Brian Porter was named Friday to succeed Rick Waugh as Scotiabank CEO.Fernando Morales/The Globe and Mail
Bank of Nova Scotia's decision to name Brian Porter its next chief executive officer demonstrates just how instrumental the bank believes its international division will be to future growth.
On Friday, Scotiabank said current CEO Rick Waugh will retire in November and Mr. Porter, presently the bank's president, will take over.
Until last fall, Mr. Porter ran Scotiabank's international unit, something the bank deemed extremely valuable for the incoming CEO. Though Canadian banking remains the bank's biggest money maker, the international division is a close second.
Mr. Porter has held roles in risk and global markets, but has never worked in Canadian banking. He took a cross-country tour in the past few months to meet with Scotiabank's key players as he prepared for the CEO's office.
The formal announcement was widely expected after Mr. Porter was named president in the fall. Scotiabank strives to operate with few surprises, and Mr. Porter said in an interview to expect the same under his reign, both in terms of strategy and earnings growth. "We pride ourselves on delivering consistency and predictability," he said.
Beyond Canada's borders, Scotiabank has invested heavily in three key areas: Latin America, Asia, and Central America and the Caribbean, and plans to stay focused on these regions. "We're not going to Africa. We're not going to Europe," Mr. Porter said.
Of the international regions, Latin America is the current growth driver, as commercial lending slows in Asia, and Central America struggles to rebound in the aftermath of the financial crisis. But it isn't clear yet whether Mr. Porter will follow in Mr. Waugh's footsteps and strike as many deals in Latin America.
In the past few years Scotiabank has invested heavily in countries like Colombia and Peru, striking acquisitions like its majority stake in Colombia's Banco Colpatria and its joint venture in Peru's BBVA Horizonte. However, the bank aims to ensure it doesn't burden itself with integrating too many targets into existing operations. As Mr. Porter acknowledges: "Buying's the easy part."
Mr. Porter's appointment comes amid a changing of the guard in Canada's financial industry. The Bank of Canada recently appointed a new governor, and Julie Dickson, head of the Office of the Superintendent of Financial Institutions, recently announced she will not seek a second term when her current one ends next summer.
Toronto-Dominion Bank also said last month that CEO Ed Clark will retire in 2014 and Bharat Masrani, who runs the bank's U.S. operation, will take over. Much like Scotiabank, TD named a CEO who has ample experience in the region where it expects strong growth.
However, there is one constant that Canadian investors can count on. On Thursday Canadian Imperial Bank of Commerce renewed CEO Gerry McCaughey's contract for another four years.
Unlike many of his peers who have been vocal about a Canadian banking slowdown, Mr. Porter was some what of an outlier during this past earnings season when asked about his outlook for his sector. Though mortgage growth is cooling, he doesn't foresee a huge hit coming.
But even if it does, he argues that Scotiabank's diversified operation can withstand the shock, the same way a slowdown in one Latin American country shouldn't do too much damage to the earnings outlook. "We never let one country get too big," he said.
With files from reporter Bertrand Marotte in Montreal.
Tim Kiladze