Scotiabank and Davivienda Finalize Transfer of Banking Operations in Colombia, Costa Rica, and Panama

The Bank of Nova Scotia (Scotiabank) (TSX: BNS, NYSE: BNS) and Banco Davivienda S.A. (BVC: PFDAVVNDA, BCS: DAVIVIENCL) today finalized the previously announced transaction involving the transfer of Scotiabank’s banking operations in Colombia, Costa Rica, and Panama to Davivienda.

The agreement, initially announced on January 6, 2025, provided Scotiabank with an approximate 20% ownership stake in the newly formed holding company, Davivienda Group, in exchange for the transferred operations. The combined operations of both institutions will be managed under the Davivienda Group umbrella.

Scott Thomson, President and CEO of Scotiabank, commented that the completion of the transfer supports the bank’s International Banking strategy, citing the achievement of operational scale across its regional markets and projected improvements in profitability. Thomson also noted that the equity stake provides Scotiabank with exposure to a combined business positioned for scale, potential synergies, and an expanded client base under a single management team.

Javier Suárez, CEO of Davivienda Group, stated that the transaction integrates complementary capabilities and expertise, positioning the group to expand business development opportunities and scale operations by leveraging Scotiabank’s global experience with Davivienda’s regional expertise across Colombia and Central America.

The integration plan dictates that the former Scotiabank operations in Colombia and Costa Rica will operate under a transitional brand, DAVIbank. In Panama, the businesses will fully transition to the Davivienda brand.

Scotiabank and Davivienda are expected to collaborate to strengthen their combined global reach. This cooperation is designed to allow Davivienda to expand its international product offerings as a regional player, while enabling Scotiabank to continue supporting its Corporate, Wealth, and Global Banking and Markets clients throughout Davivienda’s operational footprint.

Financial and Regulatory Impact

Scotiabank forecasts recording an after-tax loss of approximately $300,000,000 CAD in the first quarter of 2026 within its Other segment. This loss is primarily related to the release of cumulative foreign currency translation losses, net of hedges.

For accounting purposes, Scotiabank’s investment in Davivienda will be recorded as an investment in associate. The company anticipates an approximate 10 basis points benefit to its Common Equity Tier 1 (CET1) ratio for Q1 2026, primarily resulting from the reduction in risk-weighted assets net of the Davivienda investment.