* Scotiabank eyes Mexico and Chile, TD buying in U.S.
* BMO buys Hong Kong firm in second takeover in 2 months,
* High capital levels, strong Canadian dollar drive growth
By Cameron French
TORONTO, Jan 11 Canadian banks, which ended
2010 with a flurry of takeover announcements, are chomping at
the bit to add assets in countries that promise more growth
than the stagnant Canadian market.
Bank of Nova Scotia (BNS.TO) is looking to add to its
already substantial presence in Mexico and Chile, an official
said on Tuesday, while Toronto-Dominion Bank's (TD.TO) chief
executive said the lender will look for opportunities to build
on its 1,300-strong branch presence in the United States.
Their comments followed Bank of Montreal's (BMO.TO)
announcement that it is buying Hong Kong-based wealth
management firm Lloyd George Management to bulk up its presence
in China's fast-growing financial sector.
The banks have been leveraging their strength in the wake
of the financial crisis, which devastated the balance sheets of
many U.S. and European lenders but left the well-capitalized
Canadian banks largely unscathed.
"There's a limited amount of buyers with deeper pockets, so
why wouldn't the Canadian banks look at this as the opportunity
of a decade to get bigger?" said Tony Demarin, chief investment
officer at BCV Asset Management in Winnipeg.
They've also enjoyed the benefit of the Canadian dollar's
7.5 percent rise against the U.S. dollar since late August,
which gives them more spending power in international markets.
Speaking at a banking conference in Toronto, Canadian bank
executives identified international growth as a priority.
Scotiabank, which already has a substantial presence in
Latin America, aims to add assets in regions in which it
already operates, particularly those where it holds less than
its target of a 10 percent market share, Chief Financial
Officer Sabi Marwah said.
"Where we're not at 10 percent is really Chile and Mexico,"
he said. "So if something were to come up whereby one of the
local banks were for sale, it's clearly something where we
would step up."
TD Bank, which just three weeks ago said it was buying auto
lender Chrysler Financial for $6.3 billion, hasn't decided
whether it will push further into car loans, but it will eye a
bigger footprint for its U.S. retail bank, CEO Ed Clark said.
"We will do opportunistic smaller deals," he told the
conference, adding that he believes some smaller U.S. lenders
who survived the financial crisis may now be thinking it is a
good time to sell.
"I think there's a mood shift," he said.
The international push comes as the banks see few avenues
for growth in Canada, where the retail banking market is
crowded, and where loan growth is expected to fall as interest
rates rise and economic growth stagnates.
"I think you'll see consumer debt levels start to stabilize
and maybe even trend down a bit," said Royal Bank of Canada
(RY.TO) CEO Gord Nixon, although he said he expected business
borrowing to strengthen.
RBC, the country's largest bank, has been expanding its
wealth management and wholesale banking presence
internationally, with particular emphasis on wealth management
in high growth markets such as Asia, Nixon said.
The bank also has a retail bank network in the southeastern
United States that has struggled for several years.
Nixon said the bank is unsure at this point whether it will
eventually add to the business or retreat from U.S. retail
(Reporting by Cameron French; editing by Peter Galloway)