Categories Analysis, Earnings, Finance

Bank of Nova Scotia posts Q4 revenue and earnings growth

The Bank of Nova Scotia (BNS), also known as Scotiabank, reported growth in revenue and earnings for the fourth quarter of 2018, but both metrics came in shy of market estimates. The stock was up 0.96% in premarket hours on Tuesday.

Total revenue amounted to CAD7.4 billion compared to CAD6.8 billion in the same period last year.

Net income attributable to common shareholders improved to CAD2.1 billion or CAD1.71 per share from CAD1.9 billion or CAD1.64 per share in the prior-year period. Earnings in the quarter benefited from asset growth, increases in non-interest income and net interest margin, and acquisitions. Adjusted EPS grew 8% to CAD1.77, coming ahead of the expectations of CAD1.35.

Net interest income grew 10%, driven primarily by acquisitions and broad-based lending growth across retail, commercial and corporate segments. Non-interest income grew 8%, driven by acquisitions, higher banking and credit card fees, as well as trading revenues.

Increased investments in technology and other business growth-related initiatives drove an 11% increase in non-interest expenses, which in turn put pressure on earnings.

During the quarter, Scotiabank reported increases in revenue and earnings for its Canadian Banking and International Banking segments. Revenue in the Global Banking and Markets segment remained relatively flat versus the year-ago quarter while net income grew 6%.

Bank of America tops Q3 estimates with solid results

The 4% growth in Canadian Banking earnings was helped by margin expansion, increases in assets, deposits and non-interest income, and a lower provision for credit losses. Earnings in International Banking increased 18%, benefiting from strong loan and deposit growth in the Pacific Alliance and higher non-interest income. In Global Banking and Markets, earnings benefited from lower provision for credit losses and reductions in non-interest expenses.

The company declared a quarterly dividend of CAD0.85 per common share, payable on January 29, 2019 to shareholders of record on January 2, 2019.


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