Canadian multi-national bank Scotiabank has agreed to acquire Banco Dominicano del Progreso based in Dominican Republic for an undisclosed price.
Banco Dominicano del Progreso operates 57 branches in Dominican Republic. Its network also includes 188 automated banking machines (ABMs) and 367 banking sub-agents that cater to over 250,000 retail and commercial customers.
Scotiabank said that the transaction reinforces its commitment to achieve greater scale in economically stable markets having strong growth prospects. The acquisition is also expected to help the Canadian bank to improve its profitability even further for the long term.
Scotiabank claims that it will become the fourth largest full-service bank in Dominican Republic upon completion of the transaction, in terms of assets. It will also become the fourth-largest loans provider in the country with a market share of 10%.
The Canadian bank believes that the transaction will help it double its customer base in Dominican Republic from about 250,000 to 500,000.
“The Dominican Republic, with a population of over 10 million people, has had the fastest growing economy in Latin America for the last several years and is a priority market for Scotiabank in the Caribbean region,” Scotiabank said in a statement.
The Canadian lender revealed that its common equity tier one capital ratio will be affected by nearly 10 basis points due to the transaction, which it said will not be financially material.
The transaction is subject to regulatory approval and until its closing, all operations, branches and products will continue to be operated normally, said Scotiabank.
Founded in 1832, the Canadian bank operates in more than 50 countries with presence in North America, Latin America, the Caribbean and Central America, Asia-Pacific and Europe.
Recently, Scotiabank entered into a deal to acquire a controlling stake of 51% in Banco Cencosud, a provider of credit cards and consumer loans in Peru, for a price of CAD$130m ($99.1m).
The transaction, which is being executed by the Canadian bank’s Peruvian subsidiary Scotiabank Peru, is expected to help Scotiabank become the second-largest credit card issuer in Peru.