Scotiabank earnings: Bank reports Q4 profit down but sees growth in global banking

Scotiabank's Q4 earnings showed growth in its international banking division, though overall results were weighed down by about $500 million in one-time charges.

Scotiabank kicked off bank earnings with results that showed earnings growth in its international banking division, though overall results were weighed down by about $500 million in one-time charges.

The bank reported fourth-quarter net income of $2.09 billion, down from $2.56 billion in the same quarter last year as it made several adjustments, including a $340 million loss from the sale of investments in Venezuela and Thailand and $98 million of committed support costs for the expansion of its loyalty points program.

Adjusted net income for the quarter was $2.62 billion or $2.06 per diluted share, compared with adjusted income of $2.61 billion or $2.10 per diluted share.

Analysts on average had expected a profit of $2 per share, according to financial markets data firm Refinitiv.

For the year as a whole, adjusted net income was $10.75 billion, up from $10.17 billion last year as the bank managed improved income despite difficulties in some markets, said outgoing chief executive Brian Porter on an earnings call.

“Our results this year clearly reflect solid contributions across our businesses, and the ability to absorb periods of volatility, as evidenced by the challenging conditions faced by our market-sensitive businesses.”

The bank’s international division showed net income up 25 per cent from a year earlier on a constant dollar basis. Canadian banking, wealth management, and its markets declined, though the capital markets performance was better than expected, said Barclay’s analyst John Aiken.

“Scotia kicked off fourth-quarter earnings with a strong beat, led by better than expected performances in capital markets and its international operations,” said Aiken in a note. “International in particular saw strong loan growth and net interest margin expansion.”