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A Scotiabank branch in Vancouver.Isabella Falsetti/The Globe and Mail
Bank of Nova Scotia BNS-T reported first-quarter earnings that topped analysts’ estimates as profit rose across its businesses, shrugging off concerns of tepid loan growth and tariffs.
Scotiabank earned $2.29-billion, or $1.73 per share, in the three months that ended Jan. 31. That compared with $993-million, or $0.66 per share, in the same quarter last year, which included an impairment loss of $1.36-billion on the sale of banking operations in Colombia, Costa Rica and Panama.
Adjusted to exclude certain items, the bank said it earned $2.05 per share. That beat the $1.95 per share analysts expected, according to data from S&P Capital IQ.
“We saw earnings growth across all of our business lines this quarter, including in Canadian Banking, where we delivered another quarter of sequential margin expansion, accelerating fee income growth, and positive operating leverage,” Scotiabank chief executive officer Scott Thomson said in a statement.
Scotiabank is the first major Canadian bank to report earnings for the fiscal first quarter. Bank of Montreal and National Bank of Canada will release results on Wednesday. Royal Bank of Canada, Toronto-Dominion Bank and Canadian Imperial Bank of Commerce will close out the week on Thursday.
In the quarter, Scotiabank set aside $1.18-billion in provisions for credit losses – the funds banks set aside to cover loans that may default. That was slightly higher than the same quarter last year and included $73-million against loans that are still being repaid, based on models that use economic forecasting to predict future losses.
Total revenue rose 3 per cent in the quarter to $9.65-billion while expenses fell 18 per cent to $5.29-billion.
Profit from Canadian banking was $960-million, up 5 per cent from a year earlier as an increase in net interest income offset higher provision for credit losses. But loan balances rose 3 per cent as mortgages increased 5 per cent, while business loans and personal loans both fell 1 per cent.
Profit from the bank’s international division was up 10 per cent at $717-million, driven by lower expenses and provision for credit losses.
The global wealth management division generated profit of $481-million, up 18 per cent on higher mutual fund fees, brokerage revenues, and net interest income across the Canadian and international segments.
And capital markets profit rose 5 per cent to $545-million on higher non-interest income and net interest income, which was partially offset by a rise in expenses and provisions for credit losses.
