Bank of Nova Scotia or Scotiabank (BNS, BNS.TO) on Friday reported a 31 percent increase in profit for the fourth quarter from last year. The results reflect growth in earning assets and stronger fixed-income trading revenues, partially offset by a higher provision for credit losses.
The Canadian bank's net interest income for the fourth quarter grew 11 percent to C$2.58 billion, primarily due to a 7 percent increase in core banking assets and a nine basis points increase in the core banking margin. Non-interest revenues rose 19 percent to C$2.35 billion.
Provision for credit losses increased 14 percent from last year to C$321 million, primarily due to a C$30 million decrease in the collective allowance on performing loans last year, and higher provisions in International Banking in the current year.
Scotiabank's fourth-quarter net income was C$1.40 billion ($1.42 billion) or C$1.18 per share, up from C$1.07 billion or C$0.97 per share in the year-ago period.
Adjusted earnings per share for the quarter were C$1.21, compared to C$1.00 in the year-ago period. On average, 18 analysts polled by Thomson Reuters expected the company to earn C$1.18 per share. Analysts' estimates typically exclude special items.
Total revenue, on a taxable equivalent basis, rose 15 percent to C$4.94 billion from C$4.30 billion in the same period last year. Analysts' had a consensus revenue estimate of C$4.79 billion.
Segment wise, Canadian Banking's net income for the quarter increased 15 percent from the year-ago period to C$481 million, driven by volume growth in residential mortgages and commercial lending.
International Banking recorded a 22 percent increase in net income to C$453 million, reflecting the company's acquisition of Banco Colpatria in Colombia and strong contributions from Latin America as well as Asia.
Global Wealth Management's net income increased 15 percent to C$300 million due to strong results from insurance and wealth management. Assets under management rose 12 percent from last year to C$115 billion.
Global Banking and Markets net income surged 62 percent to C$396 million, reflecting strong revenue growth partly due to more favorable market conditions. The latest quarter's results reflect higher revenues from fixed income initiatives that performed well and growth in other key product areas.
For fiscal year 2012, Scotiabank's net income rose to C$6.02 billion or C$5.22 per share from C$4.97 billion or C$4.53 per share last year. Adjusted earnings per share for the year were C$5.33, compared to C$4.62 in the prior year.
Total revenue for the year, on a taxable equivalent basis, grew 14 percent to C$19.99 billion from C$17.60 billion in the previous year.
Analysts expected the company to earn C$4.75 per share for the year on revenues of C$19.18 billion.
Scotiabank's board approved a quarterly dividend of C$0.57 per share, payable on January 29, 2013 to shareholders at the close of business on January 2.
BNS closed Thursday's trading at $56.07. In Friday's pre-market, the stock is up $0.46 or 0.82 percent to $56.50.
On the Toronto stock exchange, BNS.TO closed Thursday's trading at C$55.56, down C$0.28 on 1.35 million shares.
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