Lending growth drives Scotiabank profit, shares up

Tue May 29, 2012 12:35pm EDT
 
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By Cameron French

TORONTO (Reuters) - Bank of Nova Scotia's (BNS.TO: Quote) operating profit rose 16 percent in the second quarter, topping estimates on strong growth in international banking profits and domestic loans, Canada's No. 3 bank said on Tuesday.

Shares of Scotiabank, the fourth Canadian bank to report in what has been a mixed earnings season so far, were up 1.9 percent on the results, which analysts said were strong across all the bank's business lines.

"A great core business performance justifies the premium valuation for the bank," said Peter Routledge, an analyst at National Bank Financial.

Net income fell 10 percent as the year-before results were boosted by non-recurring foreign currency and acquisition-related gains of C$363 million.

But operating profit rose 16 percent to C$1.46 billion ($1.43 billion) or C$1.15 a share, the bank said, while adjusted profit was C$1.18 a share, topping analysts' expectations of C$1.15.

"While we do not characterize it as a blow-out quarter, based on what we have seen to date from its peers, it is positive," Barclays Capital analyst John Aiken said in a note.

MIXED RESULTS

Canadian banks have mostly struggled with slowing domestic loan growth this quarter, leading to mixed results.   Continued...