Scotiabank hikes dividend as Q1 net income up 17%
TORONTO — The Bank of Nova Scotia raised its dividend Tuesday as it reported better-than-expected adjusted profit of roughly $2.275 billion for its first quarter, with strong earnings internationally as well as at home.
Scotiabank increased its quarterly payment to common shareholders by three cents per share to 82 cents per share, the third of the big Canadian banks to do so this quarter after CIBC and Royal Bank.
On an adjusted basis, Canada’s thirdlargest lender reported $1.87 earnings per diluted share, up from to $1.58 per diluted share a year ago, and higher than the $1.68 per share expected by analysts surveyed by Thomson Reuters.
A year earlier, Scotiabank’s adjusted profit attributable to shareholders was $1.946 billion or $1.58 per diluted share.
“All of our businesses delivered strong results, contributing to solid top line growth and a continued improvement in efficiency,” said Brian Porter, Scotiabank’s president and chief executive.
The lender’s Canadian banking division reported net income attributable to shareholders of $1.1 billion, up 12 per cent compared to the same period a year earlier.
Scotiabank’s Canadian residential mortgage portfolio was $208 billion, up roughly 6.7 per cent from $195 billion a
year earlier. For comparison, the bank saw 2.6 per cent growth in its domestic residential mortgage portfolio in the fiscal first quarter of 2017, up from $190 billion in the first quarter of 2016.
Its mortgage portfolios are being closely watched for any impact from new stiffer rules for uninsured mortgages introduced on Jan. 1. The revised underwriting guidelines require would-be homebuyers with a 20 per cent down payment or larger to prove they can continue to make their mortgage payments if interest rates rise. Executives have signalled that these new rules could act as a headwind to the business. CIBC and RBC executives said last week that it is too early to tell what impact the new rules have had thus far.