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Scotia Bank (BNS) Stock Dips 2.2% Despite Q4 Earnings Growth
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The Bank of Nova Scotia (BNS - Free Report) reported fourth-quarter fiscal 2021 (ended Oct 31) adjusted net income of C$2.72 billion ($2.16 billion), which rose 40.1% year over year. Results excluded certain one-time items.
A drastic decline in provisions and higher non-interest income primarily drove the results. Moreover, the balance sheet position remained strong. However, a decline in net interest income and higher expenses were headwinds. Thus, shares of the company fell 2.2% following the release.
Adjusted Revenues & Expenses Increase
Total revenues were C$7.69 billion ($6.12 billion), up 2.4% year over year. The rise was driven by an increase in non-interest income.
Net interest income was C$4.22 billion ($3.36 billion), down 1% from the prior-year quarter. Non-interest income rose 6.9% from the year-ago quarter to C$3.47 billion ($2.76 billion).
Non-interest expenses were C$4.06 billion ($3.23 billion), up 1.4% year over year.
Provision for credit losses plunged 85.1% year over year to C$168 million ($133.7 million).
Balance Sheet Strong
As of Oct 31, 2021, Scotia Bank’s total assets were C$1.18 trillion ($0.95 trillion), up 1.8% from the prior quarter. Deposits were C$797.3 billion ($643.48 billion), decreasing marginally on a sequential basis.
Net customers’ liability under acceptances was C$20.4 billion ($16.46 billion), up 19.9% from the previous quarter.
Assets under administration were up 17.2% from the year-ago quarter to C$526.93 billion ($464.8 billion).
Capital and Profitability Ratios Solid
As of Oct 31, 2021, the Common Equity Tier 1 ratio was 12.3% compared with 11.8% as of Oct 31, 2020. Further, the total capital ratio was 15.9% compared with the prior-year figure of 15.5%.
Adjusted return on equity was 15.6%, up from 11.3% in the year-earlier quarter.
Our Take
A diversified product mix and strong capital position are expected to help Scotia Bank grow organically as well as through acquisitions. However, renewed concerns related to the coronavirus pandemic make us apprehensive.
Bank of Nova Scotia The Price, Consensus and EPS Surprise
Some other Canadian banks expected to announce results soon are Bank of Montreal (BMO - Free Report) , Canadian Imperial Bank of Commerce (CM - Free Report) and The Toronto-Dominion Bank (TD - Free Report) .
Canadian Imperial Bank of Commerce and Toronto-Dominion are scheduled to report quarterly figures tomorrow, while Bank of Montreal is scheduled to report quarterly figures on Dec 3.
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Scotia Bank (BNS) Stock Dips 2.2% Despite Q4 Earnings Growth
The Bank of Nova Scotia (BNS - Free Report) reported fourth-quarter fiscal 2021 (ended Oct 31) adjusted net income of C$2.72 billion ($2.16 billion), which rose 40.1% year over year. Results excluded certain one-time items.
A drastic decline in provisions and higher non-interest income primarily drove the results. Moreover, the balance sheet position remained strong. However, a decline in net interest income and higher expenses were headwinds. Thus, shares of the company fell 2.2% following the release.
Adjusted Revenues & Expenses Increase
Total revenues were C$7.69 billion ($6.12 billion), up 2.4% year over year. The rise was driven by an increase in non-interest income.
Net interest income was C$4.22 billion ($3.36 billion), down 1% from the prior-year quarter. Non-interest income rose 6.9% from the year-ago quarter to C$3.47 billion ($2.76 billion).
Non-interest expenses were C$4.06 billion ($3.23 billion), up 1.4% year over year.
Provision for credit losses plunged 85.1% year over year to C$168 million ($133.7 million).
Balance Sheet Strong
As of Oct 31, 2021, Scotia Bank’s total assets were C$1.18 trillion ($0.95 trillion), up 1.8% from the prior quarter. Deposits were C$797.3 billion ($643.48 billion), decreasing marginally on a sequential basis.
Net customers’ liability under acceptances was C$20.4 billion ($16.46 billion), up 19.9% from the previous quarter.
Assets under administration were up 17.2% from the year-ago quarter to C$526.93 billion ($464.8 billion).
Capital and Profitability Ratios Solid
As of Oct 31, 2021, the Common Equity Tier 1 ratio was 12.3% compared with 11.8% as of Oct 31, 2020. Further, the total capital ratio was 15.9% compared with the prior-year figure of 15.5%.
Adjusted return on equity was 15.6%, up from 11.3% in the year-earlier quarter.
Our Take
A diversified product mix and strong capital position are expected to help Scotia Bank grow organically as well as through acquisitions. However, renewed concerns related to the coronavirus pandemic make us apprehensive.
Bank of Nova Scotia The Price, Consensus and EPS Surprise
Bank of Nova Scotia The price-consensus-eps-surprise-chart | Bank of Nova Scotia The Quote
Scotia Bank currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Release Schedule of Other Canadian Banks
Some other Canadian banks expected to announce results soon are Bank of Montreal (BMO - Free Report) , Canadian Imperial Bank of Commerce (CM - Free Report) and The Toronto-Dominion Bank (TD - Free Report) .
Canadian Imperial Bank of Commerce and Toronto-Dominion are scheduled to report quarterly figures tomorrow, while Bank of Montreal is scheduled to report quarterly figures on Dec 3.