CashNews.co
Canada’s third-biggest bank by assets has agreed a $2.8bn deal for a minority stake in US regional lender KeyCorp, continuing moves in recent years by Canadian lenders to seek growth opportunities in their southern neighbour’s economy.
The Bank of Nova Scotia announced on Monday it would take a 14.9 per cent stake in KeyCorp in a two-stage process, with the Cleveland, Ohio-based lender set to issue common shares in a placement to its new partner at $17.17 a piece.
KeyCorp shares were up about 18 per cent in pre-market trading on Monday at $17.25.
In recent years, Canadian lenders have sought growth opportunities outside their own highly-concentrated domestic banking sector. The forays have not been without challenges, as Bank of Montreal and TD Bank have found.
KeyCorp, which was among lenders drawn in to the US regional banking crisis last year, said that alongside Scotiabank’s injection of capital, it intends to “evaluate a potential repositioning” of its “available-for-sale securities portfolio”.