Scotiabank (TSX:BNS) posted double-digit declines in profits, both for its fourth quarter and for its entire fiscal 2008 year, as it confirmed $642 million in fourth-quarter writedowns related to the Lehman Brothers (NYSE:LEH) bankruptcy earlier this year.

The bank, which is the second major bank to report its fourth-quarter earnings thus far after Bank of Montreal (TSX:BMO), said net income for the quarter fell to $315 million or 28 cents per diluted share, from $954 million or 98 cents a year earlier, primarily because of its exposure to the New York-based financial services firm Lehman but also because of valuation adjustments. Revenues also declined by 19.1 per cent for the quarter, to $2.5 billion.

Meanwhile, full-year earnings dropped to $3.14 billion or $3.05 per diluted share from $4.05 billion or $4.01 per share, while revenues for the year fell 4.9 per cent to $12.3 billion. Writedowns for the year totalled $822 million.

"Clearly, 2008 was a difficult year, particularly with the writedowns we took in the fourth quarter," said Scotiabank CEO Rick Waugh in a statement. "While Canadian banks have fared better than their counterparts in other parts of the world, none of us have been immune to the forces buffeting global markets."

The bank said it expected per-share earnings growth of between seven and 12 per cent, and predicted continued volatility in the world financial markets, weak economic activity and low household, business and investor confidence throughout 2009.