Scotiabank hikes dividend amid solid earnings as international banking focus pays off

TORONTO — The Bank of Nova Scotia raised its dividend Tuesday as it reported better-than-expected adjusted profit of roughly $2.275 billion for its first quarter, with strong earnings internationally as well as at home.Scotiabank increased its quarterly payment to common shareholders by three cents per share to 82 cents per share, the third of the big Canadian banks to do so this quarter after CIBC and Royal Bank.On an adjusted basis, Canada’s third-largest lender reported $1.87 earnings per diluted share, up from to $1.58 per diluted share a year ago and higher than the $1.68 per share expected by analysts surveyed by Thomson Reuters.Wealth-hungry Scotiabank to buy investment manager Jarislowsky Fraser for $950MCanadian banks raise prime lending rate to 3.45% in wake of Bank of Canada hikeA year earlier, Scotiabank’s adjusted profit attributable to shareholders was $1.946 billion or $1.58 per diluted share.“All of our businesses delivered strong results, contributing to solid top line growth and a continued improvement in efficiency…. We are pleased with our strong start to the year,” said Brian Porter, Scotiabank’s president and chief executive, in a statement.The lender’s Canadian banking division reported net income attributable to shareholders of $1.1 billion, up 12 per cent compared to the same period a year earlier.Scotiabank’s Canadian residential mortgage portfolio was $208 billion, up roughly 6.7 per cent from $195 billion a year earlier. For comparison, the bank saw 2.6 per cent growth in its domestic residential mortgage portfolio in the fiscal first quarter of 2017, up from $190 billion in the first quarter of 2016.The Canadian banks’ mortgage portfolios are being closely watched for any impact from new stiffer rules for uninsured mortgages introduced on Jan. 1. The revised underwriting guidelines require would-be homebuyers with a 20 per cent down payment or larger to prove they can continue to make their mortgage payments if interest rates rise. Banking executives have signalled that these new rules could act as a headwind to the business. CIBC and RBC executives said last week that it is too early to tell what impact the new rules have had thus far.Meanwhile, earnings attributable to shareholders in Scotiabank’s international banking division was up 16 per cent year-over-year to $667 million, as Scotiabank continues to focus its expansion efforts on the Pacific Alliance countries of Chile, Colombia, Mexico, and Peru.“The strong momentum in our business was driven by double-digit growth in loans in the Pacific Alliance countries, positive operating leverage and good credit quality,” Porter said in a statement.Its global banking and markets division, however, reported net income attributable to shareholders of $454 million, marking a decrease of $15 million or three per cent from the same period a year earlier.The bank’s common equity tier 1 ratio (CET1), a key measure of financial health, was 11.2 per cent, down from 11.3 per cent a year ago and 11.5 per cent in the previous quarter.Scotiabank’s provisions for credit losses, or money set aside for bad loans, dropped slightly in the latest quarter to $544 million, compared with $553 million a year earlier. However, this quarter was the first to reflect a new accounting standard, known as IFRS 9. The new standards puts a greater emphasis on a banks’ expected losses over the life of the loan, and in turn, introduces more volatility to the measure. read more

Court OKs deal to settle classaction lawsuit filed after tainted beef recall

EDMONTON – An Alberta court has approved a $4-million settlement of a class-action lawsuit filed after an E. coli outbreak that sparked the largest meat recall in Canadian history.The lawsuit was against XL Foods Inc., which operated a meat-packing plant in southern Alberta during the tainted beef recall in the fall of 2012.Lawyer Clint Docken said hundreds of people in Canada and the United States could apply for a share of the award by the Aug. 17 deadline.“Now it is all settled and there is the consumer component and the injury component,” he said Wednesday.“People who threw out the product can apply to get their money back and people who ate the product and got sick can apply for compensation for their injury.”Under the agreement, which refers to possible E. coli contamination, XL Foods does not accept any wrongdoing or liability.Company officials could not immediately be reached for comment.During the outbreak, health officials confirmed that 18 people in Canada tested positive for a specific strain of E. coli bacteria linked to meat from the company’s plant in Brooks, Alta.XL Foods recalled more than 1.8 million kilograms of beef in Canada and the United States.The plant in Brooks was later sold to JBS Canada.Under the distribution rules of the settlement, provincial health insurers can file claims to recover health-care costs.Lawyers involved in the lawsuit said the class action highlights the importance of food safety and holding companies accountable.“Food safety is of significant concern. Every week it seems there is a recall,” Docken said.“We are hoping in the light of this particular case that there will be more awareness out there on the part of food producers.” by John Cotter, The Canadian Press Posted Feb 17, 2016 11:00 am MDT Last Updated Feb 17, 2016 at 12:40 pm MDT AddThis Sharing ButtonsShare to TwitterTwitterShare to FacebookFacebookShare to RedditRedditShare to 電子郵件Email Court OKs deal to settle class-action lawsuit filed after tainted beef recall read more