Scotiabank Looks Abroad for Earnings as Profit Beats Estimates

Bank of Nova Scotia’
s focus on international banking is paying off.

The Canadian lender, which has operations in about 50 countries, earned a record C$725 million ($571 million) from overseas businesses in the fiscal first quarter, up 14 percent from a year earlier. Those contributions, along with gains in Canadian banking, helped it post total profit that beat analysts estimates.

Scotiabank is expanding in Latin America through acquisitions including its December

to buy Banco Bilbao Vizcaya Argentaria SA’s 68 percent stake in a Chilean lender, and a January

to buy Citigroup Inc.’s Colombian consumer and small-business banking operations. Latin America accounted for 62 percent of international banking earnings in the quarter ended Jan. 31.

“The strong momentum in our business was driven by double digit growth in loans in the Pacific Alliance countries, positive operating leverage and good credit quality,” Chief Executive Officer Brian Porter, who has focused on growth in Mexico, Peru, Chile and Colombia, said Tuesday in a


See also: Scotiabank opts to keep its metals business, ending speculation

The lender’s shares climbed 1.4 percent to C$79.86 at 10:06 a.m. in Toronto, the best performance in the S&P/TSX Composite Banks Index and paring this year’s decline to 1.5 percent.

“This was a good quarter, with positive trends showing through in the areas in which we need them to sustain our positive view on the shares,” Robert Sedran, a Canadian Imperial Bank of Commerce analyst, said in a note.

Here’s a summary of Scotiabank’s first-quarter results:

  • Net income rose 16 percent to C$2.34 billion, or C$1.86 a share, from C$2.01 billion, or C$1.57, according to the statement. Adjusted earnings were C$1.87 a share, the lender said, beating the C$1.68

    average estimate
    of 14 analysts surveyed by Bloomberg.
  • Earnings from Canadian banking, its largest operation, rose 12 percent to C$1.1 billion from a year earlier.
  • Capital markets profit fell 3.2 percent to C$454 million. 
  • Revenue increased 3.2 percent to C$7.09 billion.
  • Scotiabank raised its quarterly dividend 3.8 percent to 82 cents a share.

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