1. Gain on sale of
As previously announced, the Bank sold its 49% interest in
2. Allowance for credit losses
The Bank determines its allowance for credit losses (ACL) using three probability-weighted forward-looking scenarios. The "base case" represents the most likely outcome and the other two scenarios represent more optimistic and more pessimistic outcomes, to which relative probabilities are assigned. Consistent with developing practice among major international banks in applying IFRS 9, and the Bank's prudent approach to expected credit loss provisioning, the Bank has added an additional, more severe pessimistic scenario, effective this quarter. The Bank currently estimates that the addition of this fourth scenario will increase the ACL of
3. Derivatives valuation adjustment
Together with the implementation of a new derivatives valuation platform, the Bank has enhanced its fair value methodology primarily relating to uncollateralized OTC derivatives. This enhancement will result in an after-tax charge of approximately
4. Impairment charge on one software asset
The Bank has identified one software asset that depends on embedded third-party software which will be discontinued, and vendor support will subsequently cease to be available at the end of 2020. This asset must be replaced, and the Bank has already developed plans in this regard. The Bank will record an after-tax impairment charge of approximately
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SOURCE Scotiabank
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