Scotiabank Expects C$590 Million Hit to 4Q From Job Cuts, Other Items

By Robb M. Stewart

Bank of Nova Scotia warned its financial results for the fiscal fourth quarter will be dented by restructuring and other charges, including for a roughly 3% cut to its workforce globally.

The big Canadian bank said the impact of certain notable items for the quarter is expected to be about 590 million Canadian dollars ($432.2 million), or C$0.49 a share. The impact on its common equity Tier 1 capital ratio is expected to be about 10 basis points.

Cost savings are expected throughout the coming fiscal year, with the full benefits anticipated in fiscal 2025, Scotiabank said Wednesday.

Based on a poll by FactSet, analysts had been expecting net income of C$2.12 billion for the fiscal fourth quarter, or about C$1.73 a share, up from C$2.09 billion, or C$1.63, in the three months to Oct. 31, 2022. Results for the quarter are scheduled to be released Nov. 28.

Scotiabank said it expects to book a restructuring charge and provisions of about C$247 million related to job cuts resulting from digitization, automation and changes in customers' day-to-day banking preferences. The charges also cover ongoing efforts to streamline operational processes.

As well, the bank expects C$63 million in costs related to the consolidation and exit from certain real-estate premises and service contracts.

Scotiabank said it will see impairment charges of C$280 million for its investment in associate corporation Bank of Xi'an Co., whose market value has remained below the bank's carrying value for a prolonged period, as well as for the impairment of certain intangible assets including software.

Write to Robb M. Stewart at robb.stewart@wsj.com

Corrections & Amplifications

This item was corrected at 9:07 a.m. ET to clarify that the expected net income was up from the year-ago net, not down.

(END) Dow Jones Newswires

October 18, 2023 09:12 ET (13:12 GMT)

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