<\/p>\n
Scotiabank says it expects to see continued loan pressure and political uncertainty in the months ahead as it reported profits that were up from a year ago but below analyst expectations.<\/p>\n
The bank kicked off a week of bank earnings Tuesday as it reported a fourth-quarter profit of $1.69 billion, up from $1.35 billion in the same period last year, as it set aside a smaller amount for bad loans compared with a year ago.<\/p>\n
Profits were hit by taxes and a writedown of its holding in a Chinese bank, while its Canadian operations were affected by the softening economy, said chief executive Scott Thomson.<\/p>\n
\u201cThe realities of a slowing economy and the impact of peak interest rates made for a challenging operating environment,\u201d he said on a conference call with analysts.<\/p>\n
While banks are expected to still see rising provisions for potentially bad loans, Scotiabank set aside $1.03 billion in its fourth quarter, down from $1.26 billion a year ago. The drop was because loans of less concern eased, even as impaired loans, meaning ones the bank doesn\u2019t expect to get paid back, rose.<\/p>\n
Revenue for the quarter totalled $8.53 billion, up from $8.27 billion in the bank\u2019s fourth quarter last year.<\/p>\n
Profits amounted to $1.22 per diluted share for the quarter ended Oct. 31, up from 99 cents in the same quarter a year ago.<\/p>\n
On an adjusted basis, Scotiabank says it earned $1.57 per diluted share in its latest quarter, up from an adjusted profit of $1.23 per diluted share a year ago.<\/p>\n
The average analyst estimate had been for an adjusted profit of $1.60 per share, according to data provided by LSEG Data & Analytics.<\/p>\n
Jeffries analyst John Aiken said the miss was largely from a higher-than-anticipated tax rate, while the bank also saw revenue headwinds and mixed performance on efficiency.<\/p>\n
Scotiabank said its Canadian banking operations amounted to $1.06 billion for the quarter, up from $793 million in the same quarter last year, due primarily to lower provisions for credit losses and higher revenue, partly offset by higher non-interest expenses.<\/p>\n
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