OFG Bancorp (NYSE:OFG) surges 17% in premarket trading after announcing an
agreement to buy Bank of Nova Scotia's (NYSE:
BNS) Puerto Rico operations and U.S. Virgin Island branches, a deal that KBW analyst Glen Manna calls the deal "transformational: and "highly accretive" for OFG.
Puts OFG in "an excellent position to capitalize on the post-hurricane recovery" in Puerto Rico and to address its "nagging funding/scale issue."
Meanwhile, Credit Suisse analyst Mike Rizvanovic says the dealhas a "minimal" effect on Scotiabank, estimating that Puerto Rico accounts for ~0.5% of Scotia's consolidated earnings and was a "very low ROE" business.
Sees BNS repositioning its international operations, focusing on Pacific Alliance countries of Mexico, Chile, Peru, and Colombia as a positive.