Scotiabank CEO links 'Trump doctrine,' heavy crude, and new pipelines to the bank's next growth leg
Bank of Nova Scotia is tying its growth story to a rightward shift in Latin America, a revived “Trump doctrine,” and a new push for Canadian pipelines — even as at least one analyst warns its lending stance could blunt returns.
According to Bloomberg, chief executive Scott Thomson told Royal Bank of Canada’s annual Canadian bank CEO conference that Bank of Nova Scotia’s international business could benefit as Latin American politics move right or “centre-right” and US influence in the region increases.
He called the past decade in Latin America “a bit of a lost decade” for growth, saying it was “partly because the political environment moved left” and because “the US moved away from the region and China came in.”
Bloomberg reported that Thomson pointed to shifts in countries such as Chile, Colombia and Peru, along with what he called a “very business-friendly administration” in Mexico, as supportive of stronger growth.
He said this should help Scotiabank over the next several years, given its outsized international footprint, including operations in Mexico and a 20 percent stake in Colombia’s Banco Davivienda SA, after exiting Venezuela in 2014.
Thomson also framed the backdrop around US policy.
As per Financial Post, he cited “the (Donald) Trump doctrine, the Monroe Doctrine of increasing emphasis in the Western Hemisphere,” arguing that this renewed focus “is good for growth,” adding: “It’s a good thing for the US; it’s a good thing for the Bank of Nova Scotia.”
Bloomberg reported that he described US President Donald Trump’s renewed push for Western Hemisphere dominance as a longer-term positive and said, “Longer-term, this is a good thing for the Western Hemisphere. It’s a good thing for the US. It’s a good thing for the Bank of Nova Scotia.”
Bloomberg linked those comments to Venezuela.
US forces ousted and captured Venezuelan leader Nicolás Maduro over the weekend, and he now faces multiple criminal charges in New York, as per Financial Post.
Thomson cast those developments as part of the same trend of greater US involvement in the region.
For Canada’s energy and infrastructure outlook, Thomson drew a direct connection between Venezuela’s oil sector and Canadian heavy crude.
Financial Post reported that he emphasised how Venezuelan oil is similar to Western Canadian heavy crude and that US Gulf Coast refineries specialise in refining this type of oil.
As Trump pledges to reopen the Venezuelan oil industry, Bloomberg noted that Thomson warned of increased competition to supply US Midwest refineries designed for heavy crude.
“As the Venezuelan crude re-enters the system over the next five to 10 years, having another pipeline here for Canada is really important,” Thomson said, as per Financial Post.
He added that he hopes this “provides more impetus to the ‘Build Canada‘ program that Prime Minister Mark Carney is trying to implement.”
Financial Post reported that he also said “having another pipeline here for Canada, I think, is really important,” linking it to a broader federal push to build major national infrastructure projects.
Financial Post noted that the Trans Mountain pipeline expansion started transporting oil from Alberta to British Columbia last year and that talks on another pipeline are now “in the cards” as Ottawa looks to fast-track key projects in energy, defence and mining to support Canada’s economy and reduce reliance on the US.
National Bank of Canada chief executive Laurent Ferreira reinforced the urgency around execution rather than policy direction.
As per Financial Post, he told the same event there is an “economic war” underway and said Canada needs to speed up building its key projects if it wants to be part of a “new world order.”
He argued that the events in Venezuela “should play into Canada’s decision-making process” and warned that any opposition to Ottawa’s nation-building plan, “whether it’s ideology, whether it’s bureaucracy, is not a good thing for our country.”
On the risk side, Bloomberg reported that TD Cowen analyst Mario Mendonca expects Scotiabank may adopt a more cautious stance on commercial lending in Latin America.
He warned that such restraint could delay loan growth and weigh on the bank’s turnaround plan, now in its third year — a reminder that even if the macro and political backdrop improves, capital deployment and risk appetite will still shape the earnings path.
