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Scotiabank tops profit targets as ROE rises and EPS jumps
Third-quarter adjusted net income increased to $2.97 billion, and global banking and markets delivered its best quarterly net income ever at $647 million.
Scotiabank’s third-quarter results beat the bank’s own profit target, with return on equity reaching 14.2% and adjusted net income rising to $2.97 billion, according to Yahoo Finance. Adjusted earnings per share climbed to $2.28 from $1.88 a year earlier, a 21.0% increase.
Yahoo Finance reports that CEO Scott Thomson said the bank’s 14% return on equity would not be the ceiling going forward. Canadian Banking earnings totaled $1.1 billion, up 12.0% year over year, helped by a fifth straight quarter of margin expansion and commercial loan growth that accelerated to 3.0% sequentially.
The lender’s Global Banking and Markets unit posted its best quarterly net income ever at $647 million, up 37.0% year over year, with net interest margin expanding by more than 30 basis points and contributions from large debt capital markets issuances and Canada’s biggest IPO since 2021, per Yahoo Finance. Global Wealth Management earnings rose 23.0% to $515 million, with net sales of $3.0 billion for the quarter, a Q3 record, and assets under management reaching $474 billion.
While the quarter showed positive operating leverage for the tenth straight quarter, costs rose, Yahoo Finance reports, with expenses up 14.0% year over year due largely to performance-based pay and a 16.0% increase in technology spending to $1.5 billion. Chief Risk Officer Shannon McGinnis said the bank continues to monitor pockets of weakness including elevated mortgage delinquencies.