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A profitability milestone landed at a major Canadian bank before management expected it.
Return on equity, the ratio measuring how much profit a bank generates for every dollar shareholders have committed, reached 14.2% at the Bank of Nova Scotia (NYSE: BNS) in quarterly results reported August 25.
Management had been framing that level as a medium-term target. Adjusted net income came in at $2.97 billion. Adjusted earnings per share rose to $2.28 from $1.88 a year earlier, a 21% increase.
CEO Scott Thomson said publicly that 14% is not the ceiling for the bank's returns. Where the gains came from Canadian Banking earned $1.1 billion, up 12% year over year.
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