Scotiabank caps big bank earnings with 30% profit rise to over $2B
Scotiabank boosted its second-quarter net income by 30 per cent to $2.06 billion, in a period that saw all of the country's biggest banks shrug off concerns about high house prices and overstretched borrowers.
Scotiabank's earnings amounted to $1.62 per share, compared with $1.23 per share or $1.58 billion of net income during the second quarter of 2016.
The bank had $6.58 billion of revenue during the three-month period ended April 30, compared with $6.59 billion a year ago.
All of Canada's five biggest banks — including Royal Bank, TD Bank, BMO and CIBC — reported higher second-quarter profits, in spite of fears about the health of the country's housing market.
- TD Bank profit rises to $2.5B
- Royal Bank profit rises to $2.8B
- CIBC profit tops $1B last quarter
- BMO profit rises 40%
Combined, the five banks had $9.67 billion of profits during the quarter, up nearly 20 per cent from $8.12 billion a year ago.
Their combined quarterly revenue was $34.80 billion, up five per cent from $33.11 billion during the second quarter of 2016.
Scotiabank CEO Brian Porter said the bank's earnings growth was driven by strong results in all three of its main businesses — Canadian banking, international banking and global banking and markets.
"Continued focus on improving the customer experience, advancing the digitization of the bank and driving a more efficient operation has contributed to this performance," Porter said Tuesday in a statement.
Barclays analyst John Aiken wrote in a note to clients that Scotiabank's international banking segment did especially well and that's "a distinct positive given that these operations are the bank's key differentiator."
The segment had $595 million of net income during the quarter, up 19 per cent from the same quarter last year. The bank attributed the increase partially to higher net interest margins and less money set aside for bad loans.
Canadian banking had $971 million of net income, down one per cent from a year ago when it benefited from the sale of a lease finance business.