Scotiabank reports strong earnings in third quarter

POSTED: 09/3/12 10:45 PM

St. Maarten / TORONTO, – Scotiabank reported third quarter net income of $2,051 million compared with net income of $1,303 million in the same period last year. Year over year, net income grew by 57%. Diluted earnings per share were $1.69, compared to $1.10 in the same period a year ago, an increase of 54%.
Return on equity was strong at 24.6%. Large notable items this quarter included an after-tax gain on the sale of Scotia Plaza in Toronto, Canada of $614 million or 53 cents per share, and an increase in the collective allowance for credit losses on performing loans of $100 million, representing 6 cents per share after tax. A dividend of 57 cents per common share was announced, an increase of 2 cents per share.

“We had record net income this quarter, with our business lines continuing to show good, diversified and sustainable growth and high profitability, coupled with the gain from the sale of Scotia Plaza in Toronto,” said Rick Waugh, Scotiabank President and CEO. “This performance is supported by our strong balance sheet, capital ratios and provisions.

“With net income of $521 million, Canadian Banking had a very strong quarter with very good volume growth, disciplined expense control and lower provisions. There was also good revenue growth in both cards and payments with strong new credit card and checking account originations across all channels, and strong small business and commercial deposit growth. As well, Canadian Banking continued to make solid contributions to Global Wealth Management for mutual cheap valium canada funds sold through the branch network.
“International Banking also continued its strong contribution to earnings with net income of $442 million. Solid growth in retail and commercial businesses across Latin America and Asia combined with earnings from acquisitions, mostly in Colombia, drove these results.
“Global Wealth Management results this quarter were solid, earning $284 million in financial markets that remain challenging. There was strong growth in both insurance and wealth earnings, partly offset by higher taxes.
“Global Banking and Markets had an excellent quarter, reporting net income of $398 million. Results were strong across the diversified client driven platform, particularly in the fixed income and equities businesses.
“Due to weakening economic forecasts and continuing global uncertainty, the Bank increased its allowance for credit losses on performing loans this quarter, resulting in a coverage ratio among the highest of our peers. Notwithstanding, the Bank’s credit portfolios are currently performing as expected, a reflection of our proven risk management discipline.
“Our capital position remains strong by international standards with a Tier 1 capital ratio of 12.6% and a tangible common equity ratio of 10.2%. Furthermore, at July 31, our common equity tier 1 ratio under Basel III was within our objective of 7% – 7.5%.
“We anticipate achieving our 2012 financial goals, as outlined in our guidance at the beginning of the year and are well positioned for next year. Accordingly, we have again increased our dividend, at the same time as retaining substantial sustainable earnings to finance our anticipated growth.”

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