All amounts are in
Canadian dollars and are based on our unaudited Interim Condensed
Consolidated Financial Statements for the quarter ended January 31,
2019 and related notes prepared in accordance with International
Financial Reporting Standards (IFRS), unless otherwise noted. Our
complete First Quarter 2019 Report to Shareholders, including our
unaudited interim financial statements for the period January 31,
2019, can also be found on the SEDAR website at www.sedar.com and
on the EDGAR section of the SEC's website at www.sec.gov. In
addition, Supplementary Financial Information is also available,
together with the First Quarter 2019 Report on the Investor
Relations page of www.scotiabank.com.
|
First Quarter
Highlights on a Reported basis (versus Q1, 2018)
|
First Quarter
Highlights on an Adjusted basis1 (versus Q1,
2018)
|
|
|
•
|
Net income of $2,247
million, compared to $2,337 million
|
•
|
Net income of $2,291
million, compared to $2,350 million
|
•
|
Earnings per share
(diluted) of $1.71, compared to $1.86
|
•
|
Earnings per share
(diluted) of $1.75, compared to $1.87
|
•
|
Return on equity of
13.5%, compared to 16.2%
|
•
|
Return on equity of
13.7%, compared to 16.3%
|
•
|
Quarterly dividend
increase of 2 cents per common share to 87 cents
|
|
|
TORONTO, Feb. 26, 2019 /CNW/ - Scotiabank reported first
quarter net income of $2,247 million
compared to $2,337 million in the
same period last year. Diluted earnings per share were $1.71, compared to $1.86 in the same period a year ago. Return on
equity was 13.5% compared to 16.2% last year.
Adjusting for Acquisition-related costs(1), net
income decreased 3% to $2,291 million
and diluted earnings per share declined 6% to $1.75 compared to $1.87 last year. Return on equity was 13.7%
compared to 16.3% a year ago.
In the same period a year ago, earnings included an accounting
benefit of $150 million ($203 million pre-tax), or 12 cents of diluted earnings per share, driven by
the re-measurement of a liability from an employee benefit
plan.
"In the first quarter, we demonstrated continued progress in the
execution of our strategy to further de-risk the Bank, simplify our
operations, and position the Bank for further growth. We had a
solid start to the year with strong earnings growth in
International Banking and Wealth Management. This quarter also saw
good progress related to the integration of recent acquisitions
which is proceeding as expected," said Brian Porter, President and CEO of
Scotiabank.
"While significant market volatility impacted some of our
business lines, we still experienced strong growth. In addition,
credit quality remains strong and in line with recent
quarters."
International Banking reported strong results this quarter, with
adjusted annual earnings growth of 18% on a constant currency
basis. The growth was driven largely by strong loan and deposit
growth in the Pacific Alliance and positive operating leverage.
The Bank's Common Equity Tier 1 capital ratio remains above 11%
and will further benefit from the dispositions announced this
quarter, which positions the Bank well to continue to invest in
line with its strategic objectives. This quarter we announced a
2 cent increase in the quarterly
dividend to 87 cents per common
share, 6% higher than a year ago.
"For the remainder of 2019, integration of recent acquisitions
will remain a key focus for the Bank. We have a focused strategic
agenda and strong management team to execute on our plans for the
year to achieve our medium-term objectives."
_________________________
|
1 Adjusted for Acquisition-related
costs. Refer to Non-GAAP Measures section on page 2.
|
Financial Results
The 2019 first quarter results are presented below:
Reported
Results
|
|
For the three months
ended
|
|
|
January
31
|
|
October 31
|
|
January 31
|
(Unaudited)($
millions)
|
|
2019
|
|
2018
|
|
2018
|
Net interest
income
|
$
|
4,274
|
$
|
4,220
|
$
|
3,936
|
Non-interest
income
|
|
3,330
|
|
3,228
|
|
3,152
|
Total
revenue
|
|
7,604
|
|
7,448
|
|
7,088
|
Provision for credit
losses
|
|
688
|
|
590
|
|
544
|
Non-interest
expenses
|
|
4,171
|
|
4,064
|
|
3,498
|
Income tax
expense
|
|
498
|
|
523
|
|
709
|
Net
income
|
$
|
2,247
|
$
|
2,271
|
$
|
2,337
|
Net income
attributable to non-controlling interests in
subsidiaries
|
|
111
|
|
92
|
|
58
|
Net income
attributable to equity holders of the Bank
|
|
2,136
|
|
2,179
|
|
2,279
|
Preferred shareholders
and other equity instrument holders
|
|
29
|
|
65
|
|
30
|
Common
shareholders
|
$
|
2,107
|
$
|
2,114
|
$
|
2,249
|
Earnings per
common share (in dollars)
|
|
|
|
|
|
|
Basic
|
$
|
1.72
|
$
|
1.72
|
$
|
1.88
|
Diluted
|
$
|
1.71
|
$
|
1.71
|
$
|
1.86
|
Non-GAAP measures
The Bank uses a number of financial measures to assess its
performance. Some of these measures are not calculated in
accordance with Generally Accepted Accounting Principles (GAAP),
which are based on International Financial Reporting Standards
(IFRS), are not defined by GAAP and do not have standardized
meanings that would ensure consistency and comparability among
companies using these or similar measures. The Bank believes that
certain non-GAAP measures are useful in assessing ongoing business
performance and provide readers with a better understanding of how
management assesses performance. These non-GAAP measures are used
throughout this press release and are defined in the "Non-GAAP
Measures" section of our First Quarter 2019 Report to
Shareholders.
Adjusted results and diluted earnings per share
The following tables present reconciliations of GAAP Reported
financial results to non-GAAP Adjusted financial results. The
financial results have been adjusted for the following:
Acquisition-related costs –
Acquisition-related costs are defined as:
- Integration costs – Includes costs that are incurred and relate
to integrating the acquired operations. These costs will cease once
integration is complete. The costs relate to the following
acquisitions:
- Jarislowsky, Fraser Limited
- MD Financial Management
- BBVA Chile
- Citibank consumer and small and medium enterprise operations,
Colombia.
- Day 1 provision for credit losses on acquired performing
financial instruments, as required by IFRS 9. The standard does not
differentiate between originated and purchased performing loans and
as such, requires the same accounting treatment for both. These
credit losses are considered Acquisition-related costs in periods
where applicable. These costs relate to BBVA Chile and Citibank
Colombia.
- Amortization of Acquisition-related intangible assets,
excluding software. These costs relate to the four acquisitions
above as well as prior acquisitions.
|
For the three months
ended
|
|
January
31
|
October 31
|
January 31
|
($
millions)
|
2019
|
2018
|
2018
|
Reported
Results
|
|
|
|
|
|
|
Net interest
income
|
$
|
4,274
|
$
|
4,220
|
$
|
3,936
|
Non-interest
income
|
|
3,330
|
|
3,228
|
|
3,152
|
Total
revenue
|
|
7,604
|
|
7,448
|
|
7,088
|
Provision for credit
losses
|
|
688
|
|
590
|
|
544
|
Non-interest
expenses
|
|
4,171
|
|
4,064
|
|
3,498
|
Income before
taxes
|
|
2,745
|
|
2,794
|
|
3,046
|
Income tax
expense
|
|
498
|
|
523
|
|
709
|
Net
income
|
$
|
2,247
|
$
|
2,271
|
$
|
2,337
|
Net income
attributable to non-controlling interests in subsidiaries
(NCI)
|
|
111
|
|
92
|
|
58
|
Net income
attributable to equity holders
|
|
2,136
|
|
2,179
|
|
2,279
|
Net income
attributable to common shareholders
|
|
2,107
|
|
2,114
|
|
2,249
|
Diluted earnings
per share (in dollars)
|
$
|
1.71
|
$
|
1.71
|
$
|
1.86
|
|
|
|
|
|
|
|
Adjustments for
Acquisition-related costs
|
|
|
|
|
|
|
Day 1 provision for
credit losses on acquired performing financial
instruments(1)
|
$
|
-
|
$
|
-
|
$
|
-
|
Integration
costs(2)
|
|
31
|
|
75
|
|
-
|
Amortization of
acquisition-related intangible assets, excluding
software(2)
|
|
30
|
|
27
|
|
18
|
Acquisition-related costs (Pre-tax)
|
|
61
|
|
102
|
|
18
|
Income tax
expense
|
|
17
|
|
28
|
|
5
|
Acquisition-related costs (After
tax)
|
|
44
|
|
74
|
|
13
|
Adjustment
attributable to NCI
|
|
5
|
|
9
|
|
-
|
Acquisition-related costs (After tax and
NCI)
|
$
|
39
|
$
|
65
|
$
|
13
|
|
|
|
|
|
|
|
Adjusted
Results
|
|
|
|
|
|
|
Net interest
income
|
$
|
4,274
|
$
|
4,220
|
$
|
3,936
|
Non-interest
income
|
|
3,330
|
|
3,228
|
|
3,152
|
Total
revenue
|
|
7,604
|
|
7,448
|
|
7,088
|
Provision for credit
losses
|
|
688
|
|
590
|
|
544
|
Non-interest
expenses
|
|
4,110
|
|
3,962
|
|
3,480
|
Income before
taxes
|
|
2,806
|
|
2,896
|
|
3,064
|
Income tax
expense
|
|
515
|
|
551
|
|
714
|
Net
income
|
$
|
2,291
|
$
|
2,345
|
$
|
2,350
|
Net income
attributable to NCI
|
|
116
|
|
101
|
|
58
|
Net income
attributable to equity holders
|
|
2,175
|
|
2,244
|
|
2,292
|
Net income
attributable to common shareholders
|
|
2,146
|
|
2,179
|
|
2,262
|
|
|
|
|
|
|
|
Adjusted diluted
earnings per share
|
|
|
|
|
|
|
Adjusted net income
attributable to common shareholders
|
$
|
2,146
|
$
|
2,179
|
$
|
2,262
|
Dilutive impact of
share-based payment options and others
|
|
45
|
|
21
|
|
13
|
Adjusted net income
attributable to common shareholders (diluted)
|
$
|
2,191
|
$
|
2,200
|
$
|
2,275
|
Weighted average
number of basic common shares outstanding
(millions)
|
|
1,226
|
|
1,230
|
|
1,199
|
Dilutive impact of
share-based payment options and others (millions)
|
|
29
|
|
16
|
|
16
|
Adjusted weighted
average number of diluted common shares outstanding
(millions)
|
|
1,255
|
|
1,246
|
|
1,215
|
Adjusted diluted
earnings per share (in dollars)
|
$
|
1.75
|
$
|
1.77
|
$
|
1.87
|
Impact of
adjustments on diluted earnings per share (in
dollars)
|
$
|
0.04
|
$
|
0.06
|
$
|
0.01
|
(1)
|
Recorded in
provision for credit losses.
|
(2)
|
Recorded in
non-interest expenses.
|
Reconciliation of reported and adjusted results and diluted
earnings per share by business line
Canadian
Banking(1)
|
|
|
For the three months
ended
|
|
January
31
|
October 31
|
January 31
|
($
millions)
|
2019
|
2018
|
2018
|
Reported
Results
|
|
|
|
|
|
|
Net interest
income
|
$
|
2,036
|
$
|
2,029
|
$
|
1,939
|
Non-interest
income
|
|
1,379
|
|
1,414
|
|
1,364
|
Total
revenue
|
|
3,415
|
|
3,443
|
|
3,303
|
Provision for credit
losses
|
|
233
|
|
198
|
|
210
|
Non-interest
expenses
|
|
1,730
|
|
1,747
|
|
1,605
|
Income before
taxes
|
|
1,452
|
|
1,498
|
|
1,488
|
Income tax
expense
|
|
379
|
|
383
|
|
386
|
Net
income
|
$
|
1,073
|
$
|
1,115
|
$
|
1,102
|
Net income
attributable to non-controlling interests in subsidiaries
(NCI)
|
|
-
|
|
-
|
|
-
|
Net income
attributable to equity holders
|
$
|
1,073
|
$
|
1,115
|
$
|
1,102
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
Acquisition-related costs
|
|
|
|
|
|
|
Day 1 provision for
credit losses on acquired performing financial
instruments(2)
|
$
|
-
|
$
|
-
|
$
|
-
|
Integration
costs(3)
|
|
7
|
|
28
|
|
-
|
Amortization of
acquisition-related intangible assets, excluding
software(3)
|
|
14
|
|
14
|
|
7
|
Acquisition-related costs (Pre-tax)
|
|
21
|
|
42
|
|
7
|
Income tax
expense
|
|
5
|
|
11
|
|
2
|
Adjustments for
Acquisition-related costs (After tax)
|
|
16
|
|
31
|
|
5
|
Adjustment
attributable to NCI
|
|
-
|
|
-
|
|
-
|
Adjustments for
Acquisition-related costs (After tax and NCI)
|
$
|
16
|
$
|
31
|
$
|
5
|
|
|
|
|
|
|
|
Adjusted
Results
|
|
|
|
|
|
|
Net interest
income
|
$
|
2,036
|
$
|
2,029
|
$
|
1,939
|
Non-interest
income
|
|
1,379
|
|
1,414
|
|
1,364
|
Total
revenue
|
|
3,415
|
|
3,443
|
|
3,303
|
Provision for credit
losses
|
|
233
|
|
198
|
|
210
|
Non-interest
expenses
|
|
1,709
|
|
1,705
|
|
1,598
|
Income before
taxes
|
|
1,473
|
|
1,540
|
|
1,495
|
Income tax
expense
|
|
384
|
|
394
|
|
388
|
Net
income
|
$
|
1,089
|
$
|
1,146
|
$
|
1,107
|
Net income
attributable to NCI
|
|
-
|
|
-
|
|
-
|
Net income
attributable to equity holders
|
$
|
1,089
|
$
|
1,146
|
$
|
1,107
|
(1)
|
Refer to Business
Segment Review on page 6.
|
(2)
|
Recorded in
provision for credit losses.
|
(3)
|
Recorded in
non-interest expenses.
|
International
Banking
|
|
|
For the three months
ended
|
|
January
31
|
October 31
|
January 31
|
($
millions)
|
2019
|
2018
|
2018
|
Reported
Results
|
|
|
|
|
|
|
Net interest
income
|
$
|
2,080
|
$
|
2,030
|
$
|
1,707
|
Non-interest
income
|
|
1,251
|
|
1,104
|
|
997
|
Total
revenue
|
|
3,331
|
|
3,134
|
|
2,704
|
Provision for credit
losses
|
|
470
|
|
412
|
|
344
|
Non-interest
expenses
|
|
1,742
|
|
1,721
|
|
1,442
|
Income before
taxes
|
|
1,119
|
|
1,001
|
|
918
|
Income tax
expense
|
|
226
|
|
197
|
|
193
|
Net
income
|
$
|
893
|
$
|
804
|
$
|
725
|
Net income
attributable to non-controlling interests in subsidiaries
(NCI)
|
|
111
|
|
92
|
|
58
|
Net income
attributable to equity holders
|
$
|
782
|
$
|
712
|
$
|
667
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
Acquisition-related costs
|
|
|
|
|
|
|
Day 1 provision for
credit losses on acquired performing financial
instruments(2)
|
$
|
-
|
$
|
-
|
$
|
-
|
Integration
costs(3)
|
|
24
|
|
47
|
|
-
|
Amortization of
acquisition-related intangible assets, excluding
software(3)
|
|
16
|
|
13
|
|
11
|
Acquisition-related costs (Pre-tax)
|
|
40
|
|
60
|
|
11
|
Income tax
expense
|
|
12
|
|
17
|
|
3
|
Adjustments for
Acquisition-related costs (After tax)
|
|
28
|
|
43
|
|
8
|
Adjustment
attributable to NCI
|
|
5
|
|
9
|
|
-
|
Adjustments for
Acquisition-related costs (After tax and NCI)
|
$
|
23
|
$
|
34
|
$
|
8
|
|
|
|
|
|
|
|
Adjusted
Results
|
|
|
|
|
|
|
Net interest
income
|
$
|
2,080
|
$
|
2,030
|
$
|
1,707
|
Non-interest
income
|
|
1,251
|
|
1,104
|
|
997
|
Total
revenue
|
|
3,331
|
|
3,134
|
|
2,704
|
Provision for credit
losses
|
|
470
|
|
412
|
|
344
|
Non-interest
expenses
|
|
1,702
|
|
1,661
|
|
1,431
|
Income before
taxes
|
|
1,159
|
|
1,061
|
|
929
|
Income tax
expense
|
|
238
|
|
214
|
|
196
|
Net
income
|
$
|
921
|
$
|
847
|
$
|
733
|
Net income
attributable to NCI
|
|
116
|
|
101
|
|
58
|
Net income
attributable to equity holders
|
$
|
805
|
$
|
746
|
$
|
675
|
(1)
|
Refer to Business
Segment Review on page 6.
|
(2)
|
Recorded in
provision for credit losses.
|
(3)
|
Recorded in
non-interest expenses.
|
Reconciliation of International Banking's reported results
and constant dollar results
International Banking business segment results are analyzed on a
constant dollar basis. Under the constant dollar basis, prior
period amounts are recalculated using current period average
foreign currency rates. The following table presents the
reconciliation between reported and constant dollar results for
International Banking for prior periods.
|
For the three months
ended
|
($
millions)
|
October 31,
2018
|
January 31,
2018
|
(Taxable
equivalent basis)
|
|
Reported
|
Foreign
exchange
|
Constant
dollar
|
|
Reported
|
Foreign
exchange
|
Constant
dollar
|
Net interest
income
|
$
|
2,030
|
$
|
(8)
|
$
|
2,038
|
$
|
1,707
|
$
|
(22)
|
$
|
1,729
|
Non-interest
income
|
|
1,104
|
|
5
|
|
1,099
|
|
997
|
|
6
|
|
991
|
Total
revenue
|
|
3,134
|
|
(3)
|
|
3,137
|
|
2,704
|
|
(16)
|
|
2,720
|
Provision for credit
losses
|
|
412
|
|
1
|
|
411
|
|
344
|
|
-
|
|
344
|
Non-interest
expenses
|
|
1,721
|
|
5
|
|
1,726
|
|
1,442
|
|
(6)
|
|
1,448
|
Income tax
expense
|
|
197
|
|
-
|
|
197
|
|
193
|
|
(2)
|
|
195
|
Net
income
|
$
|
804
|
$
|
1
|
$
|
803
|
$
|
725
|
$
|
(8)
|
$
|
733
|
Net income
attributable to non-controlling interest in subsidiaries
|
$
|
92
|
$
|
2
|
$
|
90
|
$
|
58
|
$
|
-
|
$
|
58
|
Net income
attributable to equity holders of the Bank
|
$
|
712
|
$
|
(1)
|
$
|
713
|
$
|
667
|
$
|
(8)
|
$
|
675
|
Other
measures
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
assets ($ billions)
|
$
|
193
|
$
|
-
|
$
|
193
|
$
|
153
|
$
|
4
|
$
|
149
|
Average liabilities
($ billions)
|
$
|
153
|
$
|
(1)
|
$
|
154
|
$
|
117
|
$
|
(2)
|
$
|
119
|
Business Segment Review
Canadian Banking
Q1 2019 vs Q1
2018
Net income attributable to equity holders was $1,073 million, a decrease of $29 million or 3%. Adjusting for
Acquisition-related costs, net income decreased by 2% due primarily
to higher non-interest expenses and provision for credit losses
partly offset by higher net interest income driven by solid volume
growth and the impact of acquisitions. Lower gains on sale of real
estate and the prior year gain on the reorganization of Interac
impacted earnings growth by 4%.
Q1 2019 vs Q4 2018
Net income attributable to equity holders decreased $42 million or 4%. Adjusting for
Acquisition-related costs, net income declined by 5% due primarily
to higher provision for credit losses and lower non-interest
income, partially offset by lower non-interest expenses.
International Banking
Results on a Reported basis
Q1 2019 vs Q1
2018
Net income attributable to equity holders of $782 million was up $115
million or 17%. Adjusting for Acquisition-related costs, net
income increased $130 million or 19%
to $805 million. This growth was
driven largely by higher net interest income due to strong loan and
deposit growth in the Pacific Alliance countries, the impact of
acquisitions, and higher non-interest income, partly offset by
increased non-interest expenses and provision for credit losses.
The benefit of one additional month of earnings, from the Alignment
of the reporting period of Peru
with the Bank ("Alignment of reporting period") increased net
income by 6%.
Q1 2019 vs Q4 2018
Net income attributable to equity holders increased by
$70 million or 10%. Adjusting for
Acquisition-related costs, net income increased by $59 million or 8%. Growth was largely driven by
volume growth, a higher impact of the Alignment of reporting period
of Peru with the Bank compared to
Thailand last quarter, and higher
trading revenues and investment security gains, partly offset by
increased provisions for credit losses and non-interest
expenses.
Results on a Constant dollar basis
The discussion below for International Banking is on a
constant dollar basis that excludes the impact of foreign currency
translation, which is a non-GAAP financial measure (refer to
Non-GAAP Measures). The Bank believes that reporting in
constant dollar is useful for readers in assessing ongoing business
performance.
Q1 2019 vs Q1 2018
Net income attributable to equity holders of $782 million was up $107
million or 16%. Adjusting for Acquisition-related costs, net
income increased by $122 million or
18% to $805 million. This growth was
largely driven by higher net interest income due to strong loan and
deposit growth in the Pacific Alliance countries, the impact of
acquisitions, and higher non-interest income, partly offset by
increased non-interest expenses and provision for credit
losses. The benefit of one additional month of
earnings, from the Alignment of the reporting period of
Peru with the Bank ("Alignment of
reporting period") increased net income by 6%.
Q1 2019 vs Q4 2018
Net income attributable to equity holders increased by
$69 million or 10%. Adjusting for
Acquisition-related costs, net income increased by $58 million or 8%. Growth in lending volume, a
higher impact of the Alignment of reporting period of Peru with the Bank compared to Thailand last quarter, and higher trading
revenues and investment security gains, partly offset by the
increased provisions for credit losses and non-interest
expenses.
Global Banking and Markets
Q1 2019 vs Q1
2018
Net income attributable to equity holders was $335 million, a decrease of $119 million or 26%. Lower non-interest income
due primarily to lower fixed income trading revenues, net interest
income, and higher non-interest expenses were partially offset by
the favourable impact of foreign currency translation, the benefit
of higher reversals of provision for credit losses, and lower
taxes.
Q1 2019 vs Q4 2018
Net income attributable to equity holders decreased by
$81 million or 20%. This was mainly
due to lower non-interest income, primarily lower fixed income
trading revenues, and higher non-interest expenses, partly offset
by higher net interest income and lower taxes.
Other
Q1 2019 vs Q1 2018
Net loss attributable to equity holders was $54 million, compared to net income of
$56 million in the same period last
year. This was due mainly to lower gains on sale of investment
securities and lower contributions from asset/liability management
activities, partly offset by lower non-interest expenses, and lower
taxes. The prior year had lower expenses primarily related to the
benefits remeasurement of $150
million ($203 million
pre-tax).
Q1 2019 vs Q4 2018
Net loss attributable to equity holders was $54 million, compared to $64 million. This was due mainly to lower gains
on sale of investment securities, lower contributions from
asset/liability management activities and higher non-interest
expenses, partly offset by lower taxes.
Credit risk
Allowance for credit losses
The total allowance
for credit losses as at January 31,
2019 was $5,199 million. The
allowance for credit losses on loans was $5,111 million, up from $5,065 million as at October 31, 2018, due primarily to the impact of
foreign currency translation and new provisions during the
quarter. The allowance on impaired loans increased to
$1,680 million from $1,677 million as at October 31, 2018, due primarily to the impact of
foreign currency translation. The allowance against performing
loans was higher at $3,431 million
compared to $3,388 million as at
October 31, 2018, due primarily to
the impact of foreign currency translation and new provisions
during the quarter.
Impaired loans
Total gross impaired loans as at
January 31, 2019 were $5,287 million up from $5,130 million as at October 31, 2018 due largely to new formations in
retail and commercial portfolios.
Net impaired loans, after deducting the allowance for credit
losses, were $3,607 million as at
January 31, 2019, an increase of
$154 million from October 31, 2018. Net impaired loans in Canadian
Banking were $691 million as at
January 31, 2019, an increase of
$73 million from October 31, 2018 across all portfolios.
International Banking's net impaired loans were $2,662 million as at January 31, 2019, increased marginally from
$2,627 million as at October 31, 2018. In Global Banking and Markets,
net impaired loans were $254 million
as at January 31, 2019, increased
from $208 million as at October 31, 2018 due to new formations in
Europe and U.S. Net impaired loans
as a percentage of loans and acceptances were 0.61% as at
January 31, 2019, an increase of one
basis point from 0.60% from last quarter.
Capital ratios
The Bank's Common Equity Tier 1 capital
ratio was 11.1% at January 31, 2019,
flat with the prior quarter, primarily due to strong internal
capital generation which was fully offset by organic growth in
risk-weighted assets and the impacts from employee pension and
post-retirement benefits on accumulated other comprehensive
income.
The Bank's Tier 1 capital ratio also remained flat with the
prior quarter at 12.5%. The Bank's Total capital ratio was 14.6%,
an increase of approximately 30 bps from the prior quarter,
primarily due to the issuance of $1.75
billion of subordinated debentures, partly offset by the
redemption of $300 million of
preferred shares.
The Bank's Leverage ratio declined by approximately 10 bps this
quarter due to growth in the Bank's consolidated assets and the
redemption of the preferred shares noted above.
As at January 31, 2019, the CET1,
Tier 1, Total capital and Leverage ratios were well above OSFI's
minimum capital ratios.
Forward-looking statements
From time to time, our
public communications often include oral or written forward-looking
statements. Statements of this type are included in this document,
and may be included in other filings with Canadian securities
regulators or the U.S. Securities and Exchange Commission, or in
other communications. In addition, representatives of the Bank may
include forward-looking statements orally to analysts, investors,
the media and others. All such statements are made pursuant to the
"safe harbor" provisions of the U.S. Private Securities Litigation
Reform Act of 1995 and any applicable Canadian securities
legislation. Forward-looking statements may include, but are not
limited to, statements made in this document, the Management's
Discussion and Analysis in the Bank's 2018 Annual Report under the
headings "Outlook" and in other statements regarding the Bank's
objectives, strategies to achieve those objectives, the regulatory
environment in which the Bank operates, anticipated financial
results, and the outlook for the Bank's businesses and for the
Canadian, U.S. and global economies. Such statements are typically
identified by words or phrases such as "believe," "expect,"
"foresee," "forecast," "anticipate," "intend," "estimate," "plan,"
"goal," "project," and similar expressions of future or conditional
verbs, such as "will," "may," "should," "would" and "could."
By their very nature, forward-looking statements require us to
make assumptions and are subject to inherent risks and
uncertainties, which give rise to the possibility that our
predictions, forecasts, projections, expectations or conclusions
will not prove to be accurate, that our assumptions may not be
correct and that our financial performance objectives, vision and
strategic goals will not be achieved.
We caution readers not to place undue reliance on these
statements as a number of risk factors, many of which are beyond
our control and effects of which can be difficult to predict, could
cause our actual results to differ materially from the
expectations, targets, estimates or intentions expressed in such
forward-looking statements.
The future outcomes that relate to forward-looking statements
may be influenced by many factors, including but not limited to:
general economic and market conditions in the countries in which we
operate; changes in currency and interest rates; increased funding
costs and market volatility due to market illiquidity and
competition for funding; the failure of third parties to comply
with their obligations to the Bank and its affiliates; changes in
monetary, fiscal, or economic policy and tax legislation and
interpretation; changes in laws and regulations or in
supervisory expectations or requirements, including capital,
interest rate and liquidity requirements and guidance, and the
effect of such changes on funding costs; changes to our credit
ratings; operational and infrastructure risks; reputational risks;
the accuracy and completeness of information the Bank receives on
customers and counterparties; the timely development and
introduction of new products and services; our ability to execute
our strategic plans, including the successful completion of
acquisitions and dispositions, including obtaining regulatory
approvals; critical accounting estimates and the effect of changes
to accounting standards, rules and interpretations on these
estimates; global capital markets activity; the Bank's ability to
attract, develop and retain key executives; the evolution of
various types of fraud or other criminal behaviour to which the
Bank is exposed; disruptions in or attacks (including
cyber-attacks) on the Bank's information technology, internet,
network access, or other voice or data communications systems or
services; increased competition in the geographic and in business
areas in which we operate, including through internet and mobile
banking and non-traditional competitors; exposure related to
significant litigation and regulatory matters; the occurrence of
natural and unnatural catastrophic events and claims resulting from
such events; and the Bank's anticipation of and success in managing
the risks implied by the foregoing. A substantial amount of the
Bank's business involves making loans or otherwise committing
resources to specific companies, industries or countries.
Unforeseen events affecting such borrowers, industries or countries
could have a material adverse effect on the Bank's financial
results, businesses, financial condition or liquidity. These and
other factors may cause the Bank's actual performance to differ
materially from that contemplated by forward-looking statements.
The Bank cautions that the preceding list is not exhaustive of all
possible risk factors and other factors could also adversely affect
the Bank's results, for more information, please see the "Risk
Management" section of the Bank's 2018 Annual Report, as may be
updated by quarterly reports.
Material economic assumptions underlying the forward-looking
statements contained in this document are set out in the 2018
Annual Report under the headings "Outlook", as updated by quarterly
reports. The "Outlook" sections are based on the Bank's views and
the actual outcome is uncertain. Readers should consider the
above-noted factors when reviewing these sections. When relying on
forward-looking statements to make decisions with respect to the
Bank and its securities, investors and others should carefully
consider the preceding factors, other uncertainties and potential
events.
Any forward-looking statements contained in this document
represent the views of management only as of the date hereof and
are presented for the purpose of assisting the Bank's shareholders
and analysts in understanding the Bank's financial position,
objectives and priorities, and anticipated financial performance as
at and for the periods ended on the dates presented, and may not be
appropriate for other purposes. Except as required by law, the Bank
does not undertake to update any forward-looking statements,
whether written or oral, that may be made from time to time by or
on its behalf.
Additional information relating to the Bank, including the
Bank's Annual Information Form, can be located on the SEDAR website
at www.sedar.com and on the EDGAR section of the SEC's website at
www.sec.gov.
Shareholder information
Dividend and Share Purchase Plan
Scotiabank's
dividend reinvestment and share purchase plan allows common and
preferred shareholders to purchase additional common shares by
reinvesting their cash dividend without incurring brokerage or
administrative fees.
As well, eligible shareholders may invest up to $20,000 each fiscal year to purchase additional
common shares of the Bank. All administrative costs of the plan are
paid by the Bank.
For more information on participation in the plan, please contact
the transfer agent.
Website
For information relating to Scotiabank and
its services, visit us at our website: www.scotiabank.com.
Conference call and Web broadcast
The quarterly
results conference call will take place on February 26, 2019, at 7:30
am EST and is expected to last approximately one hour.
Interested parties are invited to access the call live, in
listen-only mode, by telephone at 647-484-0474 or toll-free, at
1-888-378-4398 using ID 058659# (please call shortly before
7:30 am EST). In addition, an audio
webcast, with accompanying slide presentation, may be accessed via
the Investor Relations page of www.scotiabank.com.
Following discussion of the results by Scotiabank executives,
there will be a question and answer session. A telephone replay of
the conference call will be available from February 26, 2019, to March 13, 2019, by calling 647-436-0148 or
1-888-203-1112 (North America
toll-free) and entering the access code 6812697#. The archived
audio webcast will be available on the Bank's website for three
months.
Contact
information
|
|
Investors:
|
Financial analysts,
portfolio managers and other investors requiring financial
information, please contact Investor Relations, Finance
Department:
|
Scotiabank
|
Scotia Plaza, 44 King
Street West
|
Toronto, Ontario,
Canada M5H 1H1
|
Telephone: (416)
775-0798
|
E-mail:
investor.relations@scotiabank.com
|
|
Media:
|
For media enquiries,
please contact the Global Communications Department at the above
address.
|
Telephone: (416)
775-0828
|
E-mail:
corporate.communications@scotiabank.com
|
|
Shareholders:
|
For enquiries related
to changes in share registration or address, dividend information,
lost share certificates, estate transfers, or to advise of
duplicate mailings, please contact the Bank's transfer
agent:
|
Computershare Trust
Company of Canada
|
100 University Avenue,
8th Floor
|
Toronto, Ontario,
Canada M5J 2Y1
|
Telephone:
1-877-982-8767
|
Fax:
1-888-453-0330
|
E-mail:
service@computershare.com
|
|
Co-Transfer Agent
(U.S.A.)
|
Computershare Trust
Company N.A.
|
250 Royall
Street
|
Canton, MA 02021
U.S.A.
|
Telephone:
1-800-962-4284
|
|
For other shareholder
enquiries, please contact the Corporate Secretary's
Department:
|
Scotiabank
|
Scotia Plaza, 44 King
Street West
|
Toronto, Ontario,
Canada M5H 1H1
|
Telephone: (416)
866-3672
|
E-mail:
corporate.secretary@scotiabank.com
|
Rapport trimestriel disponible en français
Le Rapport
annuel et les états financiers de la Banque sont publiés en
français et en anglais et distribués aux actionnaires dans la
version de leur choix. Si vous préférez que la documentation vous
concernant vous soit adressée en français, veuillez en informer
Relations publiques, Affaires de la société et Affaires
gouvernementales, La Banque de Nouvelle-Écosse, Scotia Plaza, 44,
rue King Ouest, Toronto
(Ontario), Canada M5H 1H1, en joignant, si possible,
l'étiquette d'adresse, afin que nous puissions prendre note du
changement.
SOURCE Scotiabank