Scotiabank Reports Third-Quarter Profit Decline

(Reuters) – Canada’s Bank of Nova Scotia reported a decline in third-quarter profit on Tuesday as the lender increased provisions for rainy-day funds compared to the previous year, reacting to potential credit losses in an uncertain economy.

Elevated borrowing costs and recession fears have heightened the risk of customer loan defaults. In preparation for possible credit card and other delinquencies, lenders are enhancing their buffers to protect against potential loan losses.

Scotiabank’s provision for credit losses rose to C$1.05 billion, up from C$819 million a year earlier.

Net income for the three months ending July 31 was C$1.91 billion (equivalent to $1.42 billion), or C$1.41 per share. This contrasts with the prior year’s profit of C$2.19 billion or C$1.70 per share.

($1 = 1.3467 Canadian dollars)