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UPDATE 1-Scotiabank coy on plans for CI Financial stake
February 2, 2011 / 7:57 PM / 7 years ago

UPDATE 1-Scotiabank coy on plans for CI Financial stake

* Says CI investment a work in progress

* Seen willing to sell 36 pct stake

* Bank just completed purchase of DundeeWealth (In U.S. dollars, unless noted)

TORONTO, Feb 2 (Reuters) - Bank of Nova Scotia’s (BNS.TO) 36 percent stake in asset manager CI Financial (CIX.TO) is a “work in progress”, the bank’s chief financial officer said on Wednesday, hinting it might consider selling the stake.

Speaking at the Morgan Stanley Financials Conference in New York the day after Scotiabank closed its acquisition of CI rival DundeeWealth, CFO Luc Vanneste gave little insight into the bank’s plans for CI, apart from saying it was committed to building up its wealth management operations.

“At this point we are still holding our investment in CI and we’ll see what happens over a period of time,” he said.

“CI is still very much a work in progress.”

Before it bought DundeeWealth, analysts had assumed Scotiabank would eventually acquire the 64 percent of CI it did not already own.

But the Dundee deal means the bank may have less appetite for CI, some say.

Last week, CIBC World Markets analyst Robert Sedran said he expects Scotiabank to eventually sell the CI stake, and pegged Canadian Imperial Bank of Commerce (CM.TO) as a possible buyer.

Auguring against the likelihood of taking out CI -- the company has a C$6.2 billion market capitalization -- so soon after the C$2.3 billion Dundee deal is the tighter regulatory environment the banks are operating under in the wake of the financial crisis, analysts say.

Scotiabank, meanwhile, has continued to make small acquisitions to add to its considerable banking presence in Latin America and Asia, and Vanneste said that would continue.

“We are not afraid to do acquisitions and issue stock for those acquisitions,” he said.

Scotiabank shares were up 22 Canadian cents at C$57.65 on the Toronto Stock Exchange, while CI was down 2 Canadian cents at C$21.57.

$1=$0.99 Canadian Reporting by Cameron French; editing by Rob Wilson

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