The Globe and Mail reports in its Wednesday edition that Bank of Nova Scotia posted a sharp increase in expected loan losses, partly because of a cloudier economic outlook in Canada and Mexico, leaving investors waiting for signs of a turnaround in the second half. The Globe's James Bradshaw writes that the bank's second-quarter profit increased by 3.8 per cent from last year, to $2.26-billion, as higher loans losses and rising costs mostly offset a revenue increase of nearly 11 per cent. The slow growth in the bottom line, which was below analyst expectations, partially obscured some of the bank's brighter spots, including good results in its international operations and its investment banking unit. Scotiabank's financial performance has been saddled with the costs of digesting $7-billion in acquisitions made last year to gain market share in Chile and retool its wealth-management division. At the same time, the bank has pulled out of numerous countries, including some Caribbean islands. Even so, provisions for credit losses to cover bad loans jumped to $873-million, driven in equal measure by loans picked up through acquisitions, growing loan portfolios and the expectation of softer growth in Canada and Mexico.
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