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Scotia Bank (BNS) Reports Impressive Q4 Earnings, Costs Up
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The Bank of Nova Scotia (BNS - Free Report) reported fourth-quarter fiscal 2017 (ended Oct 31) results before the opening bell. Net income for the quarter came in at C$2.1 billion ($1.7 billion), jumping 3% year over year.
A rise in revenues and fall in provisions largely drove the improved results. These were partially offset by elevated expenses. Improvement in capital and profitability ratios was impressive.
For fiscal 2017, net income came in at C$8.2 billion, up 10.8% year over year.
Revenues Rise & Provisions Fall, Partially Offset by Elevated Expenses
For fiscal 2017, total revenues were C$27.16 billion, up 3.1% year over year.
Total revenues were C$6.81 billion ($5.45 billion) in the quarter, around 1% year over year. A rise in net interest income, partially offset by non-interest income led to the upswing.
Net interest income came in at C$3.83 billion ($3.06 billion), up 4.9% from the prior-year quarter. Asset growth in retail and commercial lending in Canadian Banking and International Banking, along with elevated core banking margin led to the rise.
Non-interest income decreased 3.9% from the year-ago quarter to C$2.98 billion ($2.38 billion). Reduced trading revenues, lower fee and commission revenues attributed to the sale of HollisWealth business, and reduced gains on sale of real estate primarily led to the decline. These decreases were partly offset by elevated card revenues, higher net gain on investment securities and the gain on sale of business.
Non-interest expenses were C$3.67 billion ($2.94 billion), rising slightly year over year. Higher salaries and employee benefits, along with elevated professional and technology expenses, led to the rise.
Total provision for credit losses was C$536 million ($428.9 million), down 2.5% year over year. The fall mainly stemmed from lower provisions in Global Banking and Markets, partially offset by higher provisions in International Banking.
Improving Balance Sheet
As of Oct 31, 2017, Scotia Bank’s total assets were C$915.3 billion ($713.3 billion), up 2.1% from the prior-year quarter. Net Customer Loans and Acceptances were up 5.2% from the year-ago quarter to C$517.9 billion ($403.6 billion). Deposits came in at C$625.4 billion ($487.4 billion), decreasing 2.2% year over year.
Healthy Capital and Profitability Ratios
As of Oct 31, 2017, Common Equity Tier 1 ratio came in at 11.5% compared with 11% as of Oct 31, 2016. Further, total capital ratio came in at 14.9% compared with 14.6% in the prior-year quarter.
Return on equity for the reported quarter came in at 14.5% compared with 14.7% in the year-earlier quarter.
Our Viewpoint
A diversified product mix and strong capital position will help Scotia Bank grow organically, as well as through acquisitions. Though mounting expenses remain a concern, the export-driven economy of Canada is likely to benefit from gradual recovery of the U.S. economy, in turn aiding the company’s sustainable growth over the long run.
Deutsche Bank AG (DB - Free Report) reported net income of €649 million ($762.6 million) in third-quarter 2017, significantly up on a year-over-year basis. Income before income taxes grew 50.7% year over year to €933 million ($1.1 billion). Cost management and reduction in provisions were positive factors. However, lower revenues due to trading slump remained an undermining factor. Notably, net new money inflows were recorded during the quarter.
UBS Group AG (UBS - Free Report) reported third-quarter 2017 pre-tax operating profit of CHF 1.51 billion ($1.56 billion) on an adjusted basis, up around 16% from the prior-year quarter. Results displayed increase in operating income on the back of higher net fee and commission income (up 5% year over year), partially offset by lower net interest income (down 2%) along with lower trading income (down 1%) and other income (down 40%). Notably, the quarter benefited from the company’s continued focus on expense management.
Barclays PLC’s (BCS - Free Report) third-quarter 2017 net income attributable to ordinary equity holders was £583 million ($763.1 million), reflecting a significant improvement from £190 million reported in the prior-year quarter.
Investor Alert: Breakthroughs Pending
A medical advance is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating substantial revenue, and even more wondrous products are in the pipeline.
Cures for a variety of deadly diseases are in sight, and so are big potential profits for early investors. Zacks names 5 stocks to buy now.
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Scotia Bank (BNS) Reports Impressive Q4 Earnings, Costs Up
The Bank of Nova Scotia (BNS - Free Report) reported fourth-quarter fiscal 2017 (ended Oct 31) results before the opening bell. Net income for the quarter came in at C$2.1 billion ($1.7 billion), jumping 3% year over year.
A rise in revenues and fall in provisions largely drove the improved results. These were partially offset by elevated expenses. Improvement in capital and profitability ratios was impressive.
For fiscal 2017, net income came in at C$8.2 billion, up 10.8% year over year.
Revenues Rise & Provisions Fall, Partially Offset by Elevated Expenses
For fiscal 2017, total revenues were C$27.16 billion, up 3.1% year over year.
Total revenues were C$6.81 billion ($5.45 billion) in the quarter, around 1% year over year. A rise in net interest income, partially offset by non-interest income led to the upswing.
Net interest income came in at C$3.83 billion ($3.06 billion), up 4.9% from the prior-year quarter. Asset growth in retail and commercial lending in Canadian Banking and International Banking, along with elevated core banking margin led to the rise.
Non-interest income decreased 3.9% from the year-ago quarter to C$2.98 billion ($2.38 billion). Reduced trading revenues, lower fee and commission revenues attributed to the sale of HollisWealth business, and reduced gains on sale of real estate primarily led to the decline. These decreases were partly offset by elevated card revenues, higher net gain on investment securities and the gain on sale of business.
Non-interest expenses were C$3.67 billion ($2.94 billion), rising slightly year over year. Higher salaries and employee benefits, along with elevated professional and technology expenses, led to the rise.
Total provision for credit losses was C$536 million ($428.9 million), down 2.5% year over year. The fall mainly stemmed from lower provisions in Global Banking and Markets, partially offset by higher provisions in International Banking.
Improving Balance Sheet
As of Oct 31, 2017, Scotia Bank’s total assets were C$915.3 billion ($713.3 billion), up 2.1% from the prior-year quarter. Net Customer Loans and Acceptances were up 5.2% from the year-ago quarter to C$517.9 billion ($403.6 billion). Deposits came in at C$625.4 billion ($487.4 billion), decreasing 2.2% year over year.
Healthy Capital and Profitability Ratios
As of Oct 31, 2017, Common Equity Tier 1 ratio came in at 11.5% compared with 11% as of Oct 31, 2016. Further, total capital ratio came in at 14.9% compared with 14.6% in the prior-year quarter.
Return on equity for the reported quarter came in at 14.5% compared with 14.7% in the year-earlier quarter.
Our Viewpoint
A diversified product mix and strong capital position will help Scotia Bank grow organically, as well as through acquisitions. Though mounting expenses remain a concern, the export-driven economy of Canada is likely to benefit from gradual recovery of the U.S. economy, in turn aiding the company’s sustainable growth over the long run.
Bank of Nova Scotia (The) Price
Bank of Nova Scotia (The) Price | Bank of Nova Scotia (The) Quote
Scotia Bank currently carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Competitive Landscape
Deutsche Bank AG (DB - Free Report) reported net income of €649 million ($762.6 million) in third-quarter 2017, significantly up on a year-over-year basis. Income before income taxes grew 50.7% year over year to €933 million ($1.1 billion). Cost management and reduction in provisions were positive factors. However, lower revenues due to trading slump remained an undermining factor. Notably, net new money inflows were recorded during the quarter.
UBS Group AG (UBS - Free Report) reported third-quarter 2017 pre-tax operating profit of CHF 1.51 billion ($1.56 billion) on an adjusted basis, up around 16% from the prior-year quarter. Results displayed increase in operating income on the back of higher net fee and commission income (up 5% year over year), partially offset by lower net interest income (down 2%) along with lower trading income (down 1%) and other income (down 40%). Notably, the quarter benefited from the company’s continued focus on expense management.
Barclays PLC’s (BCS - Free Report) third-quarter 2017 net income attributable to ordinary equity holders was £583 million ($763.1 million), reflecting a significant improvement from £190 million reported in the prior-year quarter.
Investor Alert: Breakthroughs Pending
A medical advance is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating substantial revenue, and even more wondrous products are in the pipeline.
Cures for a variety of deadly diseases are in sight, and so are big potential profits for early investors. Zacks names 5 stocks to buy now.
Click here to see them >>