TORONTO — Scotiabank's loan growth slowed last quarter as the bank took a more cautious approach to lending amid heightened strain on borrowers from higher interest rates.
"Lending volumes in the quarter reflect a more cautious environment from both a household confidence and business investment perspective," chief executive Scott Thomson told a conference call with investors and analysts to discuss the bank's latest results Tuesday.
The pullback in lending is also part of the bank's efforts to improve its balance between loans and deposits. The bank has been working to boost its deposit base because banks have also faced higher borrowing costs, and customer cash left at the bank is a cheaper source of funding than the alternatives.
"We are closely monitoring customer behaviour and have observed a very rational and responsible shift in spending as households manage through this period of reduced discretionary income." Analysts on average had expected an adjusted profit of $1.74 per share, according to estimates compiled by financial markets data firm Refinitiv. Higher-than-expected credit loss provisions were cited as the biggest reason for the miss.
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