With a robust mortgage segment and a surging international banking arm, the Bank of Nova Scotia saw its net income rise to $1.98 billion in the quarter ending July 31.
As of the beginning of Q2 2019, the bank said that its $205-billion-plus mortgage business is significantly buffered against the worst effects of a possible downturn.
At the time, Scotiabank CEO Brian Porter expressed confidence in their profitable and “extremely well diversified” portfolio. Much of the strength stems from the fact that the bank’s mortgages are 42% insured, with the remainder’s loan-to-value ratio at approximately 54%.
“There are always going to be those who take an opposing view, and we'll prove them wrong in the long term,” he assured.
Porter added that a crucial component of the bank’s readiness is its regular testing of its mortgage portfolio against “very harsh metrics” like a massive increase in unemployment and a drastic 600-basis-point interest rate hike.
On top of these, Scotiabank’s vigorous drive into the Latin America and U.S. markets yielded positive results in the fiscal third quarter. During this period, the international banking division enjoyed $902 million in earnings, a massive 90% year-over-year increase.
This translated to earnings of $1.88 a share, outstripping analysts’ average estimate of $1.85. Adjusted profit also went up by 20%. Among Scotiabank’s main units, this represented the largest upward movement during the quarter, Bloomberg reported.