* Rise in profit largely due to DundeeWealth acquisition
* Revenue up 43 pct at C$818 mln
* AUM at C$105 bln, up from C$50 bln
TORONTO, Aug 30 (Reuters) - Quarterly profit at Bank of Nova Scotia’s (BNS.TO) wealth management division rose 12 percent, largely driven by its acquisition of Canadian asset manager DundeeWealth.
Canada’s No. 3 lender said on Tuesday that third-quarter net income at its wealth management unit was C$256 million ($261 million), up from C$228 million a year earlier.
Scotiabank surprised market watchers in November when it said it would buy the 82 percent of DundeeWealth that it did not already own for C$2.3 billion. Most expected the bank to buy DundeeWealth rival CI Financial, in which Scotia still holds a stake of around 36 percent. [ID:nN22123999]
The DundeeWealth deal helped boost assets under management at Scotiabank’s wealth unit to C$105 billion from C$50 billion a year earlier, while assets under administration rose to C$276 billion from C$185 billion.
Wealth unit revenue for the three months ended July 31 was up 43 percent at C$818 million as a result of higher fee revenue from the increased asset levels, as well as increased trading volumes and insurance revenue.
Around 85 percent of the unit’s revenue came from the wealth management business, with the remaining 15 percent coming from the insurance business. That compares to a split of 82 percent and 18 percent for the same quarter last year.
Net interest income was up 9 percent at C$88 million as growth in average assets and deposits was partly offset by margin compression.
Other income rose 49 percent to C$730 million due to the DundeeWealth deal, new sales, higher assets under management and assets under administration, increased trading volumes in at its full-service and online brokerages, and improved market conditions. Growth in insurance income came from stronger sales globally.
Non-interest expenses soared 67 percent due to costs related to the DundeeWealth deal, as well as higher expenses to support business growth.
Scotiabank’s overall profit was up nearly 22 percent at C$1.29 billion, helped by the boost from the wealth unit and on higher income from its expansive international operations. [ID:N1E77T07J]
Scotiabank is the fourth Canadian bank to report this quarter. Bank of Montreal (BMO.TO) kicked off reporting season with a robust report early last week, but that was followed by disappointing results at National Bank of Canada (NA.TO) and Royal Bank of Canada (RY.TO).
$1=$0.98 Canadian Reporting by John McCrank and Cameron French; editing by Peter Galloway