TORONTO Aug 26 Bank of Nova Scotia and
Bank of Montreal posted higher third-quarter profits on
Tuesday, benefiting from gains at their traditional Canadian
lending arms as well as the impact of buoyant capital markets.
Results from Bank of Montreal came in ahead of investors'
expectations, helping to send its stock higher. By contrast,
Scotiabank shares slipped more than 2 percent after it reported
a drop in profits at its international operation.
Scotiabank, Canada's No. 3 lender, said it earned C$2.35
billion ($2.15 billion), or C$1.85 a share, in the quarter ended
July 31, up from C$1.75 billion, or C$1.36 a share, a year
The bank benefited from a C$555 million gain from the sale
of most of its investment in fund manager CI Financial Corp
Excluding those proceeds and other non-recurring items,
Scotiabank said it had earned C$1.40 a share on a fully diluted
basis. Analysts had expected adjusted earnings per share of
Income at Scotiabank's international banking division, which
spans Latin America and includes a sizable presence in Asia,
slipped by C$80 million to C$410 million.
The bank said this was largely due to a non-recurring
benefit last year, and excluding this item, net income rose 3
percent. But it also noted growth in Latin America and Asia was
partly offset by weaker results in the Caribbean and Central
"You saw a little bit of slower growth internationally from
Scotiabank and I think that's leading to some of the weakness
today," said Tom Lewandowski, a financial services analyst for
Scotiabank shares fell 2.3 percent to C$72.51 in Toronto,
even as the bank hiked its quarterly dividend by 2 Canadian
cents to 66 Canadian cents per share.
Scotiabank said its Canadian personal and commercial banking
income increased 3 percent to C$565 million, helped by a rise in
loans and deposits. A record quarter in investment banking also
boosted profit at its global banking and markets division by 8
percent to C$408 million.
Bank of Montreal, Canada's fourth-largest bank, also saw
gains from both sectors, with profit at its Canadian retail bank
rising 8 percent to C$526 million. Its BMO Capital Markets unit
earned C$306 million, up 14 percent.
Overall profit was C$1.13 billion, or C$1.67 a share, for
the quarter, compared with C$1.12 billion, or C$1.66 a share, a
Adjusted earnings were C$1.73 a share. Analysts had expected
C$1.66 a share. Its stock rose 0.15 percent to C$81.93 in
Edward Jones' Lewandowski said he has a "hold" on both
stocks, noting that while both banks are "exceptionally"
profitable by global standards, there are signs that growth is
"As you look forward I think that slower growth is going to
be the theme for the industry and for these two banks
specifically," he said.
(U.S. $1 = 1.0940 Canadian dollar)
(Editing by G Crosse)