Bank of Nova Scotia posted a 13.2% increase in net income in the fourth quarter, as chairman and CEO Peter Godsoe ended his tenure at the bank in record-setting fashion.

The bank said net income for the final three months of fiscal 2003 was $660 million, up 13.2% from the fourth quarter last year. Diluted earnings per share rose to $1.26, from $1.09 a year ago. ROE was 18.6%.

The fourth-quarter performance helped the bank reach record earnings for the full year, ended Oct. 31. Net income came in at almost $2.5 billion, up 37.8% from last year; eps (diluted) was $4.69 vs $3.30 in 2002; ROE was a strong 17.6% vs 13% last year. Excluding charges related to Argentina in 2002, last year’s eps were $4.35 and ROE was 16.6%, the bank said.

However, revenue for the quarter fell 4.8% to $2.6 billion from $2.7 billion a year ago. For the year, revenue (on a taxable equivalent basis) was off 4% to $10.4 billion, with the bank blaming the high Canadian dollar, asset sales and problems in Argentina.

“Record results, once again this year, demonstrate the long-term success of Scotiabank’s core strategies — as all our diversified businesses delivered consistent and superior results,” said Godsoe, who is stepping down as CEO effective today, but remains as chairman until March 2, following the bank’s annual meeting of shareholders.

“In particular, a substantial reduction in credit losses has been a driving force in Scotia Capital’s increased performance this year and has helped us to earn through the negative impact of foreign currency translation as a result of the strengthening Canadian dollar.”

The bank said it met all of its performance targets this year.

In a statement, Godsoe said he was honoured to have had the chance to lead the bank for the past 11 years and he thanked shareholders, customers and employees. “Scotiabank truly is a wonderful bank, with a very bright future.”

The bank said Godsoe is being replaced by Richard Waugh as CEO effective immediately. Waugh was appointed president in January and joined the board of directors in March.