The head of Bank of Nova Scotia says he was impressed by the bank’s fiscal performance in the third quarter as the lender focused on redeploying capital to its Canadian operations.
“This is our third quarter since our investor day and what I was pleased to see is that we did what we said we were going to do,” Scotiabank’s President and CEO Scott Thomson told BNN Bloomberg in an interview that aired Thursday.
“For the third consecutive quarter, we were able to increase profitability, we were able to see sequential earnings growth, which was great. Our Canadian business performed well; we grew deposits … I was pleased with the quarter.”
Scotiabank reported quarterly profit of $1.63 per share on an adjusted basis, ahead of the $1.62 average estimate of Bloomberg analysts.
Its Canadian banking unit reported adjusted earnings of $1.1 billion, up six per cent from the same quarter a year ago. Thomson said strengthening the bank’s domestic retail business has been a priority since he stepped into the CEO role in 2023.
“We’ve talked a lot about redeployment of capital into our Canadian business, aligned with that North American corridor focus, and the Canadian business is performing well,” he explained.
“We saw multi-product mortgages improvement, we saw cards improvement, we saw small business improvement, we saw the commercial business do well also.”
Meanwhile, Scotiabank’s international units posted earnings of $709 million in the third quarter, up roughly 10 per cent compared to a year ago. Thomson said that earnings growth was particularly impressive considering the lender’s decision to cut costs in many international markets.
“In the international business, what I’ve been really pleased about is they’re doing more with less,” he said.
“You actually saw capital come out of the international business, yet earnings improve, and it’s a huge testament to our international teams to be able to do that, and they’ve done it through a focus on primary clients and a real focus on productivity.”
‘A toe in the water’
Scotiabank’s most recent acquisition was the purchase of a 14.9 per cent stake in Cleveland-based lender KeyCorp for US$2.8 billion.
Thomson said the deal will be a boon to Scotia shareholders in the near term and help the bank establish more ties to the U.S. market as part of the bank’s longer-term strategy.
“It gets us a toe in the water in a very uncertain environment right now in the U.S.,” he said.
“It was a low-cost, low-risk way to get U.S. exposure, redeployment of capital from developing markets to developed markets, and that will provide optionality for us in the long term.”
With files from Bloomberg News