Scotiabank Hit by $168M in Costs Due to Closure of Metals Business

SEATTLE (Scrap Monster): The Bank of Nova Scotia (Scotiabank) has earmarked a sum of $168 million to cover the costs relating to the costs of winding down its metals business. The above money will be also used in settlement of investigations by U.S. regulators on its metals trading activities.

Last month, the bank had announced that it will close down its metal business by early-2021. Earlier in 2018, it had decided to sell the business, but had failed to find a buyer. Following this, it had downsized the business, reducing the staff at its various offices across the world from over 100 to around 15.

Recently, the precious metals trading activities of the bank had come under regulatory scrutiny, following an incident in which a trader was pleaded guilty for trying to manipulate prices through spoofing. Scotiabank announced that it is engaged in discussions with the authorities of the Commodity Futures Trading Commission and the U.S. Department of Justice towards settlement of investigations.

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For years, Scotia Bank had been the world’s biggest lender to the physical precious metals industry. The bank had played a key role in settling gold trades and had been an active participant in daily gold price auctions.

Meantime, the press release issued by the bank says that it recorded 41% fall in profits in the quarterly period ending on April 30^th, 2020.