March 4, 2008 / 12:42 PM / 10 years ago

CORRECTED:Scotiabank profit drops 18 pct in first quarter

Corrects headline to say first quarter instead of fourth

TORONTO (Reuters) - Bank of Nova Scotia (BNS.TO) said on Tuesday its first-quarter earnings dropped 18 percent amid substantial volatility in global financial markets.

Scotiabank, Canada’s third-biggest bank by market value, reported earnings of C$835 million ($843 million), or 82 Canadian cents a share, in the three months ended January 31. That compares with net income of C$1.02 billion, or C$1.01 a share, in the same period a year earlier.

Analysts had expected Scotiabank to earn C$1.01 a share before exceptional items, according to Reuters Estimates.

Provisions for credit losses, which are rising across Canada’s bank sector after years of record lows, increased 23 percent to C$91 million.

Scotiabank said net income at its domestic banking unit rose 1.7 percent to C$367 million.

Profit at Scotiabank’s international operations, which include businesses in the Caribbean, South America and Mexico, fell 10.7 percent to C$282 million.

Profit at Scotia Capital, the group’s investment banking and capital markets unit, slumped 36 percent to C$187 million from a year earlier as trading revenue fell.

Scotiabank has targeted earnings per share growth of 7 to 12 percent in 2008.

At a time when banks in Canada and around the world are taking hits from investments linked to the crisis-plagued U.S. subprime housing market, Scotiabank has said it has no direct exposure to this market and only “nominal holdings” of troubled Canadian nonbank asset-backed commercial paper.

($1=$0.99 Canadian)

Reporting by Frank Pingue; Editing by Bernadette Baum

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