Scotiabank's Q4 profit inches up 3% amid Canadian, worldwide growth

Marcus Newton
November 29, 2017

Bank of Nova Scotia's quarterly earnings, released at the start of the Canadian bank earnings season, also missed expectations.

Adjusted for certain items, Scotiabank earned $1.65 per share, whereas analysts polled by Bloomberg LP had expected $1.66.

Canada's main stock index ended slightly lower on Tuesday, weighed by a fall in Bank of Nova Scotia shares after it agreed to buy a bank in Chile, with investors rattled after North Korea fired a ballistic missile.

If the transaction to acquire all the shares of BBVA Chile is completed, Scotiabank's CET1 would be reduced by approximately 135 basis points, it said.

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The bank posted revenue of $7.39 billion in the period.

"Although modest, this was Scotia's first earnings miss in several quarters", said John Aiken, an analyst at Barclays Capital Canada Inc., in a research note. Scotiabank's diluted earnings per share for the 2017 fiscal year rose eight per cent to $6.49, compared to $6 in 2016.

Worldwide banking profit rose 11 per cent to $605 million amid loan and deposit growth in Latin America. The bid for BBVA Chile, if successful, would boost Scotiabank's market share in Chile to about 14 per cent.

Its key measure of financial health, the common equity tier 1 ratio (CET1), increased to 11.5 per cent, up from 11.3 per cent in its third quarter and 11.0 per cent in the fourth quarter a year ago. Scotiabank's stock (TSX:BNS) was down $1.75, or 2.10 per cent, to $81.73 at the closing of markets.

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