The outlook for the Canadian bank Scotiabank is positive for its operations in Latin America. This was stated to Forbes by Scott Thomson, global CEO and president of Scotiabank, who arrived in Peru as part of a series of strategic meetings with bank clients.
Thomson’s arrival also served the purpose of showing the parent company’s support for the Peruvian operation a few weeks after Sebastián Arcuri took over as the new local country head, and in the midst of a readjustment of its global strategy. On the one hand, as it had announced last year, the multinational seeks to strengthen its investments in the North American corridor – Canada, the US and Mexico – due to the scale they have in those countries. This, far from diminishing the bank’s operation in Latin America, can connect more multinationals with countries in our region, the manager explained. In that sense, he was emphatic and ruled out that these priorities mean a withdrawal from other markets.
“We are the third largest bank in Canada, the tenth largest foreign banking organization in the US, the fifth largest bank in Mexico, the largest international bank in the Caribbean, the third largest bank in Chile and the third largest bank from Peru. “Those countries probably represent about 95% of the bank’s revenue”: Scott Thomson, global CEO and president of Scotiabank.
Likewise, whether they are retail, commercial or corporate clients, multi-product relationships – which combine several products in a single offering – are at the center of the global strategy, Thomson highlighted. That logic, in fact, was what explained the sale of the financial company CrediScotia to Banco Santander in May of this year, since it offered a single product for a very specific segment, he added.
“We are the third largest bank in Chile and the third largest bank in Peru. And that is why our objective is to strengthen the bank in those areas. We have divested from CrediScotia (the microfinance company that was sold in Peru to Banco Santander), which was a small part of the bank that dealt with the mass market. “We are really focused on multi-product relationships with our retail, commercial and corporate clients,” he specified.
“We seek primacy (being the number 1 option) with our customers, which means that you have to have more than one product. You have to have multiple products,” he added.
It is worth mentioning that, regarding Colombia, with Scotiabank Colpatria, an operation that has been recording losses in the last nine months until July of this year in the midst of a difficult macroeconomic environment, Thomson assured that they are working closely with their local partner to strengthen their businesses in that country and reverse the situation. “Our team has been executing the new strategy, changing the historical trend and performing better than the (Colombian) market in relative terms. From Canada and, together with our local partner, we are dedicating considerable attention to its development to ensure that we continue to improve business results in the short and medium term,” he highlighted.
The international business
International banking, which represents around 30% of the company’s revenue, has just had “its best year at Scotiabank,” Thomson said. Between November 2023 and July 2024, international banking generated adjusted profits of $2,184 million, a growth of more than almost 10% compared to the same period last year, according to company reports.
“This has been driven in large part by the success of our customers. They have been very resilient during a difficult period. Interest rates have gone down, inflation has gone down, the economy has slowed, but our customers have been resilient. Our clients continue to perform relatively well in a very difficult macroeconomic environment. We are very satisfied with the performance of our clients and that of our own banks. We hope to continue like this in 2025,” he commented.
Along these lines, the executive said that international markets in Latin America are further ahead in terms of reducing interest rates compared to developed economies such as the US and Canada, which explains the pace of GDP growth in Peru. and Chile versus Canada, for example. Thomson’s expectation is that, as interest rates begin to fall in Canada and the US, growth in these economies will regain strength. Thus, the outlook for Latin America looks positive, according to Thomson, since “clients will be able to continue accessing capital and grow their businesses in the future with lower interest rates.”
“I think interest rate reductions will be helpful to our customers. They have been very resilient during a very difficult period. We are starting to see growth in most of our economies, so I am hopeful that in 2025 and 2026 we will not have a recession, but rather a gradual resumption of GDP growth and that will be helpful for Latin America, and all countries of the world,” he concluded.
Digitalization and physical agencies
Achieving a seamless experience between mobile devices and branches is a challenge for all company operations. How do you plan to do it? On the one hand, Thomson said they will continue to automate service delivery for a better and more efficient retail customer experience. Meanwhile, they are also investing, globally, in improving their cash management capacity for their commercial clients.
Likewise, he highlighted the work that the company does with artificial intelligence (AI). “We see an opportunity for AI to be used in our contact centers to help improve customer experience and reduce costs. Once again, Peru will benefit from those investments that we are making in Canada that we can then bring to the country to improve the customer experience,” he stressed.
In this scenario, physical branches play an “extremely important” role, Thomson said. “The branch will never disappear. Particularly in our Canadian business we are adding more branches in highly dense areas to ensure that there is a place for our clients to come and receive advice. “They want to make sure that those branches are in areas that have a population base around them, but the branch will be an important component of our retail strategy in the future,” he concluded.
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