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Toronto Star
27-05-2025
- Business
- Toronto Star
Scotiabank profit dips as it prepares for potential turbulence ahead
TORONTO - Cautious borrowers and a worsening economic outlook pushed Scotiabank earnings slightly down in the second quarter from last year as the bank put aside more money for potentially bad loans ahead. The bank reported a net income of $2.03 billion, compared with $2.09 billion a year earlier, as its provisions for credit losses rose by $391 million from last year to $1.4 billion. 'While we have not seen a meaningful deterioration in credit, our base-case forward looking indicators have worsened,' said chief executive Scott Thomson on an earnings call Tuesday. ARTICLE CONTINUES BELOW He said deposits are rising and mortgage growth is slowing as consumers become more cautious, while capital markets activity slowed in April as tariff uncertainty escalated. But Thomson said he was optimistic about the Canadian election being over, granting some political stability that will help the country focus on growth and productivity issues. 'While weaker consumer and business confidence is impacting near-term loan growth and capital markets activity, the future looks bright for Canada.' In a show of confidence in the bank's own finances, Scotiabank boosted its dividend to $1.10 per share, up from $1.06 — its first raise in two years. With a common equity capital ratio of 13.2 per cent, well above the mandated minimum of 11.5 per cent, the bank has also launched a buyback program of up to 20 million shares to help boost its stock price and return cash to shareholders. The increased payment to shareholders came as Scotiabank says its profit amounted to $1.48 per diluted share for the quarter ended April 30 compared with a profit of $1.57 per diluted share in the same quarter last year. ARTICLE CONTINUES BELOW ARTICLE CONTINUES BELOW Revenue totalled $9.08 billion, up from $8.35 billion. On an adjusted basis, Scotiabank says it earned $1.52 per diluted share, down from an adjusted profit of $1.58 per diluted share a year earlier. Analysts on average had expected an adjusted profit of $1.56 per share, according to data provided by LSEG Data & Analytics. Jefferies analyst John Aiken said the miss was largely from the higher provisions build, while otherwise the results were solid. 'While there are still some headwinds to underlying growth, we believe that this is a result of the operating environment and not necessarily Scotia specific,' he said in a note. National Bank analyst Gabriel Dechaine said there were some areas of concern in Scotiabank's Canadian banking division as it showed negative earnings growth and flat loan volumes, but also pointed to provisions as the reason for the earnings miss. 'The reason BNS missed expectations was entirely due to a larger than expected addition to performing allowances, which is a conservative approach that we believe is appropriate in the current economic climate.' ARTICLE CONTINUES BELOW ARTICLE CONTINUES BELOW Scotiabank's said its build in provisions will help it navigate the uncertainties ahead and that its impaired provisions — the segment that it doesn't reliably expect to get paid back — should be high enough to remain stable through the year. 'We're not seeing any major pockets of strain in any of our portfolios, and we're feeling quite confident as I look at the Canadian book that mortgage delinquencies have stabilized. I'm seeing auto delinquencies stabilized,' said Phil Thomas, chief risk officer. 'So as we look out the next two quarters and with our forecast, we're seeing things relatively stable at the current rates.' Credit agencies are showing consumers are finding it harder to pay bills, including an Equifax report out Tuesday showing delinquency rates for non-mortgage holders were up 8.9 per cent year-over-year and up 6.5 per cent for mortgage holders. Thomas said the consumer strain is showing up at the bank less on delinquencies and more in cautious spending. He said they're seeing less foreign travel, more budget-focused groceries and greater hesitancy on putting bids on houses given uncertainty about jobs. 'You do see some of that slowing down, but it's not showing up in the day to day impact,' said Thomas. ARTICLE CONTINUES BELOW ARTICLE CONTINUES BELOW 'Bottom line is this is why we just did an 18 basis point performing allowance build to make sure that we're prepared for an eventuality if it does come about that, you know, unemployment continues to spike up and we do see layoffs and and and it does significantly impact the Canadian consumer.' This report by The Canadian Press was first published May 27, 2025. Companies in this story: (TSX:BNS)
Free Malaysia Today
27-05-2025
- Business
- Free Malaysia Today
Scotiabank misses profit estimates as tariff concerns pile on loan loss reserves
Scotiabank's Canadian banking unit recorded a 31% fall in net income largely due to a build in loan loss reserves. (Global news pic) TORONTO : Bank of Nova Scotia missed quarterly earnings estimates today, burdened by a larger-than-expected sum of money kept aside to shield against bad loans in a challenging environment riddled with trade uncertainties. Scotiabank's Canadian banking unit, its biggest income generator, recorded a 31% fall in net income largely due to a build in loan loss reserves as US tariffs weigh on Canadian retail and commercial portfolios. 'Amidst the continuously evolving economic outlook, we are focused on what we can control,' CEO Scott Thomson said. While trade negotiations are ongoing, analysts have still projected a recession or stagflation in Canada, but are optimistic that newly elected Prime Minister Mark Carney could implement pro-business policies that will drive private sector investment. 'This quarter we increased our performing allowances to reflect the impact of an uncertain macroeconomic outlook,' Thomson said. Since taking charge in 2023, Thomson has led the company in a new direction focusing on the US$1.5 trillion North American trade corridor by selling troubled assets in Colombia, Panama and Costa Rica and instead investing in regional US lender KeyCorp. Its international business reported a 6% increase in adjusted earnings and its global banking and markets segment recorded a 10% rise. The lender reported adjusted earnings of C$1.52 (US$1.10) per share, compared with analysts' average estimate of C$1.56, according to LSEG data. Loan loss provisions, the money lenders set aside to cover for souring loans, rose to C$1.40 billion, from C$1 billion a year ago. Analysts had projected C$1.22 billion.
Toronto Sun
27-05-2025
- Business
- Toronto Sun
Scotiabank reports Q2 profit down from year ago, provision for credit losses up
Published May 27, 2025 • 2 minute read A Scotiabank sign is shown on a shopping mall in Ottawa on Thursday, June 27, 2024. Photo by Sean Kilpatrick / The Canadian Press The Bank of Nova Scotia reported second-quarter net income of $2.03 billion, down from $2.09 billion a year earlier as it put aside more money for bad loans. This advertisement has not loaded yet, but your article continues below. THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLY Subscribe now to read the latest news in your city and across Canada. Unlimited online access to articles from across Canada with one account. Get exclusive access to the Toronto Sun ePaper, an electronic replica of the print edition that you can share, download and comment on. Enjoy insights and behind-the-scenes analysis from our award-winning journalists. Support local journalists and the next generation of journalists. Daily puzzles including the New York Times Crossword. SUBSCRIBE TO UNLOCK MORE ARTICLES Subscribe now to read the latest news in your city and across Canada. Unlimited online access to articles from across Canada with one account. Get exclusive access to the Toronto Sun ePaper, an electronic replica of the print edition that you can share, download and comment on. Enjoy insights and behind-the-scenes analysis from our award-winning journalists. Support local journalists and the next generation of journalists. Daily puzzles including the New York Times Crossword. REGISTER / SIGN IN TO UNLOCK MORE ARTICLES Create an account or sign in to continue with your reading experience. Access articles from across Canada with one account. Share your thoughts and join the conversation in the comments. Enjoy additional articles per month. Get email updates from your favourite authors. THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK. Create an account or sign in to continue with your reading experience. Access articles from across Canada with one account Share your thoughts and join the conversation in the comments Enjoy additional articles per month Get email updates from your favourite authors Don't have an account? Create Account The bank also raised its quarterly dividend Tuesday to $1.10 per share, up from $1.06 per share. The increased payment to shareholders came as Scotiabank says its profit amounted to $1.48 per diluted share for the quarter ended April 30 compared with a profit of $1.57 per diluted share in the same quarter last year. Revenue totalled $9.08 billion, up from $8.35 billion., while the bank's provision for credit losses for the quarter amounted to $1.40 billion, up from $1.01 billion a year ago. On an adjusted basis, Scotiabank says it earned $1.52 per diluted share, down from an adjusted profit of $1.58 per diluted share a year earlier. Analysts on average had expected an adjusted profit of $1.56 per share, according to data provided by LSEG Data & Analytics. This advertisement has not loaded yet, but your article continues below. Scotiabank chief executive Scott Thomson said the bank is focused on what it can control and its strategic plan amid an evolving economic outlook. 'This quarter we increased our performing allowances to reflect the impact of an uncertain macroeconomic outlook,' Thomson said in a statement. 'With strong balance sheet metrics, we remain well positioned to support our clients through this period of uncertainty and to seize growth opportunities as they arise.' Scotiabank said its Canadian banking operations earned $613 million in net income attributable to equity holders, down from $893 million a year ago as it faced a higher provision for credit losses and non-interest expenses, partly offset by higher revenues. Scotiabank's international banking operations earned $676 million in net income attributable to equity holders, up from $639 million in the same quarter last year. The bank's global wealth management group's net income attributable to equity holders was $399 million for its latest quarter, up from $341 million a year earlier. Scotiabank's global banking and markets division earned $413 million in net income attributable to equity holders, up from $375 million a year ago. Columnists Sunshine Girls Sunshine Girls Columnists Relationships
Yahoo
27-05-2025
- Business
- Yahoo
Scotiabank posts lower profit amid uncertainty related to U.S. tariffs
Bank of Nova Scotia reported slightly lower second-quarter profits as it kept aside a higher amount of money to tackle loans that may potentially go bad, which it said reflects 'the continued uncertainty related to U.S. tariffs.' Its net income for the three months ending April 30 was $2.03 billion, compared to $2.09 billion during the same period a year ago, resulting in net earnings per share of $1.48. Scotiabank's adjusted net income — which removes the impact of non-recurring items — was $2.07 billion, compared to $2.10 billion a year ago, resulting in adjusted earnings per share of $1.52, below analysts' expectations of about $1.54 per share. 'Amidst the continuously evolving economic outlook, we are focused on what we can control,' chief executive Scott Thomson said in a statement on Tuesday. 'This quarter we increased our performing allowances to reflect the impact of an uncertain macroeconomic outlook.' Scotiabank is the second of Canada's six biggest banks to release its second-quarter results, which are often considered a signpost for the country's economy. This is the first time the results will reflect the impact of the tariffs imposed by the United States on an array of Canadian exports since the levies were imposed on March 4 and the earnings cover the three-month period ending April 30. As a result, analysts are keeping an eye on the amount of money the banks keep aside to tackle loans that may potentially go bad, also known as provisions for credit losses (PCLs), which are a key credit metric for measuring the health of a bank's loan book as well as the ability of households and businesses to pay their debts. Toronto-Dominion Bank increased its PCLs to $1.3 billion last week when it reported its second-quarter earnings, up from about $1.2 billion in the previous quarter and about $1 billion a year ago. Scotiabank said on Tuesday that it increased its PCLs to $1.39 billion during the second quarter, up from $1.16 billion in the first quarter and about $1 billion a year ago. The bank also increased its provision for credit losses on performing loans, or loans that are less likely to go bad, to $346 million, compared to $98 million in the previous quarter and $32 million during the same quarter last year. Scotiabank said it 'substantially increased' its provision for credit losses on performing loans to reflect the 'impact of a significant deterioration in the macroeconomic outlook indicators in the U.S., Canada and Mexico.' The increase also reflects the 'continued uncertainty related to U.S. tariffs, mainly impacting the Canadian retail and commercial portfolios,' it said. The PCLs on impaired loans — loans that are more likely to default — increased by $77 million from a year ago to about $1.05 billion during the second quarter. However, it was lower than the $1.06 billion reported during the first, quarter mainly due to 'lower provisions in international retail in most markets,' the bank said. TD Bank to cut 2% of workforce in restructuring Scotiabank analysts rank Canada's big banks as earnings season kicks off Scotiabank's Canadian banking segment reported adjusted earnings of $613 million, down 31 per cent compared to a year ago, primarily due to the significant increase in performing credit loss allowances and lower margins, the bank said. Its international banking, global wealth management and global banking segments reported higher numbers compared to last year. • Email: nkarim@
Yahoo
27-05-2025
- Business
- Yahoo
Scotiabank posts lower profit amid uncertainty related to U.S. tariffs
Bank of Nova Scotia reported slightly lower second-quarter profits as it kept aside a higher amount of money to tackle loans that may potentially go bad, which it said reflects 'the continued uncertainty related to U.S. tariffs.' Its net income for the three months ending April 30 was $2.03 billion, compared to $2.09 billion during the same period a year ago, resulting in net earnings per share of $1.48. Scotiabank's adjusted net income — which removes the impact of non-recurring items — was $2.07 billion, compared to $2.10 billion a year ago, resulting in adjusted earnings per share of $1.52, below analysts' expectations of about $1.54 per share. 'Amidst the continuously evolving economic outlook, we are focused on what we can control,' chief executive Scott Thomson said in a statement on Tuesday. 'This quarter we increased our performing allowances to reflect the impact of an uncertain macroeconomic outlook.' Scotiabank is the second of Canada's six biggest banks to release its second-quarter results, which are often considered a signpost for the country's economy. This is the first time the results will reflect the impact of the tariffs imposed by the United States on an array of Canadian exports since the levies were imposed on March 4 and the earnings cover the three-month period ending April 30. As a result, analysts are keeping an eye on the amount of money the banks keep aside to tackle loans that may potentially go bad, also known as provisions for credit losses (PCLs), which are a key credit metric for measuring the health of a bank's loan book as well as the ability of households and businesses to pay their debts. Toronto-Dominion Bank increased its PCLs to $1.3 billion last week when it reported its second-quarter earnings, up from about $1.2 billion in the previous quarter and about $1 billion a year ago. Scotiabank said on Tuesday that it increased its PCLs to $1.39 billion during the second quarter, up from $1.16 billion in the first quarter and about $1 billion a year ago. The bank also increased its provision for credit losses on performing loans, or loans that are less likely to go bad, to $346 million, compared to $98 million in the previous quarter and $32 million during the same quarter last year. Scotiabank said it 'substantially increased' its provision for credit losses on performing loans to reflect the 'impact of a significant deterioration in the macroeconomic outlook indicators in the U.S., Canada and Mexico.' The increase also reflects the 'continued uncertainty related to U.S. tariffs, mainly impacting the Canadian retail and commercial portfolios,' it said. The PCLs on impaired loans — loans that are more likely to default — increased by $77 million from a year ago to about $1.05 billion during the second quarter. However, it was lower than the $1.06 billion reported during the first, quarter mainly due to 'lower provisions in international retail in most markets,' the bank said. TD Bank to cut 2% of workforce in restructuring Scotiabank analysts rank Canada's big banks as earnings season kicks off Scotiabank's Canadian banking segment reported adjusted earnings of $613 million, down 31 per cent compared to a year ago, primarily due to the significant increase in performing credit loss allowances and lower margins, the bank said. Its international banking, global wealth management and global banking segments reported higher numbers compared to last year. • Email: nkarim@ Sign in to access your portfolio
