Not any more

Scotiabank profit tops $1-billion

In Canada on August 31, 2010 at 09:29

Profit at Bank of Nova Scotia BNS-T rose 14 per cent in the third quarter as earnings at its capital markets division fell, reflecting a trend seen across the banking sector this summer.

Scotiabank made $1.06-billion, or 98 cents a share in the quarter ending July 31, compared to profit of $931-million, or 87 cents a year earlier. The earnings were below the expectations of analysts, who were forecasting profit of $1 a share.

Revenue was $3.85-billion, up $11-million from the same quarter last year.

Profit in the capital markets division, a number that has slumped at all the major banks amid a dismal quarter for trading due to upheaval in the global markets, fell 35 per cent to $305-million.

“Scotia Capital delivered a solid quarter, notwithstanding a decline in trading revenues, as expected, from the records set in previous quarters,” Scotiabank chief executive officer Rick Waugh said in a statement.

Scotiabank’s lower capital markets profit comes on the heels of similar slumps seen at Bank of Montreal, Canadian Imperial Bank of Commerce and Royal Bank last week.

Loan loss provisions, another closely watched number, were $276-million compared to $554-million in the same quarter of 2009. That was also an improvement on $338-million in the second quarter of this year.

Provisions for credit losses are the amount of money banks set aside to cover bad loans, and the figure rises in a slowing economy.

Scotiabank’s Canadian operations, driven by lending and deposits at its branch network, had net income of $604-million in the quarter, up 21 per cent from a profit of $500-million a year ago.

Profit at the bank’s international operations rose $5-million to $317-million.

Scotiabank’s international businesses took an $89-million hit from the rising Canadian dollar. The bank, which has retail operations in several countries, from Thailand to the Caribbean, benefits from those operations when the Canadian dollar is lower.

The bank’s other operations, where it records profit from smaller operating segments and various tax adjustments on the books, reported a net loss of $164-million in the quarter, an improvement on a loss of $351-million a year ago.

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