EPS of $1.69 beat estimates of $1.61; revenue of $8.43B beat estimates by 2%. Scotiabank showed its ability to earn through weaker economic conditions and higher credit provisioning under its new North American-focused strategy. Some pressure may persist as management cited potential economic challenges across its operating geographies, even in the absence of recession. Wholesale banking could remain challenged by the elimination of a dividend-tax deduction. Strong fiscal 1Q net-interest-margin (NIM) growth could slow until rate cuts materialize, possibly later this year. Even as Scotiabank is delivering on its goal of low- to mid-single-digit expense growth, reaching full-year EPS gains may depend on 2H improvements. Scotiabank confirmed its 2024 provision ratio guidance of 45-55 bps, despite reaching 50 bps in 1Q. A CET1 ratio of 12.9% is above the bank's 12.5% goal. Still, a beat is a beat, and the market has reacted positively. We think it still has room to recover.
5i Research Answer: