We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Scotia Bank's (BNS) Stock Gains on Improved Q2 Earnings
Read MoreHide Full Article
Shares of The Bank of Nova Scotia (BNS - Free Report) gained nearly 1% on the NYSE following the release of its second-quarter fiscal 2017 (ended Apr 30) results before the opening bell. Net income for the quarter came in at C$2.06 billion ($1.55 billion), jumping 30% year over year.
A rise in net interest income and a decline in expenses largely drove the improved results. These were partially offset by lower non-interest income and an increase in provisions. Improvement in capital and profitability ratios was impressive.
Revenues Fall Slightly, Lower Expenses Support Results
Total revenue was C$6.58 billion ($4.94 billion), marginally down year over year. A rise in net interest income was more than offset by lower non-interest income.
Net interest income came in at C$3.73 billion ($2.80 billion), up 6% from the prior-year quarter. Non-interest income declined 7% from the year-ago quarter to C$2.85 billion ($2.15 billion).
Non-interest expenses were C$3.6 billion ($2.7 billion), declining 6% year over year. The prior-year quarter figure included restructuring charges. Excluding these, expenses increased 5% from the prior-year quarter, mainly due to investment in digital and technology initiatives.
Total provision for credit losses was C$587 million ($441 million), up 6% year over year. The rise was mainly owing to higher provisions in the International Banking segment.
Improving Balance Sheet
As of Apr 30, 2017, Scotia Bank’s total assets were C$921.65 billion ($674.7 billion), up 4% sequentially. Loans were up 4% from the prior quarter to C$496.26 billion ($363.3 billion). Deposits came in at C$628.21 billion ($459.9 billion), increasing 4% year over year.
Healthy Capital and Profitability Ratios
As of Apr 30, 2017, Common Equity Tier 1 ratio came in at 11.3% compared with 10.1% as of Apr 30, 2016. Further, Total capital ratio came in at 14.7% compared with 13.6% in the prior-year quarter.
Return on equity for the reported quarter came in at 14.9% compared with 12.1% in second-quarter fiscal 2016.
Steady Capital Deployment
Concurrent with the earnings release, Scotia Bank announced a quarterly dividend of 76 cents per share. The dividend will be paid on Jul 27, to shareholders on record as of Jul 4.
Additionally, Scotia Bank authorized repurchase of up to 24 million shares through Jun 1, 2018. This was announced following the regulatory approval.
Our Viewpoint
A diversified product mix and strong capital position will help Scotia Bank to grow organically as well as through acquisitions. Further, the export-driven economy of Canada is expected to benefit from gradual recovery of the U.S. economy. However, a persistent low interest rate environment along with stringent regulatory reforms, keep us skeptical about the company’s sustainable growth in the long term.
Bank of Nova Scotia (The) Price, Consensus and EPS Surprise
Barclays PLC’s (BCS - Free Report) first-quarter 2017 net income from continuing operations more than doubled from the prior-year quarter. Encouraging underwriting performance and significant drop in losses in Non-Core division were the primary reasons for the drastically improved results. However, an unexpected fall in trading revenues, lower net interest income and a rise in credit impairment charges were the undermining factors.
HSBC Holdings plc’s (HSBC - Free Report) first-quarter 2017 net profit attributable to shareholders declined from the year-ago quarter. This mainly reflected the absence of Brazil business results, which was divested last July. Despite witnessing steady success in its cost-saving initiatives, results were hampered by streamlining operations. Further, a rise in operating expenses acted as a headwind.
UBS Group AG (UBS - Free Report) reported an increase in first-quarter 2017 pre-tax operating profit from the prior-year quarter. Results reflected an increase in net trading income, along with net fee and commission income. Notably, the quarter benefited from the company’s consistent focus on expense management.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Scotia Bank's (BNS) Stock Gains on Improved Q2 Earnings
Shares of The Bank of Nova Scotia (BNS - Free Report) gained nearly 1% on the NYSE following the release of its second-quarter fiscal 2017 (ended Apr 30) results before the opening bell. Net income for the quarter came in at C$2.06 billion ($1.55 billion), jumping 30% year over year.
A rise in net interest income and a decline in expenses largely drove the improved results. These were partially offset by lower non-interest income and an increase in provisions. Improvement in capital and profitability ratios was impressive.
Revenues Fall Slightly, Lower Expenses Support Results
Total revenue was C$6.58 billion ($4.94 billion), marginally down year over year. A rise in net interest income was more than offset by lower non-interest income.
Net interest income came in at C$3.73 billion ($2.80 billion), up 6% from the prior-year quarter. Non-interest income declined 7% from the year-ago quarter to C$2.85 billion ($2.15 billion).
Non-interest expenses were C$3.6 billion ($2.7 billion), declining 6% year over year. The prior-year quarter figure included restructuring charges. Excluding these, expenses increased 5% from the prior-year quarter, mainly due to investment in digital and technology initiatives.
Total provision for credit losses was C$587 million ($441 million), up 6% year over year. The rise was mainly owing to higher provisions in the International Banking segment.
Improving Balance Sheet
As of Apr 30, 2017, Scotia Bank’s total assets were C$921.65 billion ($674.7 billion), up 4% sequentially. Loans were up 4% from the prior quarter to C$496.26 billion ($363.3 billion). Deposits came in at C$628.21 billion ($459.9 billion), increasing 4% year over year.
Healthy Capital and Profitability Ratios
As of Apr 30, 2017, Common Equity Tier 1 ratio came in at 11.3% compared with 10.1% as of Apr 30, 2016. Further, Total capital ratio came in at 14.7% compared with 13.6% in the prior-year quarter.
Return on equity for the reported quarter came in at 14.9% compared with 12.1% in second-quarter fiscal 2016.
Steady Capital Deployment
Concurrent with the earnings release, Scotia Bank announced a quarterly dividend of 76 cents per share. The dividend will be paid on Jul 27, to shareholders on record as of Jul 4.
Additionally, Scotia Bank authorized repurchase of up to 24 million shares through Jun 1, 2018. This was announced following the regulatory approval.
Our Viewpoint
A diversified product mix and strong capital position will help Scotia Bank to grow organically as well as through acquisitions. Further, the export-driven economy of Canada is expected to benefit from gradual recovery of the U.S. economy. However, a persistent low interest rate environment along with stringent regulatory reforms, keep us skeptical about the company’s sustainable growth in the long term.
Bank of Nova Scotia (The) Price, Consensus and EPS Surprise
Bank of Nova Scotia (The) Price, Consensus and EPS Surprise | 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.
Performance of Other Foreign Banks
Barclays PLC’s (BCS - Free Report) first-quarter 2017 net income from continuing operations more than doubled from the prior-year quarter. Encouraging underwriting performance and significant drop in losses in Non-Core division were the primary reasons for the drastically improved results. However, an unexpected fall in trading revenues, lower net interest income and a rise in credit impairment charges were the undermining factors.
HSBC Holdings plc’s (HSBC - Free Report) first-quarter 2017 net profit attributable to shareholders declined from the year-ago quarter. This mainly reflected the absence of Brazil business results, which was divested last July. Despite witnessing steady success in its cost-saving initiatives, results were hampered by streamlining operations. Further, a rise in operating expenses acted as a headwind.
UBS Group AG (UBS - Free Report) reported an increase in first-quarter 2017 pre-tax operating profit from the prior-year quarter. Results reflected an increase in net trading income, along with net fee and commission income. Notably, the quarter benefited from the company’s consistent focus on expense management.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>