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The Bank of Nova Scotia, commonly known as Scotiabank (TSX: BNS, NYSE: BNS), announced its financial results for the second quarter of the fiscal year. The bank reported a net income of $2,092 million, slightly down from $2,146 million in the same period last year. Diluted earnings per share (EPS) also saw a decrease, coming in at $1.57 compared to $1.68 from the previous year.
Adjusted Earnings and Return on Equity
Scotiabank's adjusted net income for the second quarter was $2,105 million, with an adjusted diluted EPS of $1.58, down from $1.69 last year. The adjusted return on equity (ROE) was 11.3%, a decrease from the previous year's 12.3%.
Leadership's Perspective
Scott Thomson, President and CEO of Scotiabank, commented on the performance, stating,
Canadian Banking Performance
Canadian Banking reported adjusted earnings of $1 billion for the quarter. The segment saw solid revenue growth outpacing expense growth, leading to positive operating leverage. However, provisions for credit losses increased compared to the prior year. Notably, deposit growth, a key component of Scotiabank's refreshed strategy, increased by 7% year-over-year.
International Banking Highlights
International Banking generated adjusted earnings of $701 million. Revenue growth was driven by strong margin expansion and disciplined expense and capital management. However, this was offset by higher provisions for credit losses. The adjusted return on equity for this segment was 14.5%, a 120 basis point improvement from last year.
Global Wealth Management
Global Wealth Management reported adjusted earnings of $389 million, marking an 8% increase year-over-year. Assets under management reached $349 billion, a 6% increase, which contributed to strong revenue growth. This was partly offset by investments aimed at supporting long-term business growth.
Global Banking and Markets
The Global Banking and Markets segment reported earnings of $428 million, up 7% from the previous year. This performance was supported by higher fee-based revenue and lower provisions for credit losses.
Capital and Liquidity
Scotiabank reported a Common Equity Tier 1 (CET1) capital ratio of 13.2%, up from 12.3% last year, indicating strong capital and liquidity metrics.
Dividend and Share Purchase Plan
Scotiabank’s Shareholder Dividend and Share Purchase Plan allows common and preferred shareholders to purchase additional common shares by reinvesting their cash dividend without incurring brokerage or administrative fees. Eligible shareholders may invest up to $20,000 each fiscal year to purchase additional common shares of the Bank, with all administrative costs of the plan covered by Scotiabank.
