Scotiabank says it won't meet this year's profit growth target
Scotiabank 3-month trading
The Bank of Nova Scotia said credit losses and weaker capital markets make it unlikely it will reach its target for earnings growth this year.
The bank on Tuesday reported its second-quarter earnings fell six per cent to $980 million (97 cents a share). Analysts who cover BNS had a consensus forecast of a $1-a-share profit before one-time items.
But the bank said it would boost its quarterly dividend by two cents to 49 cents a share, citing continued asset growth in all of its business lines and an improving capital position.
Scotiabank is the most international of Canada's big banks, with extensive interests in Latin America. It has minimal exposure to problems in the U.S. capital markets — a situation that allowed it to avoid much of the damage its rivals faced from an imploding U.S. mortgage market.
"In a period when many financial institutions experienced significant problems in global and domestic capital markets, our strong risk management and moderate exposures resulted in minimal writedowns," said CEO Rick Waugh in a statement.
Scotiabank's lower second-quarter profit was due to higher provisions for credit losses this quarter — from $20 million for the quarter last year to $153 million this year — and weaker capital markets revenues.
Scotiabank stock ended the trading day at $47.65 on the TSX, down 55 cents.
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