Bank of Nova Scotia (NYSE:BNS) Announces Earnings Results

Bank of Nova Scotia (NYSE:BNS) (TSE:BNS) issued its quarterly earnings data on Tuesday. The bank reported $1.64 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $1.53 by $0.11, Zacks reports. Bank of Nova Scotia had a return on equity of 16.12% and a net margin of 13.91%.The business had revenue of $7.52 billion for the quarter, compared to analysts’ expectations of $7.11 billion. During the same quarter in the prior year, the firm posted $1.84 EPS. The firm’s quarterly revenue was up 11.1% on a year-over-year basis.

Here are the key takeaways from Bank of Nova Scotia’s conference call:

• Positive Sentiment: Scotiabank reported a record quarter, with earnings of CAD 3 billion, EPS of CAD 2.28—up 21% year over year—and ROE of 14.2%, exceeding its 14% medium-term target ahead of schedule.
• Positive Sentiment: Canadian Banking continued to drive performance: ROE rose to 19.4%, margins expanded for the fifth consecutive quarter, fee income grew strongly, and management cited continued opportunities in mid-market, small-business lending, cards, mutual funds, and productivity.
• Positive Sentiment: Global Banking and Markets posted record earnings of CAD 647 million, up 37% year over year, supported by strong capital-markets activity, 7% sequential loan growth, 9% deposit growth, and several major Canadian debt, equity, and structured-finance transactions.
• Positive Sentiment: Global Wealth Management earnings increased 23% year over year, with record third-quarter net sales of CAD 3 billion and the eighth consecutive quarter of positive net flows; International Banking also reported 6% earnings growth and expects revenue growth of roughly 6%–8% over time.
• Negative Sentiment: Credit performance improved, but management continues to monitor elevated mortgage delinquencies, geopolitical and trade uncertainty, and energy-cost pressures. The upcoming International Banking shift to AIRB capital models is expected to reduce the CET1 ratio by approximately 15 basis points, while a Chilean tax-rate change will require a one-time deferred-tax-asset write-down in Q4.

Bank of Nova Scotia Stock Performance

BNS stock traded down $0.47 during midday trading on Monday, reaching $91.92. 841,302 shares of the company were exchanged, compared to its average volume of 2,400,005. Bank of Nova Scotia has a one year low of $61.69 and a one year high of $94.96. The firm has a market capitalization of $112.03 billion, a price-to-earnings ratio of 16.63, a price-to-earnings-growth ratio of 1.05 and a beta of 1.11. The company has a debt-to-equity ratio of 1.98, a current ratio of 1.04 and a quick ratio of 1.04. The business has a 50-day moving average price of $88.14 and a two-hundred day moving average price of $80.16.

Bank of Nova Scotia Announces Dividend

The company also recently announced a quarterly dividend, which will be paid on Wednesday, October 28th. Shareholders of record on Tuesday, October 6th will be paid a $1.14 dividend. This represents a $4.56 annualized dividend and a yield of 5.0%. The ex-dividend date of this dividend is Tuesday, October 6th. Bank of Nova Scotia’s dividend payout ratio is presently 58.05%.

Institutional Trading of Bank of Nova Scotia

A number of hedge funds have recently made changes to their positions in the stock. AQR Capital Management LLC boosted its position in Bank of Nova Scotia by 111.2% during the 1st quarter. AQR Capital Management LLC now owns 19,096 shares of the bank’s stock valued at $911,000 after acquiring an additional 10,056 shares in the last quarter. Sivia Capital Partners LLC bought a new stake in shares of Bank of Nova Scotia in the 2nd quarter valued at approximately $330,000. EverSource Wealth Advisors LLC lifted its stake in Bank of Nova Scotia by 42.8% during the second quarter. EverSource Wealth Advisors LLC now owns 2,165 shares of the bank’s stock valued at $120,000 after purchasing an additional 649 shares during the last quarter. Sei Investments Co. raised its stake in shares of Bank of Nova Scotia by 2.1% in the 2nd quarter. Sei Investments Co. now owns 21,212 shares of the bank’s stock valued at $1,172,000 after acquiring an additional 434 shares in the last quarter. Finally, Quantinno Capital Management LP grew its position in Bank of Nova Scotia by 61.1% in the second quarter. Quantinno Capital Management LP now owns 66,962 shares of the bank’s stock valued at $3,701,000 after acquiring an additional 25,400 shares during the period. 49.13% of the stock is owned by institutional investors.

Analyst Ratings Changes

BNS has been the subject of several research analyst reports. National Bank Financial upgraded shares of Bank of Nova Scotia from a “sector perform” rating to an “outperform” rating in a report on Wednesday, August 26th. Weiss Ratings downgraded Bank of Nova Scotia from a “buy (a-)” rating to a “buy (b+)” rating in a research report on Tuesday, August 18th. Keefe, Bruyette & Woods initiated coverage on Bank of Nova Scotia in a research note on Friday, August 21st. They issued an “outperform” rating on the stock. TD Securities upgraded shares of Bank of Nova Scotia from a “hold” rating to a “buy” rating in a research report on Tuesday, August 25th. Finally, Royal Bank Of Canada lifted their price target on Bank of Nova Scotia from $98.00 to $117.00 and gave the company a “sector perform” rating in a research report on Thursday, May 28th. Five analysts have rated the stock with a Buy rating and two have given a Hold rating to the stock. According to MarketBeat.com, the stock currently has an average rating of “Moderate Buy” and an average target price of $117.00.

About Bank of Nova Scotia

Bank of Nova Scotia, commonly known as Scotiabank, is a Canadian multinational banking and financial services company founded in 1832 and headquartered in Toronto, Ontario. It is one of Canada’s largest banks and provides a broad range of financial services to retail, commercial, corporate and institutional clients. The bank combines a domestic Canadian franchise with an extensive international presence to serve customers across multiple markets.

Scotiabank’s core activities include personal and commercial banking, wealth management, corporate and investment banking, capital markets, and global transaction banking.