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Scotiabank reported fourth-quarter earnings of $2.2-billion, or $1.65 per share, on Monday.Chris Wattie/Reuters
Bank of Nova Scotia BNS-T reported higher fourth-quarter profit that beat analysts’ estimates as activity in capital markets and wealth management surged, offsetting a restructuring charge aimed at cutting costs.
Scotiabank earned $2.2-billion, or $1.65 per share, in the three months ended Oct.31. That compared with $1.69-billion, or $1.22 per share, in the same quarter last year.
Adjusted to exclude certain items, including a restructuring charge and severance provisions, the bank said it earned $1.93 per share. That edged out the $1.84 per share analysts expected, according to data from S&P Capital IQ.
“We delivered improving results through the year as we strengthened our balance sheet, improved our loan-to-deposit ratio, and increased return on equity,” Scotiabank chief executive officer Scott Thomson said in a statement.
The bank kept its quarterly dividend unchanged at $1.10 per share.
Scotiabank is the first major bank to release earnings for the three months ended Oct. 31. Royal Bank of Canada RY-T and National Bank of Canada NA-T will report results on Wednesday. Toronto-Dominion Bank TD-T, Bank of Montreal BMO-T, and Canadian Imperial Bank of Commerce CM-T will wrap up earnings week on Thursday.
In the quarter, Scotiabank set aside $1.1-billion in provisions for credit losses – the funds banks set aside to cover loans that may default – and included $71-million against loans that are still being repaid, based on models that use economic forecasting to predict future losses.
In the same quarter last year, Scotiabank set aside $1.03-billion in provisions.
Total revenue rose 15 per cent in the quarter to $9.8-billion. But expenses increased 10 per cent to $5.8-billion, which the bank said was driven by higher personnel costs, technology and business development.
Profit from Canadian banking was $941-million, up 1 per cent from a year earlier, driven by higher private equity gains, mutual fund distribution fees and insurance income. Loan balances were up 2 per cent year over year.
Profit from the bank’s international division was up 6 per cent to $634-million.
The global wealth management division generated $447-million of profit, up 18 per cent. And capital markets profit jumped 50 per cent to $519-million on stronger activity in the United States.
