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OFG Bancorp To Buy Scotiabank’s Operations in the U.S. Virgin Islands and Puerto Rico

OFG Bancorp To Buy Scotiabank's Operations in the U.S. Virgin Islands and Puerto Rico

NEW YORK, NY - OCTOBER 30: José Rafael Fernández, President and CEO of OFG Bancorp and its subsidiary Oriental Bank, rings the NYSE Closing Bell to celebrate Oriental Bank’s 50th anniversary and the 20th anniversary of OFG Bancorp’s NYSE listing at The New York Stock Exchange on October 30th, 2014 in New York City. (Photo by Josh Kuckens/NYSE)

TORONTO — The Bank of Nova Scotia is unloading its operations in the U.S. Virgin Islands and Puerto Rico at a loss as the bank continues to shrink its sprawling global footprint.

OFG Bancorp says it is acquiring the Toronto-based bank’s Puerto Rico operation for $550 million in cash, and Scotiabank’s U.S. Virgin Islands branch operation for a $10 million deposit premium.

Scotiabank says that as a result of the transaction, as per accounting standards, the lender will record a loss of approximately $400 million after-tax in its financial third quarter of 2019.

Under the deal, which is subject to approval, Scotiabank’s operations in each market will be merged into the Puerto-Rico based bank and its related businesses.

Scotiabank has announced its exit or its intention to exit 19 countries in the past four years, including the divestment of its banking operations in nine Caribbean countries, as part of its strategy to focus on its core footprint.

The lender said with this transaction the repositioning of its international footprint will be “substantially complete.”

Scotiabank’s group head of international banking and digital transformation Ignacio Deschamps said it was pleased to reach an agreement with Oriental Bank, a prominent lender with a “strong reputation.”

We are confident that Oriental Bank, with the support of a talented team, will be well positioned to continue to grow the businesses and provide continuity to customers and employees in Puerto Rico and the USVI,” Deschamps said in a prepared statement.

Scotiabank is Canada’s third-largest lender.

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