(Bloomberg) — Bank of Nova Scotia reported a record for soured-loan provisions in the fiscal third quarter, the result of its large foreign business, while Bank of Montreal pulled back from a peak set during the early days of the coronavirus pandemic.
Scotiabank’s international-banking unit, which distinguishes Canada’s third-largest lender from its domestic rivals, delivered its first quarterly net loss in 18 years as higher provisions and a loss tied to its stake in a Colombian bank contributed to the company missing analysts’ estimates.
Bank of Montreal, meanwhile, showed resiliency, with record earnings in capital markets and wealth management, along with an easing of provisions from a peak in the previous three months. That helped Canada’s fourth-biggest lender report earnings that beat estimates.
“We have the appropriate defensive positioning for an uncertain environment with our diversified business model, meaningful performing-loan coverage and more capital than we had before Covid-19,” Bank of Montreal Chief Executive Officer Darryl White said on a conference call with analysts Tuesday.
Scotiabank and Bank of Montreal are the first Canadian lenders to report results for the three months through July, a period in which the country’s six biggest banks are expected to see an average profit decline of 30%, according to analysts’ estimates. Bank of Montreal’s net income fell 21%, while Scotiabank’s plunged 34%, giving investors an indication of how the pandemic continues to cause havoc for lenders.
‘Bore the Brunt’
“Scotia’s miss was predicated on higher than forecast provisions as Scotia catches up on its allowances for performing loans,” Barclays Plc analyst John Aiken said in a note to investors Tuesday morning. “International bore the brunt of the impact, with its contribution essentially coming in as nil.”
Loan-loss provisions drove the profit declines at both Toronto-based banks, though even in that area the two deviated. Scotiabank earmarked C$2.18 billion ($1.65 billion) for bad loans — with more than half from its international division — topping the previous record, set in the second quarter. Bank of Montreal set aside C$1.05 billion, less than the prior period’s record, supporting the firm’s earlier view that its allowances are “appropriate” for navigating the crisis.
Scotiabank executives said during a conference call Tuesday that the third quarter marks the “peak” for loan-loss provisioning, with the bank seeing improvements ahead from what CEO Brian Porter called “a trying time for all.”
“We are beginning to see some positive signs which provide cause for optimism as we look ahead,” Porter said on the call. “Today business conditions have begun to slowly improve across our footprint, although many challenges remain due to the timing and uneven impact of the recovery. That said, our outlook today is more positive and has improved.”
Scotiabank shares fell 0.7% to C$56.11 at 3:23 p.m. in Toronto, and have slumped 24% this year, while Bank of Montreal shares climbed 6% to C$81.41, and have dropped 19% since the start of 2020.
Capital Markets
Both banks showed improvements in their wealth-management and capital-markets divisions, thanks in part to increased dealmaking and heightened trading activity.
Scotiabank’s capital-markets division has been showing signs of a turnaround this year after two years of shrinking revenue and profit. Earnings in the unit jumped 60% to a record C$600 million on higher trading revenue and investment-banking fees. Bank of Montreal’s BMO Capital Markets unit regained profitability from its second quarter, as increased trading revenue and fees fueled a 36% jump from a year earlier to C$426 million.
More from Scotiabank’s results:
Canadian banking, the company’s largest operation, had earnings of C$429 million in the quarter, down 53% from a year ago as loan-loss provisions weighed on results.The international division, which has an emphasis on Latin America and the Caribbean, posted a C$28 million loss, after provisions swelled to C$1.28 billion. Excluding the company’s share of a loss in Banco Colpatria in Colombia, which Scotiabank doesn’t control, the division reported a C$26 million profit.Net income fell to C$1.3 billion, or C$1.04 a share, while adjusted earnings also totaled C$1.04 a share, missing the C$1.10 average estimate of 11 analysts in a Bloomberg survey.
More from Bank of Montreal’s results:
Profit at the Canadian banking division fell 51% from a year earlier to C$320 million, while earnings at the U.S. banking unit declined 29% to C$263 million, as loan-loss provisions surged from a year earlier in both regions.Earnings at the wealth-management business jumped 36% from a year earlier to C$341 million.Net income fell to C$1.23 billion, or C$1.81 a share, while adjusted per-share earnings totaled C$1.85, beating the C$1.73 average estimate of 12 analysts in a Bloomberg survey.
(Updates with Scotiabank’s international adjusted results starting in second paragraph.)
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Job seekers owe it to themselves to understand and accept; fundamentally, hiring is a process of elimination. Regardless of how many applications an employer receives, the ratio revolves around several applicants versus one job opening, necessitating elimination.
Essentially, job gatekeepers—recruiters, HR and hiring managers—are paid to find reasons and faults to reject candidates (read: not move forward) to find the candidate most suitable for the job and the company.
Nowadays, employers are inundated with applications, which forces them to double down on reasons to eliminate. It’s no surprise that many job seekers believe that “isms” contribute to their failure to get interviews, let alone get hired. Employers have a large pool of highly qualified candidates to select from. Job seekers attempt to absolve themselves of the consequences of actions and inactions by blaming employers, the government or the economy rather than trying to increase their chances of getting hired by not giving employers reasons to eliminate them because of:
Typos, grammatical errors, poor writing skills.
“Communication, the human connection, is the key to personal and career success.” ― Paul J. Meyer.
The most vital skill you can offer an employer is above-average communication skills. Your resume, LinkedIn profile, cover letters, and social media posts should be well-written and error-free.
Failure to communicate the results you achieved for your previous employers.
If you can’t quantify (e.g. $2.5 million in sales, $300,000 in savings, lowered average delivery time by 6 hours, answered 45-75 calls daily with an average handle time of 3 and a half minutes), then it’s your opinion. Employers care more about your results than your opinion.
An incomplete LinkedIn profile.
Before scheduling an interview, the employer will review your LinkedIn profile to determine if you’re interview-worthy. I eliminate any candidate who doesn’t have a complete LinkedIn profile, including a profile picture, banner, start and end dates, or just a surname initial; anything that suggests the candidate is hiding something.
Having a digital footprint that’s a turnoff.
If an employer is considering your candidacy, you’ll be Google. If you’re not getting interviews before you assert the unfounded, overused excuse, “The hiring system is broken!” look at your digital footprint. Employers are reading your comments, viewing your pictures, etc. Ask yourself, is your digital behaviour acceptable to employers, or can it be a distraction from their brand image and reputation? On the other hand, not having a robust digital footprint is also a red flag, particularly among Gen Y and Gen Z hiring managers. Not participating on LinkedIn, social media platforms, or having a blog or website can hurt your job search.
Not appearing confident when interviewing.
Confidence = fewer annoying questions and a can-do attitude.
It’s important for employers to feel that their new hire is confident in their abilities. Managing an employee who lacks initiative, is unwilling to try new things, or needs constant reassurance is frustrating.
Job searching is a competition; you’re always up against someone younger, hungrier and more skilled than you.
Besides being a process of elimination, hiring is also about mitigating risk. Therefore, being seen as “a risk” is the most common reason candidates are eliminated, with the list of “too risky” being lengthy, from age (will be hard to manage, won’t be around long) to lengthy employment gaps (raises concerns about your abilities and ambition) to inappropriate social media postings (lack of judgement).
Envision you’re a hiring manager hiring for an inside sales manager role. In the absence of “all things being equal,” who’s the least risky candidate, the one who:
offers empirical evidence of their sales results for previous employers, or the candidate who “talks a good talk”?
is energetic, or the candidate who’s subdued?
asks pointed questions indicating they’re concerned about what they can offer the employer or the candidate who seems only concerned about what the employer can offer them.
posts on social media platforms, political opinions, or the candidate who doesn’t share their political views?
on LinkedIn and other platforms in criticizes how employers hire or the candidate who offers constructive suggestions?
has lengthy employment gaps, short job tenure, or a steadily employed candidate?
lives 10 minutes from the office or 45 minutes away?
has a resume/LinkedIn profile that shows a relevant linear career or the candidate with a non-linear career?
dressed professionally for the interview, or the candidate who dressed “casually”?
An experienced hiring manager (read: has made hiring mistakes) will lean towards candidates they feel pose the least risk. Hence, presenting yourself as a low-risk candidate is crucial to job search success. Worth noting, the employer determines their level of risk tolerance, not the job seeker, who doesn’t own the business—no skin in the game—and has no insight into the challenges they’ve experienced due to bad hires and are trying to avoid similar mistakes.
“Taking a chance” on a candidate isn’t in an employer’s best interest. What’s in an employer’s best interest is to hire candidates who can hit the ground running, fit in culturally, and are easy to manage. You can reduce the odds (no guarantee) of being eliminated by demonstrating you’re such a candidate.
Nick Kossovan, a well-seasoned veteran of the corporate landscape, offers “unsweetened” job search advice. You can send Nick your questions to artoffindingwork@gmail.com.
Human Resources Officers must be very busy these days what with the general turnover of employees in our retail and business sectors. It is hard enough to find skilled people let alone potential employees willing to be trained. Then after the training, a few weeks go by then they come to you and ask for a raise. You refuse as there simply is no excess money in the budget and away they fly to wherever they come from, trained but not willing to put in the time to achieve that wanted raise.
I have had potentials come in and we give them a test to see if they do indeed know how to weld, polish or work with wood. 2-10 we hire, and one of those is gone in a week or two. Ask that they want overtime, and their laughter leaving the building is loud and unsettling. Housing starts are doing well but way behind because those trades needed to finish a project simply don’t come to the site, with delay after delay. Some people’s attitudes are just too funny. A recent graduate from a Ivy League university came in for an interview. The position was mid-management potential, but when we told them a three month period was needed and then they would make the big bucks they disappeared as fast as they arrived.
Government agencies are really no help, sending us people unsuited or unwilling to carry out the jobs we offer. Handing money over to staffing firms whose referrals are weak and ineffectual. Perhaps with the Fall and Winter upon us, these folks will have to find work and stop playing on the golf course or cottaging away. Tried to hire new arrivals in Canada but it is truly difficult to find someone who has a real identity card and is approved to live and work here. Who do we hire? Several years ago my father’s firm was rocking and rolling with all sorts of work. It was a summer day when the immigration officers arrived and 30+ employees hit the bricks almost immediately. The investigation that followed had threats of fines thrown at us by the officials. Good thing we kept excellent records, photos and digital copies. We had to prove the illegal documents given to us were as good as the real McCoy.
Restauranteurs, builders, manufacturers, finishers, trades-based firms, and warehousing are all suspect in hiring illegals, yet that becomes secondary as Toronto increases its minimum wage again bringing our payroll up another $120,000. Survival in Canada’s financial and business sectors is questionable for many. Good luck Chuck!. at least your carbon tax refund check should be arriving soon.
NORMAN WELLS, N.W.T. – Imperial Oil says it will temporarily reduce its fuel prices in a Northwest Territories community that has seen costs skyrocket due to low water on the Mackenzie River forcing the cancellation of the summer barge resupply season.
Imperial says in a Facebook post it will cut the air transportation portion that’s included in its wholesale price in Norman Wells for diesel fuel, or heating oil, from $3.38 per litre to $1.69 per litre, starting Tuesday.
The air transportation increase, it further states, will be implemented over a longer period.
It says Imperial is closely monitoring how much fuel needs to be airlifted to the Norman Wells area to prevent runouts until the winter road season begins and supplies can be replenished.
Gasoline and heating fuel prices approached $5 a litre at the start of this month.
Norman Wells’ town council declared a local emergency on humanitarian grounds last week as some of its 700 residents said they were facing monthly fuel bills coming to more than $5,000.
“The wholesale price increase that Imperial has applied is strictly to cover the air transportation costs. There is no Imperial profit margin included on the wholesale price. Imperial does not set prices at the retail level,” Imperial’s statement on Monday said.
The statement further said Imperial is working closely with the Northwest Territories government on ways to help residents in the near term.
“Imperial Oil’s decision to lower the price of home heating fuel offers immediate relief to residents facing financial pressures. This step reflects a swift response by Imperial Oil to discussions with the GNWT and will help ease short-term financial burdens on residents,” Caroline Wawzonek, Deputy Premier and Minister of Finance and Infrastructure, said in a news release Monday.
Wawzonek also noted the Territories government has supported the community with implementation of a fund supporting businesses and communities impacted by barge cancellations. She said there have also been increases to the Senior Home Heating Subsidy in Norman Wells, and continued support for heating costs for eligible Income Assistance recipients.
Additionally, she said the government has donated $150,000 to the Norman Wells food bank.
In its declaration of a state of emergency, the town said the mayor and council recognized the recent hike in fuel prices has strained household budgets, raised transportation costs, and affected local businesses.
It added that for the next three months, water and sewer service fees will be waived for all residents and businesses.
This report by The Canadian Press was first published Oct. 21, 2024.
