OFG Bancorp has secured key regulatory approvals to acquire Scotiabank’s operations in Puerto Rico and US Virgin Islands (USVI).

The financial holding company received green light from the Board of Governors of the Federal Reserve System and Federal Deposit Insurance.

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Additionally, the Office of the Commissioner of Financial Institutions of Puerto Rico has also approved the deal.

In June this year, Scotiabank signed an agreement to sell the operations to OFG Bancorp subsidiary Oriental Bank.

As per the agreement, Oriental Bank will pay $550m in cash to purchase the Puerto Rican business and a $10m deposit premium for USVI operations.

Currently, the acquisition of USVI business awaits final approval and related licences from the USVI banking board.

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According to the company, the acquisition will make Oriental the second largest bank by market share in Puerto Rico. It is also set to become the third largest bank in USVI by deposits.

Following the closure of the deal, Oriental is expected to have 500,000 customers. It will also have 55 branches, 460 ATMs, and around 2,400 employees.

OFG and Oriental president, CEO and vice-chairman of the board José Rafael Fernández said: “We are combining two excellent franchises to create a strongly capitalized, market-leading institution.

“We’re excited about welcoming Scotia’s valued customers and talented team into the Oriental family.”

“The new Oriental will offer a wide array of products and services with a special emphasis on consumers and small businesses in Puerto Rico and US Virgin Islands, building upon our differentiated reputation for convenience and helping customers better manage their finances.”

The deal is expected to close by the end of this month.