Scotiabank acquisitions come with risks attached

A C$7 billion ($5.4 billion) buying spree piled new credit, market, and operational risks onto Scotiabank in the three months to end-July, eating into its core capital ratio. 

The bank’s purchase of BBVA Chile, Jarislowsky Fraser, and Citibank’s consumer and small business operation in Colombia pushed total risk-weighted assets (RWAs) to C$411.4 billion from C$375.9 billion – 9% – over the quarter, directly leading to a 29 basis points reduction in the Canadian firm’s Common Equity Tier 1 (CET1