Bank of Nova Scotia’s capital-markets division is showing signs of a turnaround.

The unit had long been the weakest link for the Toronto-based lender, with growth in quarterly profit only once in the past two years. The division appears to have turned a corner in the fiscal first quarter, reporting an 11 per cent increase in income, helping the bank post results that beat analysts’ estimates.

Key Insights

-Scotiabank’s global banking and markets division benefited from rising equities and fixed income and more deal activity compared with a year earlier. Earnings for the division totaled $372 million, up from $335 million.

-The company started reporting global wealth management as a separate division, and business head Glen Gowland wants it to eventually generate 15 per cent of overall bank earnings. Wealth-management earnings rose 12 per cent to $309 million, to account for 13 per cent of overall earnings.

-Scotiabank has exited more than 20 countries in the past six years, scaling back in the Caribbean and Asia to focus on the Americas, with an emphasis on Mexico, Peru, Chile and Colombia. The international-banking division earned $582 million, down 30 per cent from $828 million a year earlier.

-The lender told investors in January that it aims to get 40 per cent of its earnings from Canadian banking. The domestic-banking division had earnings of $852 million in the first quarter, down one per cent from a year ago.

Market Reaction

-Scotiabank has fallen 0.3 per cent this year through Monday, underperforming the 2.2 per cent gain for Canada’s eight-company S&P/TSX Commercial Banks Index.

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-Net income for the three months through Jan. 31 rose 3.5 per cent to $2.33 billion, or $1.84 a share, after a gain from its Thanachart Bank sale, charges tied to derivatives and discontinued software, and revisions to its allowance for credit losses.

-Adjusted earnings totaled $1.83 a share, beating the $1.75 estimate of 13 analysts in a Bloomberg survey.