Scotiabank beats expectations despite higher provisions for credit losses
The Bank of Nova Scotia beat analysts’ expectations despite higher provisions for credit losses and posting a $1.35-billion loss related to the sale of its operations in Colombia, Costa Rica and Panama during the first quarter.
Scotiabank’s net income was $993 million for the three-month period that ended on Jan. 31, down from $2.2 billion during the same period a year ago.
However, the bank earned $2.3 billion on an adjusted basis, which does not include the loss related to the sale of its foreign assets, compared to $2.2 billion a year ago, resulting in adjusted earnings per share of $1.76. Analysts had expected $1.65 per share.
“Our results this quarter demonstrate the value of our diversified franchise and continued focus on deepening relationships,” chief executive Scott Thomson said in a statement. “We are encouraged by the progress towards our stated medium-term financial objectives and remain focused on supporting our clients as they navigate through this challenging period of economic uncertainty.”
Canada’s biggest banks are releasing their first-quarter earnings results this week just days before United States president Donald Trump is expected to impose tariffs on Canadian goods, a move some economists say could trigger a recession in Canada.
The banking sector plays a key role in Canada’s economy and is responsible for 3.5 per cent of the country’s gross domestic product in 2023, so the Big 6’s results and the projections often act as an economic barometer, analysts say.
Scotiabank had lower adjusted earnings in its Canadian and international banking sectors because it was impacted by higher provisions for credit losses — the money that banks keep aside to tackle potentially bad loans. But it had higher
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