Scotiabank CEO Sees ‘Trump Doctrine’ as Positive for Growth
(Bloomberg) — Bank of Nova Scotia’s international business could benefit from growing U.S. influence in the region as well as a political shift to the right in Latin America, Chief Executive Scott Thomson said.
After what he described as “somewhat of a lost decade” for regional growth, U.S. President Donald Trump’s renewed push for Western Hemisphere dominance should yield a positive outcome in the long term, Thomson told Royal Bank of Canada’s annual Canadian bank CEO conference on Tuesday. US forces overthrew Venezuelan President Nicolas Maduro over the weekend.
“In the long run, this is a good thing for the Western Hemisphere. It’s a good thing for the United States. It’s a good thing for the Bank of Nova Scotia,” he said. Thomson said political movements to the right or centre-right in countries such as Chile, Colombia and Peru, as well as what he called a “very business-friendly” administration in Mexico, were supporting stronger growth. He said this trend will benefit Scotiabank over the next few years.
He also pointed to the Trump Doctrine, a modern version of the 19th-century Monroe Doctrine outlined in his national security strategy late last year, as another factor he sees as positive for growth.
Toronto-based Scotiabank has the largest proportionate international exposure of any Canadian bank. The lender exited Venezuela in 2014 but continues to operate in Mexico and has a 20% stake in Banco Davivienda SA in Colombia, Thomson said.
Thomson’s views on the latest developments in Venezuela contradict the assessments of some analysts.
TD Cowen analyst Mario Mendonca said in a report on Monday that Scotiabank may take a more cautious stance on business lending in Latin America, warning that such a clampdown could delay credit growth and weigh on its turnaround plan, now in its third year.
Meanwhile, as Trump promises to reopen Venezuela’s oil industry, Thomson said Canada must respond. Both countries produce heavy crude oil, raising the risk of increased competition to supply U.S. refineries in the Midwest designed to process crude oil.
“I think it’s really important for Canada to have another pipeline,” Thomson said, adding that he hopes it will strengthen the federal government’s push to build major national infrastructure projects.
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