(Bloomberg) Bank of Nova Scotia, which sells gold coins and bars to clients in Canada through an online store, plans to establish similar programs in countries such as Mexico and Dubai, Vice Chairman Barry Wainstein said.
“We’re looking at a number of different countries simultaneously,” Wainstein said in an interview. “In 2011, we may be up and running in one or two countries.”
Canada’s third-largest bank by assets has been expanding its ScotiaMocatta business, which trades and distributes metals such as gold and has roots that date back to 1671. The bank’s total revenue from precious-metals trading was C$245 million ($246 million) in the fiscal year that ended Oct. 31, a 53 percent increase from C$160 million two years earlier. ScotiaMocatta doesn’t disclose its financial results.
“We think we can roll out our retail product suite to a number of other countries,” said Wainstein, who is also the global head of foreign exchange and precious metals for the lender’s Scotia Capital investment-banking unit.
ScotiaMocatta opened its so-called eStore in September 2009, allowing Canadians to purchase physical gold valued at up to C$10,000 by ordering online. Clients outside of Canada, or those buying larger amounts, typically do so through wholesalers, Wainstein said.
About 60 percent of eStore users aren’t Scotiabank clients, said Wainstein, who declined to say how many customers have used the site.
The Toronto-based lender, which has operations in about 50 countries, may expand in Mexico because of ties to its Scotiabank Inverlat consumer bank.
Dubai would be a good market for expansion because of demand for gold in the Middle Eastern country, Wainstein said.
“We’re not competing in the Canadian league; we’re competing in the global league,” Wainstein said.
Scotiabank has made two acquisitions in the bullion industry since 1998, including the purchase of about $900 million in precious-metals loans from Bank of America Corp. in 2006.
Wainstein, whose bank owns gold vaults in Toronto and New York and leases space within the Bank of England’s vault in London, declined to say how much of the metal it stores.
Canada's Scotiabank to Sell Gold to Online Consumers in Mexico, Dubai
Just as a curiosity, and maybe also to show how much consumers are drawn into gold (never a good sign for gold, from a contrarian perspective):