SCO­TIA­BANK TO EXIT NINE COUN­TRIES IN CARIBBEAN SHAKE-UP

Fourth-quar­ter earn­ings slightly be­low ex­pec­ta­tions

The Star (St. Lucia) - Business Week - - EDUCATION -

TORONTO — Bank of Nova Sco­tia on Tues­day re­ported fourth-quar­ter earn­ings which were marginally be­low ex­pec­ta­tions and said it planned to exit nine coun­tries in the Caribbean as part of a shake-up of that busi­ness.

The bank, which has op­er­ated in the Caribbean since 1889, said that it would re­fo­cus its busi­ness in the re­gion by sell­ing its in­sur­ance op­er­a­tions in Ja­maica and Trinidad & Tobago to Sagi­cor Fi­nan­cial Cor­po­ra­tion, with whom it will part­ner to sell in­sur­ance prod­ucts in those coun­tries.

Sco­tia­bank said it planned to sell its bank­ing op­er­a­tions in An­guilla, An­tigua, Do­minica, Grenada, Guyana, St Kitts & Ne­vis, St Lu­cia, St Maarten, St Vin­cent & the Gre­nadines to Re­pub­lic Fi­nan­cial Hold­ings.

“Due to in­creas­ing reg­u­la­tory com­plex­ity and the need for con­tin­ued in­vest­ment in tech­nol­ogy to sup­port our reg­u­la­tory re­quire­ments, we made the de­ci­sion to fo­cus the bank’s ef­forts on those mar­kets with sig­nif­i­cant scale in which we can make the great­est dif­fer­ence for our cus­tomers,” Ig­na­cio Deschamps, Sco­tia­bank’s group head of in­ter­na­tional bank­ing, said in a state­ment.

The trans­ac­tions are not ma­te­rial to Sco­tia­bank, it said, but will re­sult in its core tier 1 cap­i­tal ra­tio, a key mea­sure of its fi­nan­cial strength, in­creas­ing by 10 ba­sis points when the deals, which are sub­ject to reg­u­la­tory ap­provals, close.

The bank re­ported ad­justed earn­ings per share of $1.77 in the quar­ter ended Oct. 31, up 8 per cent but marginally be­low the av­er­age fore­cast by an­a­lysts of $1.79 per share, ac­cord­ing to IBES data from Refini­tiv.

Ex­clud­ing one-off costs, net in­come rose by 13 per cent to $2.35 bil­lion, com­pared with the av­er­age es­ti­mate by an­a­lysts of $2.24 bil­lion, ac­cord­ing to IBES data.

For the full year, Sco­tia­bank re­ported a 7 per cent in­crease in earn­ings at its Cana­dian busi­ness to $4.4 bil­lion, helped by im­proved mar­gins as it ben­e­fited from five Bank of Canada rate hikes since last sum­mer and growth in cus­tomer de­posits.

The bank’s in­ter­na­tional busi­ness in­creased earn­ings by 18 per cent dur­ing the year, driven by growth in the Pa­cific Al­liance trad­ing bloc which com­prises Peru, Mex­ico, Chile and Co­lum­bia and ac­counts for around a quar­ter of its rev­enues.

Sco­tia­bank is the first of Canada’s ma­jor banks to re­port fourth-quar­ter earn­ings. Royal Bank of Canada and Toron­toDo­min­ion Bank re­port later this week.

Sco­tia­bank, which has op­er­ated in the Caribbean since 1889, says it plans to re­fo­cus its busi­ness in the re­gion by sell­ing a num­ber of in­sur­ance and bank­ing op­er­a­tions

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