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Bank Of Nova Scotia (BNS)
NYSE:BNS
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Positive Factors
Balance Sheet and Liquidity
The Bank of Nova Scotia demonstrated a strong balance sheet and liquidity position, which is beneficial for navigating potential economic uncertainties.
Dividend Increase
Scotiabank announced a 4% dividend increase, which is viewed positively given management’s decision to pause.
Global Banking & Markets Performance
Global Banking and Markets exceeded expectations with a 23.1% year-over-year increase in adjusted profit before taxes and provisions.
Negative Factors
Canadian Banking Earnings
Canadian Banking earnings were below estimates due to lower risk-adjusted margins and negative operating leverage.
Canadian NIM
Canadian NIM slipped but management expects we’ve reached the trough.
Credit Risk
Higher provisions for credit losses in Canadian and International Banking indicate increased caution regarding credit risk.
Bank Of Nova Scotia (BNS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$67.22B
Dividend Yield5.64%
Average Volume (3M)1.51M
Price to Earnings (P/E)15.1
Beta (1Y)0.65
Revenue GrowthN/A
EPS GrowthN/A
CountryUS
Employees88,722
SectorFinancial
Sector Strength81
IndustryBanks - Diversified
Share Statistics
EPS (TTM)1.11
Shares Outstanding1,245,573,000
10 Day Avg. Volume1,601,294
30 Day Avg. Volume1,506,943
Financial Highlights & Ratios
PEG Ratio-0.75
Price to Book (P/B)1.03
Price to Sales (P/S)0.00
P/FCF Ratio5.02
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$58.74Price Target Upside8.64% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
Bank Of Nova Scotia Business Overview & Revenue Model
Company DescriptionThe Bank of Nova Scotia provides various banking products and services in Canada, the United States, Mexico, Peru, Chile, Colombia, the Caribbean and Central America, and internationally. It operates in four segments: Canadian Banking, International Banking, Global Wealth Management, and Global Banking and Markets. The company offers financial advice and solutions, and day-to-day banking products, including debit and credit cards, chequing and saving accounts, investments, mortgages, loans, and insurance to individuals; and business banking solutions comprising lending, deposit, cash management, and trade finance solutions to small, medium, and large businesses, including automotive financing solutions to dealers and their customers. It also provides wealth management advice and solutions, including online brokerage, mobile investment, full-service brokerage, trust, private banking, and private investment counsel services; and retail mutual funds, exchange traded funds, liquid alternative funds, and institutional funds. In addition, the company offers international banking services for retail, corporate, and commercial customers; and lending and transaction, investment banking advisory, and capital markets access services to corporate customers. Further, it provides online, mobile, and telephone banking services. The company operates a network of 954 branches and approximately 3,766 automated banking machines in Canada; and approximately 1,300 branches and a network of contact and support center internationally. The Bank of Nova Scotia was founded in 1832 and is headquartered in Halifax, Canada.
How the Company Makes Money
Bank Of Nova Scotia Earnings Call Summary
Earnings Call Date:May 30, 2025
(Q2-2025)
| % Change Since: 1.52%|
Next Earnings Date:Aug 26, 2025
Earnings Call Sentiment Neutral
While the bank demonstrated strong financial performance metrics and strategic initiatives such as dividend increases and share buybacks, the earnings call highlighted significant challenges, including increased provisions for credit losses and macroeconomic uncertainties. The positive achievements were balanced by notable lowlights, leading to a cautious outlook.Q2-2025 Updates
Positive Updates
Strong Financial Metrics
Adjusted earnings for the quarter were $2.1 billion or $1.52 per share. The CET1 ratio increased by 30 basis points to 13.2%, and liquidity metrics remained strong.
Dividend and Share Buyback
Scotiabank announced an increase in quarterly dividends by $0.04 to $1.10 per share and launched a share buyback program for 20 million shares.
Global Wealth Management Growth
Earnings from Global Wealth Management rose 17% year-over-year to $405 million, driven by asset growth and higher net interest income.
Positive Operating Leverage
The bank delivered positive operating leverage for the fifth straight quarter, with year-to-date positive operating leverage of 2%.
Negative Updates
Increased Provisions for Credit Losses
The provision for credit losses increased to approximately $1.4 billion, with a PCL ratio of 75 basis points, primarily due to higher-performing loan provisions.
Canadian Banking Earnings Decline
Earnings in Canadian Banking were $613 million, down 31% year-over-year, impacted by significant performing PCLs and a slight decline in pre-tax pre-provision profit.
Macroeconomic Uncertainty
The bank faces ongoing global economic uncertainty, particularly related to trade tensions and tariffs, impacting credit outlook and client behavior.
Company Guidance
During Scotiabank's 2025 Q2 Results Call, Scott Thomson, the President and CEO, highlighted the bank's strategic focus amidst global economic uncertainty. The bank reported adjusted earnings of $2.1 billion, or $1.52 per share, and demonstrated strong balance sheet metrics with a Common Equity Tier 1 (CET1) ratio of 13.2%, an increase of 30 basis points quarter-over-quarter. Liquidity metrics remained robust, and the bank built almost $200 million in allowances, cumulating $1.8 billion since the end of 2022. Despite a challenging macroeconomic backdrop, the bank increased its quarterly dividend by $0.04 to $1.10 per share and announced a share buyback program for 20 million shares. The loan-to-deposit ratio improved to 104%, marking the tenth consecutive quarter of improvement, and Canadian Banking deposits grew 5% year-over-year. Scotiabank maintained its focus on client primacy, with Canadian retail advisors making 20% more client calls compared to the prior quarter. The bank also continued its investment in AI to enhance productivity, with over 70% of commercial client emails now processed by AI. Although the year-to-date return on equity (ROE) was down slightly, the bank remains committed to achieving a 14%-plus ROE over the medium term and expects to grow earnings per share (EPS) by 5% to 7% in fiscal 2025.Bank Of Nova Scotia Financial Statement Overview
Summary
The Bank of Nova Scotia maintains a robust financial position with strong revenue growth and stable cash flows. While profitability margins appear pressured, the bank's solid equity base and cash flow suggest resilience. However, high leverage remains a strategic focus area to mitigate potential financial risks in fluctuating market conditions.Income Statement
The Bank of Nova Scotia has shown stable revenue growth over the years, with a notable increase in total revenue for the TTM compared to previous years. However, the net profit margin has been fluctuating, and the EBIT margin for the TTM is lower compared to historical figures, indicating some operational challenges. Overall, the income statement reflects steady revenue growth but with potential profitability pressures.65
Positive
Balance Sheet
The company's balance sheet is characterized by strong equity, with a relatively stable debt-to-equity ratio. The equity ratio is moderate, reflecting a solid foundation amidst high total assets. However, the total debt remains high, which could pose risks if economic conditions change unfavorably. The bank's strong equity position provides a cushion, but leveraging remains an area to watch.70
Positive
Cash Flow
The Bank of Nova Scotia demonstrates a strong cash flow position, with a healthy free cash flow to net income ratio and consistent operating cash flow. The free cash flow has grown, indicating efficient capital management. The discrepancy between operating cash flow and net income ratio suggests solid cash generation capabilities, which is a positive indicator of liquidity and financial health.75
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 44.76B | 33.62B | 31.79B | 31.15B | 30.91B | 31.29B | Gross Profit |
| 44.76B | 33.62B | 31.79B | 31.15B | 30.91B | 31.29B | EBIT |
| 3.85B | 8.80B | 8.69B | 28.12B | 12.49B | 8.32B | EBITDA |
| 1.75B | 10.56B | 0.00 | 14.20B | 14.00B | 9.70B | Net Income Common Stockholders |
| 6.73B | 7.76B | 7.41B | 9.92B | 9.62B | 6.78B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 192.62B | 108.17B | 140.83B | 119.31B | 120.05B | 116.50B | Total Assets |
| 1.44T | 1.41T | 1.41T | 1.35T | 1.18T | 1.14T | Total Debt |
| 309.12B | 300.67B | 313.81B | 310.86B | 245.66B | 7.41B | Net Debt |
| 238.92B | 236.81B | 223.50B | 244.96B | 159.34B | -69.06B | Total Liabilities |
| 1.35T | 1.33T | 1.33T | 1.27T | 1.11T | 1.07T | Stockholders Equity |
| 84.80B | 82.37B | 76.93B | 73.22B | 70.80B | 68.13B |
| Cash Flow | Free Cash Flow | ||||
| 17.39B | 15.16B | 31.28B | 16.37B | -13.27B | 55.89B | Operating Cash Flow |
| 17.74B | 15.65B | 31.72B | 16.94B | -12.81B | 56.66B | Investing Cash Flow |
| -11.51B | -7.45B | -30.04B | -11.29B | 14.70B | -56.46B | Financing Cash Flow |
| -5.89B | -8.84B | 16.71B | -4.58B | -2.78B | 28.13B |
Bank Of Nova Scotia Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
| $67.22B | 15.14 | 8.00% | 5.64% | ― | ― | ||
77 Outperform | $78.26B | 14.00 | 9.88% | 4.16% | 15.63% | 66.95% | |
64 Neutral | $12.86B | 9.79 | 7.78% | 16985.65% | 12.28% | -7.82% | |
| $64.35B | 12.03 | 13.19% | 3.90% | ― | ― | ||
| $179.95B | 14.13 | 14.17% | 3.26% | ― | ― | ||
| $123.09B | 10.28 | 14.27% | 4.22% | ― | ― | ||
| $38.27B | 12.85 | 13.42% | 3.28% | ― | ― |
* Financial Sector Average
Performance Comparison
BNS
Bank Of Nova Scotia
54.07
10.42
23.87%
BMO
Bank Of Montreal
108.05
27.56
34.24%
CM
Canadian Bank of Commerce
68.71
22.17
47.64%
RY
Royal Bank Of Canada
127.61
25.05
24.42%
TD
Toronto Dominion Bank
70.09
17.66
33.68%
NTIOF
National Bank of Canada
98.44
15.90
19.26%
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.