All amounts are in
Canadian dollars and are based on our unaudited Interim Condensed
Consolidated Financial Statements for the quarter ended July 31,
2022 and related notes prepared in accordance with International
Financial Reporting Standards (IFRS), unless otherwise noted. Our
complete Third Quarter 2022 Report to Shareholders, including our
unaudited interim financial statements for the period ended July
31, 2022, can also be found on the SEDAR website at www.sedar.com
and on the EDGAR section of the SEC's website at www.sec.gov.
Supplementary Financial Information is also available, together
with the Third Quarter 2022 Report to Shareholders on the Investor
Relations page of www.scotiabank.com
|
Third Quarter 2022
Highlights on a Reported Basis
(versus Q3, 2021)
• Net income of $2,594
million, compared to $2,542 million
• Earnings per share
(diluted) of $2.09, compared to $1.99
• Return on
equity(2) of 15.3%, compared to 15.0%
|
Third Quarter 2022
Highlights on an Adjusted
Basis(1)
(versus Q3, 2021)
• Net income of $2,611
million, compared to $2,560 million
• Earnings per share
(diluted) of $2.10, compared to $2.01
• Return on equity of
15.4%, compared to 15.1%
|
TORONTO, Aug. 23,
2022 /CNW/ - Scotiabank reported third quarter net
income of $2,594 million compared to
$2,542 million in the same period
last year. Diluted earnings per share (EPS) were $2.09, compared to $1.99 in the same period a year ago.
Adjusted net income(1) for the third quarter was
$2,611 million and EPS were
$2.10, up from $2.01 last year. Adjusted return on equity was
15.4% compared to 15.1% a year ago.
"The quarter saw EPS growth of 4% and a return on equity of
15.4%. Strong credit quality, while growing the loan book across
all business lines, prudent expense management and resilient
customers were positive highlights against the backdrop of a more
challenging macro environment this quarter," said Brian Porter, President and CEO of
Scotiabank.
Canadian Banking earnings grew 12% underpinned by strong net
interest income growth, driven by 14% loan growth and net interest
margin expansion. The division reported its seventh
consecutive quarter of positive operating leverage.
International Banking earnings grew 28% driven by higher net
interest income with loans growing at 12%, expanding margins and
prudent management of expenses. International Banking earnings also
benefitted from lower income taxes and lower provision for credit
losses.
Global Wealth Management delivered earnings of $383 million. Lower fee income resulting from a
market driven decline in assets under management was partly offset
by higher net interest income from robust loan growth and lower
volume-related expenses.
Global Banking and Markets earnings of $378 million declined 26% driven by lower capital
markets revenue as a result of market conditions and lower advisory
fees.
Strong internal capital generation was deployed to grow the
Bank's risk-weighted assets in support of future earnings, while
returning capital to shareholders, resulting in a Common Equity
Tier 1 Ratio(3) of 11.4%.
"I am proud of the many recognitions Scotiabank received this
quarter including being named Best Bank in Canada, North
America's Best Bank for Sustainable Finance and Best
Investment Bank in Chile at the
2022 Euromoney Awards for Excellence. These awards showcase the
Bank's focus on putting our customers first, providing great advice
and offering products and services that meet their needs," said
Brian Porter. "We also welcomed
Empire Company Limited to the Scene+ program, creating a uniquely
flexible loyalty program for Canadians with options to earn and
redeem points on nearly all of their daily purchases," added Mr.
Porter. "The Bank continues to demonstrate its commitment to the
communities where we operate, as evidenced by the release of our
inaugural ScotiaRISE Impact Report, which showcases more than 200
community partnerships, and $26
million in community investments globally."
__________________________________________________
(1) Refer to Non-GAAP Measures section on page 6.
|
(2) Refer to
page 51 of the Management's Discussion & Analysis in the Bank's
Third Quarter 2022 Report to Shareholders, available on
www.sedar.com, for an explanation of the composition of the
measure. Such explanation is incorporated by reference
hereto.
|
(3) This
measure has been disclosed in this document in accordance with OSFI
Guideline – Capital Adequacy Requirements (November
2018).
|
Financial Highlights
Reported
Results
|
|
For the three months ended
|
|
For the nine months ended
|
|
|
July
31
|
|
April
30
|
|
July
31
|
|
July
31
|
|
July
31
|
(Unaudited)($
millions)
|
|
2022
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net interest
income
|
$
|
4,676
|
$
|
4,473
|
$
|
4,217
|
$
|
13,493
|
$
|
12,744
|
Non-interest
income
|
|
3,123
|
|
3,469
|
|
3,540
|
|
10,297
|
|
10,821
|
Total
revenue
|
|
7,799
|
|
7,942
|
|
7,757
|
|
23,790
|
|
23,565
|
Provision for credit
losses
|
|
412
|
|
219
|
|
380
|
|
853
|
|
1,640
|
Non-interest
expenses
|
|
4,191
|
|
4,159
|
|
4,097
|
|
12,573
|
|
12,347
|
Income tax
expense
|
|
602
|
|
817
|
|
738
|
|
2,283
|
|
2,182
|
Net
income
|
$
|
2,594
|
$
|
2,747
|
$
|
2,542
|
$
|
8,081
|
$
|
7,396
|
Net income attributable
to non-controlling interests in
|
|
|
|
|
|
|
|
|
|
|
|
subsidiaries
|
|
54
|
|
78
|
|
81
|
|
220
|
|
261
|
Net income attributable
to equity holders of the Bank
|
$
|
2,540
|
$
|
2,669
|
$
|
2,461
|
$
|
7,861
|
$
|
7,135
|
|
Preferred shareholders
and other equity instrument holders
|
|
36
|
|
74
|
|
35
|
|
154
|
|
155
|
|
Common
shareholders
|
$
|
2,504
|
$
|
2,595
|
$
|
2,426
|
$
|
7,707
|
$
|
6,980
|
Earnings per common
share (in dollars)
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
2.10
|
$
|
2.16
|
$
|
2.00
|
$
|
6.41
|
$
|
5.75
|
|
Diluted
|
$
|
2.09
|
$
|
2.16
|
$
|
1.99
|
$
|
6.39
|
$
|
5.73
|
Business Segment Review
Canadian Banking
Q3 2022 vs Q3 2021
Net income attributable to equity holders was $1,213 million, compared to $1,079 million. Adjusted net income attributable
to equity holders was $1,217 million,
an increase of $134 million or 12%.
The increase was due primarily to higher revenues, partly offset by
higher non-interest expenses and provision for credit losses.
Q3 2022 vs Q2 2022
Net income attributable to equity holders increased $34 million or 3%. The increase was due primarily
to higher revenues, partly offset by higher provision for credit
losses and non-interest expenses.
Year-to-date Q3 2022 vs Year-to-date Q3 2021
Net income attributable to equity holders was $3,593 million, compared to $2,917 million. Adjusted net income attributable
to equity holders was $3,605 million,
an increase of $676 million or 23%.
The increase was due primarily to higher revenues and lower
provision for credit losses, partly offset by higher non-interest
expenses.
International Banking
Q3 2022 vs Q3 2021
Net income attributable to equity holders was $625 million, compared to $486 million. Adjusted net income attributable to
equity holders was $631 million, an
increase from $493 million. This
increase was driven by higher net interest income, lower provision
for income taxes, and lower provision for credit losses, partly
offset by lower non-interest income.
Q3 2022 vs Q2 2022
Net income attributable to equity holders increased by
$20 million or 3% from $605 million. Adjusted net income attributable to
equity holders increased by $18
million or 3%, compared to $613
million last quarter. This was due largely to higher net
interest income and lower provision for income taxes, partly offset
by lower non-interest income, higher provision for credit losses
and higher non-interest expenses.
Year-to-date Q3 2022 vs Year-to-date Q3 2021
Net income attributable to equity holders was $1,775 million, an increase of $480 million. Adjusted net income attributable to
equity holders was $1,796 million, an
increase of $476 million. This
increase was due largely to lower provision for credit losses,
non-interest expenses and higher net interest income, partly offset
by lower non-interest income, and the negative impact of foreign
currency translation.
Financial Performance on an Adjusted and Constant Dollar
Basis
The discussion below on the results of operations is on an
adjusted and constant dollar basis. Constant dollar basis excludes
the impact of foreign currency translation, which is a non-GAAP
financial measure (refer to Non-GAAP measures section on page 6).
The Bank believes that reporting in constant dollar is useful for
readers to understand business performance without the impact of
foreign currency.
Q3 2022 vs Q3 2021
Net income attributable to equity holders was $625 million, compared to $481 million. Adjusted net income attributable to
equity holders increased to $631
million from $488 million.
This increase was driven by higher net interest income, lower
provision for income taxes, and lower provision for credit losses,
partly offset by lower non-interest income.
Q3 2022 vs Q2 2022
Net income attributable to equity holders increased by
$27 million or 5% from $598 million. Adjusted net income attributable to
equity holders increased by $26
million or 5%, compared to $605
million last quarter. This was due largely to higher net
interest income and lower provision for income taxes, partly offset
by lower non-interest income, higher provision for credit losses
and higher non-interest expenses.
Year-to-date Q3 2022 vs Year-to-date Q3 2021
Net income attributable to equity holders was $1,775 million, an increase of $533 million. Adjusted net income attributable to
equity holders was $1,796 million, up
$530 million. This increase was due
largely to lower provision for credit losses, and higher net
interest income, partly offset by lower non-interest income and
higher provision for income taxes.
Global Wealth Management
Q3 2022 vs Q3 2021
Net income attributable to equity holders was $376 million, a decrease of $14 million or 3%. The decline is due primarily
to lower fee income driven by market conditions, partly offset by
higher net interest income and lower volume-related expenses.
Q3 2022 vs Q2 2022
Net income attributable to equity holders decreased $31 million or 8%. Lower fee income driven
by market conditions was partly offset by higher net interest
income and lower expenses.
Year-to-date Q3 2022 vs Year-to-date Q3 2021
Net income attributable to equity holders was $1,195 million, up $15
million or 1%. Higher brokerage revenues and net interest
income were partly offset by lower mutual fund fees, higher
volume-related expenses, and the 5% impact of elevated seasonal
performance fees in the prior year.
Global Banking and Markets
Q3 2022 vs Q3 2021
Net income attributable to equity holders was $378 million, a decrease of $135 million or 26%. This was due to lower
non-interest income driven by challenging market conditions and
lower customer activity, higher non-interest expenses, and lower
recovery on provision for credit losses, partly offset by higher
net interest income.
Q3 2022 vs Q2 2022
Net income attributable to equity holders decreased by
$110 million or 23%. This was due to
lower non-interest income driven by lower customer activity, as
well as lower recovery on provision for credit losses, partly
offset by higher net interest income.
Year-to-date Q3 2022 vs Year-to-date Q3 2021
Net income attributable to equity holders was $1,427 million, a decrease of $146 million or 9%. This was due to higher
non-interest expenses and lower non-interest income driven by lower
customer activity, partly offset by higher net interest income and
higher recovery on provision for credit losses.
Other
Q3 2022 vs Q3 2021
Net income attributable to equity holders was a net loss of
$52 million, compared to a net loss
of $7 million in the prior year. The
decrease of $45 million was due
primarily to a lower contribution from asset/liability management
activities, and significantly lower investment gains, partly offset
by lower income taxes and lower non-interest expenses.
Q3 2022 vs Q2 2022
Net income attributable to equity holders decreased $42 million from the prior quarter, due primarily
to lower contribution from asset/liability management activities
and lower investment gains, partly offset by lower income taxes and
lower non-interest expenses.
Year-to-date Q3 2022 vs Year-to-date Q3 2021
Net income attributable to equity holders was a net loss of
$129 million compared to net income
of $170 million in the prior year.
The decrease of $299 million was due
mainly to significantly lower investment gains and a lower
contribution from asset/liability management activities. This was
partly offset by lower non-interest expenses, mainly related to the
Bank's increased investment in the SCENE loyalty program in the
prior year.
Credit risk
Provision for credit losses
Q3 2022 vs Q3 2021
The provision for credit losses was $412 million compared to $380 million, an increase of $32 million or 8%. The provision for credit
losses ratio decreased two basis points to 22 basis
points.
Provision for credit losses on performing loans was $23 million, compared to a net reversal of
$461 million. The provision was
driven by the less favorable macroeconomic forecast and portfolio
growth in the retail and commercial portfolios, partly offset by
provision reversals in retail due to improved portfolio credit
quality. Higher provision reversals last year were due mainly to
the more favourable macroeconomic outlook and credit migration to
impaired, primarily in International Banking.
Provision for credit losses on impaired loans was $389 million, compared to $841 million, a decrease of $452 million or 54% due primarily to lower retail
provisions in International Banking, driven by lower formations
across most markets. The provision for credit losses ratio on
impaired loans decreased 32 basis points to 21 basis points.
Q3 2022 vs Q2 2022
The provision for credit losses was $412
million compared to $219
million, an increase of $193
million or 88%. The provision for credit losses ratio
increased nine basis points to 22 basis points.
Provision for credit losses on performing loans was $23 million, compared to a net reversal of
$187 million. The provision was
driven by the less favorable macroeconomic forecast and portfolio
growth in the retail and commercial portfolios, offset by provision
reversals in retail due to improved portfolio credit quality
expectations. The provision this quarter includes approximately
$65 million reversal, compared to
$210 million in prior period, due to
the release of allowances built in fiscal year 2020 no longer
required, primarily in the Canadian retail portfolio, reflecting
improved portfolio credit quality expectations.
Provision for credit losses on impaired loans was $389 million, compared to $406 million, a decrease of $17 million or 4% driven primarily by lower
retail formations in International Banking, mainly Peru, Mexico
and Central America, partly offset
by higher formations in the Canadian retail portfolio. The
provision for credit losses ratio on impaired loans was 21 basis
points, a decrease of three basis points.
Year-to-date Q3 2022 vs Year-to-date Q3 2021
The provision for credit losses was $853
million compared to $1,640
million, a decrease of $787
million or 48%. The provision for credit losses ratio
decreased 19 basis points to 16 basis points.
Provision for credit losses on performing loans was a net
reversal of $347 million compared to
a net reversal of $1,155
million. The provision reversals were primarily in the
retail portfolio driven by improved credit quality and in the
energy portfolio due to increased commodity prices. This was partly
offset by the less favorable macroeconomic forecast and portfolio
growth. The provision reversals included approximately $485 million (July 31,
2021 - $380 million) of
allowance releases from those built in fiscal year 2020 no longer
required.
The provision for credit losses on impaired loans was
$1,200 million, compared to
$2,795 million, a decrease of
$1,595 million or 57% due primarily
to lower formations across all portfolios. The provision for credit
losses ratio on impaired loans decreased 37 basis points to 23
basis points.
Allowance for credit losses
The total allowance for credit losses as at July 31, 2022, was $5,295
million. The allowance for credit losses on loans was
$5,147 million, a decrease of
$147 million from the prior quarter.
The decrease was due primarily to impact of foreign currency
translation and provision releases due to improved portfolio credit
quality. This was partly offset by allowance build for the impact
of macroeconomic forecast.
The allowance on performing loans was lower at $3,590 million compared to $3,690 million as at April
30, 2022. The decrease was due primarily to the impact of
foreign currency translation and provision releases due to improved
portfolio credit quality. This was partly offset by provisions
driven by the less favorable macroeconomic forecast and portfolio
growth.
The allowance on impaired loans decreased to $1,557 million from $1,604
million last quarter. The decrease was primarily related to
the International Banking Retail portfolio driven by lower
formations, and higher write-offs in the International commercial
portfolio.
Impaired loans
Gross impaired loans decreased to $4,252
million as at July 31, 2022,
compared to $4,264 million last
quarter. The decrease was due primarily to commercial and corporate
repayments and the impact of foreign currency translation partly
offset by new formations in International Banking. The gross
impaired loan ratio was 58 basis points as at July 31, 2022, a decrease of two basis points
from last quarter.
Net impaired loans in Canadian Banking were $355 million as at July
31, 2022, a decrease of $66
million from last quarter, due primarily to lower commercial
gross impaired loans due to a recovery on one account, partly
offset by new formations. International Banking's net impaired
loans were $2,202 million as at
July 31, 2022, an increase of
$134 million from last quarter, due
primarily to higher commercial gross impaired loans. In Global
Wealth Management, net impaired loans were $18 million as at July 31,
2022, a decrease of $5 million
from last quarter, due primarily to write off and repayment on one
account. In Global Banking and Markets, net impaired loans were
$120 million as at July 31, 2022, a decrease of $28 million from last quarter, due primarily to
repayment and a recovery on one account in the energy sector,
partly offset by provisions. Net impaired loans as a percentage of
loans and acceptances were 0.36% as at July
31, 2022, a decrease of one basis point from 0.37% last
quarter.
Capital Ratios
The Bank's Common Equity Tier 1 (CET1) capital
ratio(1) was 11.4% as at July 31,
2022, a decrease of approximately 20 basis points from the
prior quarter, due primarily to strong organic growth in
risk-weighted assets across all business lines and common share
buybacks under the Bank's Normal Course Issuer Bid, partly offset
by the Bank's internal capital generation.
The Bank's Tier 1 capital ratio(1) was 13.0% as at
July 31, 2022, an increase of
approximately 20 basis points from the prior quarter, due primarily
to a $1.5 billion issuance of Limited
Recourse Notes (LRCNs), partly offset by the above noted impacts to
the CET1 ratio.
The Bank's Total capital ratio(1) of 15.0% as at
July 31, 2022 remained approximately
flat from the prior quarter, due to the above noted impacts to the
Tier 1 capital ratio.
The Leverage ratio(2) was 4.2% as at July 31, 2022 also remained flat from the prior
quarter, due primarily to higher Tier 1 capital offset by strong
growth in the Bank's on and off-balance sheet assets.
The TLAC ratio(3) was 28.4% as at July 31, 2022, a decrease of approximately 170
basis points from the prior quarter, mainly from lower TLAC
instruments and the above noted impacts to the Total capital
ratio.
The TLAC Leverage ratio(3) was 9.3%, a decrease of
approximately 50 basis points, due primarily to lower TLAC
instruments and higher leverage exposures.
As at July 31, 2022, the CET1,
Tier 1, Total capital, Leverage, TLAC and TLAC Leverage ratios were
well above OSFI's minimum capital ratios.
______________________________________________
(1) This measure has been disclosed in this document in
accordance with OSFI Guideline – Capital Adequacy Requirements
(November 2018).
|
(2) This
measure has been disclosed in this document in accordance with OSFI
Guideline – Leverage Requirements (November 2018).
|
(3) This
measure has been disclosed in this document in accordance with OSFI
Guideline – Total Loss Absorbing Capacity (September
2018).
|
Non-GAAP Measures
The Bank uses a number of financial measures to assess its
performance, as well as the performance of its operating segments.
Some of these measures are presented on a non-GAAP basis and are
not calculated in accordance with Generally Accepted Accounting
Principles (GAAP), which are based on International Financial
Reporting Standards (IFRS) as issued by the International
Accounting Standards Board (IASB), are not defined by GAAP and do
not have standardized meanings that would ensure consistency and
comparability among companies using these measures. The Bank
believes that non-GAAP measures are useful as they provide readers
with a better understanding of how management assesses performance.
These non-GAAP measures are used throughout this press release and
defined below.
Adjusted results and diluted earnings
per share
The following tables present a reconciliation of GAAP reported
financial results to non-GAAP adjusted financial results. The
financial results have been adjusted for the following:
Amortization of acquisition-related intangible
assets:
These costs relate to the amortization of intangibles recognized
upon the acquisition of businesses, excluding software, and are
recorded in the Canadian Banking, International Banking and Global
Wealth Management operating segments.
Reconciliation of
reported and adjusted results and diluted earnings per
share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months
ended
|
For the nine months
ended
|
|
July
31
|
April 30
|
July 31
|
July
31
|
July 31
|
($
millions)
|
2022
|
2022
|
2021
|
2022
|
2021
|
Reported
Results
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
$
|
4,676
|
$
|
4,473
|
$
|
4,217
|
$
|
13,493
|
$
|
12,744
|
Non-interest
income
|
|
3,123
|
|
3,469
|
|
3,540
|
|
10,297
|
|
10,821
|
Total Revenue
|
|
7,799
|
|
7,942
|
|
7,757
|
|
23,790
|
|
23,565
|
Provision for credit
losses
|
|
412
|
|
219
|
|
380
|
|
853
|
|
1,640
|
Non-interest
expenses
|
|
4,191
|
|
4,159
|
|
4,097
|
|
12,573
|
|
12,347
|
Income before
taxes
|
|
3,196
|
|
3,564
|
|
3,280
|
|
10,364
|
|
9,578
|
Income tax
expense
|
|
602
|
|
817
|
|
738
|
|
2,283
|
|
2,182
|
Net
income
|
$
|
2,594
|
$
|
2,747
|
$
|
2,542
|
$
|
8,081
|
$
|
7,396
|
Net income attributable
to non-controlling interests in subsidiaries (NCI)
|
|
54
|
|
78
|
|
81
|
|
220
|
|
261
|
Net income attributable
to equity holders
|
$
|
2,540
|
$
|
2,669
|
$
|
2,461
|
$
|
7,861
|
$
|
7,135
|
Preferred shareholders
and other equity instrument holders
|
|
36
|
|
74
|
|
35
|
|
154
|
|
155
|
Net income attributable
to common shareholders
|
$
|
2,504
|
$
|
2,595
|
$
|
2,426
|
$
|
7,707
|
$
|
6,980
|
Diluted earnings per
share (in dollars)
|
$
|
2.09
|
$
|
2.16
|
$
|
1.99
|
$
|
6.39
|
$
|
5.73
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
Amortization of
acquisition-related intangible assets(1)
|
$
|
24
|
$
|
24
|
$
|
24
|
$
|
73
|
$
|
78
|
Adjustments
(Pre-tax)
|
|
24
|
|
24
|
|
24
|
|
73
|
|
78
|
Income tax
expense/(benefit)
|
|
(7)
|
|
(6)
|
|
(6)
|
|
(20)
|
|
(21)
|
Adjustments (After
tax)
|
|
17
|
|
18
|
|
18
|
|
53
|
|
57
|
Adjustment attributable
to NCI
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Adjustments (After
tax and NCI)
|
$
|
17
|
$
|
18
|
$
|
18
|
$
|
53
|
$
|
57
|
Adjusted
Results
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
$
|
4,676
|
$
|
4,473
|
$
|
4,217
|
$
|
13,493
|
$
|
12,744
|
Non-interest
income
|
|
3,123
|
|
3,469
|
|
3,540
|
|
10,297
|
|
10,821
|
Total revenue
|
|
7,799
|
|
7,942
|
|
7,757
|
|
23,790
|
|
23,565
|
Provision for credit
losses
|
|
412
|
|
219
|
|
380
|
|
853
|
|
1,640
|
Non-interest
expenses
|
|
4,167
|
|
4,135
|
|
4,073
|
|
12,500
|
|
12,269
|
Income before
taxes
|
|
3,220
|
|
3,588
|
|
3,304
|
|
10,437
|
|
9,656
|
Income tax
expense
|
|
609
|
|
823
|
|
744
|
|
2,303
|
|
2,203
|
Net
income
|
$
|
2,611
|
$
|
2,765
|
$
|
2,560
|
$
|
8,134
|
$
|
7,453
|
Net income attributable
to NCI
|
|
54
|
|
78
|
|
81
|
|
220
|
|
261
|
Net income attributable
to equity holders
|
$
|
2,557
|
$
|
2,687
|
$
|
2,479
|
$
|
7,914
|
$
|
7,192
|
Preferred shareholders
and other equity instrument holders
|
|
36
|
|
74
|
|
35
|
|
154
|
|
155
|
Net income attributable
to common shareholders
|
$
|
2,521
|
$
|
2,613
|
$
|
2,444
|
$
|
7,760
|
$
|
7,037
|
Adjusted diluted
earnings per share
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income
attributable to common shareholders
|
$
|
2,521
|
$
|
2,613
|
$
|
2,444
|
$
|
7,760
|
$
|
7,037
|
Dilutive impact of
share-based payment options and others
|
|
6
|
|
-
|
|
9
|
|
92
|
|
41
|
Adjusted net income
attributable to common shareholders (diluted)
|
$
|
2,527
|
$
|
2,613
|
$
|
2,453
|
$
|
7,852
|
$
|
7,078
|
Weighted average number
of basic common shares outstanding (millions)
|
|
1,195
|
|
1,199
|
|
1,215
|
|
1,201
|
|
1,213
|
Dilutive impact of
share-based payment options and others (millions)
|
|
8
|
|
2
|
|
8
|
|
20
|
|
12
|
Adjusted weighted
average number of diluted common shares outstanding
(millions)
|
|
1,203
|
|
1,201
|
|
1,223
|
|
1,221
|
|
1,225
|
Adjusted diluted
earnings per share (in dollars)(2)
|
$
|
2.10
|
$
|
2.18
|
$
|
2.01
|
$
|
6.43
|
$
|
5.78
|
Impact of
adjustments on diluted earnings per share (in
dollars)
|
$
|
0.01
|
$
|
0.02
|
$
|
0.02
|
$
|
0.04
|
$
|
0.05
|
(1)
|
Recorded in
non-interest expenses.
|
(2)
|
Earnings per share
calculations are based on full dollar and share
amounts.
|
Reconciliation of
reported and adjusted results by business
line(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global
|
Global
|
|
|
|
|
Canadian
|
International
|
Wealth
|
|
Banking
|
|
|
|
|
($
millions)
|
Banking
|
Banking
|
Management
|
and
Markets
|
Other
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months
ended July 31, 2022
|
Reported net income
(loss)
|
$
|
1,213
|
$
|
677
|
$
|
378
|
$
|
378
|
$
|
(52)
|
$
|
2,594
|
Net income attributable
to non-controlling interests in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
subsidiaries
(NCI)
|
|
-
|
|
52
|
|
2
|
|
-
|
|
-
|
|
54
|
Reported net income
attributable to equity holders
|
$
|
1,213
|
$
|
625
|
$
|
376
|
$
|
378
|
$
|
(52)
|
$
|
2,540
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
acquisition-related intangible assets(2)
|
|
4
|
|
6
|
|
7
|
|
-
|
|
-
|
|
17
|
Adjusted net income
(loss)
|
$
|
1,217
|
$
|
683
|
$
|
385
|
$
|
378
|
$
|
(52)
|
$
|
2,611
|
Adjusted net income
attributable to equity holders
|
$
|
1,217
|
$
|
631
|
$
|
383
|
$
|
378
|
$
|
(52)
|
$
|
2,557
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months
ended April 30, 2022
|
Reported net income
(loss)
|
$
|
1,179
|
$
|
681
|
$
|
409
|
$
|
488
|
$
|
(10)
|
$
|
2,747
|
Net income attributable
to NCI
|
|
-
|
|
76
|
|
2
|
|
-
|
|
-
|
|
78
|
Reported net income
attributable to equity holders
|
$
|
1,179
|
$
|
605
|
$
|
407
|
$
|
488
|
$
|
(10)
|
$
|
2,669
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
acquisition-related intangible assets(2)
|
|
4
|
|
8
|
|
6
|
|
-
|
|
-
|
|
18
|
Adjusted net income
(loss)
|
$
|
1,183
|
$
|
689
|
$
|
415
|
$
|
488
|
$
|
(10)
|
$
|
2,765
|
Adjusted net income
attributable to equity holders
|
$
|
1,183
|
$
|
613
|
$
|
413
|
$
|
488
|
$
|
(10)
|
$
|
2,687
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months
ended July 31, 2021
|
Reported net income
(loss)
|
$
|
1,079
|
$
|
564
|
$
|
392
|
$
|
513
|
$
|
(6)
|
$
|
2,542
|
Net income attributable
to NCI
|
|
-
|
|
78
|
|
2
|
|
-
|
|
1
|
|
81
|
Reported net income
attributable to equity holders
|
$
|
1,079
|
$
|
486
|
$
|
390
|
$
|
513
|
$
|
(7)
|
$
|
2,461
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
acquisition-related intangible assets(2)
|
|
4
|
|
7
|
|
7
|
|
-
|
|
-
|
|
18
|
Adjusted net income
(loss)
|
$
|
1,083
|
$
|
571
|
$
|
399
|
$
|
513
|
$
|
(6)
|
$
|
2,560
|
Adjusted net income
attributable to equity holders
|
$
|
1,083
|
$
|
493
|
$
|
397
|
$
|
513
|
$
|
(7)
|
$
|
2,479
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the nine months
ended July 31, 2022
|
Reported net income
(loss)
|
$
|
3,593
|
$
|
1,988
|
$
|
1,202
|
$
|
1,427
|
$
|
(129)
|
$
|
8,081
|
Net income attributable
to NCI
|
|
-
|
|
213
|
|
7
|
|
-
|
|
-
|
|
220
|
Reported net income
attributable to equity holders
|
$
|
3,593
|
$
|
1,775
|
$
|
1,195
|
$
|
1,427
|
$
|
(129)
|
$
|
7,861
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
acquisition-related intangible assets(2)
|
|
12
|
|
21
|
|
20
|
|
-
|
|
-
|
|
53
|
Adjusted net income
(loss)
|
$
|
3,605
|
$
|
2,009
|
$
|
1,222
|
$
|
1,427
|
$
|
(129)
|
$
|
8,134
|
Adjusted net income
attributable to equity holders
|
$
|
3,605
|
$
|
1,796
|
$
|
1,215
|
$
|
1,427
|
$
|
(129)
|
$
|
7,914
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the nine months
ended July 31, 2021
|
Reported net income
(loss)
|
$
|
2,917
|
$
|
1,548
|
$
|
1,187
|
$
|
1,573
|
$
|
171
|
$
|
7,396
|
Net income attributable
to NCI
|
|
-
|
|
253
|
|
7
|
|
-
|
|
1
|
|
261
|
Reported net income
attributable to equity holders
|
$
|
2,917
|
$
|
1,295
|
$
|
1,180
|
$
|
1,573
|
$
|
170
|
$
|
7,135
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
acquisition-related intangible assets(2)
|
|
12
|
|
25
|
|
20
|
|
-
|
|
-
|
|
57
|
Adjusted net income
(loss)
|
$
|
2,929
|
$
|
1,573
|
$
|
1,207
|
$
|
1,573
|
$
|
171
|
$
|
7,453
|
Adjusted net income
attributable to equity holders
|
$
|
2,929
|
$
|
1,320
|
$
|
1,200
|
$
|
1,573
|
$
|
170
|
$
|
7,192
|
(1)
|
Refer to Business
Segment Review section of the Bank's Q3, 2022 Quarterly Report to
Shareholders.
|
(2)
|
Recorded in
non-interest expenses.
|
Reconciliation of International Banking's reported, adjusted
and constant dollar results
International Banking business segment results are analyzed on a
constant dollar basis. Under the constant dollar basis, prior
period amounts are recalculated using current period average
foreign currency rates. The following table presents the
reconciliation between reported, adjusted and constant dollar
results for International Banking for prior periods. The Bank
believes that constant dollar is useful for readers to understand
business performance without the impact of foreign currency.
Reported
Results
|
For the three months
ended
|
For the nine months
ended
|
($
millions)
|
April 30,
2022
|
|
July 31,
2021
|
July 31,
2021
|
(Taxable equivalent
basis)
|
Reported
results
|
Foreign
exchange
|
Constant
dollar
|
|
Reported
results
|
Foreign
exchange
|
Constant
dollar
|
|
Reported
results
|
Foreign
exchange
|
Constant
dollar
|
Net interest
income
|
$
|
1,687
|
$
|
20
|
$
|
1,667
|
|
$
|
1,586
|
$
|
1
|
$
|
1,585
|
|
$
|
5,036
|
$
|
180
|
$
|
4,856
|
Non-interest
income
|
|
720
|
|
4
|
|
716
|
|
|
776
|
|
10
|
|
766
|
|
|
2,265
|
|
88
|
|
2,177
|
Total
revenue
|
|
2,407
|
|
24
|
|
2,383
|
|
|
2,362
|
|
11
|
|
2,351
|
|
|
7,301
|
|
268
|
|
7,033
|
Provision for credit
losses
|
|
276
|
|
3
|
|
273
|
|
|
339
|
|
(4)
|
|
343
|
|
|
1,260
|
|
49
|
|
1,211
|
Non-interest
expenses
|
|
1,268
|
|
11
|
|
1,257
|
|
|
1,299
|
|
(1)
|
|
1,300
|
|
|
3,995
|
|
123
|
|
3,872
|
Income tax
expense
|
|
182
|
|
(1)
|
|
183
|
|
|
160
|
|
6
|
|
154
|
|
|
498
|
|
23
|
|
475
|
Net
income
|
$
|
681
|
$
|
11
|
$
|
670
|
|
$
|
564
|
$
|
10
|
$
|
554
|
|
$
|
1,548
|
$
|
73
|
$
|
1,475
|
Net income attributable
to non-controlling interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
in
subsidiaries
|
$
|
76
|
$
|
4
|
$
|
72
|
|
$
|
78
|
$
|
5
|
$
|
73
|
|
$
|
253
|
$
|
20
|
$
|
233
|
Net income attributable
to equity holders of the Bank
|
$
|
605
|
$
|
7
|
$
|
598
|
|
$
|
486
|
$
|
5
|
$
|
481
|
|
$
|
1,295
|
$
|
53
|
$
|
1,242
|
Other
measures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average assets ($
billions)
|
$
|
204
|
$
|
3
|
$
|
201
|
|
$
|
191
|
$
|
2
|
$
|
189
|
|
$
|
195
|
$
|
7
|
$
|
188
|
Average liabilities
($ billions)
|
$
|
149
|
$
|
3
|
$
|
146
|
|
$
|
146
|
$
|
2
|
$
|
144
|
|
$
|
149
|
$
|
6
|
$
|
143
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
Results
|
For the three months
ended
|
For the nine months
ended
|
($
millions)
|
April 30,
2022
|
|
July 31,
2021
|
July 31,
2021
|
(Taxable equivalent
basis)
|
Adjusted
results
|
Foreign
exchange
|
Constant
dollar adjusted
|
|
Adjusted
results
|
Foreign
exchange
|
Constant
dollar adjusted
|
|
Adjusted
results
|
Foreign
exchange
|
Constant
dollar adjusted
|
Net interest
income
|
$
|
1,687
|
$
|
20
|
$
|
1,667
|
|
$
|
1,586
|
$
|
1
|
$
|
1,585
|
|
$
|
5,036
|
$
|
180
|
$
|
4,856
|
Non-interest
income
|
|
720
|
|
4
|
|
716
|
|
|
776
|
|
10
|
|
766
|
|
|
2,265
|
|
88
|
|
2,177
|
Total
revenue
|
|
2,407
|
|
24
|
|
2,383
|
|
|
2,362
|
|
11
|
|
2,351
|
|
|
7,301
|
|
268
|
|
7,033
|
Provision for credit
losses
|
|
276
|
|
3
|
|
273
|
|
|
339
|
|
(4)
|
|
343
|
|
|
1,260
|
|
49
|
|
1,211
|
Non-interest
expenses
|
|
1,258
|
|
11
|
|
1,247
|
|
|
1,288
|
|
(2)
|
|
1,290
|
|
|
3,960
|
|
120
|
|
3,840
|
Income tax
expense
|
|
184
|
|
(2)
|
|
186
|
|
|
164
|
|
7
|
|
157
|
|
|
508
|
|
25
|
|
483
|
Net
income
|
$
|
689
|
$
|
12
|
$
|
677
|
|
$
|
571
|
$
|
10
|
$
|
561
|
|
$
|
1,573
|
$
|
74
|
$
|
1,499
|
Net income attributable
to non-controlling interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
in
subsidiaries
|
$
|
76
|
$
|
4
|
$
|
72
|
|
$
|
78
|
$
|
5
|
$
|
73
|
|
$
|
253
|
$
|
20
|
$
|
233
|
Net income attributable
to equity holders of the Bank
|
$
|
613
|
$
|
8
|
$
|
605
|
|
$
|
493
|
$
|
5
|
$
|
488
|
|
$
|
1,320
|
$
|
54
|
$
|
1,266
|
Return on equity
Return on equity is a profitability measure that presents the
net income attributable to common shareholders (annualized) as a
percentage of average common shareholders' equity.
The Bank attributes capital to its business lines on a basis
that approximates 10.5% of Basel III common equity capital
requirements which includes credit, market and operational risks
and leverage inherent within each business segment.
Return on equity for the business segments is calculated as a
ratio of net income attributable to common shareholders
(annualized) of the business segment and the capital
attributed.
Adjusted return on equity represents adjusted net income
attributable to common shareholders (annualized) as a percentage of
adjusted average common shareholders' equity.
Forward-looking
statements
From time to time, our public communications often include oral
or written forward-looking statements. Statements of this type are
included in this document, and may be included in other filings
with Canadian securities regulators or the U.S. Securities and
Exchange Commission, or in other communications. In addition,
representatives of the Bank may include forward-looking statements
orally to analysts, investors, the media and others. All such
statements are made pursuant to the "safe harbor" provisions of the
U.S. Private Securities Litigation Reform Act of 1995 and any
applicable Canadian securities legislation. Forward-looking
statements may include, but are not limited to, statements made in
this document, the Management's Discussion and Analysis in the
Bank's 2021 Annual Report under the headings "Outlook" and in other
statements regarding the Bank's objectives, strategies to achieve
those objectives, the regulatory environment in which the Bank
operates, anticipated financial results, and the outlook for the
Bank's businesses and for the Canadian, U.S. and global economies.
Such statements are typically identified by words or phrases such
as "believe," "expect," "foresee," "forecast," "anticipate,"
"intend," "estimate," "plan," "goal," "project," and similar
expressions of future or conditional verbs, such as "will," "may,"
"should," "would" and "could."
By their very nature, forward-looking statements require us to
make assumptions and are subject to inherent risks and
uncertainties, which give rise to the possibility that our
predictions, forecasts, projections, expectations or conclusions
will not prove to be accurate, that our assumptions may not be
correct and that our financial performance objectives, vision and
strategic goals will not be achieved.
We caution readers not to place undue reliance on these
statements as a number of risk factors, many of which are beyond
our control and effects of which can be difficult to predict, could
cause our actual results to differ materially from the
expectations, targets, estimates or intentions expressed in such
forward-looking statements.
The future outcomes that relate to forward-looking statements
may be influenced by many factors, including but not limited to:
general economic and market conditions in the countries in which we
operate; changes in currency and interest rates; increased funding
costs and market volatility due to market illiquidity and
competition for funding; the failure of third parties to comply
with their obligations to the Bank and its affiliates; changes in
monetary, fiscal, or economic policy and tax legislation and
interpretation; changes in laws and regulations or in supervisory
expectations or requirements, including capital, interest rate and
liquidity requirements and guidance, and the effect of such changes
on funding costs; changes to our credit ratings; operational and
infrastructure risks; reputational risks; the accuracy and
completeness of information the Bank receives on customers and
counterparties; the timely development and introduction of new
products and services, and the extent to which products or services
previously sold by the Bank require the Bank to incur liabilities
or absorb losses not contemplated at their origination; our ability
to execute our strategic plans, including the successful completion
of acquisitions and dispositions, including obtaining regulatory
approvals; critical accounting estimates and the effect of changes
to accounting standards, rules and interpretations on these
estimates; global capital markets activity; the Bank's ability to
attract, develop and retain key executives; the evolution of
various types of fraud or other criminal behaviour to which the
Bank is exposed; disruptions in or attacks (including
cyber-attacks) on the Bank's information technology, internet,
network access, or other voice or data communications systems or
services; increased competition in the geographic and in business
areas in which we operate, including through internet and mobile
banking and non-traditional competitors; exposure related to
significant litigation and regulatory matters; climate change and
other environmental and social risks, including sustainability that
may arise, including from the Bank's business activities; the
occurrence of natural and unnatural catastrophic events and claims
resulting from such events; the emergence of widespread health
emergencies or pandemics, including the magnitude and duration of
the COVID-19 pandemic and its impact on the global economy,
financial market conditions and the Bank's business, results of
operations, financial condition and prospects; and the Bank's
anticipation of and success in managing the risks implied by the
foregoing. A substantial amount of the Bank's business involves
making loans or otherwise committing resources to specific
companies, industries or countries. Unforeseen events affecting
such borrowers, industries or countries could have a material
adverse effect on the Bank's financial results, businesses,
financial condition or liquidity. These and other factors may cause
the Bank's actual performance to differ materially from that
contemplated by forward-looking statements. The Bank cautions that
the preceding list is not exhaustive of all possible risk factors
and other factors could also adversely affect the Bank's results,
for more information, please see the "Risk Management" section of
the Bank's 2021 Annual Report, as may be updated by quarterly
reports.
Material economic assumptions underlying the forward-looking
statements contained in this document are set out in the 2021
Annual Report under the headings "Outlook", as updated by quarterly
reports. The "Outlook" sections are based on the Bank's views and
the actual outcome is uncertain. Readers should consider the
above-noted factors when reviewing these sections. When relying on
forward-looking statements to make decisions with respect to the
Bank and its securities, investors and others should carefully
consider the preceding factors, other uncertainties and potential
events.
Any forward-looking statements contained in this document
represent the views of management only as of the date hereof and
are presented for the purpose of assisting the Bank's shareholders
and analysts in understanding the Bank's financial position,
objectives and priorities, and anticipated financial performance as
at and for the periods ended on the dates presented, and may not be
appropriate for other purposes. Except as required by law, the Bank
does not undertake to update any forward-looking statements,
whether written or oral, that may be made from time to time by or
on its behalf.
Additional information relating to the Bank, including the
Bank's Annual Information Form, can be located on the SEDAR website
at www.sedar.com and on the EDGAR section of the SEC's website at
www.sec.gov.
Shareholders Information
Dividend and Share Purchase Plan
Scotiabank's dividend reinvestment and share purchase plan
allows common and preferred shareholders to purchase additional
common shares by reinvesting their cash dividend without incurring
brokerage or administrative fees. As well, eligible shareholders
may invest up to $20,000 each fiscal
year to purchase additional common shares of the Bank. All
administrative costs of the plan are paid by the Bank. For more
information on participation in the plan, please contact the
transfer agent.
Website
For information relating to Scotiabank and its services, visit
us at our website: www.scotiabank.com.
Conference Call and Web Broadcast
The quarterly results conference call will take place on
August 23, 2022, at 8:00 am EDT and is expected to last approximately
one hour. Interested parties are invited to access the call live,
in listen-only mode, by telephone at 416-641-6104 or toll-free, at
1-800-952-5114 using ID 2921392# (please call shortly before
8:00 am EDT). In addition, an audio
webcast, with accompanying slide presentation, may be accessed via
the Investor Relations page of www.scotiabank.com.
Following discussion of the results by Scotiabank executives,
there will be a question and answer session. A telephone replay of
the conference call will be available from August 23, 2022, to September 29, 2022, by calling 905-694-9451 or
1-800-408-3053 (North America
toll-free) and entering the access code 1127377#. The archived
audio webcast will be available on the Bank's website for three
months.
Additional Information
Investors:
Financial Analysts, Portfolio Managers and
other Institutional Investors requiring financial information,
please contact Investor Relations, Finance Department:
Scotiabank
Scotia Plaza, 44 King Street West
Toronto, Ontario,
Canada M5H 1H1
Telephone: (416) 775-0798
E-mail: investor.relations@scotiabank.com
Global Communications:
Scotiabank
44 King Street
West, Toronto, Ontario
Canada M5H 1H1
E-mail:
corporate.communications@scotiabank.com
Shareholders:
For enquiries related to changes in
share registration or address, dividend information, lost share
certificates, estate transfers, or to advise of duplicate mailings,
please contact the Bank's transfer agent:
Computershare Trust Company of Canada
100 University Avenue, 8th Floor
Toronto, Ontario,
Canada M5J 2Y1
Telephone: 1-877-982-8767
E-mail: service@computershare.com
Co-Transfer Agent (U.S.A.)
Computershare Trust Company, N.A.
Overnight Mail Delivery:
Computershare
C/O: Shareholder Services
462 South 4th Street, Suite 1600
Louisville, KY 40202
First Class, Registered or Certified Mail
Delivery:
Computershare
C/O: Shareholder Services
P.O. Box 505000
Louisville, KY 40233-5000
Tel: 1-800-962-4284
E-mail: service@computershare.com
For other shareholder enquiries, please contact
the Corporate Secretary's Department:
Scotiabank
Scotia Plaza, 44 King Street West
Toronto, Ontario,
Canada M5H 1H1
Telephone: (416) 866-3672
E-mail: corporate.secretary@scotiabank.com
Rapport trimestriel disponible en français
Le Rapport annuel et les états financiers de la Banque sont
publiés en français et en anglais et distribués aux actionnaires
dans la version de leur choix. Si vous préférez que la
documentation vous concernant vous soit adressée en français,
veuillez en informer Relations publiques, Affaires de la société et
Affaires gouvernementales, La Banque de Nouvelle-Écosse, Scotia
Plaza, 44, rue King Ouest, Toronto (Ontario), Canada M5H 1H1, en joignant, si possible,
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changement.
SOURCE Scotiabank