Scotiabank profit rises on ING deal, but int'l unit weak

Fri Dec 6, 2013 12:08pm EST
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By Cameron French

TORONTO (Reuters) - Bank of Nova Scotia (BNS.TO: Quote) reported a 12 percent rise in quarterly profit due to its acquisition last year of online bank ING Direct, but results were marred by a sluggish performance at its international unit.

Shares of Scotiabank, Canada's No. 3 lender, were up 0.7 percent at mid-morning, slightly underperforming most of its Canadian peers.

"I thought it was a pretty good quarter for domestic banking, but (there was) weakness in international, which really drives the story at Scotia," said Tom Lewandowski, a bank analyst at St. Louise-based Edward Jones.

Income from Scotiabank's international banking division, which includes a presence throughout Latin America and parts of Asia, rose 3 percent to C$467 million ($438.64 million), held back by narrowing interest margins and an 18 percent rise in loan-loss provisions.

The results cap a Canadian bank reporting period in which most banks benefited from steady growth in domestic retail banking and wealth management income but were hurt by weakness at their capital markets arms.

Scotiabank's overall net profit rose to C$1.70 billion, or C$1.30 per share, in the fourth quarter ended October 31, from C$1.52 billion, or C$1.18 per share, a year earlier.

Excluding amortization of intangibles, the bank earned C$1.31 per share, slightly below the average analyst estimate of C$1.32, according to Thomson Reuters I/B/E/S.

Canadian retail bank earnings rose 23 percent to C$593 million, driven mainly by the bank's acquisition of the Canadian online banking division of Dutch lender ING Groep ING.AS last year.   Continued...

The logo of Scotiabank is seen at a branch in Toronto November 9, 2007. REUTERS/Mark Blinch