Puerto Rico’s OFG Bancorp announced yesterday it has received the necessary regulatory approvals for its subsidiary, Oriental Bank, to proceed with the acquisition of Scotiabank’s operations in its domicile territory and the United States Virgin Islands (USVI).
Despite the board of governors of the United States Federal Reserve System, Federal Deposit Insurance Corporation and the Office of the Commissioner of Financial Institutions of Puerto Rico authorising the takeover, OFG will have to await the final approval of the US Virgin Islands Banking Board to complete the transaction in that territory.
According to a release the company, OFG expects to complete the transaction by December 31, 2019.
“The new Oriental will offer a wide array of products and services with a special emphasis on consumers and small businesses in Puerto Rico and US Virgin Islands, building upon our differentiated reputation for convenience and helping customers better manage their finances.”– President, chief executive officer and vice-chairman of the board of OFG and Oriental, José Rafael Fernández
The acquisition and subsequent merger of Scotiabank’s operation with Oriental Bank will strengthen the latter’s position in Puerto Rico with the second-largest market share in the retail banking sector. Meanwhile, in the USVI, Oriental Bank will become the third-largest bank by deposit.
“We are combining two excellent franchises to create a strongly capitalized, market-leading institution,” said José Rafael Fernández, president, chief executive officer and vice-chairman of the board of OFG and Oriental.
Following the acquisition, Oriental Bank will possess a loan portfolio totalling US$7.2 billion while deposits will reach US$7.9 billion. The merger will also grow the Puerto Rican bank’s mortgage operation five-fold, to approximately US$5 billion, and could potentially generate substantial non-interest income.
In addition, Oriental Bank will increase the number of its automated teller machines to 460, its interactive teller machines to 11, and branches to 55, with over 2,400 employees.
“The new Oriental will offer a wide array of products and services with a special emphasis on consumers and small businesses in Puerto Rico and US Virgin Islands, building upon our differentiated reputation for convenience and helping customers better manage their finances,” Fernandez revealed.
Oriental Bank will continue to use Scotiabank’s technology platform for some time after the completion of the acquisition. As such, customers can conduct transactions at both banks’ ATMs or branches at no charge.