(November 30 – 12:40 ET) – Scotiabank is reporting net income of $1.551 billion for fiscal 1999, up 11% from last year. This marks the Bank’s tenth consecutive year of record operating income, BNS said in a prepared statement. Earnings per share were $2.93, up 11% from $2.64 last year, while return on equity was 15.3%.
Net income in the fourth quarter of 1999 was $402 million, compared to $359 million for the last quarter of 1998. Earnings per share during the quarter were $0.76 compared to $0.67 in the fourth quarter of 1998, and return on equity was 15.3% compared to 14.8%.
The BNS Board of Directors approved a quarterly dividend of 24 cents per common share, payable on January 27, 2000 to shareholders of record as of the close of business on January 4, 2000.
During the fourth quarter of 1999, the Bank recorded a one-time increase to the general provision of $550 million ($314 million after tax) as a direct charge to retained earnings, as opposed to net income. This accounting treatment, while not in accordance with Canadian generally accepted accounting principles, is in accordance with the accounting requirements specified by the Superintendent of Financial Institutions Canada (OSFI) under the Bank Act. The impact on the full year and quarterly results are summarized in the attached table of performance highlights.
The Bank’s Canadian Retail and Commercial Banking division earned net income of $610 million in 1999, up $5 million from last year.
During 1999, several groups within Scotiabank—including ScotiaMcLeod, Scotia Discount Brokerage, Scotia Securities, Scotia Cassels Investment Counsel and Scotiatrust—were realigned to focus on investment and advisory needs of customers. The new Wealth Management Group earned revenues of $662 million. Assets under administration were 17% higher in 1999, totalling $82 billion at the end of the year. Assets under management by Scotia Cassels Investment Counsel grew a substantial 20% from last year, to $16 billion at the end of 1999.
Scotiabank’s International Banking division had strong earnings of $305 million this year, up 20% over last year.
Corporate Banking reported record earnings of $604 million, up 40% over 1998. These strong results arose from higher assets, spreads, fee income and securities gains, all of Investment Banking earned a record $368 million in 1999, up 69% over 1998. Over half of this income came from Group Treasury, which had earnings of $212 million, an increase of 48% from the prior year. A substantial portion of this increase came from gains of $281 million on the sale of investment securities. Notwithstanding the gains realized during the year, the surplus of market over book value in the Bank’s investment portfolio.
Net interest income on a taxable-equivalent basis was $4.8 billion in 1999, up 7% over 1998. This arose from good asset growth across the Bank’s major business lines. The full extent of the growth in interest income was understated in 1999 as a result of higher asset securitizations. In 1999, $9.4 billion of assets were securitized, compared with $1.0 billion in 1998. This reduced interest profit by $175 million, with securitization revenues being reported in other income.
The Bank’s net interest margin, which expresses net interest income as a percentage of average total assets, was 2.11% in 1999, unchanged from the prior year. Other income reached $3.2 billion in 1999, an 11% increase year over year. Non-interest expenses were $4.8 billion in 1999, an increase of 7% or $310 million from 1998.
-IE Staff
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