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Scotiabank Q3 EPS tops estimates on international banking rebound

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Scotia has become the sixth of Canada’s largest banks to top estimates this week.

Scotiabank (TSE:BNS), Canada's third-largest bank, posted a third-quarter profit that topped market expectations, helped by growth in its international retail banking segment. 

Net income fell to C$1.85bn, or C$1.45 per share, for the three months ended July 31, from C$2.35bn, or C$1.85 per share, a year ago, the Toronto, Ontario-based company said in a statement on Friday.

Core earnings were C$1.47 per share, above the C$1.45 average estimate of 15 analysts surveyed by Capital IQ.

“We delivered solid third quarter results for shareholders, with strong earnings in our personal and commercial businesses in Canada and international banking,” chief executive officer Brian Porter said in the statement.

Canadian banking earned C$863mln in this year’s third quarter, down 35% from last year. The Canadian unit's profit dropped due in part to a gain recorded in the year-earlier period. Stripping out special items, the segment grew 15 percent.

International banking earned C$537mln, up 10.5%, helped by loan growth across Latin America and higher fee income. Scotiabank has operations in more than 55 countries.

Profit from the bank’s global banking and markets division fell 20%, reflecting weakness in investment banking and higher provisions for credit losses. Underwriting and advisory fees fell 44% to C$113mln. Trading revenue climbed 1.7% to C$353mln.

Revenue dropped 5.6% to C$6.1bn from a year earlier.

The bank set aside C$480mln for bad loans, up 21% from C$398mln. 

The company lifted its dividend 2.9% to C$0.70 per share. This quarterly dividend is payable to shareholders of record as of October 6 on October 28.

Shares closed up 2.5% at C$59.98 on Thursday, paring this year’s slump to 9.6%.

Scotia has become the sixth of Canada’s largest banks to top estimates this week.

On Thursday, Toronto-Dominion Bank (TSE:TD), Canada’s second-largest lender by assets, reported a higher-than-expected 7.5% profit gain, buoyed by stronger Canadian and U.S. retail banking.

Canadian Imperial Bank of Commerce (TSE:CM), the fifth-largest lender by assets, reported higher-than-expected profit, aided by growth in its retail and wealth management businesses, and lifted its quarterly dividend. 

On Wednesday, Royal Bank of Canada (TSE:RY), the country’s largest lender, reported a 4% profit gain on record earnings from domestic banking and increased its dividend. 

On Tuesday, Bank of Montreal (TSE:BMO), the country’s fourth-largest bank, reported better-than-estimated profit, helped by gains in consumer banking and wealth management. 

The banks’ performance comes as Canada’s economy has been hit hard by falling prices for its top export, crude oil. The economy shrank in the first five months of 2015.

 

Quick facts: Bank of Nova Scotia

Price: 56.66 CAD

TSX:BNS
Market: TSX
Market Cap: $68.64 billion
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