Photographer: Ben Nelms/Bloomberg

Scotiabank Profit Tops Estimates on Gains in Capital Markets

Updated on
  • Bank of Nova Scotia raises quarterly dividend 2.7% to 76 cents
  • International and Canadian banking also posted profit gains

Bank of Nova Scotia said fiscal first-quarter profit rose 11 percent, beating analysts’ estimates, on gains in capital markets. The lender raised its quarterly dividend 2.7 percent to 76 cents a share.

Net income for the period ended Jan. 31 climbed to C$2.01 billion ($1.52 billion), or C$1.57 a share, from C$1.81 billion, or C$1.43, a year earlier, the Toronto-based lender said Tuesday in a statement. Profit excluding some items was C$1.58 a share, exceeding the C$1.57 average estimate of 17 analysts surveyed by Bloomberg.

“All our businesses delivered strong results, contributing to solid top line growth and a continued improvement in efficiency," Chief Executive Officer Brian Porter, 59, said in the statement. “We are pleased with the results in our global banking and markets business, which continues to build on good earnings we saw in the second half of 2016."

Scotiabank is the third Canadian lender to raise its payout after posting profit that exceeded analysts’ estimates, joining Royal Bank of Canada and Canadian Imperial Bank of Commerce. Higher contributions in its fixed-income and corporate-lending businesses helped drive a 28 percent jump in capital markets earnings. Profit also increased in domestic and international banking for Canada’s third-largest lender by assets.

Canadian Banking

Revenue increased 7.9 percent to C$6.87 billion from a year earlier. The lender set aside C$553 million for bad loans, up from C$539 million a year earlier.

Earnings from Canadian banking, which includes wealth management, rose 12 percent to C$981 million, on higher net interest income and improved banking and wealth-management revenues. International banking profit rose 14 percent to C$637 million, on retail loan and deposit growth and cost cutting. Scotiabank has operations in more than 55 countries, including Latin America, the Caribbean and Asia.

Global banking and markets posted profit of C$469 million, up from C$366 million a year earlier, helped by contributions from fixed income and European and Canadian lending businesses. Investment banking fees rose 81 percent to C$143 million, and trading revenue improved 25 percent to C$548 million.

(Updates with unit performance from sixth paragraph.)
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