Higher asset volumes across Scotiabank’s three business lines, due in part to several recent strategic acquisitions, have led to strong revenue growth and record earnings in the third quarter of fiscal 2006 ended July 31.

Scotiabank reported earnings per share (diluted) of $0.93 for the quarter, up a strong 21% from $0.77 for the same period last year. Net income rose to $936 million in the third quarter, an increase of 19% over last year.

“The quarter reflected strong growth in sustainable revenue — one of our key strategic priorities,” said Rick Waugh, president and CEO. “All three business lines — domestic banking, Scotia Capital and international banking — contributed to this quarter’s record results, including recent acquisitions such as the mortgage business of Maple Financial Group and the purchase of two banks in Peru. Highlighting our success was a 16% increase in total assets over the first nine months of the year, representing broad-based growth in retail, commercial and corporate portfolios. In addition, both International and Scotia Capital continue to demonstrate their ability to earn through the negative impact of foreign currency translation.

“International banking experienced strong underlying growth across its businesses, led by Mexico, which saw significant increases in both retail and commercial lending. The Caribbean showed a steady rise in both retail and commercial loan volumes and there were solid contributions from Peru and other recent acquisitions. International Banking also recorded a recovery in value added tax of $51 million, or $0.05 per share,” he added

“We experienced significant growth in retail and commercial lending in domestic banking. This growth, along with higher transaction-based revenue, led to another solid contribution from this business line.

“Scotia Capital’s results were highlighted by continued growth in its loan portfolio and benefited from loan loss and interest recoveries and securities gains, which more than offset a drop in trading revenues,” he noted.
“The bank’s capital position remains strong, providing us with the opportunity to continue to pursue further growth options across product lines and geographies and increase returns for shareholders,” Waugh added.

Net income for the nine-month period ending July 31 was almost $2.7 billion, compared to almost $2.4 million for the same period last year.

“With our record results for the nine months, we expect to achieve the upper range of our key performance objectives this year,” Waugh said.

Year-to-date performance vs Scotiabank’s 2006 financial and operational objectives was as follows:

1. OBJECTIVE: Earn a return on equity of 18 to 22%. For the nine months, Scotiabank earned an ROE of 22.5%.
2. OBJECTIVE: Generate growth in earnings per common share (diluted) of 5%-10% per year. Its year-over-year growth in earnings per share was 13%.
3. OBJECTIVE: Maintain a productivity ratio of less than 58%. Scotiabank’s ratio was 54.7% for the nine months.
4. OBJECTIVE: Maintain strong capital ratios. At 10%, Scotiabank’s Tier 1 capital ratio remains strong by Canadian and international standards.

In related news, Scotiabank announced on Tuesday a dividend of 39¢ per common share for the quarter ending Oct. 31, payable on Oct. 27 to shareholders of record at the close of business on Oct. 3.

The bank also declared the following dividends on Non-Cumulative Preferred Shares for the quarter ending Oct. 31 payable on Oct. 27 to shareholders of record at the close of business on Oct. 3.

– Series 12, Dividend No. 33 of $0.328125 per share;
– Series 13, Dividend No. 6 of $0.30 per share.

Holders may elect to receive their dividends in common shares of the bank in lieu of cash dividends, in accordance with the bank’s shareholder dividend and share purchase plan.