Is Scotiabank planning to roll out its digital sub-brand Tangerine internationally? Douglas Blakey comments

That intriguing suggestion was mooted by James O’Sullivan, Scotiabank Group Head, Canadian Banking, speaking at CIBC's Annual Eastern Institutional Investor Conference in Montreal on 21 September.

Other than a piece by the Globe & Mail’s respected David Berman, I have not spotted any other media comment thus far in response to O’Sullivan’s suggestion.

At the time of Scotiabank’s acquisition of ING Direct Canada in August 2012 (the unit was rebranded as Tangerine in 2014), the deal seemed to be on the expensive side.

Scotia paid just over C$3bn to snap up Canada’s eighth-largest bank, acquiring C$30bn of core deposits and 1.8 million customers.

The counter-argument is that deals of such size come along very rarely in Canada. It was the largest sale of Canadian bank assets in more than a decade, a result of the government effectively banning big bank mergers since the 1990s.

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Scotia funded the acquisition by selling about 29 million new shares at C$52 each to raise about C$1.5bn.

And for a time, the deal seemed to do little to boost the Scotia share price: C$52 in August 2012; unchanged at C$52 in January 2016 though September ended with the share price topping C$70.

On being acquired by Scotia, ING Direct CEO Peter Aceto said that Scotiabank’s strategy would be to operate the bank separately; he remains at Tangerine to this day as a high-profile CEO.

Tangerine has sought to position itself as Canada’s most innovative digital lender.

Chuck in Scotia’s strong focus on more than 50 international markets – 14 million of its 21 million customers are outside Canada – and international expansion for Tangerine makes sense.

Scotia has tended to focus on South and Central America, regions expected to offer faster economic growth than Canada and the US.

At home, Tangerine’s ambitions are modest but deliverable: to grow customer numbers to about 3 million.

If Tangerine is to roll out beyond Canada, it is a project that its leadership team is more than capable of delivering-and deserving of a little more than a piece in the Globe & Mail.