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Scotiabank's Chilean unit looks to grow market share, eyes new acquisitions

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Scotiabank's Chilean unit looks to grow market share, eyes new acquisitions

Scotiabank Chile, a unit of Canada's Bank of Nova Scotia, is open to additional acquisitions to achieve its goal of increasing its market share in Chile to 10% from about 6.6% currently, Diario Financiero reported Jan. 23, citing an interview with bank CEO Francisco Sardón.

Despite the bank's recent growth in both lending and profitability, its goal of obtaining a 10% share in Chile's highly competitive market is still "a dream," Sardón reportedly said.

"It is not impossible but it will take a long time. Through organic growth I think we can reach 8% [market share] in five years. We are open to possible acquisitions," he was quoted as saying.

Scotiabank bought Cencosud's credit card business in early 2015, which brought in 2.5 million new clients, and would consider other acquisitions going forward, Sardón said.

Although the bank is not currently in any negotiations, it "is always open to investment opportunities if they fit with our long-term strategic plan and value generation," Sardón said.

Scotiabank Chile's five-year strategic plan, launched in 2013, has achieved its main goals two years ahead of schedule, including growing the bank's market share to 6.6% from 4.7%.

The bank has also seen strong lending growth, on average, compared to other banks. In 2016, for example, it grew its loan book 10% compared to 6% average growth in the sector.

As well as becoming more efficient, the bank also roughly doubled its profitability to 12.5% as of November 2016 from between 6% and 7% three years earlier, according to the report.

This compares to Scotiabank's profitability of 14% at the global level and 18% in Peru, but "Chile is more efficient and competitive," Sardón noted.

The company's progress in the last three years gives it more time to implement its digital banking strategy, with the aim of increasing the proportion of retail banking products sold online, including term deposits, insurance and loans, to around 50% from 27% currently, Sardón said.

In this regard, the bank has created a new digital banking unit in Chile headed by the vice president of digital banking, Daniel Kennedy.