Bank of Nova Scotia (BNS 56.91, +0.51) has added 0.9% after reporting mixed results for the second quarter.
Canada's third largest bank reported above-consensus second quarter earnings of CAD1.62 per share on revenue of CAD6.58 billion, which ticked down 0.2% year-over-year and was shy of market expectations.
Bank management was satisfied with the performance of all three of its segments. Strength in International Banking was fueled by improving margins, positive operating leverage, and stronger credit performance. Canadian Banking benefited from asset and deposit growth while Global Banking and Markets enjoyed a strong all-around quarter with improvement in credit quality.
Common Equity Tier 1 Capital ratio increased to 11.3% from 10.1% one year ago. Leverage ratio increased to 4.4 from 4.1 one year ago. Provision for credit losses declined to CAD587 million from CAD752 million, as lower commercial provisions in the energy sector were offset by an increase in retail provisions in Canada Banking and International Banking.
Growing concerns about the health of Canada's housing market prompted a modest increase in the provision for credit losses as percentage of loans, which increased to 0.31% from 0.30% in the previous quarter and 0.28% one year ago. Assets under management grew to $155 billion from $137 billion while Return on Equity decreased to 22.5% from 23.1% one year ago.