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Scotiabank keen on Mexico

Scotiabank keen on Mexico

Posted by Juan Gavasa on April 16, 2014

Mexico's banking industry has been under scrutiny since Citigroup said in February it had discovered at least $400 million in fraudulent loans made by Banamex to Mexican oil services company Oceanografia.

Mexico's government has since taken control of Oceanografia and begun a criminal investigation. U.S. federal authorities are also investigating the fraud, according to sources.

But the scandal has not marred Mexico's regulatory climate, said Dieter Jentsch, who took over as head of Scotiabank's international retail bank last year. He said the country's bank oversight is strong and that the onus is on banks to know their customers and do their own due diligence.

Scotiabank is Canada's third-largest bank, and its Inverlat subsidiary is Mexico's seventh-largest lender by assets.

"The regulator can only ask for you to have things in place, they don't actually run your day-to-day operations," he said. "Every bank has that accountability. If you don't stay on top of your game, things will happen in any market. Not just Mexico."

He said the scandal had prompted Scotiabank to take a look at its own processes, and that the bank has concluded its controls are sufficient.

Scotiabank Chief Executive Officer Brian Porter said earlier this month that Mexico is one of four countries the bank is focusing on for international growth, along with Chile, Colombia and Peru.

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