Bank of Nova Scotia Earnings: Better Credit Costs Than Peers Helped Results

Narrow-moat-rated Bank of Nova Scotia reported solid third-quarter results that were largely in line with our expectations. Adjusted net revenue increased 5% year over year and 2% from last quarter to CAD 8.5 billion, with net interest income primarily contributing to the growth. Adjusted net income fell 1% from last year and increased 4% from last quarter to CAD 2.2 billion. The annual decrease was primarily driven by the bank’s credit provisioning expense, which was CAD 1.05 billion versus CAD 819 million last year and CAD 1.01 billion last quarter. As we incorporate these results, we do not plan to materially alter our CAD 71/USD 52 fair value estimates. We see the shares as fairly valued now.