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.