Scotiabank Surpasses Profit Expectations Driven by Strong Capital Markets and Wealth Management
Scotiabank has reported impressive fourth-quarter earnings that exceeded analyst expectations. The Bank of Nova Scotia announced a profit of CAD 2.2 billion, or CAD 1.65 per share, for the period ending October 31. This represents an increase from the CAD 1.69 billion, or CAD 1.22 per share, reported during the same quarter last year.
Financial Highlights
Adjusted earnings, excluding specific items like a restructuring charge, stood at CAD 1.93 per share, beating the anticipated CAD 1.84 per share according to S&P Capital IQ data. The results reflect Scotiabank’s strong performance in capital markets and wealth management.
Key Figures
- Net Profit: CAD 2.2 billion
- Earnings per Share: CAD 1.65
- Adjusted Earnings per Share: CAD 1.93
- Quarterly Dividend: CAD 1.10
- Total Revenue: CAD 9.8 billion (up 15%)
- Total Expenses: CAD 5.8 billion (up 10%)
CEO Scott Thomson noted that the bank has strengthened its balance sheet over the year. The loan-to-deposit ratio has improved, alongside an increase in the return on equity.
Provisions and Credit Losses
During the quarter, Scotiabank allocated CAD 1.1 billion for credit loss provisions, an increase from CAD 1.03 billion the previous year. This reflects the bank’s strategy to mitigate risks from potential loan defaults.
Sector Performance
Profit from Canadian banking reached CAD 941 million, a 1% increase due to higher private equity gains and insurance income. Scotiabank’s international operations reported a profit of CAD 634 million, up 6%. The global wealth management division also showed promising results with a profit of CAD 447 million, marking an 18% increase. Notably, capital markets profits soared by 50% to CAD 519 million, driven by heightened activity in the United States.
Scotiabank, as the first major bank to disclose its earnings for the period, sets the stage for upcoming reports from Royal Bank of Canada, National Bank of Canada, and others this week.
