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  5. BNS: Long term holder of BNS. [Bank of Nova Scotia (The)]
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Q: Long term holder of BNS. Your thoughts on the latest quarter...worth still holding? Do you like the direction and latest results?
Thanks...Steve
Asked by Stephen on August 27, 2024
5i Research Answer:

EPS of $1.63 slightly beat estimates of $1.62; revenue of $8.36B slightly missed estimates. Earnings did fall, due to higher loan loss provisions. Scotiabank sees tough economic conditions, yet some improvement in Canada and no recessions across its international markets. These trends may lead to a return of organic-earnings growth in 2025. Despite 3Q pressure and guidance for a Canadian net interest margin decline and international stability, Scotiabank is positioned for overall NIM improvement in 4Q as policy rates ease, driving higher interest income. It may still take time for loan growth to accelerate. Management expects the 4Q provisions ratio to remain elevated at around 55 bps. The bank argued for a better use of capital with its KeyCorp investment vs. share buybacks.  A CET1 ratio of 13.3% is above the bank's 12.5% goal, which should hold through the investment period. Overall, we are comfortable with the results, outlook and holding the stock. While hardly 'spectacular' we would consider the results a step in the right direction.