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May 31, 2016updated 04 Apr 2017 1:26pm

Scotiabank Q2 net income down 12%

Scotiabank has posted a net income of C$1.58bn for the second quarter of fiscal 2016, a decrease of 11.8% compared to C$1.79bn a year ago.

By Verdict Staff

Scotiabank has posted a net income of C$1.58bn for the second quarter of fiscal 2016, a decrease of 11.8% compared to C$1.79bn a year ago.

The Canadian lender registered a restructuring charge of C$278m after tax during the period. Adjusting for the restructuring charge, net income for the second quarter increased 4% to C$1.86bn.

For the quarter ended 30 April 2016, the bank’s total revenue was C$6.59bn, an increase of 11% from C$5.93bn in the corresponding quarter of 2015.

Net interest income stood at C$3.52bn, an increase of 10% from C$3.19bn in the prior year. Non-interest income increased 12.3% to C$3.07bn from C$2.74bn a year earlier, while non-interest expenses increased 18.4% year-on-year to C$3.81bn.

The bank’s provision for credit losses during the period was C$752m, compared to C$448m in the year-ago quarter.

Scotiabank president and CEO Brian Porter said: "The strength of our results this quarter underscores the continued strong performance of both our Canadian Banking and International Banking businesses.

"Both businesses delivered solid asset and deposit growth and our strategy to deepen relationships with our customers has translated into growth. Partly offsetting our earnings growth were elevated loan losses in the energy sector, which are expected to decline beginning next quarter.

"Canadian Banking generated solid gains in both personal and commercial banking, which contributed to stronger operating results. A consistent focus on improving our business mix led to very strong deposit growth which supported targeted growth in assets that produce attractive returns for our shareholders.

"International Banking delivered a third consecutive quarter of at least $500 million of earnings. Earnings increased 12% from last year notwithstanding an elevated level of loan losses that are expected to decline over the second half of this year.

"The Pacific Alliance countries of Mexico, Peru, Chile and Colombia continued to deliver robust loan and deposit growth, which we expect to continue and reinforces our enthusiasm about the longer term potential for these markets."

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