Scotiabank Quarterly Profit Matches Analysts’ Esimtates, Raises Dividend

Bank of Nova Scotia, Canada’s third- largest bank, said gains in consumer lending and wealth management lifted profit to a 10th quarterly gain, matching analysts’ estimates. The bank increased its quarterly dividend.

Net income for the period ended Jan. 31 climbed 15 percent to C$1.44 billion ($1.44 billion), or C$1.20 a share, from C$1.25 billion, or C$1.08, a year earlier, the Toronto-based bank said today in a statement.

Profit from consumer banking climbed 5.3 percent to C$475 million amid higher transaction volumes and card businesses, as spending remained strong in the Canadian economy. The lender also posted gains in its international and asset-management units.

“Scotia is the first bank to not exceed consensus expectations, with its peers reporting to date all coming in well above forecasts,” Barclays Capital analyst John Aiken wrote today in a note.

Earnings excluding an 8-cent per share gain from a real estate sale and other one-time items were C$1.15 a share, matching the average estimate of 15 analysts surveyed by Bloomberg. The bank had topped estimates in seven of the prior eight quarters, according to data compiled by Bloomberg.

Boosted Dividend

Scotiabank’s profit increase “looks more like what I had expected from the Canadian banks” in this quarter, said John Kinsey, who helps manage about C$1 billion at Caldwell Securities Ltd. “I’ve been expecting high single-digit growth for the year.”

Scotiabank fell 1.4 percent to C$52.94 at 4 p.m. in Toronto, its biggest one-day decline since Jan. 26..

The bank boosted its dividend to 55 cents a share, the third increase in its payout since May 2008. Royal Bank of Canada and Toronto-Dominion Bank (TD) also announced dividend increases this month.

International banking profit climbed 8.9 percent to C$391 million as earnings in Latin America and Asia offset a lower contribution in Thailand after recent flooding. Scotiabank has spent more than C$3.5 billion over the past five years on acquisitions outside Canada and has operations in about 50 countries.

Wealth management profit surged 21 percent to C$288 million on an increase in revenue, while investment-bank earnings dropped 7.2 percent to C$311 million. The bank set aside C$265 million for soured loans in the quarter, down from a year- earlier C$275 million.

To contact the reporter on this story: Sean B. Pasternak in Toronto at spasternak@bloomberg.net

To contact the editors responsible for this story: David Scanlan at dscanlan@bloomberg.net; David Scheer at dscheer@bloomberg.net

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