Scotia Reports 11.5% Increase in Net Profit Due to Rise in Non-core Revenues

  • For the 6-month period ending April 2021, Scotia Group reported a net profit of $4.48Bn (EPS: $1.44), which translates to an 11.5% (or $462.73Mn) increase over the same period in 2020. 
  • The outturn was driven by a 5.8% rise in total operating income on the back of a $1.00Bn rise in net gains on foreign currency activities, given higher trading volumes and revaluation gains. Other revenue, which grew by $969.70Mn due to gains realized on extinguishable debt securities, also influenced the improvement in the bottom-line. 
  • Despite the positive outturn in the company’s bottom-line, net interest income, net fee & commission income and insurance revenue, contracted year-over-year by 9.4%, 11.5% and 30.3%, respectively. This performance reflects the lingering effects of the current economic conditions of the financial sector evidenced by lower transaction volumes as well as low market interest rates. 
  • Since the start of the year, Scotia’s stock price has decline by 8.0% to $40.57 per share. At this price, the stock trades at a P/E ratio of 13.3x earnings, which is below the main market financial sector average of 17.9x earnings.

(Source: Company Financials)