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Scotiabank reports 1.6 per cent rise in profit on growth in Canadian and international banking


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Scotiabank reports 1.6 per cent rise in profit on growth in Canadian and international banking

Bank of Nova Scotia, Canada’s third-biggest lender, posted a 1.6 per cent rise in quarterly profit on Tuesday, slightly exceeding expectations as loan and deposit growth and international earnings offset falling margins and higher credit provisions.Scotiabank reported adjusted earnings attributable to common shareholders of $2.23 billion, or $1.82 a share, compared with estimates of $1.81.…

Scotiabank reports 1.6 per cent rise in profit on growth in Canadian and international banking

Bank of Nova Scotia, Canada’s third-biggest lender, posted a 1.6 per cent rise in quarterly profit on Tuesday, slightly exceeding expectations as loan and deposit growth and international earnings offset falling margins and higher credit provisions.

Scotiabank reported adjusted earnings attributable to common shareholders of $2.23 billion, or $1.82 a share, compared with estimates of $1.81. That compared with $2.17 million, or $1.77 a share, a year ago.

For fiscal 2019, the bank posted a 2.9 per cent increase in profit to $9.4 billion.

Provisions for credit losses during the quarter jumped 28 per cent to $753 million.

Growing economic uncertainties that have raised the prospect of interest rate cuts at home, higher provisions for loan losses and sluggish deal-making have weighed on Canadian banks in recent quarters. Analysts expect the lenders to post their worst growth since the global financial crisis this fiscal year.

Canada’s central bank held interest rates steady last month, but left the door open for a possible cut in the coming months to help the economy weather the damaging effects of the trade war.

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Scotiabank’s results were helped by its focus on international markets — particularly the Pacific Alliance trading bloc of Peru, Mexico, Chile and Colombia, which now accounts for around a quarter of its revenue. The division’s 4.3 per cent adjusted earnings growth outpaced the Canadian unit’s more staid 1.2 per cent increase.

But that was tempered by a 9 basis point decrease in net interest margins in the international division, compared with a 2 basis point rise in Canada.

Scotiabank’s global banking and markets unit was also beset by the challenges seen across the rest of the capital markets sector, with net income and margins declining while expenses climbed.

The bank also announced a dividend of 90 cents a share.

© Thomson Reuters 2019

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