Chile consolidates as the main market for Scotiabank after Canada

RIO DE JANEIRO, BRAZIL – The Chilean operation of Canada’s Scotiabank is becoming increasingly profitable since BBVA acquired it in 2017.

In the framework of the presentation of results for the second quarter of the Canadian fiscal year – which ends in April – the contribution of the Chilean subsidiary was relevant to reaching global profits, which reached US$2.1 billion, scoring a 12% growth in 12 months.

Scotiabank’s CEO, Brian Porter, pointed out that the figures obtained are “combined with prudent expense management and position the bank well to increase its profits”.

The international bank’s profits exceeded US$468 million this quarter, driven by growth in mortgage and commercial lending.

As for the markets that make up the Pacific Alliance – Mexico, Colombia, Peru, and Chile – they had a net income of US$416 million, up from the US$279 million reported a year ago.

THE WEIGHT OF CHILE

Chile is the second most important market after Canada, surpassing even the United States and leading the Pacific Alliance countries when analyzed by country.

During the second Canadian quarter, the Chilean operation contributed 42% of net income from the Pacific Alliance, followed by Mexico with 36%, Peru with 18%, and Colombia with 4%.

In adjusted net income attributable to shareholders, Chile was the second-largest operation with a contribution to the parent company of US$182 million. This figure was 57% higher than reported for the same period in 2021.

In the first six months of the Canadian fiscal year, the local operation has delivered earnings of US$326 million, a year-on-year increase of 47.2%.

Looking ahead to the coming quarters, Porter said, “we will continue to manage expenses prudently to generate positive operating leverage for the remainder of the year.”

“We remain fully confident that the diversification of our business model, coupled with prudent risk management and a focused approach to serving our clients, especially in times of uncertainty, will produce strong results over the long term,” the executive commented.

DIGITAL BANKING

During the results presentation conference, Scotiabank executives highlighted that they are strengthening the cash management business in Chile and Peru.

Another aspect they highlighted in the Pacific Alliance markets is the increase in digital banking. The percentage of sales through this channel increased to 61%, growing seven percentage points compared to 2021.

Active digital customers increased 11% over 12 months, and those using cell phones for transactions rose 20%. In addition, transactions made by customers through digital channels reached 89%.

With information from Diario Financiero

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