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We’re being prudent — I think we’re being vigilant in the market, but we’re not overly concerned

During Tuesday’s conference call, executives said that so far, the decision to scale back mortgage lending was part of a “prudent business decision.” Stephen Hart, chief risk officer for Scotiabank, said that the bank’s lending portfolio remained healthy and there weren’t signs of stress.

“In Canada, we are seeing some regional weakness in Alberta, but that is being offset by strength in Ontario and B.C.,” he said during the call.

Scotiabank also reported that the amount it had set aside to cover bad loans in the energy sector had declined for the quarter. The bank was seen as being among the most exposed to such loans, but a rebound in oil prices in the third quarter helped energy firms make payments.

“Provision for credit losses declined $181 million from last quarter,” said Porter in a statement. “The majority of the decline related to lower losses in the energy sector, which is consistent with our previously stated expectations that energy losses had peaked during the last quarter.”

For the energy sector specifically, Scotia said it set aside $37 million to cover bad loans in the third quarter, compared with the $150 million it set aside in the second quarter. Total loan exposure to oil and gas was also down — Scotia now has $16.1 billion in loans to the energy sector, or 3.3 per cent of its total portfolio. That is down from $16.3 billion in the second quarter, which was 3.4 per cent of its loan portfolio.

Overall, Scotiabank’s profit rose to $1.96 billion for the quarter, compared with $1.85 billion during the same time last year. Revenue hit $6.64 billion compared with $6.12 billion a year ago.

The results extended a win streak for Canadian banks, which have shrugged off fears of slowing consumer borrowing and damage to their balance sheets from bad energy loans. Toronto-Dominion Bank, Bank of Montreal, Royal Bank of Canada and the Canadian Imperial Bank of Commerce all reported better-than-expected earnings last week.