Bank of Nova Scotia misses in Q3 as provisions reach $2.18 billion - BNN

Bank of Nova Scotia fell short of profit expectations in its fiscal third quarter as its international banking operations swung to a loss and amid a double-digit increase in provisions for credit losses.

Net income for the three months ending July 31 was $1.30 billion, compared to $1.98 billion a year earlier. On a per share basis, Scotia earned $1.04; analysts, on average, expected the bank to earn $1.10.

The bank set aside $2.18 billion in the quarter for loans that could go bad, an 18-per-cent increase from the previous quarter when Scotia's provisions for credit losses reached $1.85 billion.

“Scotiabank continues to focus on its customers while remaining operationally resilient during the COVID-19 pandemic," said president and CEO Brian Porter in a release Tuesday. "The bank has strong capital and liquidity ratios and has reserved conservatively for estimated future loan losses."

Scotia's sprawling international banking division reported a net loss of $28 million in the latest quarter, compared to a profit of $844 million a year earlier. The fiscal third quarter was marred by another sharp increase in provisions for credit losses, which reached $1.28 billion from just over $1 billion in the prior quarter. In a release, Scotia noted Latin America's economic activity was hampered in the quarter by the spread of COVID-19.

“A challenging quarter for Bank of Nova Scotia on multiple fronts. We are most concerned about the medium-term prospects for the bank’s International business, which we believe could see materially suppressed earnings power in a low-rate environment,” wrote Credit Suisse analyst Mike Rizvanovic in a report to clients.

The bank's Canadian operations also suffered in the quarter, as profit fell to $429 million from $910 million a year earlier. Scotia blamed the profit erosion on higher credit loss provisions and weaker net interest income.

Scotia's global banking and markets unit provided some relief, as profit in that division surged 60 per cent year-over-year to $600 million.

Wealth management also fared well in the fiscal third quarter, as net income from that unit increased six per cent to $321 million.

Let's block ads! (Why?)

https://news.google.com/__i/rss/rd/articles/CBMiZ2h0dHBzOi8vd3d3LmJubmJsb29tYmVyZy5jYS9iYW5rLW9mLW5vdmEtc2NvdGlhLW1pc3Nlcy1pbi1xMy1hcy1wcm92aXNpb25zLXJlYWNoLTItMTgtYmlsbGlvbi0xLjE0ODQ1NjbSAQA?oc=5

2020-08-25 10:39:12Z
52781019875819