Anya Schnoor, senior vice-president - investments, Scotiabank Jamaica, says the loan activities of the commerical bank and DB&G's merchant banking arm do not conflict. - File

Ashford W. Meikle, Business Reporter

Anya Schnoor, CEO-designate of Dehring, Bunting and Golding (DB&G), says Scotiabank has no plans to surrender DB&G's merchant bank licence.

The merchant bank will operate as a separate entity within the Scotia Group, she told the Financial Gleaner.

"It has a niche market [and] it's very profitable," said Schnoor, who is also a vice-president of Scotiabank.

"It has done well for DB&G so we plan to keep it and allow it to grow over time. But it will be marketed separately. It will continue to serve the needs of the investment clientele that we have as well as look for new business," said Schnoor on Wednesday.

The merchant bank has a different market and credit philosophy, said Schnoor, with much of its investments and loans transacted in American currency.

Separate entity

Scotia Group is the holding company of Scotiabank and Dehring, Bunting and Golding, but while the commercial bank which, together with its Canadian parent has a 68 per cent stake in DB&G - has made it clear that the investment and brokerage arm of its recently acquired subsidiary would continue to operate as a separate entity, the future of the merchant bank had not been articulated.

On Wednesday, Schnoor, who takes over from Peter Bunting at DB&G on July 1, played down the potential competitive rivalry between Scotiabank's credit department and DB&G's merchant bank.

"There is a joint committee between the commercial banking centre of BNS and the merchant bank and they work very closely together - they share deals - and so far that has been working very well," the CEO said.

With assets of just under $5 billion, DB&G merchant bank is the country's third largest but fastest growing entity among fourover the past two years.

Its asset base grew 65 per cent over two years to March 2007, from $2.97 billion to $4.9 billion.

Over the same period its loan portfolio has grown by almost 270 per cent, from $866 million to $3.1 billion - roughly two thirds of its asset base.

Schnoor gave the assurance that there would be no tweaking of the merchant bank's business model, even as Scotiabank attempts to enhance the operations.

"It has grown rapidly over the last two to three years and so we do not plan to change its philosophy," said Schnoor.

"Plus, it's our intention to widen its sales and service [across] the island so it will naturally pick up customers from that growth."

ashford.meikle@gleanerjm.com

Asset base

Merchant banking sector assets to March 2007:

Capital & Credit $33.3 billion

DB&G $4.90 billion

PCMB $7.97 billion

MF&G Trust $1.18 billion

Total $47.4 billion