The Bank of Nova Scotia on Tuesday announced a few moves to reward its shareholders after the country’s banking regulator lifted its ban on dividend increases and stock repurchases from the pandemic.
Scotia said it would benefit from the newly gained freedom by raising its quarterly dividend by 11 percent to $ 1.00 per share. share and launch a program to repurchase up to 24 million of its shares. These measures were made possible after the Office of the Superintendent of Financial Institutions said on November 4 that it had ended a temporary ban on dividend increases and buybacks designed to protect the financial system from the ravages of COVID-19.
And those shareholder-friendly announcements landed on Tuesday along with an increase in profits for the full year and the fiscal fourth quarter.
The Bank of Nova Scotia said it earned $ 9.96 billion in fiscal year 2021, compared to $ 6.85 billion in 2020.
For the fiscal fourth quarter, which ended October 31, Scotia’s net income rose to $ 2.56 billion from nearly $ 1.9 billion a year earlier. On an adjusted basis, the bank earned $ 2.10 per share. shares; analysts expected $ 1.91 on average.
“Overall, we believe Scotia reported a solid quarter, but we expect its return on capital to still fall to the lower end of its peers as the rest of the group reports through the week,” Barclays capital analyst John Aiken said in a report to customers.
Scotia benefited from a continued improvement in credit quality over the past quarter, as total provisions for loan losses fell to $ 168 million from $ 380 million in its taxable third quarter.
Profits from the bank’s extensive international activities more than doubled during the quarter to $ 528 million from $ 263 million the year before.
Meanwhile, Scotia’s Canadian core banking division saw its profits rise 59 percent year-on-year to $ 1.24 billion amid a $ 96 million release that had previously been set aside for bad loans.
Profit growth was more subdued in the bank’s other divisions. Scotia’s net income from global banks and markets rose nine percent year-on-year to $ 502 million, while wealth management earnings rose 19 percent to $ 387 million.
“Our diversified business model has demonstrated its resilience through the pandemic, and the bank is well positioned to achieve its full earning capacity in the coming year,” said Brian Porter, Scotia’s President and CEO, in a statement.
“As we look forward to 2022, we expect to deliver strong growth across all our business areas, with choices and more opportunities to grow.