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.
Bank of Nova Scotia (BNS) Gains 3% Despite Lower Q3 Earnings
Read MoreHide Full Article
The Bank of Nova Scotia’s (BNS - Free Report) third-quarter fiscal 2023 (ended Jul 31) adjusted net income was C$2.23 billion ($1.67 billion), which declined 14.7% year over year. Results excluded certain one-time items.
A significant surge in provisions for credit losses, lower loan balance and a rise in expenses hurt the results. Also, a decline in net interest income despite higher rates acted as an undermining factor. Yet, higher non-interest income and solid capital ratios were tailwinds. These cheered investors, as shares of the company gained 3% on the NYSE following the release.
After considering non-recurring items, net income was C$2.21 billion ($1.66 billion), down 14.7% from the prior-year quarter.
Adjusted Revenues Rise, Expenses Increase
Total revenues were C$8.09 billion ($6.06 billion), up 3.7% year over year.
Net interest income was C$4.58 billion ($3.43 billion), which decreased 2.1%. Then again, non-interest income grew 12.4% to C$3.51 billion ($2.63 billion).
Non-interest expenses were C$4.54 billion ($3.40 billion), up 9%.
Provision for credit losses jumped 98.8% to C$819 million ($613.7 million). The rise reflects a deteriorating economic outlook.
Balance Sheet Strong
As of Jul 31, 2023, Scotia Bank’s total assets were C$1.4 trillion ($1.06 trillion), up 1.7% sequentially. Deposits were C$957.2 billion ($724.5 billion), up almost 1%.
Net loans and acceptances were C$772.6 billion ($584.8 billion), down 1.7% from the previous quarter.
Capital and Profitability Ratios Solid
As of Jul 31, 2023, Common Equity Tier 1 ratio was 12.7% compared with 11.5% as of Jul 31, 2022. Further, total capital ratio was 16.9% compared with the prior-year figure of 15.2%.
Adjusted return on equity was 12.2%, down from 13.4% in the year-earlier quarter.
Our Take
A diversified product mix and strong capital position are expected to help Scotia Bank grow organically and through acquisitions. However, concerns related to macroeconomic conditions and rising expenses make us apprehensive.
Bank of Nova Scotia (The) Price, Consensus and EPS Surprise
Toronto-Dominion Bank (TD - Free Report) shares have declined 3.5% since the release of its third-quarter fiscal 2023 (ended Jul 31) results. Quarterly adjusted net income of C$3.73 billion ($2.80 billion) decreased 2.2% from the prior-year quarter.
TD recorded a rise in net interest income on the back of higher interest rates and decent loan demand. Also, the company’s capital ratios were solid in the quarter. However, an increase in expenses and higher provision for credit losses were major headwinds.
Royal Bank of Canada (RY - Free Report) reported a third-quarter fiscal 2023 (ended Jul 31) adjusted net income of C$4.02 billion ($3.01 billion), which increased 10.9% from the prior-year quarter.
Results were aided by an improvement in revenues. However, higher expenses and provisions were the undermining factors. In the reported quarter, RY’s capital ratios improved.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Bank of Nova Scotia (BNS) Gains 3% Despite Lower Q3 Earnings
The Bank of Nova Scotia’s (BNS - Free Report) third-quarter fiscal 2023 (ended Jul 31) adjusted net income was C$2.23 billion ($1.67 billion), which declined 14.7% year over year. Results excluded certain one-time items.
A significant surge in provisions for credit losses, lower loan balance and a rise in expenses hurt the results. Also, a decline in net interest income despite higher rates acted as an undermining factor. Yet, higher non-interest income and solid capital ratios were tailwinds. These cheered investors, as shares of the company gained 3% on the NYSE following the release.
After considering non-recurring items, net income was C$2.21 billion ($1.66 billion), down 14.7% from the prior-year quarter.
Adjusted Revenues Rise, Expenses Increase
Total revenues were C$8.09 billion ($6.06 billion), up 3.7% year over year.
Net interest income was C$4.58 billion ($3.43 billion), which decreased 2.1%. Then again, non-interest income grew 12.4% to C$3.51 billion ($2.63 billion).
Non-interest expenses were C$4.54 billion ($3.40 billion), up 9%.
Provision for credit losses jumped 98.8% to C$819 million ($613.7 million). The rise reflects a deteriorating economic outlook.
Balance Sheet Strong
As of Jul 31, 2023, Scotia Bank’s total assets were C$1.4 trillion ($1.06 trillion), up 1.7% sequentially. Deposits were C$957.2 billion ($724.5 billion), up almost 1%.
Net loans and acceptances were C$772.6 billion ($584.8 billion), down 1.7% from the previous quarter.
Capital and Profitability Ratios Solid
As of Jul 31, 2023, Common Equity Tier 1 ratio was 12.7% compared with 11.5% as of Jul 31, 2022. Further, total capital ratio was 16.9% compared with the prior-year figure of 15.2%.
Adjusted return on equity was 12.2%, down from 13.4% in the year-earlier quarter.
Our Take
A diversified product mix and strong capital position are expected to help Scotia Bank grow organically and through acquisitions. However, concerns related to macroeconomic conditions and rising expenses 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
BNS currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Canada Banks
Toronto-Dominion Bank (TD - Free Report) shares have declined 3.5% since the release of its third-quarter fiscal 2023 (ended Jul 31) results. Quarterly adjusted net income of C$3.73 billion ($2.80 billion) decreased 2.2% from the prior-year quarter.
TD recorded a rise in net interest income on the back of higher interest rates and decent loan demand. Also, the company’s capital ratios were solid in the quarter. However, an increase in expenses and higher provision for credit losses were major headwinds.
Royal Bank of Canada (RY - Free Report) reported a third-quarter fiscal 2023 (ended Jul 31) adjusted net income of C$4.02 billion ($3.01 billion), which increased 10.9% from the prior-year quarter.
Results were aided by an improvement in revenues. However, higher expenses and provisions were the undermining factors. In the reported quarter, RY’s capital ratios improved.