2024-04-09 21:49:34
The Bank of Nova Scotia said Tuesday that upcoming elections in the United States and Mexico create political uncertainty, but Canada’s third-largest lender is well-equipped to navigate the region’s changing environments.
Scotiabank’s presence in the United States, Canada and Mexico makes it unique among Canadian banks, giving it one of the highest exposures to the booming North American trade, worth 1 .6 trillion dollars. In December, CEO Scott Thomson unveiled a strategy to leverage regional trade.
“With elections this year in Mexico and the United States, and soon in Canada, the political uncertainty is such that it is difficult to make the long-term decisions that will guarantee our future prosperity in the region,” Mr Thomson told investors at the bank’s annual general meeting.
“But difficult does not mean impossible,” he assured shareholders, adding that Scotiabank is “well placed to be a major player as the continent seeks to strengthen its ties for the benefit of all.”
According to Mr. Thomson, the “Mexico First” strategy offers customers in Canada, the United States and Mexico end-to-end commercial financing, which should allow Scotiabank to stand out from its Canadian competitors.
The plan might expose Scotiabank to a market where political risks are unpredictable and foreign banks have struggled to gain a foothold, analysts say.
According to Mr. Thomson, North America’s economic integration might increase through offshoring, reducing regulatory barriers and ensuring companies’ access to capital.
He added that the bank’s international operations had improved with lower capital, while continuing to prioritize the three North American countries, whose total gross domestic product stands at $30 trillion. dollars.
Net income from its international banking segment grew 16% in the first quarter of 2024, making it the fastest-growing segment.
“Our goal is not to withdraw from these countries. Our plan is to manage them more effectively,” Thomson said in response to a question regarding activities in Latin America. (Reporting by Nivedita Balu in Toronto; Editing by Josie Kao)
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