Scotiabank exceeds targets on record full year and solid fourth quarter results
biz.yahoo.com
Friday December 8, 11:26 am ET
Fiscal 2006 Highlights (year over year) - Earnings per share (diluted) of $3.55 rose 13% from $3.15 - Net income available to common shareholders of $3,549 million, up from $3,184 million - ROE of 22.1%, versus 20.9% - Productivity ratio of 55.3%, an improvement from 56.3% last year - Annual dividends per share increase of 18 cents or 14% to $1.50
Fourth Quarter Highlights (versus Q4, 2005) - Earnings per share (diluted) of $0.89, rose 11% from $0.80 - Net income available to common shareholders of $890 million, up 11% from $803 million - ROE of 21.1%, versus 20.5% - Productivity ratio of 56.9%, versus 57.8% - A further quarterly dividend increase of 3 cents was announced, taking the quarterly dividend per common share to $0.42 cents, payable in January 2007
TORONTO, Dec. 8 /PRNewswire-FirstCall/ - Scotiabank exceeded all of its key financial and operational targets in achieving record earnings in 2006, with net income available to common shareholders of $3,549 million. Earnings per share (EPS) (diluted) were $3.55, in comparison to $3.15 in 2005. Return on equity (ROE) reached its highest level in recent years at 22.1%, compared to 20.9% last year.
Scotiabank also delivered solid results for the fourth quarter ended October 31, 2006, with net income available to common shareholders of $890 million, up 11% from the same period last year. EPS (diluted) rose to $0.89, from $0.80 a year ago. ROE was 21.1%.
"Our strategy of diversifying across businesses and geographies has once again allowed us to achieve record results and exceed all of our key financial targets for 2006," said Rick Waugh, President and CEO. "For the first time, all three business lines - Domestic Banking, Scotia Capital and International Banking - each contributed more than $1 billion in annual net income. Stable credit quality also contributed to our strong results this year.
"For the second year in a row, a major contributor to the Bank's success was a substantial increase in assets, which rose 21% to $379 billion. Our overall loan portfolio rose 19% over 2005, led by significant growth in domestic residential mortgages with a solid contribution from the Bank's expanded broker channel, mainly through the acquisition of the mortgage business of Maple Financial Group. Scotia Capital and International Banking also experienced solid growth in asset levels, with increases in corporate lending, continued strong mortgage growth in Mexico and the impact of acquisitions in Peru and Costa Rica. In addition, Scotiabank added approximately 1.9 million customers during the past year, mainly through acquisitions.
"Domestic Banking had strong market share gains in several categories and Scotia Capital had a record year driven by increases in customer activity in the derivatives, fixed income and precious metals markets and a strong contribution from the M&A team.
"International Banking continues to set us apart from our peers. Revenue rose by 17% compared to 2005, due to contributions from recent acquisitions in Peru, El Salvador and Costa Rica, the purchase of a consumer lending portfolio in the Dominican Republic, and strong growth in transaction volumes and asset levels in Mexico and the Caribbean.
"This year's success across all business lines allowed us to earn through a compression in the interest margin due primarily to higher funding costs and the negative impact of foreign currency translation.
"Our strong capital ratios have enabled us to provide shareholders with two quarterly dividend increases this year, leading to a year-over-year increase of 14%. We intend to continue to use our capital in a disciplined manner to pursue strategic growth opportunities.
"These results reflect our core strengths of risk management and cost control. We continue to effectively execute the Bank's risk and portfolio management strategies and to achieve an industry-leading productivity ratio. This year's increase in expenses was carefully targeted at investments needed to ensure future growth in each of our businesses.
"I am also proud to note that Scotiabank has been named 'Bank of the Year in Canada' for the fourth time in six years by the prestigious international magazine The Banker, based on financial performance, technology innovation and corporate strategy."
The Bank exceeded all of its key financial and operational objectives this year as follows:
1. OBJECTIVE: Generate growth in EPS (diluted) of 5 to 10% per year. Our
year-over-year EPS growth was 12.7%.
2. OBJECTIVE: Earn a return on equity (ROE) of 18 to 22%. For the full
year, Scotiabank earned an ROE of 22.1%.
3. OBJECTIVE: Maintain a productivity ratio of less than 58%.
Scotiabank's performance was 55.3%.
4. OBJECTIVE: Maintain strong capital ratios. At 10.2%, Scotiabank's
Tier 1 capital ratio remains among the highest of the Canadian banks
and strong by international standards.
"Looking ahead to 2007, we will continue to achieve sustainable revenue growth through organic growth and strategic acquisitions across our three business lines," Mr. Waugh said. |
