Scotiabank Q119 results are slightly below analyst forecasts despite gains from its international banking and wealth management units.
The bank reports first quarter net income of C$2.25bn down 3.8% from the year ago quarter.
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Adjusting for acquisition-related costs, net income falls by 3% to C$2.29bn.
On the other hand, International Banking reports strong results this quarter with adjusted annual earnings growth of 18%. The growth is driven largely by strong loan and deposit growth in the Pacific Alliance and positive operating leverage.
Scotiabank Q119 results highlight that operations in Peru, Mexico, Chile and Columbia, now contribute around a quarter of group revenue.
For example, in Peru, Scotia ranks third by market share with around 17.7% of total loans market share.
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By GlobalDataScotia also ranks third by this measure in Chile with 14.0%. In Columbia and Mexico the bank ranks fifth and sixth with market shares of 6.2% and 7.1% respectively.
Scotiabank Q119 results: Canada net profit dips 2.6%
Meantime, Scotiabank Canadian business net income falls by 2.6% y-o-y to C$1.07bn.
In the first quarter, we demonstrated continued progress in executing our strategy, “says Brian Porter, President, CEO, Scotiabank.
“That is to further de-risk the bank, simplify our operations, and position the bank for further growth. We had a solid start to the year with strong earnings growth in International Banking and Wealth Management. This quarter also saw good progress related to the integration of recent acquisitions which is proceeding as expected.”
He adds: “While significant market volatility impacted some of our business lines, we still experienced strong growth. In addition, credit quality remains strong and in line with recent quarters.”
Scotiabank Q119 results: positive metrics
Scotiabank is raising its quarterly dividend by 6% y-o-y to C$0.87. The bank’s capital ratio remains strong with a CET1 ratio of 11.1%.
Despite margin pressure, the Scotiabank net interest margin rises 3 basis points y-o-y to 2.44%.
In Canada, the bank reports deposit growth of 9% y-o-y with retail deposits up by 7%.
Digital highlights include an increase in digital adoption to 33% from 26% a year ago.
