No deal with Metrobank yet, says Scotiabank

The Bank of Nova Scotia (Scotiabank) clarified yesterday that it is still in discussion with Metropolitan Bank and Trust Co. (Metrobank) contrary to earlier reports that a deal has been reached between both parties involving a share swap.

In a statement, Scotiabank said "it is not considering a share swap." Scotiabank senior vice president Robin Hibberd said that "under the right circumstances we may sell our stake in Solidbank."

Sources said Scotiabank cannot agree to a share swap because such an arrangement will only allow Scotiabank a minority stake of about six percent in Metrobank which will not enable it to declare any profit under the equity accounting principle.

Scotiabank would rather completely sell its remaining 40-percent stake in Solidbank and start anew by acquiring a smaller entity, they said.

The same path was taken by another foreign bank, ABN-AMRO, when it decided to acquire a smaller thrift bank instead of entering into a joint venture with a local partner.