Scotiabank (TSX: BNS) reported in Q1 2025 a sharply lower net income of $993 million, down from $2.20 billion in the same quarter last year and below the $1.69 billion earned in the previous quarter. The decline was driven primarily by a $1.36 billion after-tax impairment charge tied to the announced sale of its Colombia, Costa Rica, and Panama operations.
Despite these one-time costs, Scotiabank’s adjusted net income climbed to $2.36 billion, up from $2.21 billion a year ago.
The most significant factor weighing on Scotiabank’s reported results was the sale of several Latin American units, which prompted the impairment charge. This one-time item cut reported earnings per share to $0.66 from $1.68 in the prior-year quarter. By contrast, the bank’s adjusted EPS rose to $1.76, up from $1.69 in Q1 2024.
The impact is evident as quarterly revenue climbed to $9.37 billion in Q1 2025 from $8.43 billion in the comparable period last year and $8.53 billion from prior quarter.
On a per segment basis, Canadian Banking posted adjusted earnings of $914 million, down 6% year-over-year as higher revenues were offset by elevated credit-loss provisions and rising expenses. International Banking also saw a 9% dip in reported adjusted earnings to $657 million.
Global Wealth Management, on the other hand, recorded a 23% jump in adjusted net income to $414 million, while Global Banking and Markets saw its net income jump 33% to $517 million year-on-year.
Provisions for credit losses totaled $1.16 billion, up from $962 million a year ago and higher than the $1.03 billion reported last quarter, attributing this to the increase to credit migration in both retail and commercial portfolios. Impaired loan provisions also rose to $1.06 billion.
The Common Equity Tier 1 capital ratio stood at 12.9%, down 20 basis points from Q4 2024. Management cited the KeyCorp investment and the impairment from its Colombian and Central American banking operations as key contributors.
The bank announced a $1.06 per share dividend payable April 28, 2025, unchanged from the amount declared in the prior quarter.
Scotiabank last traded at $72.23 on the TSX.
Information for this briefing was found via Sedar and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
