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.

The approvals were received from the financial regulatory bodies in the respective jurisdictions, including the Superintendencia Financiera de Colombia (Superfinanciera), the Superintendencia General de Entidades Financieras (SUGEF) of Costa Rica, and the Superintendencia de Bancos de Panamá (SBP). Following the closure of the transaction, the combined operations of both institutions will function under a new holding company, Davivienda Group (BVC: PFDAVIGRP).

The transfer formalizes an agreement initially disclosed by Scotiabank on January 6, 2025. Under the terms, Scotiabank transfers its banking operations in the three Central and South American nations in exchange for an approximate 20% ownership stake in the resulting Davivienda Group on a pro forma basis.

Following the closure of the transaction, the combined operations of both institutions will function under a new holding company, Davivienda Group (BVC: PFDAVIGRP).

The consolidation is structured to achieve greater operational scale for Davivienda across all three markets. Furthermore, as part of the transaction, Mercantil Colpatria is scheduled to sell its residual interest in Scotiabank Colpatria, its joint venture with Scotiabank in Colombia.

For Scotiabank, the divestiture aligns with its five-year strategy focused on enhancing profitability across its international banking portfolio by streamlining operations in non-core markets. The company stated the transaction reduces operational complexity and helps strengthen its capital focus on its primary growth corridor across North America and select Latin American markets. The sale is considered capital neutral overall, with the potential to contribute to future earnings.

The agreement also stipulates that Scotiabank will receive a combination of newly issued common and preferred shares in the new entity, commensurate with its ownership stake. Scotiabank will also retain the right to designate individual(s) to serve on the Board of Directors of the Davivienda Group’s combined operations.

The two institutions intend to establish a mutual referral agreement to ensure Scotiabank can maintain support for its Corporate, Wealth, and Global Banking and Markets clients across the expanded Davivienda service footprint.

Financial Impact and Accounting

The initial announcement in January 2025 indicated that Scotiabank’s operations subject to the transfer would be classified as assets held for sale for accounting purposes. This classification necessitated the recognition of an after-tax impairment loss of approximately $1.4 billion CAD in the first quarter of 2025. The impairment was projected to reduce Scotiabank’s Common Equity Tier 1 (CET1) ratio by an estimated 10 to 15 basis points.

The company further disclosed that an estimated $300 million CAD in additional losses will be recorded upon closing, primarily related to cumulative foreign currency translation losses.

Upon the transaction’s completion, Scotiabank’s 20% equity stake in Davivienda Group will be recorded as an investment in associate. The reduction in risk-weighted assets from the transfer is expected to result in a commensurate benefit to the CET1 ratio, estimated at approximately 10 to 15 basis points.

Davivienda Group, which originated as Corporación de Ahorro y Vivienda in Colombia in 1972, is a regional banking entity serving roughly 25.6 million customers through a network that includes 653 branches and more 2,807 ATMs, with established operations in Colombia, Costa Rica, El Salvador, Honduras, Panama, and the US. The institutions have stated they will collaborate to facilitate a smooth transition for clients and employees in Colombia, Costa Rica, and Panama.

“With the purpose of achieving the democratization of access to land, for the benefit of rural citizens and especially  those with insufficient land, the national government will create a land fund for free distribution,” stated the peace agreement.

The indigenous, rural, and Afro-Colombian families who lack land, do not have enough land to make it productive, or do not have titles to the land they occupy or live on will receive these lands, which will be purchased from the ranchers; they will also be required to cultivate and produce food on these lands. All these land access, usage, and distribution concerns are covered in the chapter on integral rural reform. This is what is currently being promoted as agrarian reform by President Petro’s administration.

Petro said that the “development agency authorities must cease encouraging massive cattle farming and produce two objectives:” The first goal is to make agricultural appeals that encourage the production of agriculture, with “agrarian reform being one of the approaches.”

The meeting between Lafurie and Petro is notable because Lafurie’s wife is Senator Maria Fernanda Cabal from Alvaro Uribe’s Centro Democrático party, and perhaps the most outspoken opponent of President Petro.

100 million dollar loan

The second goal is to stimulate property ownership. The state says it won’t make any proposals to purchase any land; instead, it will wait for each farmer to make a bid. According to the agreement reached between the government and Fedegan, payments for the land will be made through “public debt bonds” and other means that the government will designate – and still has to determine. Actually, Colombia’s public debt would rise as a result of this policy.

All of this occurs as part of Petro’s intention to quicken rural transformation and take on the debt of 60 billion pesos required to buy these lands. In an interview for Noticias Caracol, the President said that the funding strategy for purchasing land will be “for 20 million pesos each, that is 60 billion pesos. We can think about the money over six years, at 10 billion pesos per year, we get into debt and pay the landowner with titles.”

To finance this plan, the Petro administration asked foreign creditors for $100 million USD, said the Minister of Agriculture, Cecilia López, to El Colombiano. She clarified that the credit, which would be issued by the UN’s Green Climate Change Fund, will be used to buy property as well as carry out constructive initiatives. “It is one of the largest loans in Latin America for sustainable agriculture. Part of that money is non-repayable,” she stated.

One potential funder could be the United States. When some US congressmen visited Bogotá in October and warned the government against a closer relationship with China, Petro’s administration responded that increasing Washington’s collaboration with Colombia is one strategy to stop China’s infiltration, according to El País. Petro hopes to persuade President Joe Biden to provide funding for the Colombian government to buy property from ranchers so that it may be transferred to landless rural citizens.

Petro also recently met with the heads of major financial institutions in Colombia, including Itaú, Colpatria, Bancolombia, BBVA, Davivienda, as well as large companies like Nutresa and Grupo Corona, among others. Infobae reported that Gustavo Petro suggested to private banks funding the nation’s agricultural production. “I invite you, if we co-finance agrarian production, the great reform in the financial world is that finance should finance production. It is not even whether it has more competitiveness, which is a big discussion in Colombia, if they finance the production,” commented the president.

Lastly, Petro seems to be hoping to count on Banco Agrario to fund his intentions. He told Hernando Chica Zuccardi, President of the bank, that the institution “has become vital for us”. “We have promised to capitalize the largest and most modern bank in Colombia,” Petro said in a report disclosed by Valora Analitik. “Here we need a lot of knowledge. SENA has to become almost a rural SENA. This is with knowledge, this is with credit and this is with land,” added the president.

The distribution has already started

At the end of October, Gustavo Petro reportedly said that the agricultural reform has already started as part of the distribution of land for peace to 50 peasant families in Monteria, according Valora Analitik. “The first thing I would have to say is that this first day of this agrarian reform process has to gather such speed that, when we reach the last day of government, we will be at the maximum,” said Petro.

He also told Cecilia Lopez, the minister of agriculture, that his final day in office as president should be spent “delivering land.” “Here we come to propose a pact and we can find the obstacles around what has happened in the background to deliver this farm,” said the Petro..

On the other hand, in recent days, officials have also communicated that two other proposals have been received, each of 800 hectares, and “show that there is an intention in the country to move forward with the reform.” They also indicated that the purchase of three million hectares in four years is virtually impossible and that, therefore, the greatest aspiration is to leave the legal framework in place so that the next governments can carry out this task; a risk that Cecilia López already hinted at when she revealed the 100-million-dollar credit earlier in October. She explained the government could only purchase approximately 500,000 hectares a year, or half of what Fedegán is proposing by 2026, which suggests that this policy must be maintained by the following administration.

“What we are trying to do is to leave such a successful and efficient model that the next government, whoever it may be, will sustain it,” said Lopez. “The country must ask for it and, therefore, we have to be successful so that this policy continues and that the agrarian reform, which has already begun, really becomes a reality in Colombia.”

Above photo: President Gustavo Petro (left) and José Felix Lafurie, president of Fedegan (Twitter)

Mineros President and CEO Andrés Restrepo Isaza (above) commented “Mineros is a well-established Latin American gold mining company with a long history of delivering growth and strong dividends to investors on the Colombian Stock Exchange. Filing our preliminary prospectus is an important step for the company’s growth, as we establish ourselves as a multi-asset, mid-tier gold producer “.

In connection with the offering, Mineros has applied to list the common shares to be distributed under the offering, as well as its additional issued and outstanding common shares, on the Toronto Stock Exchange (TSX). The company has also applied for an exemption from the individual voting and majority voting requirements applicable to listed issuers under TSX policies, on grounds that compliance with such requirements would constitute a breach of Colombian regulations which require the directors to be elected on the basis of a slate of nominees proposed for election pursuant to an electoral quotient system as more fully set out in the preliminary prospectus. Listing is subject to the approval of the TSX in accordance with its original listing requirements. The TSX has not conditionally approved the company’s listing application and there is no assurance that the TSX will approve the listing application.

The preliminary prospectus containing important information relating to the common shares has been filed with securities commissions or similar authorities in each of the provinces of Canada, except Québec. The preliminary prospectus is still subject to completion or amendment. Copies of the preliminary prospectus may be obtained from either of the underwriters listed above and will be available on https://sedar.com/. There will not be any sale or any acceptance of an offer to buy the securities until a receipt for the final prospectus has been issued. No securities regulatory authority has either approved or disapproved the contents of this news release.

Mineros intends to use the net proceeds from the offering to fund repayment of the indebtedness created by the Luna Roja Davivienda loan and for general working capital.  The funds provided by the Luna Roja Davivienda loan were used to complete the acquisition by Hemco of the 50% interest in the Luna Roja exploration target not already owned by it and the acquisition of the corresponding interest in the related joint venture which closed on May 21, 2021.

The same day, Mineros also filed with the Colombian Superintendence of Finance a preliminary prospectus in respect of a concurrent public offering in Colombia of common shares for gross proceeds of up to $10 million USD. The Colombian offering is being made through Corredores Davivienda S.A., Comisionista de Bolsa, as underwriter. The offering of the common shares in the Colombian Stock Exchange (BVC) pursuant to the Colombian offering and the offering remains subject to the approval of the Colombian Superintendence of Finance.

The Common Shares have not been registered in the United States, so they are not offered or sold in the United States except under an appropriate exemption.

Gowling WLG (Canada) LLP in Canada and DLA Piper Martinez Beltran in Colombia are acting as legal counsel to the Mineros, and Fasken Martineau DuMoulin LLP is acting as legal counsel to the underwriters.

The regional business outlet praised Scotiabank, which also operates in Colombia under the  Colpatria brand, for its “overall strategy,” “diversity of transactions,” “innovation and foresight,” and “role in particularly complex, innovative, or large deals over the years.”

The Toronto-based financial institution is now the first Canadian bank to win the award. Previous winners include Itaú Unibanco in 2017 and Grupo Financiero Ficohsa in 2015.

Bancolombia (NYSE: CIB) was named the top bank in Colombia by FinanceColombia in its nationals category, an award it also took home in 2015. Banco de Bogotá won last year.

The awards will be formally presented during a ceremony in New York on December to all of the winners, including other national Bank of the Year honorees such as Bradesco in Brazil, BBVA Bancomer in Mexico, Santander Chile in Chile, and Banco Galicia in Argentina.

As part of its awards announcement, the publication included its analysis about two major trends in the banking landscape of Latin America and the Caribbean.

“Many banks are continuing to grow and find profitability despite the region’s sluggish economy,” stated LatinFinance. “The banks in LatinFinance’s Banks of the Year Awards have all stood out for either making timely acquisitions, picking up market share from competitors, or simply maintaining market share in the face of economic headwinds.”

The second big trend the outlet highlighted centers around digital transformation, which has been on the radar for many major institutions in the region in recent years and is only continuing to accelerate today, it says.

“The digital revolution is in full swing,” stated LatinFinance. “Banks across the region are rolling out a broad range of new digital services and products to capture new customers and deepen their relationships with longtime clients. The new products are also helping to bring down costs, reducing the need for physical branches, and making transactions more efficient.”

The award selection process weighs each the actions of each bank considered between July 1, 2017, and June 30 of this year. LatinFinance says it judges financial services companies on three main criteria: financial data, market opinion (“including analyst and rating agency comment”), and its own editorial evaluation.

Citibank operations in Colombian include 500,000 customers, 47 branches, and 424 self-service access points in Colombia. The deal also includes “assumption by Banco Colpatria of Citibank’s workforce,” according to Scotiabank.

Citigroup, which has operated in Colombia for more than a century, began looking to sell its consumer business in Colombia two years ago. In October 2016, as part of strategy to exit the market throughout South America, the New York-based banking conglomerate sold its consumer business in Brazil to Itaú Unibanco for a reported $220 million USD and its consumer business in Argentina to Banco Santander Rio.

But six weeks after it completed unloading those assets, Citi announced that it had suspended its attempt to sell its consumer business in Colombia. While it called Colombia “a strategic market for Citi” at the time, popular speculation swirled that it had proven unable to find a buyer offering acceptable terms.

Apparently now, in making a deal with Scotiabank, the financial giant has received a good enough offer to fulfill its original intention to leave the consumer business, as first announced in February 2016. Financial terms were not announced.

“We’re excited about this acquisition because it will allow us to serve new customers in Colombia and it is in line with Scotiabank’s strategy to increase scale within the Colombian banking sector, as well as the other Pacific Alliance economies of Mexico, Chile, and Peru,” said Nacho Deschamps, group head of international banking and digital transformation at Scotiabank.

The agreement, which will include proportional investments from Scotiabank and Mercantil Colpatria to maintain their current stakes in Colpatria, is subject to regulatory approval. “The transaction is not financially material to Scotiabank,” said the Toronto-based bank in a statement.

The company also highlighted the benefits the deal will have for its credit card business and potential gains of adding Citibank customers to the Scotiabank’s “global wealth management network.”

The Canadian bank said that operations at Citibank locations in Colombia will continue “as usual” until regulatory approval is finalized. It added that “Banco Colpatria, Scotiabank, and Citibank will work together to ensure a smooth transition for customers and employees.”

Citigroup will retain its corporate business in Colombia, something that the bank had maintained was its plan since the bank’s original 2016 announcement that it wanted to exit the consumer market in the Andean nation.

“Citi will keep its presence in the country with all of its current corporate and investment bank product offerings — cash management, international trade, custody service, treasury, markets and investment banking – sharpening our focus on our corporate and institutional clients,” said Alvaro Jaramillo, Colombia country head and Latin America north cluster head for Citi.

(Photo credit: bruceg1001)

Photo: Andres Fontao, co-founder of Finnovista and organizer of the Finnosummit conference. (Credit: Finnovista)

The competition is part of Visa’s Everywhere Initiative and will be taking place within Finnovista’s larger Finnosummit on November 9 in Florida’s largest city. And while the cash award will surely benefit the winner, the real opportunity is for the top startup is the chance to collaborate with Visa on “the future of payments,” according to the organizers.

To find out more about the event, the finalists, and the startup world in Colombia, we recently spoke with Andres Fontao, co-founder of Finnovista and organizer of the Finnosummit conference. Among other insights, he highlights a recent Finnovista study that showed Colombia, with 84, to be the country in the region with the third most fintech startups after Mexico and Brazil.

Jared Wade: What is Finnosummit and why are you bringing together so many fintech startups from the region?

Andres Fontao: Over the past four years, Finnosummit has become the largest gathering of fintech leaders from Latin America. The conference features Latin America’s most prominent financial institutions, fintech startups, investors, and policy influencers.

The Inter-American Development Bank currently counts over 700 fintech startups in the region, and three out of five were created in the last three years. This rapidly evolving space desperately needed a common meeting point, and that’s why we organized Finnosummit. At these conferences we’re tackling some of Latin America’s biggest banking issues like how to regulate fintech and how to better reach the unbanked and underbanked, which the publication Latin Trade has written affects nearly 400 Million people in the region.

Jared Wade: I know that Bankity and Alegra, two fintech startups from Colombia, are among the finalists for the ultimate prize in the competition. Can you tell me a little about each company and why they are considered to be some the best in the region?

Andres Fontao: Finnosummit was thrilled to partner with Visa to host the final round of their “Everywhere Initiative,” and 10 great startups were chosen to come to Miami to present. Two of these were Colombian companies, which is excellent.

“Colombia ranks third in terms of the number of fintech startups with 84. Argentina has 72 and Chile has 65. The market leader, Mexico, with 238 fintech startups, just overtook Brazil, which has 230, in July.” – Andres Fontao

Bankity offers the first intelligent banking card in Latin America. It’s tackling a big problem because Colombia is one of the countries in the region which uses bank cards the least. Bank card adoption and formalization of the economy in this region is a worthy challenge.

Alegra, founded by Santiago Villegas and Jorge Soto, is also great because it aims to help small business owners with tedious tasks like invoicing and reporting with its cloud-based accounting software.

Jared Wade: Do you see more venture capital coming into the fintech industry in Latin America? And in terms of startup accelerators and incubators, is fintech now the leading area of interest in the region?

Andres Fontao: No doubt about it, fintech is the sector attracting the largest amount of VC investment in the region. According to LAVCA, in 2016 fintech was the largest IT sector attracting VC investment in the region, representing 25% of all IT deals. Fintech investments are on the rise in Latin America, growing 31%, in terms of dollars, and 81%, in terms of deal count, in 2016.

In terms of accelerators, we’ve seen the launch of a few fintech-specific programs over the past few years. But unlike other verticals so far in the region, the interest in launching fintech programs is driven by industry players who want support and collaborative startup-driven innovation in the industry. An example is Startupbootcamp Fintech in Mexico City, which is backed by a consortium of industry players such as Visa, HSBC, BanRegio, and Fiinlab, as well as Mexican VC firm Ignia, among other industry players.

Jared Wade: How does the space in Colombia compare to the markets for regional peers like Brazil, Mexico, Argentina, and Chile? What differentiates Colombia?

Andres Fontao: According to a recent report by my company Finnovista and the Inter-American Development Bank, Colombia ranks third in terms of the number of fintech startups with 84. Argentina has 72 and Chile has 65. The market leader Mexico, with 238 fintech startups, just overtook Brazil, which has 230, in July. So as I said before, the market keeps growing at a pretty rapid pace.

Jared Wade: Aside from the Colombian finalists at Finnosummit, are there any specific startups — or just traditional banks undergoing digital transformation — that stand out in Colombia as success stories or models to follow?

“Fintech investments are on the rise in Latin America, growing 31%, in terms of dollars, and 81%, in terms of deal count, in 2016.” – Andres Fontao

Andres Fontao: Grupo Sura stands out on the industry side having invested in some fintech startups from across the region, as does Colpatria through the regional initiatives that are being spearheaded from Toronto and have local implications in Colombia.

On the startup side, there is a lot happening with some interesting fundraises having been announced recently such as ComparaMejor and Mesfix. It will be interesting to see how they put the capital to use and if they can scale and grow their businesses.

Aflore and Tpaga are two startups that are focused on executing and capitalizing on a huge market opportunity in Colombia and across Latin America.

Jared Wade: I know there has been a lot of talk about fintech regulations in Latin America over the past few years. How is this affecting the adoption in the region? And is government involvement generally helping or curbing the rate of digital transformation in the financial services world in Latin America?

Andres Fontao: Regulation is needed and generally accepted by all stakeholders in the ecosystem. The challenge is making it startup friendly so that the cost of being regulated does not become too onerous for an early stage startup.

Mexico is on the verge of approving a fintech regulation which will be the first of its kind in the region, and hopefully once approved — assuming its startup friendly — others will follow.

In addition to domestic red tape, the Bogotá-based financial institution, which has been controlled by Scotiabank since 2012, is looking to AxiomSL’s technology to help ensure it fulfills its minimum capital requirements under the global Basel III framework.

“Since regulators are increasingly requiring full drill-down into the source and demanding access to all levels of data…it was critical to implement a solution that went beyond regulatory requirements and offered additional business benefits, such as leveraging our existing systems and data across the enterprise for risk analytics functions and processes,” said Luis Santiago Perdomo, CEO of Banco Colpatria.

AxiomSL has been growing in Colombia since its arrival in 2015, when it set up operations in Medellín’s Ruta N technology complex along with the assistance of city promotion agency ACI Medellín.

“It is a pleasure to know that foreign companies that come to Medellín are growing and consolidating their businesses not only in the city but in the country,” said Sergio Escobar, director of the ACI Medellín. “That is why we take this good news as our own as well.”

Banco Colpatria offers health insurance, life insurance, and consumer loans, among various other financial services. It joins the many other banks across the world — including Credit Suisse of Zurich, Chartis of the United States, and Banco Sabadell of Spain —that have partnered with AxiomSL on reporting platforms.

Photo: Torre Colpatria in Bogotá. (Credit: Pedro Felipe)

Moody’s said in a statement that it based its rating on the Santiago-based retailer’s large presence, market share, and geographic diversification throughout South America. Best known in Colombia for its Jumbo brand of hypermarkets, the company also operates in Chile, Brazil, Argentina, and Peru.

This spread is also a limiting factor, however. Moody’s cited the multinational’s “high leverage” in “challenging countries,” namely Brazil and Argentina, as a constraint on its rating.

But by and large, the agency is encouraged by Cencosud’s further push into the food retail sector, overall capital structure, and improving financial policies in recent quarters.

“The prospective cash tender and 2027 bond issuance, if and when successfully completed, are a modest credit positive for Cencosud as they will result in an extension of the company’s debt maturity profile and will slightly reduce its yearly cost of debt,” said Veronica Amendola, Moody’s lead analyst for Cencosud.

The new note issuance will be directed to tender Cencosud’s 5.5% senior notes due 2021 and 4.875% senior notes due in 2023 and “prepay other existing debt and for general corporate purposes,” stated Moody’s.

In addition to its retail operations in the Colombia, the company, which is 53.4% controlled by founder and chairman Horst Paulmann and his family, offers some financial products in the country in partnership with Colpatria, mainly through its Tarjeta Cencosud store credit card.

Cencosud is also present in the country’s real estate sector. Between Colombia, Chile, Argentina, and Peru, Cencosud has 54 shopping centers available for lease to third parties, according to Moody’s.

Moody’s currently has assigned Baa3 ratings to the following Cencosud senior unsecured notes, all of which have a stable outlook:

• Issuer rating, domestic currency: Baa3
• $750 million USD backed senior unsecured notes due 2021: Baa3
• $1.2 billion USD backed senior unsecured notes due 2023: Baa3
• $650 million USD backed senior unsecured notes due 2025: Baa3
• $350 million USD backed senior unsecured notes due 2045: Baa3
• $850 million USD backed senior unsecured notes due 2027: Baa3

Photo credit: Jlazarte