December 13, 2018

Bank of Nova Scotia (BNS)

The Bank of Nova Scotia (BNS) (more commonly referred to as Scotiabank) is one of Canada’s “Big Six” banks.  It was founded in 1823 in Halifax, Nova Scotia.  As part of Canada’s well-regulated banking industry they have enjoyed impressive results over the past few years.  While the Canadian banks all share some characteristics, they do differ in subtle ways.  Scotiabank is known for its prescence in Latin America and Asia and claims that the fact they have over 18.6 million customers around the world in 50 countries (including 2,000 branches and offices and 3,700 AMBs) makes them the most internationally diversified of the Canadian bank choices. This also makes BNS the best positioned Canadian Banks to benefit from emerging markets in South America such as Brazil.

 

The five strategic priorities outlined in their most recent news release stated that Scotiabank was focused on sustainable and profitable revenue growth, capital management, leadership, prudent risk management and appetite, and efficiency of expense management.  With over 73,000 employees, the Bank of Nova Scotia is a stable banking option that looks to secure profits for investors long into the future. They recently decided to not increase their dividend (while reporting 2011 Q3 financial results) as Richard Earl, BNS CEO, sees more investing opportunities and prefer keep BNS liquidity for growth than redistributing in form of dividend. Nonetheless, BNS dividend yield is sitting around 3.90% (Oct 2011) with a healthy dividend payout ratio.

 

ScotiaBank BNSScotiabank attributes success within Canada to a, “Committed team that lives our shared values and works together to provide customers with expert advice and service.  A solid foundation of key strengths and priorities, including a strong capital base, and excellent risk and expense management skills.  Diversification of our business lines, products, and locations with a clear focus on our strategy.”  The Canadian division of the bank has over 7.6 million customers that are serviced by over 1,000 braches.  Their domestic retail operation has two primary categories that are retail banking/small business banking and commercial banking.  The set-up is pretty standard for a retail bank with services ranging from the basic mortgages, loans, and credit cards to the business banking, lending, and leasing required by larger entities.

 

The Bank of Nova Scotia has the stable dividend history that one would expect of such a mature company.  At its current price it has an attractive Price-to-Earnings ratio of 12.91 and its dividend yield is 3.9%. As many other Canadian banks, BNS is lurking for buying smaller banks in order to growth their market shares. Scotiabank is believed to make some purchases in 2012 in one of their favorite market for expansion: South America.

 

Instead of complaining about bank fees join the dark side and become a shareholder.  Banks are created to make money, and the Bank of Nova Scotia (BNS), as well as the other Canadian Banks are in a great situation to do this as the market regains steam.

TSE BNS

BNS Dividend Metrics:

Ticker Name Dividend Yield Payout Ratio DEBT_TO_MKT_CAP Dividend Growth 5 years Dividend Growth 1 years
BNS Bank of Nova Scotia 3.62% 50.10% 1.2 7.28% 1.53%

 

 

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  1. […] are some differences.  TD and Royal Bank (RY) are decisively bigger than the Bank of Nova Scotia (BNS), the Bank of Montreal (BMO), the National Bank of Canada (NA), and the Canadian Imperial Bank of […]

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