Scotiabank posts record annual profit of $3.17bn from domestic banking

Bloomberg

Bank of Nova Scotia is proving to be no pushover on its home turf. Canada’s third-largest lender had record annual profit of C$4.06 billion ($3.17 billion) from domestic banking, aided by 12 percent growth in the final quarter, according to a statement on Tuesday. It’s the third time this year that the Scotiabank unit, which also includes wealth management, has set a new benchmark. More than half of the firm’s total profit comes from that division.
Scotiabank is the first Canadian lender to report fiscal fourth-quarter earnings and may be a harbinger for how the country’s other large banks fare on the domestic front. Canada’s six largest are expected to increase profit by an average 6 percent in the period from a year earlier, according to Bloomberg Intelligence analyst Paul Gulberg.
Scotiabank has focused on adding deposits and expanding in commercial lending within Canada, while benefiting from efforts to bulk up its credit-card business. Chief Executive Officer Brian Porter made increasing its Canadian card operations a priority in 2014, along with getting bigger in Mexico, Chile, Peru and Colombia. Toronto-based Scotiabank has operations in more than 50 countries, making it Canada’s most international lender.
Earlier on Tuesday, Scotiabank made a $2.2 billion binding offer to buy Banco Bilbao Vizcaya Argentaria SA’s Chilean bank to double its stake in the country. BBVA intends to accept the offer for its 68.2 percent stake in the unit and Scotiabank will proceed with a bid for the remaining shares, Spain’s second-biggest lender said in a statement. It has informed the Said family, owner of 31.6 percent of the unit, that it can exercise a right of first refusal over the shares or sell its stake to Scotiabank under the same terms.
BBVA Chile has about C$29 billion in total assets, C$19 billion of total net loans, 4,000 employees and 127 branches, Scotiabank said in a statement.
Net income rose 2.9 percent to C$2.07 billion ($1.6 billion), or C$1.64 a share, from C$2.01 billion, or C$1.57, a year earlier. Scotiabank said adjusted earnings were C$1.65 a share, while the average estimate of 15 analysts surveyed by Bloomberg was C$1.67 a share. Canadian banking profit climbed to C$1.07 billion from C$954 million a year earlier. Total annual profit increased 12 percent to a record $C8.24 billion. Total revenue rose 0.9 percent to C$6.81 billion, missing analysts’ C$7.1 billion estimate. Earnings from international banking rose 6.6 percent to C$660 million from a year earlier, while the global banking and markets unit reported profit of C$391 million, down 15 percent.