...The ratings on Scotiabank Sudamericano (SSA) consider the ownership of Bank of Nova Scotia and its full involvement in the management and operations of this institution. Since the increase of the Canadian parent's ownership to 98% in 2002, SSA was brought in line with Scotiabank's operational standards in terms of risk management, credit control, funding, capital, human resources, and technology. In addition, new strategies were implemented according to well-defined target markets in Chile. In this context, Scotiabank focused on improving the bank's asset quality and efficiency before growing its asset books. The cleanup was mostly accomplished in fiscal 2000 and 2001, both through significant charge-offs and the sale of nonperforming assets (NPAs) and repossessed assets to its controlling shareholder. With the turnaround finished, Scotiabank was challenged to start generating good quality assets actively in the competitive Chilean markets. Although the generation of new loans under the...
