Scotiabank to record C$600 million gain on office sale

Fri Jun 15, 2012 4:21pm EDT
 
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TORONTO (Reuters) - Bank of Nova Scotia (BNS.TO: Quote) will record a C$600 million ($586 million) after-tax gain in its fiscal third quarter from the sale of its Scotia Plaza office complex in Toronto, the bank said as it announced the closing of the deal on Friday.

Scotiabank said last month it would sell the complex for C$1.27 billion to Toronto's Dundee Real Estate Investment Trust and Calgary's H&R Real Estate Investment Trust as it aimed to capitalize on Toronto's strong commercial real estate market.

Analysts said the bank, Canada's third largest, was also likely trying to pump up its capital levels ahead of stricter global capital and liquidity regulations for banks that start to take effect next year. Scotiabank said the sale will boost its common equity Tier 1 ratio under Basel III by about 25 basis points.

The sale includes a 68-story tower of postmodern design, which is Canada's second-tallest office building and holds the company's head office, as well as a 1951 art-deco building and other ancillary properties on the same block.

Scotiabank, which occupies 61 percent of the complex, will remain a tenant. The company will release its results for its third quarter, which ends July 31, on August 28.

Its shares closed 2 Canadian cents lower at C$51.98 on the Toronto Stock Exchange on Friday.

($1=$1.02 Canadian)

(Reporting By Cameron French; Editing by Peter Galloway)