UPDATE 3-Scotiabank misses estimates as energy loans turn sour
* EPS below forecast when gain from sale stripped out
* Credit loss provision rises 40 percent to C$752 million
* Provision is higher than analysts had anticipated
* To cut 4-5 percent of branches in next two years (Adds comments from executives on conference call)
By Matt Scuffham
TORONTO, May 31 (Reuters) - Bank of Nova Scotia on Tuesday reported second-quarter results which were below market expectations and increased funds set aside to cover bad loans by 40 percent as lending to energy companies turned sour.
Scotiabank, which has the biggest direct exposure of the major Canadian banks to the oil and gas industry, followed rivals Royal Bank of Canada and Toronto-Dominion Bank in reporting increased bad loan provisions.
Net income for the second quarter which ended on April 30, excluding a restructuring charge, was C$1.9 billion ($1.4 billion), or C$1.46 per share, compared with C$1.8 billion, or C$1.42 per share, a year earlier.
Barclays' analyst John Aiken said the headline number included a C$100 million disposal gain, and without that, earnings were C$1.40 per share, below the average forecast for C$1.42, according to Thomson Reuters I/B/E/S. Continued...