Scotiabank Misses Earnings Estimates Amid Trade Uncertainties

The Bank of Nova Scotia failed to meet earnings expectations this quarter, with the increased allocation for bad loans weighing heavily on its financial results. Scotiabank's core Canadian banking unit experienced a 31% drop in net income, primarily attributed to the rise in loan loss provisions amid heightened trade tensions.

U.S. President Donald Trump's trade policies continue to cast a shadow over Canada's economic landscape. However, analysts are hopeful as newly elected Prime Minister Mark Carney plans to introduce pro-business reforms. Scotiabank CEO Scott Thomson emphasized that although political stability has improved, consumer and business sentiments remain weak, potentially stifling immediate loan and capital market expansion.

Despite setting aside C$1.40 billion for potential loan losses, significantly more than the C$1.22 billion analysts anticipated, Scotiabank's broader outcomes remain favorable, buoyed by its first dividend hike in two years. The bank's shares rose by 1% in Toronto, with strategic focuses shifting under Thomson towards the North American trade corridor, resulting in a 6% jump in international profits and a 10% increase in global banking returns.

(With inputs from agencies.)