Scotiabank raises dividend on strong profits from Canadian operations
$1.85B in net income for 2nd quarter
Scotiabank is raising its dividend following a third quarter that showed increased underlying profits from personal and commercial banking operations in Canada and abroad but weaker results from its investment banking division.
The bank's overall profit for the three months ended July 31 was $1.847 billion in net income, or $1.45 per share.
That was down from $2.351 billion or $1.85 per share in net income in last year's third quarter, which included an unusual item in its Canadian banking operations from the sale of most of Scotiabank's investment in CI Financial.
Excluding $555 million in unusual gains in last year's third quarter, Scotiabank's net income last year was worth $1.40 per share.
Scotiabank president and CEO Brian Porter said the Canadian banking operations had a strong quarter.
Canadian banking strong
"All of its key business segments — retail and small business banking, commercial banking and wealth management — delivered very good growth," Porter said.
Canadian banking contributed $863 million to Scotiabank's net income in this year's third quarter — up $112 million or 15 per cent if the CI Financial transaction is excluded but down $436 million or 35 per cent from last year with the special gain.
International banking contributed $537 million, up $51 million or 10.5 per cent as a result of strong loan growth across Latin America, higher fee income and contributions from investments and a positive impact from foreign currency translation..
The bank's global banking and markets division saw a 20 per cent decline in net income, which fell by $92 million from a strong quarter last year to $375 million.
Scotiabank says it received a lower contribution from investment banking and Asia lending and it took higher provisions for credit losses.
Analysts had predicted a dismal quarter for Canadian banks because of low oil, but this week's financial reports show they're doing well despite a moribund economy.