Scotiabank's better-than-expected results have come amid a series of disappointing financials from major Canadian banks this week. Earnings from CIBC (NYSE:CM) and TD Bank (NYSE:TD) released on Thursday both fell short of consensus estimates, as did Royal Bank's (NYSE:RY) Friday.
Scotiabank's net income for the quarter ending October 31 rose to $1.1 billion, or $1 per diluted share, from $0.9 billion, or 83 cents per diluted share, in the year-ago period. Fourth quarter revenue was $6.1 billion, up from $5.7 billion in the same period in 2009. Adjusted cash earnings per share, which excludes non-cash amortization charges, topped analyst estimates by 2 cents at $1.02 per share.
Fuelled by asset growth, particularly in residential mortgages, profits at the Canadian banking segment rose 13% year-over-year to $567 million. Average assets grew 7% to $210 billion in the fourth quarter. The international banking segment also increased its bottom line by 28% to $363 million, driven by growth in Chile and acquisitions in Puerto Rico and Thailand.
As expected, however, decreased trading revenues and lending volume at Scotia Capital, its capital markets segment, led to an $80 million downturn in profits for the segment, which earned $273 million for the quarter.
The bank said that global financial markets continues to be weak, but that its exposure to developing economies will allow it to capitalize on growth opportunities.
In early October, the bank created Global Wealth Management to bolster its wealth management segment abroad; the unit combines its wealth management and insurance businesses.
Last month, the firm also signed a deal to buy the remaining 82% of DundeeWealth that it does not already own for C$2.3 billion. In the earnings release Friday, Rick Waugh, Scotiabank's CEO, said the acquisition showed the firm's "strong commitment to growth in wealth management".
Looking ahead to fiscal 2011, the bank expects earnings per share to grow 7%-12% during the year. The company reported EPS of $3.91 for fiscal 2010.