The United States as a bridge to Latin American investments
October 28, 2019The United States as a bridge to Latin American investments
Robert Williams, Scotiabank’s Senior Vice President, International Corporate and Commercial Banking, discusses the expertise and value that Scotiabank can bring in facilitating transactions with companies operating in Latin America.
Interconnected in LatAm: Changing role of the banking partner
As Latin American economies continue to grow, they are attracting increased interest from institutional investors in developed economies. These investors are eager to diversify their investments in Latin American energy, mining, infrastructure and other opportunities in markets that are becoming more aligned to institutional risk profiles. However, this has placed a greater spotlight on the role of the corporate and investment banker, and the expertise and value that such a partner can bring in facilitating transactions between companies operating in Latin America and corporate investors.
To learn more about the changing role of the corporate banking partner, we speak to Robert Williams, Scotiabank’s Senior Vice President, International Corporate and Commercial Banking.
Global clients need global banks
The changing nature of both institutional investors and companies operating in Latin America has led to changing expectations of the corporate and investment banking partners who engage those stakeholders. Williams points out that the increasingly global focus of both sides of the investment banking transaction demands much more from the financial institution in the middle facilitating it. Corporate investors, whether they be from the United States, Europe, Asia or other financial centres, are increasingly looking for access to the high-growth, investor-friendly story represented by select Latin American economies, such as Brazil and the Pacific Alliance (Mexico, Chile, Colombia and Peru).
At the same time, the corporate clients in Latin America also tend to be transnational in nature, Williams reports. These include “multilatinas,” or companies headquartered in one Latin American market but with significant operations in other Latin American markets, and possibly beyond. Other client types include companies from outside Latin America with significant Latin American interests (e.g., a Canadian oil major with drilling operations in Brazil). These global clients need a banking partner with a global reach as well, Williams says.
“If you go back even a couple of years ago, the expectations that many clients had of financial institutions in different regions was that they would primarily be a lending partner, leveraging the Bank’s balance sheet,” he adds. “Over time, the competitive landscape has intensified and clients have become more sophisticated with the entrance of multinational corporations investing heavily in Latin American markets. This has led to clients looking for more sophisticated product offerings and value propositions, than simply just plain vanilla lending.”
How a bank’s connectivity makes a difference
The increased sophistication and structured nature of these funding transactions have focused attention on the capabilities of the corporate and investment bank and the differentiated services it can provide. While the needs of corporate and investment banking clients vary from company to company, and transaction to transaction, Williams has observed some common themes as to what makes for an effective and interconnected global banking partner.
Often the first measure of a global bank is its ability to deliver lending solutions, ancillary business services, and capital market products, across all the markets relevant to the global and transnational clients, he says. Another important factor is the ability to identify and advise on potential business opportunities for clients, particularly those with the capacity to make strategic investments and/or acquisitions outside their home borders. At the end of the day, Williams says, an interconnected global bank has to be able to provide certainty and seamlessness: the expertise to handle the necessary transactions and services and the ability to conduct business across multiple geographic markets through integrated on-the-ground operations.
“There has to be connectivity with respect to banking relationships,” he explains. “This helps create a level of confidence, and fluidity of transactions, in which the customer can comfortably deal with bankers in all the different geographies where the bank and the client both operate. This applies to the complete range of services in corporate and investment banking, from setting up business accounts to helping clients find the opportunities that they’re looking for in a market the bank knows well. That’s what interconnectivity comes down to.”
Scotiabank’s commitment and growing presence in Latin America
In the realm of interconnectivity across the Americas, Scotiabank leads by example. Though it is a Canadian-headquartered company, the Bank has had operations in Latin America dating back more than 50 years, which it has grown or maintained consistently throughout multiple market cycles.
Among the many Latin American industries in which Scotiabank leverages its expertise is in telecommunications, in which the Bank structures, underwrites and advises on the merger-and-acquisition activities that drive much of the expansion in this space. In the energy sector, Williams reports Scotiabank often acts in a critical advisory capacity for developed-market companies, particularly those based in Europe, that have Latin American operations but are reconfiguring their holdings to become less reliant on carbon-emitting fuels alone. In mining, Scotiabank recently served as a joint bookrunner in the US$2 billion bond issue of Codelco, a Chilean quasi-state entity and the world’s largest copper producing company in the world.
“We have a knowledgeable and committed corporate and investment banking team, and we have a customer-centric strategy to ensure we’re focusing on providing our clients with holistic solutions and relevant information and advice,” says Williams. “In Latin America, we have boots on the ground at all times, and that gives us a unique perspective. Furthermore, we’re not just focused on corporate and commercial clients; our extensive retail operations also allow us to have our finger on the pulse of the consumer in these markets. All this firsthand information feeds into important insights that benefit our corporate and investment banking customers.”
For more information about Scotiabank’s banking solutions across the Americas, please contact:
Senior Vice President, International Corporate and Commercial Banking