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Scotiabank Q2 net income, EPS decreased

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Scotiabank
Scotiabank   Diluted earnings per share were $1.23

Scotiabank reported second quarter net income of $1,584 million compared to $1,797 million in the same period last year.


Diluted earnings per share were $1.23, compared to $1.42 in the same period a year ago. Return on equity was 12.1% compared to 15.1% last year.

During the second quarter, the Bank recorded a restructuring charge of $278 million after tax ($378 million pre-tax).

Adjusting for the restructuring charge, net income increased 4% to $1,862 million and diluted earnings per share rose 3% to $1.46 compared to last year. Return on equity was 14.4% compared to 15.1% a year ago.

Canadian Banking reported net income attributable to equity holders of $977 million, an increase of $148 million or 18% over the same quarter last year.

Adjusting for the gain on the sale of a non-core lease financing business, net income increased $48 million or 6%. An increase in the net interest margin, solid growth from assets and deposits and the impact of the credit card portfolio acquired from JPMorgan Chase Bank were partially offset by increased non-interest expenses and provision for credit losses.

Net income attributable to equity holders increased $102 million or 12% over last quarter. Adjusting for the gain on sale, net income was in line with the previous quarter. Higher net interest margin and lower non-interest expenses were offset by the impact of the shorter quarter.

On a year-to-date basis, net income attributable to equity holders increased $208 million or 13%. Adjusting for the gain on sale, net income increased $108 million or 7%, due to higher net interest margin, solid growth from assets and deposits, the impact of the acquisition and higher non-interest revenues.

The increase was partially offset by higher non-interest expenses and provision for credit losses.

International Banking reported net income attributable to equity holders of $500 million, an increase of $53 million or 12% over the same quarter last year.

Strong organic and acquisition-driven loan, deposit and fee growth, the favourable impact of foreign currency translation and good expense management delivering strong positive operating leverage were partially offset by higher provision for credit losses.

Net income attributable to equity holders was down 1% over last quarter, with strong loan and deposit growth in Latin America, contributions from recent acquisitions, higher securities gains and good expense management, more than offset by higher provision for credit losses.

On a year-to-date basis, net income attributable to equity holders was $1,005 million, an increase of $141 million or 16%, driven by strong loan, deposit and fee growth in Latin America, contributions from acquisitions, and good expense management delivering positive operating leverage, partly offset by higher provision for credit losses.

Net income attributable to equity holders was $323 million, a decrease of $126 million or 28% from the same quarter last year, driven mainly by a higher provision for credit losses, and to a lesser extent, by a lower contribution from equities.

Net income attributable to equity holders decreased by $43 million or 12% compared to last quarter. This was mainly due to higher provision for credit losses, the negative impact of foreign currency translation and, to a lesser extent, by a lower contribution from equities, which was partly offset by stronger results in investment banking and fixed income.

On a year-to-date basis, net income attributable to equity holders decreased $164 million or 19%. Stronger results in the commodities business and the positive impact of foreign currency translation were more than offset by higher provision for credit losses and lower results in capital markets.

The Other segment includes Group Treasury, smaller operating segments and other corporate items which are not allocated to a business line.

Net loss attributable to equity holders was $277 million. Adjusting for the restructuring charge of $378 million ($278 million after tax), net income was $1 million compared to net income of $32 million in the same period last year.

The positive impact of foreign currency translation and a higher net gain on investment securities were more than offset by lower contributions from asset/liability management activities and higher expenses. An increase in the collective allowance against performing loans was offset by lower post-retirement benefit costs of $62 million.

Net loss attributable to equity holders was $277 million. Adjusting for the restructuring charge, net income was $1 million compared to net income of $12 million last quarter.

Lower net interest income and higher other expenses were partly offset by a higher net gain on investment securities. An increase in the collective allowance against performing loans was offset by the lower post-retirement benefit costs.

On a year-to-date basis, net loss attributable to equity holders was $265 million. Adjusting for the restructuring charge, net income was $13 million compared to net income of $75 million last year.

The positive impact of foreign currency translation and a higher net gain on investment securities were more than offset by lower contributions from asset/liability management activities. An increase in the collective allowance against performing loans was offset by the lower post-retirement benefit costs.

The Bank continues to maintain a strong capital position. As at April 30, 2016, the CET1, Tier 1, Total capital and Leverage ratios are well above Basel III all-in minimum requirements.


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