TORONTO - Scotiabank's fourth-quarter net income fell 14 per cent from last year to $1.438 billion as it recognized severance expenses for a downsizing and other items that the bank announced last month.
The net income amounted to $1.10 per share, down from $1.676 billion. Excluding the restructuring and certain other items, Scotiabank's net income was $1.703 billion — up two per cent from last year.
The adjusted earnings per share were $1.11 — short of analyst estimates of $1.40 per share, according to data compiled by Thomson Reuters. Net income, before adjustments, was $1.29 per share — also short of estimates.
Total revenue during the quarter ended Oct. 31 was $5.747 billion, up from $5.4 billion a year earlier but less than the estimate of $5.8 billion.
The quarter included a restructuring charge totalling $110 million after tax, mostly relating to employee severance as Scotiabank (TSX:BNS) moves to increase efficiency in its domestic operations and reduce the number of branches it has outside Canada.
The bank announced Nov. 4 that it planned to cut 1,500 jobs worldwide — about two-thirds of them in Canada. Its international arm will shut 120 locations but none of the Canadian branches is set to close.
Despite the decline in fourth-quarter profit, Scotiabank's full-year profit for 2014 was up 10 per cent from last year, rising to $7.298 billion and the bank's dividend remains unchanged at 66 cents per common share. Adjusting for notable items, its profit was $7.008 billion, up from $6.52 billion in 2013.
"Over the last year we've taken some important steps to become an even better bank," Scotiabank president and CEO Brian Porter said in a statement Friday.
"We are focused on providing an improved banking experience for our customers while reducing structural costs, in part by simplifying our operating model."
Porter added that Scotiabank's earnings growth will "moderate somewhat" in 2005 due to continuation of low interest rates and ongoing investments in technology and other initiatives.
Canadian banking had $483 million of net income in the quarter, or $556 million before notable items — compared with $555 million in the fourth quarter of 2013.
"We saw good growth in retail lending volumes, strong growth in fee and commission revenues and improved mortgage spreads which were partly offset by an increase in profivsion for credit losses and expenses," Porter said.
International banking had $316 million of net income, or $344 after adjusting for notable items, down from $455 million. Global Wealth and Insurance generated $327 million, up from $313 million, while Global Banking and Markets had $327 million of net income, down from $337 million in the fourth quarter of 2013.
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