Scotiabank's shares rose 1.7 percent to C$68.90 in morning trading in Toronto, while BMO dropped 3.3 percent to C$89.33, its lowest since Jan. 7. Banks in Canada are seeing increased credit provisions on elevated household debt-to-income ratios and struggles in the oil and gas sector, while margins and capital markets businesses face pressure from a global economic slowdown and trade uncertainties.
BMO reported a 64.5 percent jump in loan-loss provisions of during the quarter from a year ago. Scotiabank posted a 35 percent rise excluding one-off provisions taken a year earlier, although the level was below analyst expectations.
Although Scotiabank posted slower loan growth than BMO - 6.3 percent vs 12.4 percent - its international business, the biggest among major Canadian banks, drove its performance. That overseas presence for Scotiabank is focused on the Latin American trading bloc comprising Mexico, Peru, Chile and Colombia.
A 14 percent jump in adjusted earnings in Scotia's international business to C$815 million ($613.94 million), compared with 2.9 percent growth in domestic operations to C$1.17 billion, helped lift the results of Canada's third-biggest lender, and offset a 15 percent decline in profit from its global banking and markets unit.
The gains were driven largely by a 28 percent surge in profit in the Chile business, thanks to the acquisition of BBVA Chile, which helped shield Scotia from a 20 percent decline in earnings in Mexico due to lower margins.
Acquisitions made last year, including BBVA Chile, Citibank's Colombian retail operation overseas, a controlling interest in Cencosud Peru, Jarislosky Fraser and MD Financial, will contribute about C$400 million to earnings in 2020, executives said on an analyst call.