The Bank of Nova Scotia raised its dividend as its third-quarter earnings beat expectations, with growth in international banking offset by acquisition and divestiture-related costs and lower profits in global banking and markets.
The Toronto-based lender said Tuesday it will raise its quarterly payment to shareholders by 3¢ to 90¢ per share.
The dividend hike came as Scotiabank reported net income for the quarter ended July 31 of $1.98 billion or $1.50 per diluted share, compared with $1.94 billion or $1.55 a year prior.
On an adjusted basis to exclude one-time items, the Toronto-based lender said it earned $2.455 billion or $1.88 per diluted share, compared with $2.26 billion or $1.76 during the same period in 2018.
Analysts had expected a profit of $1.85 per diluted share, according to the financial markets data firm Refinitiv.
Scotiabank chief executive Brian Porter said “meaningful progress” was made during the quarter to reposition the bank and simplify its operations, such as the divestiture of its operations in Puerto Rico and U.S. Virgin Islands.
“As a result, we are better positioned for growth in our key markets,” he said in a statement.
In the same statement, Porter added, “Canadian Wealth Management earnings grew 20%, with good organic growth and strong contributions from MD Financial and Jarislowsky Fraser.”
Scotiabank’s Canadian banking operations earned $1.160 billion in the quarter, up from $1.130 billion a year ago, boosted by asset and deposit growth and acquisitions, partly offset by higher non-interest expenses and provision for credit losses. The bank also said lower gains on the sale of real estate impacted earnings growth by 2%.
International banking earned a profit attributable to equity holders of $781 million, up from $519 million, driven by strong loan growth in the Pacific Alliance countries, acquisitions, higher non-interest income, and the positive impact of foreign currency translation.
Meanwhile, the bank’s global banking and markets operations earned $374 million, down from $441 million from a year ago.
Provisions for credit losses totalled $713 million in the quarter, down from $943 million in the same quarter last year.
Scotiabank’s common equity tier 1 capital ratio, a key measure of the bank’s financial health, was 11.2% at the end of the most recent quarter, up about 10 basis points from the prior quarter.