The earnings results reported Wednesday come as the
Scotiabank chief risk officer
"We're very confident in the health of the Canadian consumer at this point," he told analysts.
Scotiabank chief executive
"Given the macroeconomic environment, we run stress tests that would have more harsh inputs today than we would have possibly a year ago."
For now at least the bank is benefiting from trends in both central bank rates and real estate, as its net interest income grew seven per cent in the quarter from a year earlier, while loans grew 13 per cent from last year.
In
The mortgage segment has started to slow though as prime rates increase, said
"You have seen some slowing in the mortgage growth ... there are some markets, which have, obviously, grown more in the buyers' favour, let's say, based on softening."
He said that the bank is down about 2.5 per cent in mortgage growth sequentially, but still expects to see year over year growth for the remaining quarters to be in the high single digits.
The bank has also pushed further into sectors like agriculture, technology and transportation to further diversify its holdings, said Rees.
“So we're less reliant on real estate now than we would have been a year or two ago.”
The changes in both the mortgage market and the wider macroeconomic environment mean this last quarter will likely be a floor for the bank's credit loss provisions, the bank said.
Scotiabank is also not immune to the inflationary environment, reporting a three per cent rise in expenses, including an eight per cent jump in expenses in the Canadian division from higher technology, personnel and advertising costs to support business growth.
The bank expects expenses to keep rising in the latter half of the year, but is still expecting overall growth in the low single digits as it has numerous discretionary costs it can adjust.
The bank said it would also moderate its share buybacks in the second half of the year as its capital position has ticked down to 11.6 per cent from both buybacks and increasing its stake in
Still, the bank increased its quarterly dividend three per cent to
The raise came as the bank reported a second-quarter profit of
The bank's profit for the quarter ended
Scotiabank's provision for credit losses amounted to
On an adjusted basis, the bank said it earned
Analysts on average had expected an adjusted profit of
Barclays analyst
Scotiabank said its Canadian banking business earned net income attributable to equity holders of
International banking operations earned
The bank's global wealth management arm earned
This report by
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