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Scotiabank to sell Puerto Rico, U.S. Virgin Islands operations to Oriental Bank

Reuters
Updated

(Reuters) - Bank of Nova Scotia, Canada's third biggest lender, said on Wednesday it would sell its operations in Puerto Rico and the U.S. Virgin Islands to Oriental Bank for $560 million in cash.

The deal is expected to be about 40% accretive to Oriental Bank parent OFG Bancorp's earnings per share in 2020, and the lender will have a loan portfolio totaling $7.2 billion and about 500,000 customers.

Scotiabank will record an after-tax loss of about C$400 million ($304.79 million) in the third quarter of 2019 following the deal, which will help it focus on its key six markets.

In May, the bank missed analysts' estimates for second-quarter profit and forecast low-single-digit growth in mortgages this year, citing a slow start to the domestic housing market.

(Corrects paragraph 2 to say OFG Bancorp is the "parent", not the "unit", of Oriental Bank)

(Reporting by Arundhati Sarkar in Bengaluru)