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.

According to a resolution issued by the SIC, the sanction, which totals $700.8 million COP, was levied on September 12, 2025. The authority determined that Scotiabank Colpatria failed to implement sufficient security measures to protect client data, violating Law 1581 of 2012 and Decree 1074 of 2015, which govern data protection in Colombia.

The SIC’s investigation found that between 2019 and 2022, Ladino Molano, who served as the bank’s director of regulatory reports, sent over 400 files containing client information from his work computer to his personal email address. He utilized an exception in the bank’s internal controls that allowed for the external transfer of encrypted files. This action compromised the data of approximately 721,000 clients.

While Ladino Molano denied any direct link to a third-party entity, he admitted to selling the data. His actions resulted in a separate criminal conviction, with a Colombian court sentencing him to 60 months in prison and a fine equivalent to 100 minimum monthly salaries for the aggravated violation of personal data and the use of communication networks.

The investigation revealed that the compromised data was transferred to a call center identified as The Best Marketing Limit. This firm allegedly used the information for unauthorized telephone sales and fraudulent financial transactions. The Asociación para la Investigación, Información y Control de los Sistemas de Tarjetas de Débito y Crédito (Incocrédito), a private entity, confirmed that several bank cards that had been used in transactions at the call center were subsequently affected by fraudulent activity.

In a statement to the press, the legal representative for The Best Marketing Limit stated that the firm had purchased databases from distributors in the market, a practice prohibited under Colombian law. The lawyer also confirmed that the call center is no longer operational, citing investigations by the Fiscalía General de la Nación and Incocrédito. The attorney denied any direct contact between the firm and Ladino Molano.

In addition to the fine against the institution, the SIC individually sanctioned Ladino Molano with a fine of $8.04 million COP for his role in the breach.

Following the incident, Scotiabank Colpatria terminated Ladino Molano’s employment and stated it reinforced its security protocols. The bank issued a statement affirming its intention to appeal the SIC’s resolution, noting that the decision is not yet final. The financial institution maintains its commitment to regulatory compliance and the protection of client information.

The incident highlights the vulnerabilities within some financial systems and the methods by which criminal networks can exploit internal weaknesses to obtain and monetize personal data. Colombian law, including Law 1266 of 2008 (Habeas Data Financiero), classifies financial and credit information as private, restricting its collection, use, and transfer without explicit consent from the data owner. The SIC is the government body responsible for enforcing these data protection regulations and imposing penalties for non-compliance.

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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.