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Scotiabank posts $1.7 billion profit in first quarter

Bank of Nova Scotia had $1.709 billion of net income in the first quarter, up 6.5 per cent from a year earlier overall and in line with analyst estimates.

It also announced a higher dividend, which will rise to 64 cents per Scotiabank common share starting April 28, up three per cent.

Scotiabank is the last of Canada’s big banks to report financial results for the three months ended Jan. 31. All of them reported stronger profits compared with the last year’s first quarter.

Scotiabank president and CEO Brian Porter said strong revenue growth — $5.645 billion, up from $5.171 billion — reflected the company’s diversified business.

“We are pleased to report good results to start the year,” Porter said.

The bank’s two largest units — Canadian and international banking — each contributed about $1.8 billion in revenue during the quarter, followed by nearly $1.1 billion from global wealth and insurance.

However, unlike the other major units, Scotiabank’s international banking saw a decline in first quarter net income, which fell 11 per cent from last year to $401 million from $455 million.

Porter said the international banking segment grew assets and deposits, particularly in Latin America and Asia, but its profit margins were thinner.

“The margins have now stabilized and improved from last quarter,” Porter said.

“We have deliberately chosen to invest in stable Latin American economies such as Chile, Peru, Colombia, and Mexico. We believe that the likelihood of sustainable, higher growth in these select emerging markets remains strong and our businesses are performing well.”

Canadian banking net income grew 3.6 per cent to $575 million, from $555 million. Global wealth and insurance contributed $327 million, up 4.5 per cent from $313 million, and global banking and markets was little changed at $339 million, up from $337 million.

Scotiabank’s total profit amounted to $1.32 per common share, up from $1.24 per share a year earlier, under standard accounting.

On an adjusted basis, Scotiabank had diluted earnings of $1.34 per share, up from $1.26 per share in the first quarter of fiscal 2013.

Analysts had estimated $1.34 per share of adjusted income and $1.32 per share of net income, according to data from Thomson Reuters.

Scotiabank’s provision for credit losses was $356 million this quarter, up $46 million or nearly 15 per cent from the same period last year, due to higher provisions in Canadian and international banking.

Return on equity was 15.4 per cent compared to 16.8 per cent last year while its Tier 1 capital ratio rose to 9.4 per cent.