Bank of Nova Scotia profit down 2 percent
TORONTO (Reuters) - Bank of Nova Scotia's (BNS.TO) quarterly profit slipped 2 percent despite record results in its domestic unit, as provisions for credit losses climbed and capital markets revenue fell from high levels a year earlier.
Scotiabank, Canada's third-largest bank, said on Tuesday that net income was C$1.01 billion ($962 million), or 98 Canadian cents a share, in the three months ended July 31.
That compared with a profit of C$1.03 billion, or C$1.02 a share, a year earlier.
Analysts had expected the bank to earn C$1.02 a share before items, according to Reuters Estimates.
Scotiabank stock was down 1.5 percent at C$46.94 at midday on the Toronto Stock Exchange.
Return on equity was 21.0 percent, down from 21.7 percent, and the bank repeated that it is "unlikely" to meet its target for 7 percent to 12 percent growth in earnings per share. It made a similar statement last quarter.
Provisions for credit losses rose to C$159 million, from C$92 million.
Scotiabank said domestic banking had a record quarter, with net income available to common shareholders jumping 16 percent to C$455 million on the heels of a 9 percent revenue increase. Canadian mortgages, personal and business lending volumes grew, the bank said.
Its international unit posted net income of C$321 million, up 19 percent, while Scotia Capital's profit grew by 5 percent to C$291 million.
However, the bank said the increased cost of liquidity and hedging interest-rate risk in the wholesale markets contributed to a decline in net interest income in its "other" segment, which includes smaller operations and corporate adjustments.
The bank's international operations are mainly in Mexico, the Caribbean and Latin America, and its relative lack of U.S. market exposure has helped it to weather the credit crisis this year.
As of Monday's close, Scotiabank stock was down 5 percent so far this year, versus a 13 percent decline in the S&P/TSX banks index, which tracks eight banks and one mortgage lender.
($1=$1.05 Canadian)
(Reporting by Lynne Olver; editing by Rob Wilson)
