October 1, 2022
Canada's Scotiabank, BMO beat profit forecasts but see challenges ahead

TORONTO, May 25 (Reuters) – Bank of Nova Scotia (BNS.TO) and Bank of Montreal (BMO.TO) reported better-than-expected second-quarter profits but forecast higher expenses and loan-loss provisions and slower mortgage growth, due to the impact of rising inflation and interest rates and a challenging economic environment.

Loan growth and credit quality were strong for both Canadian banks in the three months through April, driving higher revenues and lower provisions for credit losses (PCLs) from a year ago even as capital markets earnings pulled back due to recent market turmoil.

Shares of Scotiabank, whose adjusted earnings of C$2.18 per share handily beat expectations of C$1.96, jumped 3.7% to C$84.44 in morning trading in Toronto, compared with the broader stock benchmark’s 1.1% gain (.GSPTSE). read more

Both banks alluded to economic uncertainties on their calls with analysts, and said that while risks remain low, they expect some increases in PCLs and expenses.

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