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Scotiabank, a Key Player in the Mexican Banks

Scotiabank, a Key Player in the Mexican Banks

Posted by Ricardo Vázquez on September 25, 2014

The Mexican banking system has gone through a big transformation in the last two decades because of the severe crisis of 1995, which left many companies broke, nowadays it is one of the most solid and healthy systems in the world and it helps in great measure to stabilize the financial situation of the country.

Currently 46 institutions make up Mexico’s banking system according to the information given by the National Banking and Securities Commission (CNBV in Spanish), where one of the seven most important institutions, because of the size of its actives and the size of its credit portfolio, is the Canadian Scotiabank.

The Financial Group Scotiabank Inverlat, where the bank of the same name comes from, is a member of the Scotiabank Group, a global company of financial services, whose headquarters are in Toronto, Canada.

Rick Waugh, president and CEO of Scotiabank, has declared Mexico as a key country in the strategy of the group for Latin America.

Since Troy Wright’s arrival in Mexico as a general director of the Financial Group Scotiabank, more or less two years ago, the goals of the bank are very clear in the country: become one of the five most important financial institutions of the country in medium term.

And the fact is it is nowadays in the seventh place in the ranking in terms of actives inside of the financial system, its objective then is out-top the local bank Inbursa and the English HSBC, something that Troy Wright considers to be feasible in the next five years.

The Canadian group is present in 55 countries and “Mexico is maybe the most important country in what we are doing”, said the director to PanamericanWorld, who expects an aggressive, organic and healthy growth.

In Mexico the group reported until July 603 branches and 2,182 ATMs in the country, according to the CNBV. In the same way the credit portfolio of Scotiabank at the end of the second semester of 2014 was of 166,134 million pesos, which would be around 13.5 billion CAD, this makes them the seventh biggest institution of the Mexican market.

A particular segment of credit, where the bank has a very strong participation, is the credit for automobiles where they are the second most important player in the financial Mexican system, according to the CNBV.

Another segment where they are very important is mortgage credit, where they are the fifth most influencing institution and besides they stand out because they are the credit provider with the highest individual credit average in the market.

Their story of their participation in Mexico began in February of 1996, when the Bank of Nova Scotia (Scotiabank) celebrated with local authorities an agreement that implied the capitalization of the then called Financial Group Inverlat (GFI in Spanish), along with the Share Purchase Agreement and Management Conventions. Through these agreements Scotiabank was forced to buy 10% of the shares of GFI>

At the end of November of 2000, the IPAB (FOBAPROA’s successor) and GFI, celebrated a final contract where Soctiabank turned its subordinated debentures into shares of the GFI, increasing their participation to 55%.

As a consequence of this, from January 15 of 2001, the company name of GFI changed to Financial Group Scotiabank Inverlat limited company of C.V., and the company name of the Bank changed to Scotiabank Inverlat limited company. The company names of other companies in the group changed to Scotia Inverlat Brokerage and Scotia Inverlat Currency Exchange.

Four people have stood out in the history of this institution in Mexico. First in was Peter Cardinal, who was in charge of the operations fo the company in Mexico from 1996 to 2003 when he was promoted to executive vice-president of Scotiabank; Anatol von Hahn replaced him who was in charge of the operations in Mexico until the end of 2007 when as the president and general director of the Financial Group Scotiabank, was promoted to executive vice-president for Latin America and replaced by Nicole Reich de Polignac, the only woman that has been in charge of the institution in the Mexican banking system, position she had until December of 2012; in that same year Troy Wright was named president and general director of the company in Mexico who is in this position now.

 

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