UPDATE 3-Scotiabank profit misses expectations; shares slip

Tue Mar 3, 2015 3:27pm EST
 
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(Adds interview with CFO)

By John Tilak

March 3 (Reuters) - Bank of Nova Scotia posted a lower-than-expected quarterly profit on Tuesday, hurt by an increase in credit-loss provisions and higher expenses, and its shares fell 1.4 percent.

The results at Scotiabank, Canada's No. 3 lender, round out a mixed quarter for the country's big banks. Royal Bank of Canada and Canadian Imperial Bank of Commerce topped profit expectations, but Bank of Montreal fell short.

Investors had been concerned about the effects of an oil-price slump on Canadian banks' performance.

Scotiabank's provisions for credit losses jumped 30 percent to C$463 million ($369.8 million) in the first quarter ended on Jan. 31, and non-interest expenses rose about 3 percent.

Loans outstanding to corporate clients in the oil-and-gas sector rose 20 percent to C$15.4 billion from the fourth quarter, despite low energy prices.

"If that meant that they are making large, incremental bets on the oil-and-gas sector, that makes me a little bit nervous," said Edward Jones analyst James Shanahan.

Scotiabank Chief Financial Officer Sean McGuckin said the growth in corporate lending in the energy sector was helping offset any broader impact due to the lower oil prices.   Continued...