Bank of Nova Scotia 4Q Profit Falls as Provision for Credit Losses Weigh

By Adriano Marchese

Bank of Nova Scotia on Tuesday reported a 37% decline in profit in its fourth fiscal quarter, due largely to higher provisions for credit losses and one-off costs in the period.

For the three months ended Oct. 31, the Canadian financial institution posted a lower net income of 1.39 billion Canadian dollars ($1.02 billion), or C$1.02 a share, down from C$2.09 billion, or C$1.63 a share, in the comparable quarter a year ago.

In the period, the company wrote down its investment in associate with Bank of Xi'an in China. It also booked restructuring and certain impairment charges, and costs related to exiting certain real estate premises and service contracts, among others.

On an adjusted basis, which strips out those one-off items and costs, earnings fell to C$1.26 a share. According to FactSet, analysts were expecting a decline, but to C$1.65 a share.

Total revenue rose to C$8.31 billion from C$7.63 billion, better than the C$8.21 billion analysts were looking for.

Common equity tier 1 capital ratio, a measure of a bank's core equity capital against its riskier assets such as loans and mortgages, rose to 13% from 11.5%.

Provision for credit losses, which measures how much the bank may lose due to bad debts, increased to C$1.26 billion from C$529 million a year earlier. Bank of Nova Scotia cites unfavorable macroeconomic outlook and uncertainty around the effects of higher interest rates.

Write to Adriano Marchese at adriano.marchese@wsj.com

(END) Dow Jones Newswires

November 28, 2023 06:47 ET (11:47 GMT)

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