Bank of Nova Scotia to Face Charges in Fiscal Fourth Quarter

Bank of Nova Scotia, one of Canada's largest banks, has announced that its financial results for the fiscal fourth quarter will be impacted by several charges, including a reduction in its global workforce by approximately 3%. These charges are expected to amount to about CAD 590 million ($432.2 million), or CAD 0.49 per share. The bank also expects a decrease of approximately 10 basis points in its common equity Tier 1 capital ratio.

The restructuring is aimed at driving cost savings and is anticipated to yield full benefits by fiscal 2025. Notable factors contributing to the charges include digitization, automation, changes in customers' banking preferences, and ongoing efforts to streamline operational processes. Additionally, costs related to the consolidation and exit from certain real estate premises and service contracts are expected to reach CAD 63 million.

Furthermore, Bank of Nova Scotia will incur impairment charges of CAD 280 million for its investment in associate corporation Bank of Xi'an Co., whose market value has consistently lagged behind the bank's carrying value. The impairment charges will also account for certain intangible assets, including software.

Analysts had previously projected net income of CAD 2.12 billion for the fiscal fourth quarter, equivalent to about CAD 1.73 per share. This estimate reflects a decline from the previous quarter's net income of CAD 2.09 billion, or CAD 1.63 per share. The bank plans to release its quarterly results on November 28.