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Scotiabank Quarterly Profit Climbs 13% on Consumer Banking

March 05, 2013

Scotiabank Quarterly Profit Climbs 13% on Consumer Banking

Scotiabank has operations in more than 50 countries, including Mexico, Thailand and Peru. Photographer: Brent Lewin/Bloomberg

Bank of Nova Scotia (BNS), Canada’s third- largest lender, said quarterly profit climbed 13 percent as its ING Direct acquisition improved consumer-banking results. The firm also increased its quarterly dividend.

Net income for the fiscal first quarter ended Jan. 31 rose to C$1.63 billion ($1.58 billion), or C$1.25 a share, from C$1.44 billion, or C$1.20, a year earlier, the Toronto-based bank said today in a statement. Excluding one-time items, Scotiabank earned C$1.27 a share, beating the C$1.25 average estimate of 16 analysts surveyed by Bloomberg.

Domestic banking profit climbed 21 percent to C$574 million after the lender purchased the Canadian operations of ING Groep NV (INGA) for C$3.1 billion in November. Scotiabank joined Royal Bank of Canada and Toronto-Dominion Bank in posting higher first- quarter net income even as Canada’s economic growth began to stagnate on record levels of household debt.

“Some pundits were calling for a slowdown, but we really haven’t seen it yet,” said Ian Nakamoto, director of research at MacDougall MacDougall & MacTier Inc. in Toronto, which manages about C$4 billion in assets, including bank shares. “Personal and commercial banking is still the bread-and-butter for these banks.”

The lender raised its quarterly dividend 5.3 percent to 60 cents per share. Scotiabank was expected to boost the payout to 59 cents, according to Bloomberg Dividend Projections.

International Bank

Scotiabank gained 0.7 percent to close at C$61.32 in Toronto. The shares have climbed 6.7 percent this year, compared with the 4.8 percent advance of the 10-company Standard & Poor’s/TSX Banks Index. (STBANKX)

Profit from international banking increased 19 percent to C$466 million, helped by Scotiabank’s acquisition last year of Banco Colpatria in Colombia. The lender has operations in more than 50 countries, including Mexico, Thailand and Peru.

Profit from investment banking rose 28 percent to C$399 million from a year earlier, while the wealth-management unit posted a 7.6 percent gain to C$310 million.

“It was a very solid quarter for BNS, reflecting solid organic revenue growth across the operating segments augmented by select acquisitions,” Brad Smith, an analyst with Stonecap Securities Inc. in Toronto, wrote today in a note to clients.

Scotiabank was the last of Canada’s six largest banks by assets to report first-quarter results. Royal Bank, the nation’s largest, said profit rose 12 percent to C$2.07 billion. Toronto- Dominion (TD), the second-biggest, reported profit climbed 21 percent to C$1.79 billion.

To contact the reporter on this story: Sean B. Pasternak in Toronto at spasternak@bloomberg.net

To contact the editors responsible for this story: David Scanlan at dscanlan@bloomberg.net; David Scheer at dscheer@bloomberg.net


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