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Scotiabank profit beats estimates on lower provisions, Canada, wealth growth

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TORONTO, Nov 30 (Reuters) - Bank of Nova Scotia (Scotiabank) (BNS.TO) reported kicked off fourth-quarter reporting on Tuesday with better-than-expected profit, as strength in its Canadian and wealth management units and lower provisions in its international business offset weaker capital markets performance and continued margin pressure.

Canada's third-largest lender also announced a dividend of C$1 a share, up from the 90 Canadian cents it has paid in the last eight quarters, the first major bank to do so following the lifting of restrictions by the country's financial regulator earlier this month. read more

Canadian banks and investors have been hoping for an improvement in non-mortgage lending, as earnings beats over past quarters have been driven by the release of loan-loss reserves set aside last year, and home loans. read more

Scotiabank took provisions of C$168 million during the quarter, down from C$1.1 billion a year ago. Excluding the impact of provisions and taxes, the bank posted adjusted profit of C$3.6 billion, up 4% from a year ago.

While net interest income in Canada did rise 7% due to stronger lending, it was tempered by a decline in margins, as loan growth remained skewed to residential mortgages, which have lower rates.

Margins also fell in the international business, despite policy rate hikes in some of the countries the bank does business in, also due to the loan mix.

Higher fees lifted earnings in both Canadian banking and wealth management, helping offset weakness in its capital markets unit.

Net income excluding one-off items rose to C$2.72 billion ($2.13 billion), or C$2.10, in the three months ended Oct. 31, compared with C$1.9 billion, or C$1.45, a year earlier. Analysts had expected C$1.90 a share, according to IBES data from Refinitiv.

($1 = 1.2766 Canadian dollars)

Reporting by Nichola Saminather in Toronto and Manya Saini in Bengaluru; Editing by Shinjini Ganguli and Bernadette Baum
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