Scotiabank Chile's No. 6 Bank After Acquisition

SANTIAGO (Reuters) - Bank of Nova Scotia <BNS.TO said on Monday it finalized its purchase of Banco del Desarrollo in a transaction that will make it Chile's sixth-largest bank.

Bank of Nova Scotia concluded the deal, worth $1.02 billion, through a public offer for 99.5 percent of Banco del Desarrollo.

The combined operations of Scotiabank's Chilean unit, Scotia Bank Sudamericano, and Desarrollo will have 6.53 percent of Chile's bank loans -- a share James Callahan, Scotiabank's general manager in Chile, plans to grow.

"This merger will allow us to make a big jump toward our strategic goal of controlling 10 percent in each market," Callahan said.

Banco del Desarrollo has assets of more than $5.1 billion and a network of 74 branches specialized in mid-market commercial lending, small- and micro-business lending, and consumer finance.

Chilean banking is dominated by Santander Chile STG.SN, a unit of Spain's Santander (SAN.MC), and its nearest rival, Banco de Chile, which recently entered into a strategic alliance with Citigroup Inc (C.N).

Callahan said achieving 10 percent of the market through organic growth would take time and that it was open to making other acquisitions, though Chile was not a buyer's market.

"In Chile now there are more potential buyers than there are sellers, and that gets reflected in the prices," he said.

Separately, Scotiabank signed an exclusive agreement last week to negotiate the acquisition of Peru's Banco del Trabajo TRA.LM, controlled by Chile's Altas Cumbres group.

(Reporting by Antonio de la Jara; Writing by Lisa Yulkowski; Editing by Braden Reddall)