Scotiabank (TSX:BNS) profits grew by 57% in the third quarter as several divisions improved performance and the bank also benefited from the sale of its headquarters in Toronto.
The bank is raising its quarterly dividend by two cents to 57 cents per share.
Net income for the period was $2.05 billion, or $1.69 per share, up from $1.3 billion, or $1.10 per share, a year ago.
Scotiabank’s Core EPS, a measurement the bank says best compares with analyst predictions, was $1.22 per share. A survey by Thomson Reuters had shown analysts, on average, expected earnings of $1.19 per share.
Revenue increased to $5.51 billion from $4.3 billion.
Provisions for credit losses, or the money set aside for bad loans, increased to $402 million, up $152 million from a year earlier.
The bank says the results also included an after-tax gain of $614 million from the sale of its headquarters, Scotia Plaza, a 68-storey tower near the corner of King and Bay streets.
Shares of the bank were down 13 cents to $52.81 near midday on the Toronto Stock Exchange.
In its performance breakdown, the bank said its Canadian operations saw profits rise to $521 million from $426 million.
“Canadian banking had a very strong quarter with very good volume growth, disciplined expense control and lower provisions,” said Scotiabank president and CEO Rick Waugh in a release.
International banking operations posted net income of $442 million from $343 million.
Barclays analyst John Aiken said that he expects the initial reaction to “disappointing earnings” in the international division will be negative, but he believes the sentiment could subside.
“As the dust settles, we believe that the market will eventually view Scotia’s results as relatively firmer than Bank of Montreal’s and would view any significant relative performance as an interesting entry point,” he wrote in a note.
Investors have expected above average growth from Scotiabank, given its international operations, said Craig Fehr, Canadian markets specialist at Edward Jones in St. Louis.
“They’re in markets where presumably the growth should be much better,” he said in an interview.
“Scotiabank is an excellent operator around the world but I think underlying the actual expectations going into the quarter is certainly that view that (they) should be the bank that is delivering some of the better growth.”
Global wealth management profits increased 9% to $284 million.
In its global banking and markets division, the bank saw income rise 31% to $398 million, largely due to strong revenues across its diverse businesses.
In its other segment, which includes the group treasury, smaller operating segments and other items not included in a specific business segment, the bank took a profit of $406 million compared to a loss of $30 million a year earlier.
The results were bumped up partly by the Scotia Plaza sale and on an adjusted basis would have come in at a loss of $134 million.
Scotiabank is Canada’s most international bank with operations across Latin America and the Caribbean and more than 75,000 employees in 55 countries.