Scotiabank Shares Advance, Bank of Montreal Falls as Bank Earnings Season Kicks Off
By Robb M. Stewart
Shares of two of Canada's biggest banks diverged after Bank of Nova Scotia's quarterly earnings topped analyst expectations while Bank of Montreal fell short of forecasts with higher loan-loss reserves and weakness in its capital markets business.
In morning trading Tuesday, Scotiabank was 3.6% higher at C$66.21, and is now up 2.7% in the new year. Bank of Montreal was down 3.9% at C$121.92, widening the year-to-date drop to just under 10%.
The pair kicked off earnings season for the country's banks.
Scotiabank reported first-quarter income of 2.17 billion Canadian dollars ($1.61 billion), or C$1.68 a share, against C$1.72 billion, or C$1.35, a year earlier. On an adjusted basis that strips out certain items, earnings were C$1.69 a share, topping the C$1.61 mean forecast of analysts polled by FactSet.
The beat came from stronger-than-expected growth in both net interest income and noninterest revenue for the three months to Jan. 31, and despite a provision for credit losses that was C$324 million higher than a year earlier at C$962 million.
Bank of Montreal's income jumped to C$1.29 billion, C$1.73 a share, for the fiscal quarter against C$133 million, or C$0.14 a share, a year earlier, when its one-off items included a loss of C$1.46 billion related to the acquisition of Bank of the West and management of the impact of interest rate changes between announcing and closing the deal. On an adjusted basis, earnings were C$2.56 a share, below the C$3.02 consensus forecast.
Overall revenue on an adjusted basis for the period was 10% higher at C$7.85 billion, missing the C$8.36 billion that was expected.
The bank's provision for credit losses increased to C$627 million from the C$217 million put aside a year earlier against potential losses due to credit risk, with the provision for credit losses on impaired loans up C$277 million on-year to C$473 million.
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
February 27, 2024 10:37 ET (15:37 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.-
What History Tells Us About the Fed’s Next Move
-
What’s Happening In the Markets This Week
-
Alphabet’s New Dividend: What Investors Need to Know
-
Going Into Earnings, Is Palantir Stock a Buy, a Sell, or Fairly Valued?
-
Going Into Earnings, Is Eli Lilly Stock a Buy, a Sell, or Fairly Valued?
-
What’s the Difference Between the CPI and PCE Indexes?
-
5 Stocks to Buy That We Still Like After They’ve Run Up
-
Markets Brief: Stocks Are Starting to Look Cheap Again
-
AbbVie Earnings: Next-Generation Immunology Drugs Help Offset Humira Biosimilar Pressure
-
Exxon Earnings: Ignore Earnings Shortfall as Long-Term Growth and Improvement on Track
-
American Airlines Earnings: We See Costs Overshadowing Market Share This Year
-
Snap Earnings: Advertising Growth and Snapchat+ Drive Monetization
-
STMicro Earnings: We Still See an Attractive Margin of Safety Despite a Poor First-Half Forecast
-
Alphabet Shares Surge on Strong Earnings, Dividend Surprise
-
Microsoft Earnings: Firm Beats Forecasts on Strong AI and Cloud Demand
-
PG&E Earnings: Near-Term Regulatory Certainty Supports Industry-Leading Earnings Growth