Scotiabank’s Machen makes U.S. push with midtown move, Dallas hub

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Photo by Galit Rodan/Bloomberg via Getty ImagesBank of Nova Scotia is moving its New York capital-markets office from downtown Manhattan to Fifth Avenue, a shift that for Travis Machen represents something much bigger as the Canadian lender pushes to win more United States business and recruit top talent there.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountMachen, a long-time financial-institutions banker who was born in Texas and previously worked at Morgan Stanley and JPMorgan Chase & Co., became chief executive officer of Scotiabank’s global banking and markets unit in May 2024. The bank was less than six months into a strategic overhaul that would see it slim down its sprawling international operations and direct new investment toward Canada, the U.S. and Mexico.At the capital-markets unit, Machen pared back Scotiabank’s Asian operations and says he “de-emphasized” its presence in areas including biotechnology while refocusing on sectors with cross-border activity that reflect traditional pillars of the Canadian economy — infrastructure, mining, energy, power and utilities.Breaking business news, incisive views, must-reads and market signals. Weekdays by 9 a.m.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Posthaste will soon be in your inbox.We encountered an issue signing you up. Please try again“We want to be able to win at home. And, from there, then we can expand,” Machen said in an interview at the bank’s Toronto headquarters.Scotiabank had previously underinvested in the U.S., he said, and with a market roughly 10 times the size of Canada’s and an annual fee pot he estimates at US$70 billion to US$80 billion, there’s plenty of room to grow.“Frankly the U.S. is the easiest market in the world to solve,” he said. “If you have great ideas, great people and great products, you can win.”Scotiabank’s capital-markets net income rose about 30 per cent in fiscal 2025, helped by favourable trading conditions and a resurgence of dealmaking. In the most recent quarter, earnings at the division totalled $647 million, up almost 37 per cent from a year earlier.“While we expect some normalization in capital-markets revenue, Scotiabank has invested heavily in the franchise over the last approximately three years, enhancing its capabilities, which should drive a higher floor in capital-markets revenues,” Keefe Bruyette & Woods analyst David Konrad wrote in a post-earnings report last month. Scotiabank’s shares are up almost 30 per cent this year, topping the 27 per cent gain for the S&P/TSX Canadian bank index.In recent months, Scotiabank was joint lead bookrunner on Canadian-dollar bond issues from both Amazon.com Inc. and Alphabet Inc., the result of relationships the firm spent years cultivating, according to Machen. The bank was also joint lead bookrunner on Apotex Health Corp.’s $1.3 billion initial public offering, the largest Canadian healthcare IPO on record.Canada, fresh off an investment conference led by Prime Minister Mark Carney aimed at attracting overseas money, is starting to draw more capital, Machen said. He pointed to Blackstone Inc.’s recent deal with a group of Canadian pension funds to acquire a 25 per cent stake in Air Canada’s loyalty program for $2.5 billion. Scotiabank was exclusive financial adviser to Blackstone on the transaction.This advertisement has not loaded yet.This advertisement has not loaded yet, but your article continues below.Machen’s long career as a financial-institutions banker has given him a deep industry network that he’s tapped to woo veteran bankers to Scotiabank. Alton McDowell left JPMorgan Chase & Co. to run global corporate banking and, more recently, Richard Tory, president of Morgan Stanley’s Canadian investment-banking business, joined to lead Scotiabank’s global mining group.The firm’s capital-markets business has hired 50 managing directors since Machen took over and promoted more than 30 people internally. He said Scotiabank is deliberately taking its time with recruiting, looking for people who fit the culture rather than setting hiring targets.Initially, the firm invested more in Canada to fortify its home base, but it’s been steadily building in the U.S., where it posted record earnings in the third quarter. Part of that effort includes what Machen calls a “brand-new global headquarters in New York,” with the Midtown space targeted to open next fall.“If you look at where all the capital in New York is and you look where all of our clients are, they’re all in Midtown,” he said, adding that the proximity to Grand Central Terminal and Penn Station makes the location more appealing to employees commuting into Manhattan. “When we say it’s in Midtown, it really helps with recruiting.”U.S. buildoutOver the past two years, Scotiabank has also opened a regional hub in Dallas, with plans to employ more than 1,000 people there, and is making a bigger push into Texas, where it has operated since 1962 and has more clients than in any other U.S. state.Giving employees the option of working in Texas is another recruiting tool, Machen said. The state also fits naturally with Scotiabank’s focus on energy and other industries with strong links to Canada and Mexico, the largest market in its international-banking division.In August 2024, the Canadian bank recruited a team of seven bankers from JPMorgan to start a mortgage capital-markets business in Houston. And, earlier this year, Scotiabank agreed to acquire Maple Financial Holdings Inc., which owns a small Texas commercial bank, giving it the ability to offer Federal Deposit Insurance Corp.-insured deposits to clients.The mortgage capital-markets business also fits a broader approach Machen has implemented, which is to originate loans, distribute them to other investors where possible, redeploy the freed-up capital and repeat.“That gives you better profitability, shorter durations, better liquidity,” he said. It’s a deliberate shift away from the old model of making a loan and sitting on it for years, and gives the bank more opportunities to interact with clients.That was also the rationale for making bigger investments in Scotiabank’s transaction-banking platform and expanding it further outside Canada. Deposits in the division rose 12 per cent in the most recent quarter from a year earlier, with particularly strong growth in Canada and the U.S.“It’s very high touch. Every single day you’re helping your client. As they grow, they’re opening up new accounts, they’re opening up new markets,” he said. “I put transaction banking at the absolute core of our entire strategy.”Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.