Scotiabank Stock Wavers On Slim NII Growth, Asset Quality Dip: Retail Sentiment Sinks To 1-Year Low

Scotiabank reported a 5.5% rise in net interest income (NII) to C$4.92 billion (US$3.51 billion) while non-interest income witnessed a minor drop to C$3.6 billion.

NYSE-listed shares of Bank of Nova Scotia (BNS) fell over 1% in Tuesday’s pre-market session after the Canadian lender reported its fourth-quarter earnings.

Scotiabank reported a 5.5% rise in net interest income (NII) to C$4.92 billion (US$3.51 billion), while non-interest income witnessed a minor drop to C$3.6 billion. Total revenue rose 3% YoY to C$8.53 billion.

Adjusted earnings per share (EPS) rose to C$1.57 compared to C$1.23 in the same period a year ago. Net income attributable to common shareholders rose 25% YoY to C$1.52 billion during the quarter.

Asset quality deteriorated, with net impaired loans rising 22% YoY to C$4.685 billion during the quarter. Allowance for credit losses rose marginally to C$6.736 billion. Gross impaired loans as a percentage of loans and acceptances rose to 0.88% compared to 0.74% in the same quarter a year ago.

Net impaired loans as a percentage of loans and acceptances rose to 0.61% compared to 0.50%.

CEO Scott Thomson said 2024 was a foundational year for Scotiabank as it launched and made early progress against its new strategy.

"While I am encouraged by our strategic progress to date, there is significant work ahead as we focus on client primacy initiatives to drive enhanced profitability across our businesses. I am confident that we are on track to achieve the targets we laid out at our Investor Day for 2025,” he said.

The bank announced a dividend of C$1.06 per share.

Following the report, retail sentiment on Stocktwits dipped into the ‘extremely bearish’ territory (24/100) from ‘neutral’ a day ago, hitting a one-year low. The move was accompanied by ‘extremely high’ retail chatter.

One user believes the stock could dip below the $55 mark on Tuesday.

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Exchange Rate: 1 Canadian Dollar = 0.71 U.S. Dollar<