All amounts are in Canadian dollars and are based on our unaudited Interim Condensed Consolidated Financial Statements for the quarter ended April 30, 2024 and related notes prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), unless otherwise noted. Our complete Second Quarter 2024 Report to Shareholders, including our unaudited interim financial statements for the period ended April 30, 2024, can also be found on the SEDAR+ website at www.sedarplus.ca and on the EDGAR section of the SEC's website at www.sec.gov. Supplementary Financial Information is also available, together with the Second Quarter 2024 Report to Shareholders on the Investor Relations page at www.scotiabank.com. Second Quarter 2024 Highlights on a Reported Basis (versus Q2 2023) Second Quarter 2024 Highlights on an Adjusted Basis(1) (versus Q2 2023) •    Net income of $2,092 million, compared to $2,146 million        •    Net income of $2,105 million, compared to $2,161 million •    Earnings per share (diluted) of $1.57, compared to $1.68 •    Earnings per share (diluted) of $1.58, compared to $1.69 •    Return on equity(2) of 11.2%, compared to 12.2% •    Return on equity of 11.3%, compared to 12.3% TORONTO, May 28, 2024 /CNW/ - The Bank of Nova Scotia ("Scotiabank") (TSX:BNS) (NYSE:BNS) reported second quarter net income of $2,092 million compared to $2,146 million in the same period last year. Diluted earnings per share (EPS) were $1.57, compared to $1.68 in the same period a year ago. Adjusted net income(1) for the second quarter was $2,105 million and adjusted diluted EPS(1) was $1.58, down from $1.69 last year. Adjusted return on equity(1) was 11.3% compared to 12.3% a year ago. "The Bank delivered solid results this quarter against a backdrop of ongoing macroeconomic uncertainty, reporting positive operating leverage driven by revenue growth and continued expense discipline. We are executing on our commitment to balanced growth as our deposit momentum continues, while maintaining strong capital and liquidity metrics," said Scott Thomson, President and CEO of Scotiabank. "I am proud to see Scotiabankers across our global footprint rallying behind our new strategy and coming together to drive our key strategic initiatives forward." Canadian Banking delivered adjusted earnings(1) of $1 billion this quarter. Solid revenue growth outpaced expense growth resulting in another quarter of positive operating leverage, while provision for credit losses increased compared to the prior year. In addition, deposit growth, a key component of the refreshed strategy, was up 7% year-over-year. International Banking generated adjusted earnings(1) of $701 million. Revenue growth driven by strong margin expansion, disciplined expense and capital management, were offset by higher provision for credit losses. Adjusted return on equity(1) was 14.5%, a 120 basis point improvement from last year. Global Wealth Management adjusted earnings(1) were $389 million, up 8% year over year. Assets under management(2) of $349 billion increased by 6% resulting in strong revenue growth, partly offset by investments to support long-term business growth. Global Banking and Markets reported earnings of $428 million, up 7% compared to the prior year. Results were supported by higher fee-based revenue and lower provision for credit losses. The Bank reported a Common Equity Tier 1 (CET1) capital ratio(3) of 13.2%, up from 12.3% last year. ____________________________________________ (1) Refer to Non-GAAP Measures section starting on page 6. (2) Refer to page 55 of the Management's Discussion & Analysis in the Bank's Second Quarter 2024 Report to Shareholders, available on www.sedarplus.ca, for an explanation of the composition of the measure. Such explanation is incorporated by reference hereto. (3) The Q2 2024 regulatory capital ratios are based on Revised Basel III requirements as determined in accordance with OSFI Guideline - Capital Adequacy Requirements (November 2023). The Q2 2023 regulatory capital ratios were based on Revised Basel III requirements as determined in accordance with OSFI Guideline - Capital Adequacy Requirements (February 2023). Financial Highlights Reported Results For the three months ended For the six months ended April 30 January 31 April 30 April 30 April 30 (Unaudited) ($ millions) 2024(1) 2024(1) 2023(1) 2024(1) 2023(1) Operating results Net interest income $ 4,694 $ 4,773 $ 4,460 $ 9,467 $ 9,023 Non-interest income 3,653 3,660 3,453 7,313 6,852 Total revenue $ 8,347 $ 8,433 $ 7,913 $ 16,780 $ 15,875 Provision for credit losses 1,007 962 709 1,969 1,347 Non-interest expenses 4,711 4,739 4,574 9,450 9,035 Income tax expense 537 533 484 1,070 1,589 Net income $ 2,092 $ 2,199 $ 2,146 $ 4,291 $ 3,904 Net income attributable to non-controlling interests in subsidiaries      26 25 24 51 61 Net income attributable to equity holders of the Bank $ 2,066 $ 2,174 $ 2,122 $ 4,240 $ 3,843 Preferred shareholders and other equity instrument holders 123 108 104 231 205 Common shareholders $ 1,943 $ 2,066 $ 2,018 $ 4,009 $ 3,638 Earnings per common share (in dollars) Basic $ 1.59 $ 1.70 $ 1.69 $ 3.29 $ 3.05 Diluted $ 1.57 $ 1.68 $ 1.68 $ 3.25 $ 3.02 (1) The Bank adopted IFRS 17 effective November 1, 2023. As required under the new accounting standard, prior period amounts have been restated. Refer to Note 4 of the condensed interim consolidated financial statements in the Bank's Q2 2024 Quarterly Report to Shareholders. Adoption of IFRS 17 On November 1, 2023, the Bank adopted IFRS 17 Insurance Contracts, which provides a comprehensive principle-based framework for the recognition, measurement, presentation, and disclosure of insurance contracts and replaces IFRS 4, the previous accounting standard for insurance contracts. The Bank adopted IFRS 17 on a retrospective basis, restating the results from the transition date of November 1, 2022. Accordingly, results for fiscal 2023 have been restated to reflect the IFRS 17 basis of accounting for insurance contracts. Refer to Notes 3 and 4 of the condensed interim financial statements in the Bank's Q2 2024 Quarterly Report to Shareholders for details. Business Segment Review Canadian Banking Q2 2024 vs Q2 2023 Net income attributable to equity holders was $1,008 million, compared to $1,055 million, a decrease of $47 million or 4%. The decrease was due primarily to higher provision for credit losses and non-interest expenses, partly offset by higher revenues. Q2 2024 vs Q1 2024 Net income attributable to equity holders decreased $87 million or 8%. The decrease was due primarily to lower revenues from two fewer days in the quarter, higher provision for credit losses and an increase in non-interest expenses. Year-to-date Q2 2024 vs Year-to-date Q2 2023 Net income attributable to equity holders was $2,103 million compared to $2,141 million. Adjusted net income was $2,104 million, a decrease of $39 million or 2%. The decrease was due primarily to higher provision for credit losses and non-interest expenses, partly offset by higher revenues. International Banking Q2 2024 vs Q2 2023 Net income attributable to equity holders increased $35 million to $671 million. Adjusted net income attributable to equity holders increased $33 million to $677 million. The increase was driven by higher net interest income and the positive impact of foreign currency translation. This was partly offset by higher provision for credit losses, non-interest expenses, provision for income taxes, and lower non-interest income. Q2 2024 vs Q1 2024 Net income attributable to equity holders decreased by $75 million or 10%. Adjusted net income attributable to equity holders decreased by $75 million or 10%. The decrease was due primarily to lower non-interest income, higher provision for income taxes and the negative impact of foreign currency translation. This was partly offset by lower non-interest expenses, higher net interest income despite the impact from two fewer days in the quarter, and lower provision for credit losses. Year-to-date Q2 2024 vs Year-to-date Q2 2023 Net income attributable to equity holders was $1,417 million, an increase of 11% from $1,280 million. Adjusted net income attributable to equity holders was $1,429 million, an increase of $134 million or 10%. The increase was driven by higher net interest income, non-interest income, and the positive impact of foreign currency translation. This was partly offset by higher provision for credit losses, non-interest expenses and provision for income taxes. Financial Performance on a Constant Dollar Basis  The discussion below on the results of operations is on a constant dollar basis. Under the constant dollar basis, prior period amounts are recalculated using current period average foreign currency rates, which is a non-GAAP financial measure (refer to Non-GAAP Measures starting on page 6). The Bank believes that constant dollar is useful for readers in assessing ongoing business performance without the impact of foreign currency translation and is used by management to assess the performance of the business segment. Q2 2024 vs Q2 2023 Net income attributable to equity holders was $671 million and adjusted net income attributable to equity holders was $677 million, down $12 million or 2%. The decrease was driven by higher provision for credit losses, lower non-interest income, higher non-interest expenses and provision for income taxes, partly offset by higher net interest income. Q2 2024 vs Q1 2024 Net income attributable to equity holders decreased by $62 million or 8%. Adjusted net income attributable to equity holders decreased by $62 million or 8%. The decrease was due primarily to lower non-interest income and higher provision for income taxes, partly offset by higher net interest income and lower non-interest expenses. Year-to-date Q2 2024 vs Year-to-date Q2 2023 Net income attributable to equity holders was $1,417 million, an increase of 2% from $1,384 million. Adjusted net income attributable to equity holders was $1,429 million, an increase of $31 million or 2%. The increase was driven by higher net interest income, partly offset by higher provision for credit losses, lower non-interest income, and higher non-interest expenses and provision for income taxes. Global Wealth Management Q2 2024 vs Q2 2023 Net income attributable to equity holders was $380 million, up $27 million or 8%. Adjusted net income attributable to equity holders was $387 million, up $28 million or 8%. The increase was due primarily to higher brokerage revenues in Canada and higher mutual fund fees in International Wealth, particularly within Mexico. This was partly offset by higher non-interest expenses due largely to volume-related expenses. Q2 2024 vs Q1 2024 Net income attributable to equity holders increased $12 million or 3%. Adjusted net income attributable to equity holders increased $13 million or 3%, due primarily to higher brokerage revenues and mutual fund fees across the Canadian and International businesses, partly offset by higher non-interest expenses. Year-to-date Q2 2024 vs Year-to-date Q2 2023 Net income attributable to equity holders was $748 million, up $10 million or 1%. Adjusted net income attributable to equity holders was $761 million, up $10 million or 1%. The increase was due primarily to higher brokerage revenues in Canada and higher mutual fund fees in International Wealth, particularly within Mexico. This was partly offset by higher non-interest expenses due largely to volume-related expenses. Global Banking and Markets Q2 2024 vs Q2 2023 Net income attributable to equity holders was $428 million, an increase of $27 million or 7%. This increase was due mainly to higher non-interest income and lower provision for credit losses and provision for income taxes, partly offset by higher non-interest expenses and lower net interest income.  Q2 2024 vs Q1 2024 Net income attributable to equity holders decreased by $11 million or 3%, due mainly to lower non-interest and net interest income, partly offset by lower non-interest expenses and provision for income taxes. Year-to-date Q2 2024 vs Year-to-date Q2 2023 Net income attributable to equity holders was $867 million, a decrease of $53 million or 6%, due to lower net interest income and higher non-interest expenses, partly offset by lower provision for credit losses and provision for income taxes.  Other Q2 2024 vs Q2 2023 Net income attributable to equity holders was a net loss of $421 million, compared to a net loss of $323 million last year. The higher loss of $98 million was due mainly to lower revenues, partly offset by lower non-interest expenses.  The decrease in revenue was due mainly to higher funding costs, partly offset by higher income from liquid assets and a lower taxable equivalent basis (TEB) gross-up as the Bank no longer claims the dividend received deduction on Canadian shares that are mark-to-market property. The TEB gross-up is offset in income taxes. Q2 2024 vs Q1 2024 Net income attributable to equity holders increased $53 million from the prior quarter due mainly to higher revenues and lower non-interest expenses, partly offset by higher income taxes. The increase in revenue was due mainly to higher investment gains, lower funding costs, and a lower TEB gross-up as the Bank no longer claims the dividend received deduction on Canadian shares that are mark-to-market property. The TEB gross-up is offset in income taxes. There was also lower income from liquid assets due primarily to two fewer days in the quarter. Year-to-date Q2 2024 vs Year-to-date Q2 2023 Net income attributable to equity holders was a net loss of $895 million compared to a net loss of $1,236 million. Adjusted net income attributable to equity holders was a net loss of $895 million compared to a net loss of $657 million. This was due mainly to lower revenues, partly offset by lower non-interest expenses. The decrease in revenue was due primarily to higher funding costs and lower investment gains, which were partly offset by higher income from liquid assets and a lower TEB gross-up, as the Bank no longer claims the dividend received deduction on Canadian shares that are mark-to-market property. The TEB gross-up is offset in income taxes. Credit risk Provision for credit losses Q2 2024 vs Q2 2023 The provision for credit losses was $1,007 million, compared to $709 million, an increase of $298 million. The provision for credit losses ratio increased 17 basis points to 54 basis points. The provision for credit losses on performing loans was $32 million, compared to $88 million. The provision this quarter was driven by retail portfolio growth, provisions related to migrations in the retail portfolio mainly in Canada and Chile, and the continued unfavourable macroeconomic outlook impacting mainly the commercial portfolios. This was partly offset by migration to impaired in retail portfolios mainly in Canada, Mexico and Peru, and the relatively more favourable macroeconomic outlook impacting most retail portfolios. The provision for credit losses on impaired loans was $975 million, compared to $621 million, an increase of $354 million due primarily to higher formations in International Banking retail portfolios, mostly in Colombia, Chile and Peru, as a result of inflation and interest rate levels in these markets in the prior year. There were also higher provisions in the Canadian Banking retail portfolios, primarily auto loans and unsecured lines. The provision for credit losses ratio on impaired loans was 52 basis points, an increase of 19 basis points. Q2 2024 vs Q1 2024 The provision for credit losses was $1,007 million, compared to $962 million, an increase of $45 million. The provision for credit losses ratio increased four basis points to 54 basis points. The provision for credit losses on performing loans was $32 million, compared to $20 million, an increase of $12 million. The provision this quarter was driven by retail portfolio growth, provisions related to migrations in the retail portfolio mainly in Canada and Chile, and the continued unfavourable macroeconomic outlook impacting mainly the commercial portfolios. This was partly offset by migration to impaired in retail portfolios mainly Canada, Mexico and Peru, and the relatively more favourable macroeconomic outlook impacting most retail portfolios. The provision for credit losses on impaired loans was $975 million, compared to $942 million, an increase of $33 million, due primarily to higher provisions relating to Canadian retail portfolios mostly from migration in auto loans and mortgage portfolios. The provision for credit losses ratio on impaired loans was 52 basis points, an increase of three basis points. Year-to-date Q2 2024 vs Year-to-date Q2 2023 The provision for credit losses was $1,969 million, compared to $1,347 million, an increase of $622 million. The provision for credit losses ratio increased 17 basis points to 52 basis points. Provision for credit losses on performing loans was $52 million, compared to $164 million. The provision this period was driven primarily by retail portfolio growth and migration across markets, and the impact of the continued unfavourable macroeconomic outlook, mainly relating to the commercial portfolio and the retail portfolio in Colombia. This was partly offset by credit migration to impaired in the retail portfolios. Provision for credit losses on impaired loans was $1,917 million compared to $1,183 million, an increase of $734 million, due primarily to higher formations in the International Banking retail portfolios, mostly in Colombia, Chile and Peru, as a result of inflation and interest rate levels in these markets in the prior year, as well as higher provisions in Canadian Banking. The provision for credit losses ratio on impaired loans increased 20 basis points to 51 basis points. Allowance for credit losses The total allowance for credit losses as at April 30, 2024, was $6,768 million compared to $6,597 million last quarter. The allowance for credit losses ratio was 88 basis points, an increase of two basis points. The allowance for credit losses on loans was $6,507 million, an increase of $179 million from the prior quarter. Allowances were higher due to provisions in Canadian Banking retail portfolios, mainly in mortgages and unsecured lines, and the impact of the macroeconomic outlook impacting commercial portfolios. The impact of foreign currency translation increased the allowance by $85 million. The allowance against performing loans was higher at $4,507 million compared to $4,424 million last quarter. The allowance for performing loans ratio was 61 basis points. Allowances were driven by provisions in Canadian Banking retail portfolios mainly in residential mortgages and unsecured lines, the continued unfavourable macroeconomic outlook impacting the commercial portfolios, and portfolio growth. This was partly offset by credit migration to impaired in the retail portfolios, mainly in Mexico and Peru. The impact of foreign currency translation increased the allowance by $51 million. The allowance on impaired loans increased to $2,000 million from $1,904 million last quarter. The allowance for impaired loans ratio was 27 basis points, an increase of two basis points. The increase was due primarily to higher provisions relating to retail portfolios credit migration, and the negative impact of foreign currency translation. The impact of foreign currency translation increased the allowance by $34 million. Impaired loans Gross impaired loans increased to $6,399 million as at April 30, 2024, from $6,119 million last quarter. The increase was due primarily to new formations in the International retail portfolios, mainly Chile and Mexico, and International commercial, mostly in the real estate sector in Chile, as well as the impact of foreign currency translation. The gross impaired loan ratio was 83 basis points, an increase of three basis points from last quarter. Net impaired loans in Canadian Banking were $1,158 million, a decrease of $59 million from last quarter, as new formations were offset by higher retail provisions. International Banking's net impaired loans were $3,141 million, an increase of $218 million from last quarter, due primarily to new formations in the commercial portfolio, mostly in the real estate sector in Chile, and retail portfolios, as well as the negative impact of foreign currency translation. In Global Wealth Management, net impaired loans were $54 million, an increase of $19 million from last quarter, due to new formations. In Global Banking and Markets, net impaired loans were $46 million, an increase of $6 million from last quarter.Net impaired loans as a percentage of loans and acceptances were 0.57%, an increase of two basis points from 0.55% last quarter. Capital Ratios The Bank's Common Equity Tier 1 (CET1) capital ratio(1) was 13.2% as at April 30, 2024, an increase of approximately 30 basis points from the prior quarter, due primarily to internal capital generation, lower RWA and share issuances from the Bank's Shareholder Dividend and Share Purchase Plan, partly offset by revaluation losses on FVOCI securities and other. The Bank's Tier 1 capital(1) and Total capital(1) ratios were 15.2% and 17.1%, respectively, as at April 30, 2024, representing increases of approximately 40 basis points from the prior quarter, due mainly to the above noted impacts to the CET1 capital ratio. The Leverage ratio(2) was 4.4% as at April 30, 2024, an increase of approximately 10 basis points from the prior quarter, due primarily to higher Tier 1 capital. The Total loss absorbing capacity(3) (TLAC) and TLAC Leverage(3) ratios were 28.9% and 8.4%, respectively, as at April 30, 2024, largely unchanged from the prior quarter. As at April 30, 2024, the CET1, Tier 1, Total capital, Leverage, TLAC and TLAC Leverage ratios were well above OSFI's minimum capital ratios. ____________________________________________ (1) This measure has been disclosed in this document in accordance with OSFI Guideline – Capital Adequacy Requirements (November 2023). (2) This measure has been disclosed in this document in accordance with OSFI Guideline – Leverage Requirements (February 2023).  (3) This measure has been disclosed in this document in accordance with OSFI Guideline – Total Loss Absorbing Capacity (September 2018). Non-GAAP Measures The Bank uses a number of financial measures and ratios to assess its performance, as well as the performance of its operating segments. Some of these financial measures and ratios are presented on a non-GAAP basis and are not calculated in accordance with Generally Accepted Accounting Principles (GAAP), which are based on International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), are not defined by GAAP and do not have standardized meanings and therefore might not be comparable to similar financial measures and ratios disclosed by other issuers. The Bank believes that non-GAAP measures and ratios are useful as they provide readers with a better understanding of how management assesses performance. These non-GAAP measures and ratios are used throughout this press release and defined below. Adjusted results and diluted earnings per share Management considers both reported and adjusted results and measures useful in assessing underlying ongoing business performance. Adjusted results and measures remove certain specified items from revenue, non-interest expenses, income taxes and non-controlling interests. Presenting results on both a reported basis and adjusted basis allows readers to assess the impact of certain items on results for the periods presented, and to better assess results and trends excluding those items that may not be reflective of ongoing business performance. Adjusting items impacting results are as follows: a)     Amortization of acquisition-related intangible assets These costs relate to the amortization of intangible assets recognized upon the acquisition of businesses, excluding software, and are recorded in the Canadian Banking, International Banking and Global Wealth Management operating segments. b)    Canada Recovery Dividend In Q1 2023, the Bank recognized an additional income tax expense of $579 million reflecting the present value of the amount payable for the Canada Recovery Dividend (CRD). The CRD is a Canadian federal tax measure which requires the Bank to pay a one-time tax of 15% on taxable income in excess of $1 billion, based on the average taxable income for the 2020 and 2021 taxation years. The CRD is payable in equal amounts over five years; however, the present value of these payments was recognized as a liability in the period enacted. This amount was recorded in the Other operating segment. Reconciliation of reported and adjusted results and diluted earnings per share For the three months ended For the six months ended April 30 January 31 April 30 April 30 April 30 ($ millions) 2024(1) 2024(1) 2023(1) 2024(1) 2023(1) Reported Results Net interest income $ 4,694 $ 4,773 $ 4,460 $ 9,467 $ 9,023 Non-interest income 3,653 3,660 3,453 7,313 6,852 Total revenue 8,347 8,433 7,913 16,780 15,875 Provision for credit losses 1,007 962 709 1,969 1,347 Non-interest expenses 4,711 4,739 4,574 9,450 9,035 Income before taxes 2,629 2,732 2,630 5,361 5,493 Income tax expense 537 533 484 1,070 1,589 Net income $ 2,092 $ 2,199 $ 2,146 $ 4,291 $ 3,904 Net income attributable to non-controlling interests in subsidiaries (NCI) 26 25 24 51 61 Net income attributable to equity holders 2,066 2,174 2,122 4,240 3,843 Net income attributable to preferred shareholders and other equity instrument holders 123 108 104 231 205 Net income attributable to common shareholders $ 1,943 $ 2,066 $ 2,018 $ 4,009 $ 3,638 Diluted earnings per share (in dollars) $ 1.57 $ 1.68 $ 1.68 $ 3.25 $ 3.02 Weighted average number of diluted common shares outstanding (millions) 1,228 1,221 1,197 1,225 1,199 Adjustments Adjusting items impacting non-interest expenses (Pre-tax) Amortization of acquisition-related intangible assets $ 18 $ 18 $ 21 $ 36 $ 42 Total non-interest expense adjusting items (Pre-tax) 18 18 21 36 42 Total impact of adjusting items on net income before taxes 18 18 21 36 42 Impact of adjusting items on income tax expense Canada recovery dividend – – – – 579 Amortization of acquisition-related intangible assets (5) (5) (6) (10) (12) Total impact of adjusting items on income tax expense (5) (5) (6) (10) 567 Total impact of adjusting items on net income $ 13 $ 13 $ 15 $ 26 $ 609 Impact of adjusting items on NCI – – – – – Total impact of adjusting items on net income attributable to equity      holders and common shareholders $ 13 $ 13 $ 15 $ 26 $ 609 Adjusted Results Net interest income $ 4,694 $ 4,773 $ 4,460 $ 9,467 $ 9,023 Non-interest income 3,653 3,660 3,453 7,313 6,852 Total revenue 8,347 8,433 7,913 16,780 15,875 Provision for credit losses