Canada's Bank of Nova Scotia reported a drop in fourth-quarter profit on Tuesday, as a murky economic climate prompted the lender to set aside bigger funds for potential loan defaults.

The bank reported adjusted net income of C$1.67 billion ($1.23 billion), or C$1.26 per share, for the three months ended Oct. 31, compared with C$2.62 billion, or C$2.06 per share, a year earlier.



($1 = 1.3586 Canadian dollars) (Reporting by Niket Nishant in Bengaluru; Editing by Krishna Chandra Eluri)