The
The bank's provisions for credit losses totalled nearly
"This is not a garden-variety recession...We've never been through this before," Scotiabank chief executive
"We're cautious here. This is not a one-quarter or two-quarter event. The banking sector will be picking up broken egg shells for a number of quarters here."
Porter acknowledged that Scotiabank's results were significantly impacted by COVID-19, but reminded listeners that the bank and all its operating divisions continue to be profitable.
He said the bank is well-positioned from a capital and liquidity perspective and appropriately reserved for credit losses.
Scotiabank's profit for the quarter amounted to
On an adjusted basis, it earned
Analysts on average had expected Scotiabank to earn an adjusted profit of
The bank spent much of the quarter focused on offering loan and mortgage deferrals to customers struggling with the impacts of COVID-19 and its impact on the economy.
"I have often said the role of banking is to act as a shock absorber during times of crisis. That was true in previous times of difficulty and it is certainly true today," Porter said.
Scotiabank offered about
In the
Demand for deferrals is starting to taper off, after peaking in
Meanwhile, the bank is seeing strong growth in its digital subsidiary Tangerine and online discount brokerage iTrade.
"Longer term, we do not believe BNS or any other bank will rally on a sustained basis until there is light at the end of the credit cycle tunnel," he said, referring to the bank by its stock symbol.
Barclays analyst
He suspected that the results will likely be rewarded, but warned that these are still the early stages of credit development.
"It is our view that ongoing heightened provisions are more likely in coming quarters," he said.
"Expectations will likely be that additional reserves will need to be taken in future quarters as the true impact of the pandemic will be felt."
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Companies in this story: (TSX:BNS)
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