Scotiabank is selling its 51% stake in AFP Colfondos to an affiliate of Administradora de Fondos de Pensiones Habitat.

At the same time, AFP Habitat is acquiring Mercantil Colpatria’s 49% interest in AFP Colfondos on substantially the same terms.

The sale of the AFP Colfondos stake continues Scotiabank’s strategic decision to focus its operations on core businesses.

For example, Scotiabank reduced its investment in Thailand on 8 August.

In particular, it reduced its 49% interest in Thanachart Bank in exchange for cash and shares in TMB Bank.

The Thanachart TMB Bank merger kick starts long awaited consolidation in the Thai banking sector.

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As a result of the merger Scotiabank will hold a stake in the new bank of about 6%.

Scotiabank AFP Colfondos stake dates back to 2012

Scotiabank originally acquired its 51% stake in AFP Colfondos in 2012.

AFP Habitat manages private pension funds through a network of branches and service centres, primarily in Chile and Peru. It was founded in 1981 and is headquartered in Santiago, Chile serving around 3 million clients.

AFP Habitat currently looks after around 3 million clients. As of June 2019, Habitat was ranked first in Chile in terms of AUM with $60bn.

“Scotiabank is committed to growing and increasing our scale in Colombia. This is demonstrated by our recent acquisition of Citibank’s retail and commercial operations last year. That deal increases our wealth management and insurance offerings to our customers,” says Jaime Upegui, President, CEO of Scotiabank Colpatria.

“We are committed to working closely with AFP Habitat to support a smooth transition of the business.”

The main shareholders of AFP Habitat are Inversiones La Construcción SA and Prudential Financial with stakes of 40.3% each.

Furthermore, Scotiabank aims to grow its insurance operations across Chile, Colombia, Mexico and Peru. For instance, it recently announced a strategic alliance with BNP Paribas Cardif.