Scotiabank eyes acquisitions after earnings beat view
By Matt Scuffham
TORONTO (Reuters) - Bank of Nova Scotia, Canada's third-biggest lender, said it could take advantage of its financial strength to make acquisitions in the Pacific Alliance trade bloc after reporting better-than-expected profit.
Scotiabank said on Tuesday its earnings per share increased to C$1.58 from C$1.46 in the same period the previous year. Analysts had on average forecast earnings of C$1.51, according to Thomson Reuters I/B/E/S.
The company's shares rose as much as 2 percent to $73.98, a more than two-year peak, before trimming gains to trade 1.9 percent higher at $73.92.
The bank said its core tier 1 ratio, a key measure of its financial strength, was 11 percent, well above the minimum requirement set by regulators, which Chief Executive Brian Porter said gave it the flexibility to make acquisitions.
"Our strong capital position provides us the opportunity to invest in and grow our businesses both organically or strategically through acquisitions," he told analysts on a conference call.
Asked where potential acquisitions might be made, Chief Financial Officer Sean McGuckin told reporters the bank's international focus remained on the Pacific Alliance, a Latin American trade bloc comprising Mexico, Peru, Chile and Columbia.
McGuckin said the bank remained confident about its prospects in Mexico despite a plunge in the Mexican peso after Donald Trump's U.S. election victory this month raised fears about the country's economy.
"The trade between Canada, the U.S. and Mexico is so inter-linked. It's hard to see how that is going to change," he said. "It's hard to speculate but I think the market's discounting it more than we think it will play out." Continued...