RE: Canaccord Bank of Nova Scotia* (BNS : TSX : $61.32), Net Change: 0.45, % Change: 0.74%, Volume: 2,217,702
Keep on rolling. The Bank of Nova Scotia wrapped up a solid earnings season for the Canadian banking segment reporting EPS
of $1.27, which was ahead of Canaccord Genuity Financials Analyst Mario Mendonca’s and consensus estimates of
$1.25. Revenue was up 15% and was higher than estimated, with capital market revenue higher than expected (trading
particularly) and other income higher than expected (wealth management and insurance particularly). The company also
increased its dividend by 5% to $0.60 per quarter. The company’s international business posted solid numbers with earnings for
the segment up 12% year over year (YoY) and revenue up 21% YoY. Recent acquisitions in Colombia was the driver behind the
strong results from BNS’s international business unit. On the domestic front earnings were up 21% reflecting the recent
acquisition of ING Canada. BNS reported the best quarter in domestic retail within the Canadian banking group last quarter and
again this quarter. Revenue for domestic banking was up 13.3% and expenses up 12.1% YoY for good operating leverage of
1.2%. The company reported Basel III CET ratio of 8.2%, down from 8.6%. Mendonca was expecting the ratio to drop to 7.7%
reflecting the ING deal. The increase reflective to 7.7% reflects strong earnings and higher accumulated other comprehensive
income.