TORONTO -- Scotiabank may have withdrawn its bid to acquire a minority stake in the Bank of Guangzhou, but analysts say that's unlikely to dampen the Canadian institution's interest in Chinese acquisitions.

"The size and growth potential of the Chinese market is clear, and that's going to continue to draw the attention of management," said Rob Sedran, an analyst at CIBC World Markets.

"I think even Scotia is not ruling out doing something in the future. It's just that this deal, for whatever reason -- and we don't actually know the reason -- just didn't come to pass."

Canada's most international bank (TSX:BNS) announced its intention to acquire a 19.99 per cent stake in the Bank of Guangzhou -- the maximum allowed under Chinese law -- in September 2011.

But after nearly two years, Scotiabank announced Friday it has withdrawn its application, citing "changing conditions."

"Scotiabank will continue to consider future opportunities for investment in China that are in line with our strategy and footprint in the region," Dieter Jentsch, Scotiabank's group head of international banking, said in a statement.

"The bank also remains focused on our existing operations in the country, including the recently announced Bank of Beijing Scotia Asset Management joint venture and a 19 per cent stake in the Bank of Xi'an."

In May, Brian Porter, who has been tapped as the bank's next chief executive, said a change of government in the City of Guangzhou was likely the cause of the delay.

Scotiabank's primary international focus will continue to be in Latin America, but new acquisitions in Asia remain a "distinct possibility," said John Aiken, an analyst at Barclays.

"From our standpoint, this does not reflect a changing desire for growth in Asia or China in particular for Scotia," Aiken said in a note.

"However, with the lengthening timeline, it was quite likely that the structure and terms of the deal were not as attractive for either party at this juncture."

Earlier this year, chief executive Rick Waugh hinted the bank's patience was wearing thin, saying there were a "world of opportunities" for the bank and that it would find another place to put its capital if needed.

But Scotiabank is in no rush to find somewhere to put its money, said Sedran.

"I don't think that the $700 million that they were going to spend necessarily needs to find a home in the near term," he said.

"I think it'll just get thrown on the pile and they'll spend it over time."

The ordeal highlights how difficult it can be to close an acquisition in China, even after you have identified a target, said Sedran.

Scotiabank has had a presence in China since 1982 and over the last 31 years has grown to include branches in Guangzhou, Chongqing and Shanghai. It also has branches in Hong Kong and Taipei, Taiwan.

Earlier this year, the bank announced its fund management venture with the Bank of Beijing had received regulatory approval for a licence to operate in China.

The Canadian bank said it was the first fund management licence issued in China under a new round of pilot programs allowing commercial banks to set up fund management companies.

Scotiabank, with assets of $754 billion, together with its affiliates, serves some 19 million customers in more than 55 countries around the world.