Bank of Nova Scotia (BNS.TO) said on Friday it will purchase a near 20 percent stake in Bank of Guangzhou for about C$719 million ($722 million) to expand its footprint in China, becoming the latest foreign bank to invest in a Chinese bank before the bank does an IPO. Scotiabank, Canada's third-largest lender, said it expects the deal to add to earnings next year and to close by December this year. Guangzhou is China's third largest city, about 120 kilometers (75 miles) northwest of Hong Kong. "This is a very, very prosperous region in China. There are a lot of Fortune 500 companies that we would bank through our U.S. corporate banking operations, and there are a lot of Canadian companies in the province and city," Scotiabank's head of international banking, Brian Porter, said in an interview. "We have a tradition of following our customers, and our customers are in the region, so we view this as very complementary and a nice fit for us."
Shares of BNS fell by 1.24% or $-0.66/share to $52.71. In the past year, the shares have traded as low as $49.67 and as high as $62.33. On average, 666612 shares of BNS exchange hands on a given day and today's volume is recorded at 246086.
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