Scotiabank Boosts Buyback by About $883 Million as Profit Climbs

(Bloomberg) -- Bank of Nova Scotia boosted its stock-buyback program by 12 million shares, which would cost about C$1.1 billion ($883 million) at current prices, as the lender’s profit climbs. 

The Toronto Stock Exchange and the Office of the Superintendent of Financial institutions approved an increase in the bank’s normal course issuer bid to 36 million shares from 24 million, the Toronto-based company said Monday. The new amount represents about 3% of Scotiabank’s outstanding shares as of Nov. 22.

Scotiabank’s earnings have rebounded sharply from a drop early in the pandemic, helped by a turnaround in its Latin America-focused international division and a strong Canadian housing market that has fueled mortgage lending in its domestic business. The bank has also channeled some of its capital into increasing its stake in the Chilean unit, and it said it may look to acquire U.S. wealth-management firms.

Canada’s bank regulator had prohibited the nation’s largest lenders from buying back shares or raising their dividends from March 2020 until early November 2021 to help protect the financial system. Scotiabank’s common equity tier 1 capital ratio was 12% at the end of its fiscal first quarter this year, up from 11.4% in the first quarter of 2020, the last period before the buyback prohibition was implemented.

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