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Bank of Nova Scotia

BNS: XTSE (CAN)

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Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	CAD 83.00	Hktynv	Qddmjrmv

Bank of Nova Scotia Earnings: Expenses Outgrowing Revenue; Second Half Will Be Better

May 24, 2023

Narrow-moat-rated Bank of Nova Scotia reported OK fiscal second-quarter results. Expenses kept increasing at a healthy rate, outgrowing revenue in the quarter, however, management struck a positive tone in the call, suggesting this pattern may begin to reverse for the rest of the year. Expenses came in a bit ahead of our previous expectations, and as we adjust our forecasts we anticipate a mid-single-digit percentage decline in our current fair value estimate of CAD 75/$55 per share. It remains difficult to predict the bank’s future expense levels as we await an updated strategy, which could result in additional repositioning charges.

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