Brad Willock Bank of Nova Scotia BNS-T BUY Mar 22, 2007

New CEO refocusing on domestic operations and on growing deposit base as a source of funding. Will take time, but doable. Attractive valuation, in lower range amongst peers. Nice dividend.

Better to not hold only 1 bank; also consider RY, which is her favourite.

New strategy under new CEO made sense in theory, but devil is in the details. Non-controlling position in KeyCorp was a head scratcher. Sold Colombian business, but still invested. Show-me story. 

In his opinion, the only quality banks in Canada are RY and NA. Own quality. New CEO has done an excellent job. Results were very good, but had to raise loan losses.

Nice run, now having a bit of a setback. But that's OK, that's how it goes with the banks. He doesn't mind buying at these levels.

Worst-performing Canadian bank over the last decade, and that's one of the reasons he likes it. New CEO has freedom to exit under-performing businesses, especially in Latin America. Proceeds are being reinvested in NA. Earnings poised to rise significantly next year as capital gets properly allocated. 

Not expecting outperformance. But yield is 6.11%, and with improvement in growth and other metrics should deliver at least a 10% annualized return for the next 5 years.

He sold ~40-50% of his position at $79-80. Now that it's dropped below $70, considering buying it back. Appealing dividend yield. Not sure correction is over yet because of credit cycle. May try to buy cheaper, but it's a reasonable entry point if you have a very long horizon.

Savvy new CEO's doing quite a decent job. Managing balance sheet well, but he's unsure about 15% acquisition of KeyCorp in US.

The question was on dollar cost averaging for BNS. It is a bank in transition and has had a lot of trouble in recent years. Pays a good dividend of 6%. In general Canadian banks always come back and can be traded.

Likes it. Their exposure in Latin America offers exposure to copper and other minerals. Management is shifting focus from Latin America to outside that area. He sees success here, and the stock is priced well now. The yield is generous and safe. This could be a core holding.

Like other Canadian banks it is undergoing re-positioning itself for a turn-around. It has dialed back its overseas business and is now focused on Canada, the U.S. and Mexico. The Canada and U.S space is pretty crowded. It has acquired a struggling regional bank in the U.S.

EPS of $1.52 missed estimates of $1.56; revenue of $9.08B was marginally better than estimates. Scotiabank's transition is advancing, driving overall adjusted operating leverage and international segment efficiency improvement, aided by progress toward C$800 million in cost savings this year and primacy expansion. The bank may reach 5-7% 2025 EPS growth. Trade risks still weigh on domestic and Latin America economies, reflected in a higher-performing provisions ratio. Slower activity in domestic banking might extend as clients face uncertainty. Canadian net interest margin eased. Wealth growth is exposed to market volatility, while Capital Market's M&A fees could ease, despite a healthy pipeline. The bank expects 2H impaired provisions at or over 2Q's 57 bps, above prior guidance and expected 2H moderation. Performing reserves in 2Q may help. Scotiabank is set to buy back 20 million shares. All-in, we would be comfortable here. The bank is managing a difficult and uncertain time fairly well so far. 
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