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Bank of Nova Scotia

BNS: XNYS (USA)

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Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	$98.00	Ltkcky	Cblpchhq

Bank of Nova Scotia Earnings: Solid Results, but Provisioning Will Continue to Bite Earnings Growth

Michael Miller ,

May 28, 2024

Narrow-moat-rated Bank of Nova Scotia reported solid fiscal second-quarter results that were largely in line with our expectations. Net revenue increased 5% year over year and decreased 1% from last quarter to CAD 8.3 billion, with fees and net interest income both contributing to the growth. Adjusted net income fell 3% from last year and 5% from last quarter to CAD 2.1 billion. The annual and sequential decreases were primarily driven by the bank’s credit provisioning expense, which was CAD 1.01 billion versus CAD 709 million last year and CAD 962 million last quarter. As we incorporate these results, we do not plan to materially alter our CAD 70/USD 52 fair value estimate. We see the shares as only slightly undervalued.

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