Scotiabank Announces the Sale of its Operations in El Salvador to Imperia

TORONTO and SAN SALVADOR, El Salvador, Feb. 8, 2019

The decision is driven by the bank's strategy to focus on key markets which can generate greater scale for Scotiabank.

"We are pleased to announce this important agreement, with which we intend to enhance opportunities for the clients of both banks. We are confident this acquisition represents an exciting new development for our institutions, employees and for the country. We have a long-term commitment to invest in El Salvador and our main objective is to continue serving our customers in the best possible way," said Eduardo Montenegro, Chairman of the Board of Directors of Banco Cuscatlán and SISA Insurance.

"This transaction with Imperia is in the best interest of our customers, employees and shareholders. We are confident that Imperia, with the support of a talented team, will be well positioned to continue to grow the businesses and provide a high level of service to customers in El Salvador," said Ignacio (Nacho) Deschamps, Group Head of International Banking and Digital Transformation at Scotiabank.

This transaction is expected to result in an after-tax loss of approximately $170 million that primarily represents the carrying value of goodwill relating to this business and will be recorded in Q2 2019. Upon closing, Scotiabank's common equity Tier 1 (CET1) ratio will increase by approximately 6 basis points.

This follows the announced sales of Scotiabank's operations in nine Caribbean countries and its life insurance businesses in Jamaica and Trinidad and Tobago in November 2018, and of its pension administration and related insurance businesses in the Dominican Republic in December 2018.

The cumulative impact of these transactions, including the loss on sale of the operations in El Salvador, are expected to result in a net after-tax gain of $250 million and increase the Scotiabank's common equity Tier 1 (CET1) ratio by approximately 25 basis points.