in Latin America, the bank's chief executive said Tuesday. "To become better, we don't need to make radical changes. We've got the big picture right," chief executive Brian Porter said in prepared remarks for the bank's annual general meeting in Kelowna, B.C.

The push for more customers will be "primarily through organic initiatives," he said, although the bank will remain open to "selective" acquisitions, as long as they fit in with the strategy. Bank of Nova Scotia, Canada's most international bank with operations in Latin America, the Caribbean and Central America and Asia, also wants to sharpen its focus on Latin America.

Porter said the bank planned to increase its presence in its chosen markets of Peru, Colombia, Mexico and Chile — markets he said have similar macroeconomic fundamentals and disciplined fiscal management, as well as a strong banking and regulatory system.

They also have a growing middle class as well as a young, increasingly well-educated population. "As this middle class grows, more people will require financing for their homes and auto purchases," he said. "They will save more and want to make prudent investments."

Many other Canadian companies, he noted, have also been drawn by the region's potential.

Porter, who was addressing the annual meeting for the first time since he took over as chief executive in November from Rick Waugh, also restated the bank's push to focus on credit cards. "In an increasingly competitive environment, credit cards allow us to better serve existing customers — and attract new ones," Porter said. "They also provide us with an attractive risk-adjusted return."

He said the bank has issued more than 250,000 Scotiabank American Express cards in the past 18 months, and says more growth is expected over the next several years. Other priorities for the bank include employee and leadership training and recruiting, as well as a move to reduce structural costs.

When it comes to the Canadian operations, Porter pointed to the bank's mortgage and automotive lending businesses as two areas of strength, as well as Tangerine, the online bank formerly called ING DIRECT, which Scotiabank purchased from the Dutch-based ING Groep N.V. for $3.1 billion in 2012.

In its latest quarter, Scotiabank earned $1.71 billion and raised its dividend, as first-quarter revenue grew to $5.65 billion, boosted by the domestic banking and wealth management business.

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