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Bank of Nova Scotia BNS

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

International Still a Drag, but Other Segments Mostly Positive for Scotiabank in Fiscal Q3

Eric Compton, CFA Senior Equity Analyst

Analyst Note

| Eric Compton, CFA |

Narrow-moat rated Bank of Nova Scotia reported decent fiscal third-quarter earnings. Adjusted earnings per share were CAD 2.01, representing solid year-over-year growth compared with adjusted EPS of CAD 1.04 in the same period a year ago and higher than last quarter’s EPS of CAD 1.90. Provisioning continues to be a major driver of improved earnings, coming in at a cost of CAD 380 million this quarter, a multi-year low and materially lower than the CAD 2.2 billion charge the bank took in the second quarter of 2020. This aligns with our view that the Canadian banks will be fine from a credit perspective and that better results should be the norm going forward. We still expect the return of fee growth and much lower provisions to drive solid earnings growth for the rest of the year, while the lack of a boost from lower provisioning will make for tougher comps for the Canadian banks in 2022.

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Company Profile

Business Description

Bank of Nova Scotia is a global financial services provider. The bank has five business segments: Canadian banking, international banking, global wealth management, global banking and markets, and other. It offers a range of advice, products, and services, including personal and commercial banking, wealth management and private banking, corporate and investment banking, and capital markets. The bank's international operations span numerous countries and are more concentrated in Central and South America.

Contact
1709 Hollis Street, Bank of Nova Scotia Building
Halifax, NS, B3J 3B7, Canada
T +1 416 866-3672
Sector Financial Services
Industry Banks - Diversified
Most Recent Earnings Jul 31, 2021
Fiscal Year End Oct 31, 2021
Stock Type
Employees 90,833

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