Scotiabank announced Friday that its subsidiary in Peru has reached an agreement to acquire the retail and commercial banking operations of Citibank in Peru, subject to regulatory approval.
The transaction is not material to Scotiabank. Scotiabank's common equity tier one capital ratio will be impacted by less than 10 basis points.
"We're excited about this acquisition because it will allow us to deepen existing customer relationships, serve new customers and increase our market share in credit cards and personal loans in Peru," said Dieter Jentsch, Group Head of International Banking at Scotiabank.
He went on to add this acquisition is in line with the bank’s strategy to increase its scale within the Peruvian banking sector, as well as the other Pacific Alliance economies of Mexico, Colombia and Chile.
The deal includes the transfer of Citibank employees from the retail and commercial banking businesses in Peru to Scotiabank Peru.
Citibank's Peruvian operation includes eight branches which serve more than 130,000 retail and commercial banking customers.
Citi has been operating in Peru without interruption since 1920 and will continue to operate in the country with a focus on its Corporate and Institutional Banking Business, and International Private Bank Services, capitalizing on its global presence and competitive leadership position in these segments in Peru.
Citi Country Officer in Peru, Julio Figueroa, said the agreement with Scotiabank is part of Citi’s recent strategic announcement to streamline the Consumer Banking footprint, and he is positive that clients and employees will benefit from Scotiabank's large consumer footprint and plans for growth in the country.
"We reaffirm our longstanding commitment to Peru […] Peru is a strategic market for Citi, and we will continue to invest in growing the business," he added.
On December 11, 2014, an agreement was reached with American Airlines whereby Scotiabank will replace Citibank as American Airlines' co-branded credit card partner in Peru and provide continuity for current Citi / AAdvantage® cardholders.
Until the transaction gets all the necessary regulatory approvals, all operations, branches, products and benefits programs will continue operating without any change. Over the coming months, Scotiabank and Citibank will work together to ensure a smooth transition for customers and employees.