(Adds details on domestic, international performance)
TORONTO, Feb 27 (Reuters) - Bank of Nova Scotia reported first-quarter earnings that were ahead of market expectations, helped by a strong performance at its domestic and international businesses.
Canada's third biggest lender reported earnings per share of C$1.86 for the quarter, up from C$1.57 a year earlier. Analysts had on average forecast earnings of C$1.68 per share, Thomson Reuters I/B/E/S data showed.
The bank reported net income of C$1.1 billion ($867 million), up 12 percent from a year ago, benefiting from an improved profit margin and a decline in funds set aside to cover bad loans.
Net income at the bank's international business increased by 16 percent to C$667 million.
The bank has focused its international growth strategy on the Pacific Alliance, a Latin American trading bloc comprising Mexico, Peru, Chile and Columbia, where it saw loan growth of 10 percent or above during the period.
$1 = 1.2684 Canadian dollars Reporting by Matt Scuffham; editing by Jason Neely and Louise Heavens