Scotiabank Reports Fourth Quarter and 2015 Results
Scotiabank Reports Fourth Quarter and 2015 Results
TORONTO, ONTARIO–(Dec. 1, 2015) – Scotiabank (TSX:BNS)(NYSE:BNS)
Scotiabank’s 2015 audited annual consolidated financial statements and accompanying Management’s Discussion & Analysis (MD&A) are available at www.scotiabank.com along with the supplementary financial information and regulatory capital disclosure reports, which includes fourth quarter financial information. All amounts are in Canadian dollars and are based on our audited annual consolidated financial statements and accompanying MD&A for the year ended October 31, 2015 and related note prepared in accordance with International Financial Reporting Standards (IFRS), unless otherwise noted.
Additional information related to the Bank, including the Bank’s Annual Information Form, can be found on the SEDAR website at www.sedar.com and on the EDGAR section of the SEC’s website at www.sec.gov.
| Fiscal 2015 Highlights (versus Fiscal 2014 on a reported basis) | Fiscal 2015 Highlights (versus Fiscal 2014 adjusted for the 2014 notable items(1)) | |||
| • | Net income of $7,213 million, compared to $7,298 million | • | Net income of $7,213 million, compared to $7,008 million, up 3% | |
| • | Diluted earnings per share (EPS) of $5.67 compared to $5.66 | • | EPS of $5.67 compared to $5.43, up 4.4% | |
| • | Return on Equity (ROE) of 14.6%, compared to 16.1% | • | ROE of 14.6%, compared to 15.5% | |
| • | Annual dividends per share of $2.72 compared to $2.56, an increase of 6% | |||
| Fourth quarter Highlights (versus Q4 2014 on a reported basis) | Fourth quarter Highlights (versus Q4 2014 adjusted for the 2014 notable items(2)) | |||
| • | Net income of $1,843 million, compared to $1,438 million, up 28% | • | Net income of $1,843 million, compared to $1,703 million, up 8% | |
| • | EPS of $1.45 compared to $1.10, up 32% | • | EPS of $1.45 compared to $1.32, up 10% | |
| • | ROE of 14.2%, compared to 11.9% | • | ROE of 14.2%, compared to 14.4% | |
Fiscal 2015 performance versus medium-term objectives:
The Bank’s performance in 2015 with respect to its medium-term financial and operational objectives was as follows (comparison to 2014 performance excluding the 2014 notable items(1) is reflected in parentheses):
- Earn an ROE of 15% to 18%. For the full year, Scotiabank earned an ROE of 14.6%
- Generate growth in EPS of 5% to 10%. The year-over-year EPS growth was flat (growth of 4.4%)
- Maintain positive operating leverage. Scotiabank’s performance was negative 1.5% (negative 0.7%)
- Maintain strong capital ratios. Scotiabank’s capital position remains strong with a Common Equity Tier 1 ratio of 10.3%.
| (1) | Fiscal 2014 included a net benefit of $290 million or +23 cents per share related to notable items. Refer to 2014 notable items table below. |
| (2) | Q4 2014 included a net charge of $265 million or -22 cents per share related to notable items, as the $555 million gain on sale of CI Financial Corp. was recognized in Q3 2014. |
Scotiabank reported net income of $7,213 million in 2015, compared with net income of $7,298 million in 2014 or $7,008 million after adjusting for the 2014 notable items. Earnings per share (diluted) were $5.67, in line with last year or up 4.4% on an adjusted basis.
Scotiabank reported net income for the fourth quarter ended October 31, 2015 of $1,843 million, compared to $1,438 million for the same period last year. Diluted earnings per share (EPS) were $1.45, up 32% compared to $1.10 last year. Return on equity was 14.6%. Adjusting for the 2014 notable items, net income was up 8% and EPS growth was 10%. A quarterly dividend of 70 cents per common share was announced.
“The Bank’s earnings growth in 2015 was driven by very good performances in our personal, commercial and wealth businesses, both in Canada and internationally,” said Brian Porter, President and CEO. “The Bank continues to perform well, given challenging conditions in certain businesses and markets, and we are well-positioned, including throughout the Pacific Alliance countries, for future growth.”
“Canadian Banking had a very strong year. Delivering valued advice and products to our more than 10 million retail and commercial customers resulted in good core growth in both assets and deposits. Continued growth in our commercial banking, wealth management and retail payments strengthened many existing customer relationships, as well as improving our asset and deposit mix.
“International Banking also delivered very strong results, particularly in the second half of the year. While economic growth has moderated in some key markets, we continue to gain profitable market share throughout the key Pacific Alliance region which recorded very strong asset and deposit growth. As well, the Caribbean and Central America’s performance improved over the course of 2015 as a result of management actions to optimize operations in the region, as well as an improving economic backdrop.
“With two dividend increases, we increased our returns to shareholders by 6% this year. Our strong capital position at 10.3%, allows us to continue to make the necessary investments while also growing our businesses and making selective acquisitions.
“The Bank’s efforts continue to be centred on being more customer focused and enhancing customer experience. For this past year, strategic investments in technology were made across the entire Bank to deliver a more seamless customer experience and to drive growth. In 2016, further investment in technology will continue to digitally transform the Bank, position us for even greater growth and contribute to the creation of long-term shareholder value.”
Other Developments
Several Executive appointments have been made, subsequent to the end of the quarter. Ignachio ‘Nacho’ Deschamps has been appointed Strategic Advisor to the President and CEO, Global Digital Banking, effective January 4, 2016. Mr. Deschamps is a global banking leader with extensive experience in key Latin America markets and Europe. In addition, the following internal appointments have been made, effective December 1, 2015: Sean McGuckin, Group Head and Chief Financial Officer, with Group Treasury now reporting to Mr. McGuckin; Barb Mason, Group Head and Chief Human Resources Officer, with Real Estate now reporting to Ms. Mason; James Neate, Executive Vice President, International Corporate and Commercial Banking; Gillian Riley, Executive Vice President, Canadian Commercial Banking; Mike Henry, Executive Vice President, Retail Payments, Deposits and Unsecured Lending; John Doig, Executive Vice President and Chief Marketing Officer.
Non-GAAP Measures
The Bank uses a number of financial measures to assess its performance. Some of these measures are not calculated in accordance with Generally Accepted Accounting Principles (GAAP), which are based on International Financial Reporting Standards (IFRS), are not defined by GAAP and do not have standardized meanings that would ensure consistency and comparability between companies using these measures. These non-GAAP measures are used throughout this press release and are defined in the “Non-GAAP Measures” section of the Bank’s 2015 Annual Report.
