Scotiabank profit exceeds expectations for lower loan loss provisions and gains in retail banking – .

Scotiabank profit exceeds expectations for lower loan loss provisions and gains in retail banking – .

Bank of Nova’s third quarter profit was higher than analysts’ expectations, driven by lower loan loss provisions and improving earnings from retail banking in Canada and Latin America.

The country’s third-largest bank was the first major lender to report profits for the quarter ended July 31. Scotiabank earned $ 2.54 billion, or $ 1.99 per share, compared to $ 1.3 billion, or $ 1.04 per share, in the same quarter of the year. since.

Adjusted to exclude certain items, Scotiabank said it earned $ 2.01 per share, well above analysts’ consensus estimate of $ 1.90 per share.

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Revenue increased 1% to $ 7.76 billion and spending also increased 1% to $ 4.1 billion.

Provisions for credit losses, which are funds set aside by banks to cover loans that could default, fell to $ 380 million from $ 2.2 billion a year earlier. The bank has clawed back $ 461 million in provisions that had been set aside earlier in the pandemic in case still-performing loans turned sour, as economic forecasts have improved. The bank also earmarked $ 841 million to cover overdue loans.

Profit from Canadian banking activities increased to $ 1.08 billion from $ 429 million a year ago. The difference was mostly in the allowance for credit losses, as the bank was building up its reserves a year ago and is now recovering some of those funds after a few defaulted loans. But revenues were also driven by strength in residential mortgages and commercial loans, which rose 10% and 7% respectively.

International banking profit rose to $ 486 million, continuing to recover after a slow start to the year. Provisions for bad debt were lower than a year ago, but income was also down 8% year-over-year due to lower interest income.

Profit for the bank and global markets was $ 513 million, down from the previous quarter after a string of good results. And wealth management earnings were $ 392 million, up 22% from a year ago due to higher mutual fund fees and brokerage income.

Scotiabank has kept its quarterly dividend unchanged at 90 cents per share as Canada’s banking regulator continues to ban dividend increases and share buybacks.

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