All amounts are in
Canadian dollars and are based on our unaudited Interim Condensed
Consolidated Financial Statements for the quarter ended April 30,
2022 and related notes prepared in accordance with International
Financial Reporting Standards (IFRS), unless otherwise noted. Our
complete Second Quarter 2022 Report to Shareholders, including our
unaudited interim financial statements for the period ended April
30, 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 Second Quarter 2022 Report to Shareholders on the Investor
Relations page of www.scotiabank.com
|
Second Quarter 2022
Highlights on a Reported Basis
(versus Q2, 2021)
•
Net income of $2,747
million, compared to $2,456 million
•
Earnings per share (diluted)
of $2.16, compared to $1.88
•
Return on
equity(2) of 16.2%, compared to 14.8%
|
Second Quarter 2022
Highlights on an Adjusted
Basis(1) (versus
Q2, 2021)
•
Net income of $2,765
million, compared to $2,475 million
•
Earnings per share (diluted)
of $2.18, compared to $1.90
•
Return on equity of 16.4%,
compared to 14.9%
|
|
|
TORONTO, May 25, 2022
/CNW/ - Scotiabank reported second quarter net income of
$2,747 million compared to
$2,456 million in the same period
last year. Diluted earnings per share (EPS) were $2.16, compared to $1.88 in the same period a year ago.
Adjusted net income(1) for the second quarter was
$2,765 million and EPS was
$2.18, up from $1.90 last year. Adjusted return on equity was
16.4% compared to 14.9% a year ago.
"We are pleased with the very strong EPS growth of 15% and a
return on equity of 16.4%. Continued loan growth of 13%, an
improving net interest margin, strong customer balance sheets,
combined with prudent expense management, positions the Bank well
to grow its earnings," said Brian
Porter, President and CEO, Scotiabank.
Canadian Banking earnings grew 27% compared to the prior year.
Results were underpinned by higher revenues, driven by robust
mortgage and commercial loan growth, strong fee income, lower
provision for credit losses, and the sixth consecutive quarter of
positive operating leverage.
International Banking earnings continued its strong recovery
exceeding $600 million this quarter.
This was driven by robust mortgage and commercial loan growth,
expanding margin and continued improvement in fee income that
resulted in revenue growing at 4%, while generating positive
operating leverage and lower provision for credit losses.
Global Wealth Management earnings grew 9% driven by higher
brokerage revenues, mutual fund fees, and net interest income
supported by strong loan and deposit growth.
Global Banking and Markets delivered earnings of $488 million. Strong revenue and loan growth in
the corporate and investment banking business, was partially offset
by lower capital markets revenue reflecting market conditions.
The Bank remains well capitalized with a Common Equity Tier 1
capital ratio(3) of 11.6%. Strong internal capital
generation positions the Bank to continue to grow in line with its
strategic objectives, while returning capital to shareholders. The
Bank announced a quarterly dividend increase of 3 cents.
"I am proud of the many recognitions Scotiabank received this
quarter, most notably, the award for Best Use of Technology for
Customer Experience Overall in The Digital Banker's 2022
Global Digital CX Banking Awards. This award reinforces the Bank's
momentum in innovating, digitizing and modernizing our organization
to meet our customers' evolving needs," said Brian Porter. "Scotiabank also continues to
demonstrate leadership as a top employer, recently winning a third
consecutive recognition as one of the Best Workplaces in
Canada by the Great Place to Work
Institute. And we are reinforcing our commitment to advancing the
inclusion of women and creating a more equitable and diverse
workplace, earning a top spot in The Globe and Mail's 2022 Women
Lead Here list, which recognizes best-in-class executive
gender diversity amongst Canadian corporations."
_____________________________________________
|
(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 Second 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 six months ended
|
|
|
April
30
|
|
January
31
|
|
April
30
|
|
April
30
|
|
April
30
|
(Unaudited)($
millions)
|
|
2022
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net interest
income
|
$
|
4,473
|
$
|
4,344
|
$
|
4,176
|
$
|
8,817
|
$
|
8,527
|
Non-interest
income
|
|
3,469
|
|
3,705
|
|
3,560
|
|
7,174
|
|
7,281
|
Total
revenue
|
|
7,942
|
|
8,049
|
|
7,736
|
|
15,991
|
|
15,808
|
Provision for credit
losses
|
|
219
|
|
222
|
|
496
|
|
441
|
|
1,260
|
Non-interest
expenses
|
|
4,159
|
|
4,223
|
|
4,042
|
|
8,382
|
|
8,250
|
Income tax
expense
|
|
817
|
|
864
|
|
742
|
|
1,681
|
|
1,444
|
Net
income
|
$
|
2,747
|
$
|
2,740
|
$
|
2,456
|
$
|
5,487
|
$
|
4,854
|
Net income attributable
to non-controlling interests in
|
|
|
|
|
|
|
|
|
|
|
subsidiaries
|
|
78
|
|
88
|
|
90
|
|
166
|
|
180
|
Net income attributable
to equity holders of the Bank
|
$
|
2,669
|
$
|
2,652
|
$
|
2,366
|
$
|
5,321
|
$
|
4,674
|
|
Preferred shareholders and other equity instrument
holders
|
|
74
|
|
44
|
|
77
|
|
118
|
|
120
|
|
Common shareholders
|
$
|
2,595
|
$
|
2,608
|
$
|
2,289
|
$
|
5,203
|
$
|
4,554
|
Earnings per common
share (in dollars)
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
2.16
|
$
|
2.15
|
$
|
1.89
|
$
|
4.32
|
$
|
3.76
|
|
Diluted
|
$
|
2.16
|
$
|
2.14
|
$
|
1.88
|
$
|
4.30
|
$
|
3.74
|
Business Segment Review
Canadian Banking
Q2 2022 vs Q2 2021
Net income attributable to equity holders was $1,179 million, compared to $927 million. Adjusted net income attributable to
equity holders was $1,183 million, an
increase of $252 million or 27%. The
increase was due primarily to higher revenues and lower provision
for credit losses, partly offset by higher non-interest
expenses.
Q2 2022 vs Q1 2022
Net income attributable to equity holders decreased $22 million or 2%. The decrease was due primarily
to higher non-interest expenses and provision for credit losses,
partly offset by higher revenues.
Year-to-date Q2 2022 vs Year-to-date Q2 2021
Net income attributable to equity holders was $2,380 million, compared to $1,838 million. Adjusted net income attributable
to equity holders was $2,388 million,
an increase of $542 million or 29%.
The increase was due primarily to higher revenues and lower
provision for credit losses, partly offset by higher non-interest
expenses.
International Banking
Q2 2022 vs Q2 2021
Net income attributable to equity holders was $605 million, compared to $420 million. Adjusted net income attributable to
equity holders was $613 million, an
increase from $429 million. This
increase was driven by lower provision for credit losses, lower
non-interest expenses, and higher revenues, partially offset by the
negative impact of foreign currency translation.
Q2 2022 vs Q1 2022
Net income attributable to equity holders increased $60 million or 11% from $545 million. Adjusted net income attributable to
equity holders increased $61 million
or 11%, compared to $552 million last
quarter. This was due largely to lower income taxes, lower
non-interest expenses, and higher revenues.
Year-to-date Q2 2022 vs Year-to-date Q2 2021
Net income attributable to equity holders was $1,150 million, an increase of $341 million. Adjusted net income attributable to
equity holders was $1,165 million, an
increase of $338 million. This
increase was due largely to lower provision for credit losses and
non-interest expenses, partially offset by lower revenues, higher
income taxes 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.
Q2 2022 vs Q2 2021
Net income attributable to equity holders was $605 million, compared to $403 million. Adjusted net income attributable to
equity holders increased to $613
million from $411 million.
This increase was driven by lower provision for credit losses and
higher revenues, partially offset by higher income taxes.
Q2 2022 vs Q1 2022
Net income attributable to equity holders increased by
$58 million or 10% from $547 million. Adjusted net income attributable to
equity holders increased by $58
million or 10%, compared to $555
million last quarter. This was due to lower non-interest
expenses, income taxes, and provision for credit losses, partially
offset by lower revenues.
Year-to-date Q2 2022 vs Year-to-date Q2 2021
Net income attributable to equity holders was $1,150 million, an increase of $387 million. Adjusted net income attributable to
equity holders was $1,165 million, up
$386 million. This increase was due
to lower provision for credit losses, higher revenues, and lower
non-interest expenses, partially offset by higher income taxes.
Global Wealth Management
Q2 2022 vs Q2 2021
Net income attributable to equity holders was $407 million, an increase of $35 million or 9%. The increase is due primarily
to higher net interest income, brokerage revenues, and mutual fund
fees.
Q2 2022 vs Q1 2022
Net income attributable to equity holders decreased $5 million or 1%. Higher net interest
income and lower expenses were offset by lower mutual fund fees and
brokerage revenues as well as the 2% impact of seasonal performance
fees in the prior quarter.
Year-to-date Q2 2022 vs Year-to-date Q2 2021
Net income attributable to equity holders was $819 million, up $29
million or 4%. Higher mutual fund fees, brokerage revenues,
and net interest income were partially offset by higher
volume-related expenses and the 7% impact of elevated seasonal
performance fees in the prior year.
Global Banking and Markets
Q2 2022 vs Q2 2021
Net income attributable to equity holders was $488 million, a decrease of $29 million or 6%. This was due to higher
non-interest expense and lower non-interest income, partially
offset by higher net interest income, lower provision for credit
losses and the positive impact of foreign currency translation.
Q2 2022 vs Q1 2022
Net income attributable to equity holders decreased by
$73 million or 13%. This was due to
lower revenues and the impact of three fewer days in the quarter,
partially offset by lower provision for credit losses and lower
non-interest expenses.
Year-to-date Q2 2022 vs Year-to-date Q2 2021
Net income attributable to equity holders was $1,049 million, a decrease of $11 million or 1% due to higher non-interest
expense and the negative impact of foreign currency translation,
partially offset by higher revenues and lower provision for credit
losses.
Other
Q2 2022 vs Q2 2021
Net income attributable to equity holders was a net loss of
$10 million, compared to net income
of $130 million in the prior year.
The decrease of $140 million was due
mainly to significantly lower investment gains and higher
non-interest expenses, partially offset by a higher contribution
from asset/liability management activities.
Q2 2022 vs Q1 2022
Net income attributable to equity holders increased $57 million from the prior quarter, due primarily
to higher contribution from asset/liability management
activities.
Year-to-date Q2 2022 vs Year-to-date Q2 2021
Net income attributable to equity holders was a net loss of
$77 million compared to net income of
$177 million. The decrease of
$254 million was due mainly to
significantly lower investments gains and a lower contribution from
asset/liability management activities This was partially 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
Q2 2022 vs Q2 2021
The provision for credit losses was $219
million, compared to $496
million, a decrease of $277
million or 56%. The provision for credit losses ratio
decreased 20 basis points to 13 basis points.
Provision for credit losses on performing loans was a net
reversal of $187 million, compared to
a net reversal of $696 million. The
provision reversals this period were driven primarily by improved
retail portfolio credit quality, partially offset by portfolio
growth. Higher provision reversals last year were due mainly to
credit migration to impaired, primarily in International
Banking.
Provision for credit losses on impaired loans was $406 million, compared to $1,192 million, a decrease of $786 million or 66%, due primarily to lower
formations across all portfolios. The provision for credit losses
ratio on impaired loans decreased 56 basis points to 24 basis
points.
Q2 2022 vs Q1 2022
The provision for credit losses was $219
million, compared to $222
million, a decrease of $3
million or 1%. The provision for credit losses ratio was
stable at 13 basis points.
Provision for credit losses on performing loans was a net
reversal of $187 million, compared to
a net reversal of $183 million. The
net reversal this quarter includes approximately $210 million due to the release of allowances
built in fiscal year 2020 no longer required, primarily in the
retail portfolio, reflecting improvement in credit quality, and
reversals in energy portfolios as a result of increased commodity
prices. These were partially offset by portfolio growth and less
favourable macroeconomic forecast.
Provision for credit losses on impaired loans was $406 million compared to $405 million driven by higher commercial
formations, mainly in International Banking, mostly offset by lower
retail formations in both Canadian Banking and International
Banking. The provision for credit losses ratio on impaired loans
was 24 basis points, remaining unchanged from the prior
quarter.
Year-to-date Q2 2022 vs Year-to-date Q2 2021
The provision for credit losses was $441
million, compared to $1,260
million, a decrease of $819
million or 65%. The provision for credit losses ratio
decreased 28 basis points to 13 basis points.
Provision for credit losses on performing loans was a net
reversal of $370 million, compared to
a net reversal of $694 million. The
provision reversals were primarily in the retail portfolio driven
by improved credit quality and also in the energy portfolio due to
increased commodity prices, partially offset by portfolio growth.
The provision reversals included approximately $420 million (April 30,
2021 - $200 million) of
allowance releases from those built in fiscal year 2020 no longer
required.
Provision for credit losses on impaired loans was $811 million compared to $1,954 million, a decrease of $1,143 million or 58% due primarily to lower
formations across all portfolios. The provision for credit losses
ratio on impaired loans decreased 40 basis points to 24 basis
points.
Allowance for credit losses
The total allowance for credit losses as at April 30, 2022, was $5,375
million. The allowance for credit losses on loans was
$5,294 million, down $198 million from the prior quarter. The decrease
was due primarily to releases of performing loan provisions driven
by improved portfolio credit quality and impact of increased
commodity prices.
The allowance on performing loans was lower at $3,690 million compared to $3,869 million as at January 31, 2022. The decrease was primarily
related to the Canadian Banking retail portfolio and Global Banking
and Markets driven by releases due to improved portfolio credit
quality, and reversals of allowances in the energy portfolio as a
result of increased commodity prices.
The allowance on impaired loans decreased to $1,604 million from $1,623
million last quarter. The decrease was primarily related to
the International Banking retail portfolio driven by lower
formations across markets this quarter.
Impaired loans
Gross impaired loans decreased to $4,264
million as at April 30, 2022,
compared to $4,435 million last
quarter. The decrease was due primarily to lower net formations.
The gross impaired loan ratio was 60 basis points as at
April 30, 2022, a decrease of four
basis points from last quarter.
Net impaired loans in Canadian Banking were $421 million as at April
30, 2022, a decrease of $66
million from last quarter, due to lower gross impaired loans
driven by lower retail net formations and commercial write-offs.
International Banking's net impaired loans were $2,068 million as at April
30, 2022, a decrease of $29
million from last quarter, as lower retail gross impaired
loans were partially offset by higher commercial gross impaired
loans. In Global Wealth Management, net impaired loans were
$23 million as at April 30, 2022, unchanged from last quarter. In
Global Banking and Markets, net impaired loans were $148 million as at April
30, 2022, a decrease of $57
million from last quarter, due primarily to repayment on one
account and low formations. Net impaired loans as a percentage of
loans and acceptances were 0.37% as at April
30, 2022, a decrease of four basis points from 0.41% last
quarter.
Capital Ratios
The Bank's Common Equity Tier 1 (CET1) capital
ratio(1) was 11.6% as at April
30, 2022, a decrease of approximately 40 basis points from
the prior quarter, due primarily to common share buybacks under the
Bank's Normal Course Issuer Bid, the Bank's increased ownership in
Scotiabank Chile and changes in the valuation of investment
securities, partially offset by the impacts from remeasurement of
the Bank's pension plan obligations and other items. Internal
capital generation was offset by organic growth in risk-weighted
assets across all business lines.
The Bank's Tier 1 capital ratio(1) was 12.8% as at
April 30, 2022, a decrease of
approximately 60 basis points from the prior quarter, due primarily
to the above noted impacts to the CET1 ratio.
The Bank's Total capital ratio(1) was 15.0% as at
April 30, 2022, a decrease of
approximately 10 basis points from the prior quarter, due primarily
to the redemption of $1.25 billion of
NVCC subordinated debentures, and the above noted impacts to the
CET1 ratio, partially offset by issuances during the quarter of
$1.75 billion and USD $1.25 billion of NVCC subordinated
debentures.
The Leverage ratio(2) was 4.2% as at April 30, 2022, a decrease of approximately 20
basis points from the prior quarter, due primarily to lower Tier 1
capital combined with strong growth in the Bank's on and
off-balance sheet assets.
The TLAC ratio(3) was 30.1% as at April 30, 2022, an increase of approximately 180
basis points from the prior quarter, due primarily to net TLAC
instrument issuances during the quarter and the above noted impacts
to the Total capital ratio.
The TLAC Leverage ratio(3) was 9.8%, an increase of
approximately 40 basis points, due primarily to net TLAC issuances
during the quarter.
As at April 30, 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 year
ended
|
|
April
30
|
January 31
|
April 30
|
April
30
|
April 30
|
($
millions)
|
2022
|
2022
|
2021
|
2022
|
2021
|
Reported
Results
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
$
|
4,473
|
$
|
4,344
|
$
|
4,176
|
$
|
8,817
|
$
|
8,527
|
Non-interest
income
|
|
3,469
|
|
3,705
|
|
3,560
|
|
7,174
|
|
7,281
|
Total Revenue
|
|
7,942
|
|
8,049
|
|
7,736
|
|
15,991
|
|
15,808
|
Provision for credit
losses
|
|
219
|
|
222
|
|
496
|
|
441
|
|
1,260
|
Non-interest
expenses
|
|
4,159
|
|
4,223
|
|
4,042
|
|
8,382
|
|
8,250
|
Income before
taxes
|
|
3,564
|
|
3,604
|
|
3,198
|
|
7,168
|
|
6,298
|
Income tax
expense
|
|
817
|
|
864
|
|
742
|
|
1,681
|
|
1,444
|
Net
income
|
$
|
2,747
|
$
|
2,740
|
$
|
2,456
|
$
|
5,487
|
$
|
4,854
|
Net income attributable
to non-controlling interests in subsidiaries (NCI)
|
|
78
|
|
88
|
|
90
|
|
166
|
|
180
|
Net income attributable
to equity holders
|
$
|
2,669
|
$
|
2,652
|
$
|
2,366
|
$
|
5,321
|
$
|
4,674
|
Preferred shareholders
and other equity instrument holders
|
|
74
|
|
44
|
|
77
|
|
118
|
|
120
|
Net income attributable
to common shareholders
|
$
|
2,595
|
$
|
2,608
|
$
|
2,289
|
$
|
5,203
|
$
|
4,554
|
Diluted earnings per
share (in dollars)
|
$
|
2.16
|
$
|
2.14
|
$
|
1.88
|
$
|
4.30
|
$
|
3.74
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
Amortization of
acquisition-related intangible assets(1)
|
$
|
24
|
$
|
25
|
$
|
26
|
$
|
49
|
$
|
54
|
Adjustments
(Pre-tax)
|
|
24
|
|
25
|
|
26
|
|
49
|
|
54
|
Income tax
expense/(benefit)
|
|
(6)
|
|
(7)
|
|
(7)
|
|
(13)
|
|
(15)
|
Adjustments (After
tax)
|
|
18
|
|
18
|
|
19
|
|
36
|
|
39
|
Adjustment attributable
to NCI
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Adjustments (After
tax and NCI)
|
$
|
18
|
$
|
18
|
$
|
19
|
$
|
36
|
$
|
39
|
Adjusted
Results
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
$
|
4,473
|
$
|
4,344
|
$
|
4,176
|
$
|
8,817
|
$
|
8,527
|
Non-interest
income
|
|
3,469
|
|
3,705
|
|
3,560
|
|
7,174
|
|
7,281
|
Total revenue
|
|
7,942
|
|
8,049
|
|
7,736
|
|
15,991
|
|
15,808
|
Provision for credit
losses
|
|
219
|
|
222
|
|
496
|
|
441
|
|
1,260
|
Non-interest
expenses
|
|
4,135
|
|
4,198
|
|
4,016
|
|
8,333
|
|
8,196
|
Income before
taxes
|
|
3,588
|
|
3,629
|
|
3,224
|
|
7,217
|
|
6,352
|
Income tax
expense
|
|
823
|
|
871
|
|
749
|
|
1,694
|
|
1,459
|
Net
income
|
$
|
2,765
|
$
|
2,758
|
$
|
2,475
|
$
|
5,523
|
$
|
4,893
|
Net income attributable
to NCI
|
|
78
|
|
88
|
|
90
|
|
166
|
|
180
|
Net income attributable
to equity holders
|
$
|
2,687
|
$
|
2,670
|
$
|
2,385
|
$
|
5,357
|
$
|
4,713
|
Preferred shareholders
and other equity instrument holders
|
|
74
|
|
44
|
|
77
|
|
118
|
|
120
|
Net income attributable
to common shareholders
|
$
|
2,613
|
$
|
2,626
|
$
|
2,308
|
$
|
5,239
|
$
|
4,593
|
Adjusted diluted
earnings per share
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income
attributable to common shareholders
|
|
2,613
|
|
2,626
|
|
2,308
|
|
5,239
|
|
4,593
|
Dilutive impact of
share-based payment options and others
|
|
-
|
|
24
|
|
13
|
|
67
|
|
119
|
Adjusted net income
attributable to common shareholders (diluted)
|
$
|
2,613
|
$
|
2,650
|
$
|
2,321
|
$
|
5,306
|
$
|
4,712
|
Weighted average number
of basic common shares outstanding (millions)
|
|
1,199
|
|
1,211
|
|
1,213
|
|
1,205
|
|
1,213
|
Dilutive impact of
share-based payment options and others (millions)
|
|
2
|
|
19
|
|
10
|
|
20
|
|
35
|
Adjusted weighted
average number of diluted common shares outstanding
(millions)
|
|
1,201
|
|
1,230
|
|
1,223
|
|
1,225
|
|
1,248
|
Adjusted diluted
earnings per share (in dollars)(2)
|
$
|
2.18
|
$
|
2.15
|
$
|
1.90
|
$
|
4.33
|
$
|
3.78
|
Impact of
adjustments on diluted earnings per share (in
dollars)
|
$
|
0.02
|
$
|
0.01
|
$
|
0.02
|
$
|
0.03
|
$
|
0.04
|
(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 April 30, 2022
|
Reported net income
(loss)
|
$
|
1,179
|
$
|
681
|
$
|
409
|
$
|
488
|
$
|
(10)
|
$
|
2,747
|
Net income attributable
to non-controlling interests in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
subsidiaries
(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 January 31, 2022
|
Reported net income
(loss)
|
$
|
1,201
|
$
|
630
|
$
|
415
|
$
|
561
|
$
|
(67)
|
$
|
2,740
|
Net income attributable
to NCI
|
|
-
|
|
85
|
|
3
|
|
-
|
|
-
|
|
88
|
Reported net income
attributable to equity holders
|
$
|
1,201
|
$
|
545
|
$
|
412
|
$
|
561
|
$
|
(67)
|
$
|
2,652
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
acquisition-related intangible assets(2)
|
|
4
|
|
7
|
|
7
|
|
-
|
|
-
|
|
18
|
Adjusted net income
(loss)
|
$
|
1,205
|
$
|
637
|
$
|
422
|
$
|
561
|
$
|
(67)
|
$
|
2,758
|
Adjusted net income
attributable to equity holders
|
$
|
1,205
|
$
|
552
|
$
|
419
|
$
|
561
|
$
|
(67)
|
$
|
2,670
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months
ended April 30, 2021
|
Reported net income
(loss)
|
$
|
927
|
$
|
507
|
$
|
374
|
$
|
517
|
$
|
131
|
$
|
2,456
|
Net income attributable
to NCI
|
|
-
|
|
87
|
|
2
|
|
-
|
|
1
|
|
90
|
Reported net income
attributable to equity holders
|
$
|
927
|
$
|
420
|
$
|
372
|
$
|
517
|
$
|
130
|
$
|
2,366
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
acquisition-related intangible assets(2)
|
|
4
|
|
9
|
|
6
|
|
-
|
|
-
|
|
19
|
Adjusted net income
(loss)
|
$
|
931
|
$
|
516
|
$
|
380
|
$
|
517
|
$
|
131
|
$
|
2,475
|
Adjusted net income
attributable to equity holders
|
$
|
931
|
$
|
429
|
$
|
378
|
$
|
517
|
$
|
130
|
$
|
2,385
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the six months
ended April 30, 2022
|
Reported net income
(loss)
|
$
|
2,380
|
$
|
1,311
|
$
|
824
|
$
|
1,049
|
$
|
(77)
|
$
|
5,487
|
Net income attributable
to NCI
|
|
-
|
|
161
|
|
5
|
|
-
|
|
-
|
|
166
|
Reported net income
attributable to equity holders
|
$
|
2,380
|
$
|
1,150
|
$
|
819
|
$
|
1,049
|
$
|
(77)
|
$
|
5,321
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
acquisition-related intangible assets(2)
|
|
8
|
|
15
|
|
13
|
|
-
|
|
-
|
|
36
|
Adjusted net income
(loss)
|
$
|
2,388
|
$
|
1,326
|
$
|
837
|
$
|
1,049
|
$
|
(77)
|
$
|
5,523
|
Adjusted net income
attributable to equity holders
|
$
|
2,388
|
$
|
1,165
|
$
|
832
|
$
|
1,049
|
$
|
(77)
|
$
|
5,357
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the six months
ended April 30, 2021
|
Reported net income
(loss)
|
$
|
1,838
|
$
|
984
|
$
|
795
|
$
|
1,060
|
$
|
177
|
$
|
4,854
|
Net income attributable
to NCI
|
|
-
|
|
175
|
|
5
|
|
-
|
|
-
|
|
180
|
Reported net income
attributable to equity holders
|
$
|
1,838
|
$
|
809
|
$
|
790
|
$
|
1,060
|
$
|
177
|
$
|
4,674
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
acquisition-related intangible assets(2)
|
|
8
|
|
18
|
|
13
|
|
-
|
|
-
|
|
39
|
Adjusted net income
(loss)
|
$
|
1,846
|
$
|
1,002
|
$
|
808
|
$
|
1,060
|
$
|
177
|
$
|
4,893
|
Adjusted net income
attributable to equity holders
|
$
|
1,846
|
$
|
827
|
$
|
803
|
$
|
1,060
|
$
|
177
|
$
|
4,713
|
(1)
|
Refer to Business
Segment Review section of the Bank's Q2, 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 six months
ended
|
($
millions)
|
January 31,
2022
|
|
April 30,
2021
|
April 30,
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
|
$
|
1,648
|
$
|
(40)
|
$
|
1,688
|
|
$
|
1,662
|
$
|
44
|
$
|
1,618
|
|
$
|
3,450
|
$
|
178
|
$
|
3,272
|
Non-interest
income
|
|
749
|
|
(4)
|
|
753
|
|
|
716
|
|
24
|
|
692
|
|
|
1,489
|
|
77
|
|
1,412
|
Total
revenue
|
|
2,397
|
|
(44)
|
|
2,441
|
|
|
2,378
|
|
68
|
|
2,310
|
|
|
4,939
|
|
255
|
|
4,684
|
Provision for credit
losses
|
|
274
|
|
(9)
|
|
283
|
|
|
396
|
|
10
|
|
386
|
|
|
921
|
|
54
|
|
867
|
Non-interest
expenses
|
|
1,285
|
|
(28)
|
|
1,313
|
|
|
1,294
|
|
30
|
|
1,264
|
|
|
2,696
|
|
122
|
|
2,574
|
Income tax
expense
|
|
208
|
|
(2)
|
|
210
|
|
|
181
|
|
5
|
|
176
|
|
|
338
|
|
18
|
|
320
|
Net
income
|
$
|
630
|
$
|
(5)
|
$
|
635
|
|
$
|
507
|
$
|
23
|
$
|
484
|
|
$
|
984
|
$
|
61
|
$
|
923
|
Net income attributable
to non-controlling interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
in
subsidiaries
|
$
|
85
|
$
|
(3)
|
$
|
88
|
|
$
|
87
|
$
|
6
|
$
|
81
|
|
$
|
175
|
$
|
15
|
$
|
160
|
Net income attributable
to equity holders of the Bank
|
$
|
545
|
$
|
(2)
|
$
|
547
|
|
$
|
420
|
$
|
17
|
$
|
403
|
|
$
|
809
|
$
|
46
|
$
|
763
|
Other
measures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average assets ($
billions)
|
$
|
196
|
$
|
(3)
|
$
|
199
|
|
$
|
194
|
$
|
5
|
$
|
189
|
|
$
|
197
|
$
|
9
|
$
|
188
|
Average liabilities
($ billions)
|
$
|
144
|
$
|
(3)
|
$
|
147
|
|
$
|
149
|
$
|
5
|
$
|
144
|
|
$
|
151
|
$
|
8
|
$
|
143
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
Results
|
For the three months
ended
|
For the six months
ended
|
($
millions)
|
January 31,
2022
|
|
April 30,
2021
|
April 30,
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
|
$
|
1,648
|
$
|
(40)
|
$
|
1,688
|
|
$
|
1,662
|
$
|
44
|
$
|
1,618
|
|
$
|
3,450
|
$
|
178
|
$
|
3,272
|
Non-interest
income
|
|
749
|
|
(4)
|
|
753
|
|
|
716
|
|
24
|
|
692
|
|
|
1,489
|
|
77
|
|
1,412
|
Total
revenue
|
|
2,397
|
|
(44)
|
|
2,441
|
|
|
2,378
|
|
68
|
|
2,310
|
|
|
4,939
|
|
255
|
|
4,684
|
Provision for credit
losses
|
|
274
|
|
(9)
|
|
283
|
|
|
396
|
|
10
|
|
386
|
|
|
921
|
|
54
|
|
867
|
Non-interest
expenses
|
|
1,275
|
|
(27)
|
|
1,302
|
|
|
1,283
|
|
29
|
|
1,254
|
|
|
2,672
|
|
121
|
|
2,551
|
Income tax
expense
|
|
211
|
|
(3)
|
|
214
|
|
|
183
|
|
5
|
|
178
|
|
|
344
|
|
17
|
|
327
|
Net
income
|
$
|
637
|
$
|
(5)
|
$
|
642
|
|
$
|
516
|
$
|
24
|
$
|
492
|
|
$
|
1,002
|
$
|
63
|
$
|
939
|
Net income attributable
to non-controlling interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
in
subsidiaries
|
$
|
85
|
$
|
(2)
|
$
|
87
|
|
$
|
87
|
$
|
6
|
$
|
81
|
|
$
|
175
|
$
|
15
|
$
|
160
|
Net income attributable
to equity holders of the Bank
|
$
|
552
|
$
|
(3)
|
$
|
555
|
|
$
|
429
|
$
|
18
|
$
|
411
|
|
$
|
827
|
$
|
48
|
$
|
779
|
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
May 25, 2022, at 7:15 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 7409796# (please call shortly before
7:15 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 May 25, 2022, to July 1,
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