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Canadian Company Plans to Buy Stake in First Bank

Feb. 19, 2007 — Scotiabank of Canada announced plans Friday to buy a 10 percent stake in First BanCorp, the parent company of First Bank.
"It's purely a financial transaction," said Alan Cohen, a spokesman for First BanCorp based in San Juan, on Monday. "In no way will it affect First Bank customers."
First Bank has branches across the U.S. and British Virgin Islands, as well as Florida. Scotiabank customers also will see no changes in their service, Cohen said. No one at Scotiabank could be reached for comment Monday.
Neither bank will change its name, Cohen said.
Scotiabank expects to pay $94 million for 9.25 million shares of First BanCorp. The sale is subject to regulatory approvals and certain conditions being met. The deal involves issuing new shares and should be done within 90 days, Cohen said.
"It's what they call a private placement," he said.
First BanCorp looked for investors, analyzed several offers and picked Scotiabank because it had the best offer, Cohen said.
"This is a way of providing more capital to the institution so we're able to execute business strategies," he said, noting that banks commonly invest in other banks. The sale does not indicate financial difficulties for First BanCorp, he said.
Cohen did not rule out an eventual merger between the two banks, but said no such plans are in place at this time.
In a news release issued Friday, Scotiabank's executive vice-president for international banking, Rob Pitfield, said that Scotiabank has always looked beyond Canada's borders for new opportunities.
"We have been part of the Puerto Rican market for nearly 100 years, and this represents an immediate, increased investment and an opportunity to benefit from future growth in the Puerto Rico market," he said.
According to the news release, First BanCorp has its headquarters in San Juan. It is the second-largest financial-holding company in Puerto Rico and the 59th largest in the United States. It had about 2,800 employees and total assets of $17.4 billion as of Sept. 30, 2006.
In addition to its commercial, consumer, mortgage and auto-lending portfolios, First BanCorp subsidiary First Bank also has insurance and auto-leasing businesses. In the Virgin Islands, FirstBank operates First Insurance VI; First Trade, a foreign-corporation management company; and the small loan company First Express.
Scotiabank has done business in the Caribbean and Central America since 1889. It has 11,240 employees in the Caribbean-Central American region and a total of 57,000 employees in 50 countries worldwide. It had $379 billion in assets as of Oct. 31, 2006.
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