Bank of Nova Scotia (NYSE:BNS) reported better-than-expected third-quarter results on Tuesday, supported by record performances across several of its main business divisions and stronger profitability compared with the same period last year.
Adjusted earnings per share came in at Cdn$2.28, ahead of analysts’ forecast of Cdn$2.08. Revenue increased 11% year-on-year to Cdn$10.54 billion from Cdn$9.49 billion, also beating the consensus estimate of Cdn$9.97 billion.
Adjusted net income climbed to Cdn$2.97 billion, compared with Cdn$2.52 billion in the corresponding quarter a year earlier. Despite the earnings and revenue beats, Scotiabank shares fell 0.81% following the announcement.
Return on Equity Moves Above Medium-Term Target
Profitability also strengthened during the quarter, with adjusted return on equity rising to 14.2% from 12.4% a year earlier. The result took the measure above Scotiabank’s medium-term target of 14%.
“Q3 was a record quarter for the Bank, as all business lines reported strong results and we exceeded our medium-term objectives in the period,” said Scott Thomson, President and CEO of Scotiabank. “In particular, we exceeded our 14% return on equity target this quarter, highlighting the improvements that we have made across the bank to increase margins and fee income.”
The improvement reflected stronger margins and fee generation across the group, with several divisions posting record quarterly earnings.
Wealth Management Earnings Rise 23%
Global Wealth Management generated record earnings of Cdn$518 million, representing a 23% increase from the same quarter last year.
Growth was supported by higher mutual fund fees, increased brokerage revenue and stronger net interest income. Assets under management expanded 16% year-on-year to Cdn$474 billion, providing an additional boost to the division’s performance.
Capital Markets Business Posts Record Earnings
Global Banking and Markets also delivered a record quarter, with earnings increasing 37% year-on-year to Cdn$647 million.
The division benefited from stronger capital markets activity alongside record underwriting and advisory fees, making it one of the strongest contributors to Scotiabank’s third-quarter growth.
Canadian Banking reported earnings of Cdn$1.07 billion, up 12% from the previous year, helped by wider margins and robust growth in fee income.
International Banking also advanced, with earnings increasing 8% year-on-year to Cdn$766 million.
The broad-based improvement across Scotiabank’s operations, combined with an adjusted return on equity above its medium-term objective, highlighted stronger underlying performance during the quarter even as the shares moved lower following the results.
Bank of Nova Scotia stock price
