The Bank of Nova Scotia (BNS) Q3 2022 Earnings Call Transcript

For the period ending July 31, 2022

August 23, 2022 8:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

John McCartney

Good morning, and welcome to Scotiabank's 2022 Third Quarter Results Presentation. My name is John McCartney, and I'm Head of Investor Relations here at Scotiabank. Presenting to you this morning are Brian Porter, Scotiabank's President and Chief Executive Officer; Raj Viswanathan, our Chief Financial Officer; and Phil Thomas, our Chief Risk Officer.

Following our comments, we'll be glad to take your questions. Also present to take questions are the following Scotiabank executives: Dan Rees from Canadian Banking; Glen Gowland from Global Wealth Management; Nacho Deschamps from International Banking; and Jake Lawrence from Global Banking and Markets.

Before we start, on behalf of those speaking today, I'll refer you to slide two of our presentation, which contains Scotiabank's caution regarding forward-looking statements.

And with that, I will now turn the call over to Brian.

Brian Porter

Thank you, John, and good morning, everyone. This morning, Scotiabank announced third quarter earnings of $2.6 billion, or $2.10 per share, representing a 4% year-over-year increase. Strong personal, commercial and corporate banking activity resulted in another quarter of solid earnings in a period where market sensitive businesses were challenged globally.

The bank's trading revenues within GBM and GBM LatAm were down over $250 million year-over-year and $150 million quarter-over-quarter due to lower client activity. Asset growth of 13% year-over-year and strong credit quality, combined with prudent expense management, positions the bank well for continued earnings growth. The macroeconomic backdrop of our key geographies remains positive, as economies begin to stabilize following on a unique confluence of circumstances.

In Canada, we see the strength of the labor market as an important counterbalance to the impact of inflation and consumer confidence. In the Pacific Alliance countries, growth is moderating somewhat from the rapid post-pandemic GDP recovery experienced over the last year. Central banks in the region have acted quickly and decisively to-date to control inflation.

Our credit outlook remains favorable, a result of our high-quality, highly secured portfolio. Delinquencies and write-offs have continued to trend positively, which in absolute terms are lower than our pre-pandemic experience.

We are closely monitoring customer balance sheets and spending behavior for early signs of stress and the impact of recent inflationary pressure on the daily cost of living. Despite our current experience and confidence in the strength of our portfolio, we have made conservative adjustments to reflect the possibility of future economic outcomes, resulting in higher PCLs in the international retail division this quarter.