Scotiabank reports higher fourth-quarter profit, misses expectations

financialpost.com:

The Bank of Nova Scotia on Tuesday reported a higher fourth-quarter profit than last year, but missed analyst expectations.

On an adjusted basis, the bank earned $2.1 billion, up 29 per cent from a year ago, resulting in an earnings per share of $1.57. Analysts had expected the bank to earn $1.60 per share, according to LSEG Data & Analytics.

Net income for the three-month period ending Oct. 31 was up 25 per cent compared to the same period last year to $1.6 billion, resulting in earnings per share of $1.22.

The lender said the increase was due to higher net interest income and lower provision for credit losses — the amount of money banks keep aside to tackle potential bad loans.

It maintained its quarterly dividend at $1.06 per share.

“While I am encouraged by our strategic progress to date, there is significant work ahead as we focus on client primacy initiatives to drive enhanced profitability across our businesses,” chief executive Scott Thomson said in a release.

He described the bank’s results for fiscal 2024 as “solid.”

Scotiabank reported revenue of $8.5 billion, a three per cent increase from the same period last year. Its adjusted revenue was also 8.5 billion, up eight per cent from last year.

“We anticipate that the headline miss will garner some concern in the market today,” Jefferies inc. analyst John Aiken said in a note on Tuesday. “However, as the market parses through the numbers, the fact that the bulk of the disappointment centres around a higher-than-expected tax rate should garner some relief.”