Bank of Nova Scotia

beat analysts’ fourth-quarter expectations after posting higher profits in its global banking and markets segment on Tuesday.

The bank also said it recorded a “restructuring charge and severance provisions” as well as other related charges worth $373 million primarily due to workforce reductions across its global operations.

“These amounts reflect actions taken by the bank to simplify its organizational structure in Canadian Banking, restructure and right-size Asia operations in Global Banking and Markets and regionalize activities across its international footprint,” the bank said in a statement on Tuesday.

The move will help free up capacity to further invest in “technology and revenue-generating sales staff to propel future growth,” chief executive Scott Thomson said during a call with analysts on Tuesday.

“While these types of decisions are always difficult, they are nevertheless necessary as we work to boost the value of the Canadian bank,” he said. “We do not anticipate additional charges, but will remain focused on running our bank as efficiently as possible, including taking full advantage of emerging technologies.”

Thomson also expects Canada’s “renewed focus” on natural resource development to boost the economy and “improve national prosperity” in the medium term. He said the recent energy deal between the federal government and Alberta is a “significant development,” one that proves “Canada truly is on a new economic” trajectory.

“This renewed focus also plays into our bank strengths as a trusted provider of capital advice to key sectors such as mining, energy and critical infrastructure,” he said. “We are well-positioned to contribute to the ambitious plans of the major projects office by helping our clients drive forward large-scale infrastructure projects.”

Scotiabank’s net income for the three months ending Oct. 31 was $2.2 billion, compared to $1.7 billion during the same period a year ago, resulting in net earnings per share of $1.65.

The lender’s adjusted net income — which removes the impact of non-recurring items — was $2.6 billion, compared to $2.2 billion a year ago, resulting in adjusted earnings per share of $1.93, which was above analysts’ expectations of about $1.85 per share.

For fiscal year 2025, Scotiabank reported net income of $7.78 billion compared to $7.9 billion last year, resulting in earnings per share of $5.67. Its annual adjusted net income was $9.5 billion compared to $8.63 last year, or earnings per share of $7.09.

“We delivered improving results through the year as we strengthened our balance sheet,” Thomson said in a statement on Tuesday. “This quarter, all our business lines reported year-over-year earnings growth with particular strength in Global Wealth Management and Global Banking and Markets and improving results in Canadian Banking.”

Scotiabank’s earnings in its Canadian Banking segment increased one per cent year over year to $942 million, while its international banking segment generated earnings of $638 million, up five per cent.

Its Global Wealth Management and Global Banking and Markets segments grew by 17 per cent and 50 per cent, respectively, due to strong revenue from higher mutual fund fees, brokerage revenues, capital markets and business banking.

“We are making clear progress towards achieving our key priorities, including being disciplined in our capital allocation, prioritizing value over volume, earning primary clients and seeking out ways to work better, faster, safer and at a lower cost,” Thomson said.

Provisions for credit losses, or the amount of money the bank keeps aside for potentially bad loans, increased to $1.11 billion in the fourth quarter, compared to $1.03 billion a year ago and $1.04 billion in the third quarter.

“Scotiabank kicked off the Canadian bank earnings with a solid beat that centred on strength from both wealth and capital markets,” John Aiken, an analyst at Jefferies Inc., said in a note to clients on Tuesday. “Earnings in its retail banking segments saw headwinds sequentially from higher provisions and expenses, but we note that lending growth turned positive in its international segment.”

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Matthew Lee, an analyst at Canaccord Genuity Corp., said in a note that Scotiabank’s positive end to the year demonstrated its “improving earnings power.”

All of the Big Six banks are releasing their fourth-quarter results this week, with

Royal Bank of Canada

and National Bank of Canada reporting on Wednesday.

• Email: nkarim@postmedia.com