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Bank of Nova Scotia BNS

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1-Star Price

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Economic Moat

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Credit Picture Looking Good for Scotiabank as 2021 Gets Off to a Good Start

Eric Compton, CFA Senior Equity Analyst

Analyst Note

| Eric Compton, CFA |

Narrow-moat rated Bank of Nova Scotia reported decent fiscal first-quarter earnings. Adjusted earnings per share were CAD 1.88 for the quarter, soundly beating Factset consensus of CAD 1.24. This represented year-over-year EPS growth of 3%, as adjusted revenue was up 1% and adjusted expenses were down 2%. Provisioning was also back down to prepandemic levels. This largely aligns with our view that the Canadian banks will be fine and that better results should be returning in 2021. We are increasing our fair value estimate to CAD 71/USD 56 per share from CAD 70/USD 54. As the pandemic has further played out and we are more confident in vaccine distribution and economic resilience, we will also be lowering our uncertainty rating for Scotiabank back down to medium from high.

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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 Jan 31, 2021
Fiscal Year End Oct 31, 2021
Stock Type —
Employees 89,808

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