Dec. 6 (Bloomberg) -- Bank of Nova Scotia, Canada’s third-biggest lender by assets, said quarterly profit rose 12 percent as contributions from its takeover of ING Groep NV’s Canadian business led to record earnings in domestic consumer lending.
Net income for the fiscal fourth quarter ended Oct. 31 climbed to C$1.7 billion ($1.6 billion), or C$1.30 a share, from C$1.52 billion, or C$1.18, a year earlier, the Toronto-based bank said today in a statement. Adjusted earnings, which exclude some items, were C$1.31 a share, matching the average estimate of 13 analysts surveyed by Bloomberg.
Consumer-lending profit was helped by Scotiabank’s C$3.1 billion purchase of ING Direct Canada in November, which bolstered loans and added about 1.8 million customers. The firm is renaming the online business Tangerine next year. Earnings from Scotiabank’s wealth-management unit jumped 9.7 percent on higher mutual-fund sales and insurance revenue and as rising equity markets increased assets.
ING Direct is “a terrific tuck-under acquisition for this type of bank,” said Bob Decker, fund manager with Aurion Capital Management Inc. in Toronto, who helps manage about C$6 billion including Scotiabank shares. “They needed that offering in the marketplace and it has resonated well with clients.”
Scotiabank rose 1 percent to C$63.98 at 4 p.m. in Toronto. The shares have risen 11 percent this year, lagging the 14 percent gain of the eight-company Standard & Poor’s/TSX Commercial Banks Index.
Scotiabank set aside C$329 million for bad loans, up from C$321 million a year earlier, according to the statement.
Profit from Canadian consumer banking surged 23 percent to C$593 million, while earnings from international banking gained 3 percent to C$467 million. Scotiabank has operations in more than 55 countries, including Chile, Mexico and Thailand.
Net income from wealth management and insurance rose to C$329 million, while earnings from global banking and markets fell 13 percent to C$344 million, as underwriting and advisory fees slid 7.6 percent.
“Canadian banking had a second consecutive quarter of record earnings,” Chief Executive Officer Brian Porter, 55, said in the statement. “Existing businesses performed very well with an increased margin, lower loan-loss provisions and strong asset growth.”
Porter took over as CEO on Nov. 1, succeeding Richard Waugh, who retired.
For the fiscal year, the lender posted record profit of C$6.7 billion, up 3.6 percent from C$6.47 billion a year earlier.
Scotiabank, the last of Canada’s six biggest lenders to report results, said fourth-quarter revenue rose 11 percent to C$5.4 billion.
To contact the reporter on this story: Doug Alexander in Toronto at email@example.com