* CEO says delinquencies up, but soft landing on the way
* Data on Tuesday showed housing starts higher in March
* Heir apparent Porter says retail/wholesale mix appropriate
By Cameron French
TORONTO, April 9 Bank of Nova Scotia
Chief Executive Rick Waugh said on Tuesday that mortgage
delinquencies have risen at Canada's third-biggest bank, but
that he does not foresee a U.S.-style housing crash.
"We still anticipate what I would call in terms of housing,
a soft landing, and all the metrics which we watch daily confirm
that," Waugh told the bank's annual general meeting in Halifax,
His comments, part of an answer to a shareholder question
about risks for the bank from the domestic housing market, came
as data showed Canadian housing starts edged higher in March,
offering some reassurance that the housing market is cooling
rather than crashing.
Waugh said the rate of late payments at the bank has picked
up, but said it anticipates no significant losses.
"Our delinquency rates with our customers are showing
slightly elevated, but not significant, rises, and are well
under control," he said.
Scotiabank, the No. 3 bank in Canada by market
capitalization, is the most internationally focused of the
country's banks, with operations in about 50 countries. But it
still generates much of its income domestically and is heavily
dependent on mortgage lending.
Canada's formerly hot housing market has begun to lose steam
over the past year after the Conservative government, fearing
the possibility of a property bubble, tightened mortgage rules.
While the decline in activity has been modest so far and
prices have held steady in most markets, some point to Canadian
consumers' record-high debt-to-income levels as a warning of a
EYE ON CEO SUCCESSION
The meeting may be the last for Waugh as CEO. Former
international banking head Brian Porter is widely expected to
succeed him in the near future after being named president in
Porter told shareholders the bank, which has made several
international acquisitions since the 2008 financial crisis, is
continuing to build its international retail banking footprint.
He said Scotiabank also planned to fill out its wholesale
banking operations, which include corporate banking, trading and
advising on mergers and acquisitions.
"There is tremendous potential as we expand our wholesale
operations within our footprint in Latin America and Asia," he
But he stressed the bank felt its existing mix of wholesale
and retail banking was appropriate. Wholesale banking income is
seen as more volatile, as it depends heavily on financial market
Last year, Scotiabank's global banking and markets division
produced 24 percent of its net income, while its domestic and
international retail banking divisions produced 58 percent of
income. Scotiabank's wealth management division earned the
remaining 18 percent.
Scotiabank shares were up 0.8 percent at C$57.47 on the
Toronto Stock Exchange on Tuesday afternoon, moving roughly in
line with the S&P/TSX financials sector.