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ProfilesApril 1 2014

Scotiabank CEO sticking to growth plan

Scotiabank intends to expand its domestic credit card business, despite record levels of household debt in Canada. It also wants to push retail operations in Latin America, a region where economic growth has been largely disappointing in recent years. Chief executive Brian Porter explains the rationale behind what may sound to some like a risky plan.
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Scotiabank CEO sticking to growth plan

Household debt in Canada is historically high, and is now comparable to the sort of debt levels recorded in countries prior to a real estate crash. According to Statistics Canada, the ratio of household debt to disposable income has continued to rise over the past two decades, accelerating from 137% in 2007 to just less than 160% at the end of September 2013. This mirrors the 163% ratio recorded in the US at the time of the financial crisis in 2008. Although not directly comparable, these numbers have been sounding some alarm bells.

While acknowledging that the situation may be worrisome, Scotiabank’s chief executive Brian Porter notes the strengths of the Canadian market – where the real estate sector has traditionally been well regulated and mortgage rules have reduced loan durations over the past years.

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Silvia Pavoni is editor in chief of The Banker. Silvia also serves as an advisory board member for the Women of the Future Programme and for the European Risk Management Council, and is part of the London council of non-profit WILL, Women in Leadership in Latin America. In 2019, she was awarded an honorary fellowship by City University of London.
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