Scotiabank Earnings Decrease Due to Increased Provisions for Loan Losses as Pandemic Looms

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A Bank of Nova Scotia building stands in Toronto on August 22, 2017.

Nathan Denette / The Canadian Press

The Bank of Nova Scotia released quarterly earnings on Tuesday that exceeded analyst estimates due to strong performance in the capital markets, but the bank’s loan loss provisions have doubled.

Scotia’s loan loss provisions more than doubled to $ 1.85 billion from a year ago as it set aside more money to deal with future losses.

Canadian banks are expected to face default as the coronavirus pandemic drives the world into a recession, leaving small and medium-sized businesses struggling to pay off their debts.

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Bank said business and corporate loan supply increased by $ 275 million, hurt by poor macro outlook and falling oil prices that impacted the global energy sector .

Adjusted net income in its global wealth management segment increased 3% to $ 314 million, while profit from banking and global markets jumped 25% to $ 523 million.

Canada’s third-largest lender said net income fell to $ 1.24 billion, or $ 1 per share, for the quarter ended April 30 from $ 2.13 billion, or 1.73 $ per share, a year earlier.

On an adjusted basis, the lender earned $ 1.04 per share, compared to analysts’ estimate of earnings of $ 0.98 per share, according to IBES data from Refinitiv.

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