Scotiabank tops estimates on capital markets, international unit
Bank of Nova Scotia topped estimates on better-than-expected results at its capital-markets unit as it continues to benefit from elevated market volatility, while also outperforming in its international division and across the rest of its businesses.
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The Toronto-based lender earned C$2.28 a share on an adjusted basis in its fiscal third quarter, according to a statement Tuesday, more than the C$2.10 average analyst estimate in a Bloomberg survey.
Net income at the company’s global banking and markets unit totaled C$647 million ($467 million) in the three months through July, better than the C$514 million average forecast. At its international unit, earnings of C$725 million beat the average forecast of C$629 million.
The period “was a record quarter for the bank, as all business lines reported strong results and we exceeded our medium-term objectives,” Chief Executive Officer Scott Thomson said in the statement, pointing to a year-over-year increase in return on equity.
The bank has been investing more in the US, including through a larger push into capital markets as well as a stake in Cleveland-based KeyCorp. It’s also slashed expenses, centralized operations at its large international, sold some assets in Latin America and, in Canada, pumped the brakes on rapid mortgage growth through brokers as it aimed to win more business — deposits, credit and wealth management — from each client.
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On credit, Scotiabank set aside C$1.08 billion in provisions for loan losses in the quarter, less than the C$1.13 billion consensus forecast.
The bank posted overall net income attributable to shareholders of C$2.91 billion, more than the C$2.63 billion analysts forecast.
Scotiabank is almost three years into a new strategy under Thomson and this is a pivotal year for the bank to begin showing results. Its shares have soared this year along with all of Canada’s Big Six banks, but Scotiabank’s stock has lagged behind its peers.
