Scotiabank Profit Falls as Higher Costs Offset Improved Revenue
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Key TakeawaysThe Bank of Nova Scotia on Tuesday reported third-quarter profit below what analysts expected, with elevated costs offsetting improved revenue.Revenue rose nearly 4% year-over-year, but profit dropped roughly 13% due to the higher costs and provisions for credit losses.Scotiabank CEO Scott Thomson noted the bank's recent investment in KeyCorp as a potential growth opportunity that can improve the company's overall profitability.
The Bank of Nova Scotia (BNS) on Tuesday reported higher third-quarter revenue but lower profit than last year, as its costs and provisions for credit losses (PCL) rose.The nearly 4% year-over-year bump in revenue to 8.36 billion Canadian dollars ($6.21 billion) was almost entirely due to a nearly C$300 million rise in net interest income (NII). Both revenue and profit fell short of analysts' consensus estimates compiled by Visible Alpha.Higher Costs, PCL Drive Income LowerDespite the higher revenue, Scotiabank faced higher costs and set aside more money to account for potential credit losses, leading the bank's profits to drop by nearly 13% to C$1.91 billion.Scotiabank Chief Executive Officer (CEO) Scott Thomson said the bank faced a "continued challenging environment" in the quarter.Thomson also noted the bank's recent investment in KeyCorp (KEY) as a project that can "enhance near-term profitability, grow and diversify our well-established U.S. business, and create future strategic optionality for Scotiabank as we expand our presence in the North American corridor."Scotiabank shares rose almost 3% to $49.93 as of 10:45 a.m. ET Tuesday to move into positive territory for the year. Read the original article on Investopedia.
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