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Scotiabank mulls sale of gold trading unit: sources
October 18, 2017 / 3:53 PM / a month ago

Scotiabank mulls sale of gold trading unit: sources

(Reuters) - Canada’s Bank of Nova Scotia (BNS.TO) is exploring options for its gold business ScotiaMocatta, including a possible sale of the world’s oldest gold trader, three sources familiar with the matter said on Wednesday.

A woman leaves a Bank of Nova Scotia (Scotiabank) branch in Ottawa, Ontario, Canada, May 31, 2016. REUTERS/Chris Wattie

The Financial Times reported earlier on Wednesday that Scotiabank had made a decision to sell the business following a massive money laundering scandal centered on a U.S. refinery that involved smuggled gold from South America. It said JP Morgan had been appointed to oversee the sale.

Scotiabank said it would not comment on rumors and market speculation.

One of the sources said a review of ScotiaMocatta’s future had been underway for several months. Another source said it had been seeking a buyer for up to a year and was likely to shrink the business if a sale is not completed.

The sources spoke on condition of anonymity to discuss the confidential process.

ScotiaMocatta is one of London’s main gold trading banks with a history dating back to the 17th century. It was acquired by Scotiabank from Standard Chartered (STAN.L) in 1997 and the Canadian bank has since its expanded its operations.

The Financial Times, citing market sources, reported rumors that Chinese buyers were key targets of the Scotiabank sale.

Scotiabank, which has the biggest foreign presence of any Canadian bank, is focusing its international strategy on the Pacific Alliance, a Latin American trade bloc comprising Mexico, Peru, Chile and Colombia.

Scotiabank edged up 0.1 percent to C$80.85 on the Toronto Stock Exchange at mid-afternoon.

Reporting by John Tilak and Matt Scuffham in Toronto and Peter Hobson in London; Editing by Richard Chang

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