Scotiabank decides to expand its shares all the way in South America. The bank of Novia Scotia buys Colombia’s no. 5 bank, Banco Colpatria. With the apparent rise in the Colombian economy, scotiabank eyes an opportunity to take a step forward and take 51 per cent stake in the bank.
Many have been wondering what triggered the bank of Nova Scotia to buy stakes in just the no. 5 bank in Colombia. This long-term strategy isn’t as bad as most investors think. With the rising Colombian economy, the risk that Scotiabank took may entail a huge benefit. Firstly, it exposes Scotiabank to the citizens of Columbia. Since a lot of Colombians are moving to Canada, this is most likely the first bank they would trust their money with. Furthermore, in the span of a few years, Scotiabank may gain the opportunity to buy the remaining shares of the banks from its respective owner. The stakes are high but it can generate returns in a relatively short amount of time.
On another note, with respect to the recent news about Scotiabank taking a Chinese bank stake, it seems that the bank is slowly paving its way not just in America but also in other countries around the globe.
Link to news article: Scotiabank buys Banco Colpatria (10/20/11)