Scotiabank, BMO beat analysts’ estimates
Both reported lower-thanfeared pandemic provisions
TORONTO — Bank of Nova Scotia and Bank of Montreal beat analysts’ estimates for fourth-quarter profit as they set aside less funds than expected to cover potential loan losses due to the COVID-19 pandemic.
Canadian banks have braced for higher loan losses this year and 2021 as the pandemic ravages the global economy and leads to lower household income, with a plunge in oil prices also likely to result in higher defaults in the energy sector.
Both banks reporting on Tuesday, however, put aside far less than analysts had expected in the quarter to Oct. 31, while BMO also said it would wind down its nonCanadian investment and corporate energy business to cut costs.
“Going forward, BMO Capital Market’s Energy business will be focused on the Canadian energy market, where we believe our competitive positioning is strongest,” a spokesman for the bank said.
Scotiabank reported loan loss provisions of $1.13 billion, compared with analysts’ expectations of $1.44 billion, Refinitiv IBES data showed.
BMO posted provisions for credit losses of $432 million, versus estimates of $712.7 million.
BMO’S results also benefited from the strong performance of its wealth management and capital markets businesses, pushing net income attributable to equity holders of the bank 33 per cent higher to $1.58 billion, or $2.37 per share.
On an adjusted basis, the bank earned a profit of $2.41 per share, beating estimates of $1.90 per share.
Scotiabank’s adjusted net income attributable to shareholders fell to $1.8 billion, or $1.45 a share, but was higher than estimates of $1.22 a share.