Canadian lender Scotiabank has announced plans to offload fully or partially its 37% stake in wealth manager CI Financial Corp that currently holds a market value of $3.8 billion.
The bank says that it would invest the capital generated from the sale in other strategic priorities of the bank.
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As per the terms of the sale, Scotiabank is refrained from selling more than 20% of the stake to a single buyer, and so the sale has to be made to a consortium, or to investors through initial public offering, reported The Globe and Mail.
The developments come at a time when Canadian bankers are seeking wealth management assets -Canadian Imperial Bank of Commerce’s bid to acquire Russell Investments.
Further, Scotiabank’s total earnings include 20% contribution from its wealth management assets that also includes its recent purchase DundeeWealth.
Scotiabank vice-chairman and COO Sabi Marwah told the news agency: "With the strong momentum in our wealth management along with the continued success of our investment in Dundee, we are quite confident that we have a solid wealth management platform."
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By GlobalDataCI chairman Bill Holland said that he thought that the parent bank was intending to sell the stake directly to investors, besides accepting that he was shocked with Scotiabank’s plans that was announced the day CI released its quarterly earnings.
"This is a crippling decision they made," Holland told The Globe and Mail.
