Scotiabank Buys 51% Of Cencosud's Financial Services Business

(RTTNews) - Scotiabank announced Friday that it has acquired 51% controlling interest in the financial services business of Cencosud S.A. for C$300 million and includes a commitment to fund 100% of the loan portfolio. The deal, if approved, would make Toronto-based Scotiabank the third-largest credit-card provider in Chile.

Concurrently, Scotiabank and Cencosud also entered into a 15-year partnership arrangement to manage the credit card business and provide additional products and services to customers of both organizations.

Cencosud is the largest retailer in Chile, which distributes credit cards and consumer loans, and the third largest retailer in Latin America. The company's financial services business includes approximately 2.5 million credit cards and more than $1.2 billion in outstanding balances in Chile.

Cencosud also manages the Puntos Cencosud loyalty program, one of the most popular loyalty programs in the country. Scotiabank's business in Colombia, Banco Colpatria, has a similar partnership arrangement with Cencosud in that market.

"Scotiabank is excited about this acquisition because it will strengthen our credit card offerings for our customers and attract new customers to the bank," said Wendy Hannam, Scotiabank's Executive Vice President for Latin America.

"This transaction will also increase our scale in Chile's growing consumer lending market and is consistent with our focus on growing in key markets in Latin America, including Chile."

"Working together with Cencosud, Scotiabank will look to strengthen and build this credit-card and consumer loan portfolio," said Francisco Sardón, chief executive of Scotiabank in Chile. "This partnership will also give Scotiabank the opportunity to build new customer relationships and drive organic growth in the bank's retail banking division."