Scotiabank raises dividend as profit just tops estimates

Tue Aug 27, 2013 8:45am EDT
 
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By Cameron French

TORONTO (Reuters) - Bank of Nova Scotia (BNS.TO: Quote) posted a slightly stronger-than-expected quarterly profit and raised its dividend on Tuesday, as it benefited from higher international income as well as its acquisition last year of ING Groep's ING.AS Canadian online bank.

Net income fell 14 percent in the third quarter ended July 31, but that was due to a year-earlier gain of C$614 million ($584.01 million) from the sale of the Toronto office tower that serves as the company's headquarters.

The bank, known as Scotiabank, earned C$1.8 billion, or C$1.37 a share, compared with C$2.1 billion, or C$1.69 a share, a year earlier.

Excluding the impact of the office sale and other items, profit rose 17 percent to C$1.32 a share. Analysts on average had expected C$1.30, according to Thomson Reuters I/B/E/S.

Income from Scotiabank's Canadian banking division jumped 13 percent to C$590 million, helped by the acquisition of the ING Direct online bank.

At the international banking segment, which spans about 50 countries and includes a large footprint in Latin America, earnings jumped 26 percent to C$494 million. The bulk of the boost was due to a gain on the sale of an insurance subsidiary by Scotiabank's 49 percent-owned Thanachart Capital Pcl (TCAP.BK: Quote) in Thailand.

The bank raised its quarterly dividend to 62 Canadian cents a share from 60 Canadian cents, its fourth increase in the past two years.

Scotiabank has made several acquisitions in the last few years in Canada, Latin America and Asia, although its attempt to buy a 20 percent stake in China's Bank of Guangzhou fell apart earlier this summer after Chinese authorities decided against proceeding with the C$719 million deal.

($1 = $1.0514 Canadian)

(Reporting by Cameron French; Editing by Lisa Von Ahn)