Company Overview - Bank of Nova Scotia, also known as Scotiabank, has seen its stock decline approximately 25% from its 2022 peak due to its minimal presence in the U.S. market [1] - The bank has a strong dividend yield of nearly 5.4%, significantly higher than the S&P 500's yield of about 1.2% and the average bank's yield of 2.1% [2] - Scotiabank has a long history of paying dividends since 1833 and maintains an investment-grade-rated balance sheet [3] Regulatory Environment - Canadian banking regulations are more stringent than those in the U.S., resulting in a few large banks, including Scotiabank, that enjoy protected market positions and conservative operating models [4] Growth Strategy - Scotiabank has historically focused on expanding into Latin America rather than the U.S., which has led to lagging performance compared to its Canadian peers in earnings growth and return on equity [5][7] - The bank is now shifting its strategy to reduce exposure to less desirable markets and increase its presence in the U.S. market, including a recent acquisition of a roughly 15% stake in KeyCorp [6][8] Market Performance - Following the announcement of the KeyCorp investment in August 2024, Scotiabank's shares have risen over 20%, although they still have not fully recovered from previous losses [9] - The current high dividend yield presents a low-risk turnaround opportunity for investors, making Scotiabank an attractive long-term hold [9][10]

Financial Data and Key Metrics Changes - The bank ended the year with adjusted diluted earnings per share of $6.47, a return on equity of 11.3%, and return on tangible common equity of 13.7% [67] - Revenue was up 6% year-over-year, while expenses grew 4%, resulting in positive operating leverage of 2.3% for the year [68] - The provision for credit losses was $4.1 billion in 2024, $629 million higher, driven by higher impaired provisions [68] Business Line Data and Key Metrics Changes - Canadian Banking earnings were $4.3 billion, up $290 million or 7%, with revenue growth driven by deposit growth and margin expansion [68] - International Banking earnings were $2.7 billion, up 10% year-over-year, with revenues up 9% [69] - Global Wealth Management earnings of $1.6 billion were up 10% year-over-year, benefiting from strong assets under management growth of 18% [70] Market Data and Key Metrics Changes - The bank reported quarterly adjusted earnings of $2.1 billion and a diluted EPS of $1.57 [75] - Net interest income was $4.9 billion, up 6% year-over-year, primarily driven by loan growth [76] - Deposits were up 2% year-over-year, mostly in term, while loans were down 2% year-over-year, mainly in corporate [78] Company Strategy and Development Direction - The bank is focused on increasing the number of primary clients and has set a target of 2 million incremental primary clients by 2028 [6] - Capital allocation is being directed towards priority businesses, with a commitment to remix the portfolio to accelerate growth in fee income [7] - The bank aims to maintain a strong balance sheet with a Tier-1 capital ratio of 13.1% and has grown its allowance for credit losses by approximately 22% since the end of fiscal 2022 [8] Management's Comments on Operating Environment and Future Outlook - The management anticipates a rebound in economic activity next year due to the Bank of Canada's policy rate actions [19] - There is a focus on monitoring policy actions from the new administrations in Mexico and the US, with expectations for a cooperative environment that encourages capital investment [20] - Earnings growth is expected to be between 5% and 7% in 2025, prior to incorporating any benefits from the minority investment in KeyCorp [59] Other Important Information - The bank's productivity ratio improved to 56.1% this quarter, an improvement of 360 basis points year-over-year [80] - The Other segment reported an adjusted net loss of $453 million, compared to a loss of $465 million in the prior quarter [99] - ScotiaBond, a new culture framework, was rolled out to drive the bank's strategy forward [61] Q&A Session Summary Question: What are the expectations for earnings growth in 2025? - The bank continues to expect earnings growth between 5% and 7% in 2025, prior to incorporating any benefits from the KeyCorp investment [72] Question: How is the bank managing its capital allocation? - The bank is focused on disciplined capital allocation and execution, with a commitment to maintaining strong capital and liquidity positions [74] Question: What is the outlook for the International Banking segment? - International Banking earnings are expected to be lower, impacted by weaker Latin American currencies and slow growth economies [74]

Financial Performance - Total revenue for the year ended October 31, 2024, was $33,670 million, an increase from $32,214 million in 2023, representing a growth of 4.5%[16] - Net interest income rose to $19,252 million in 2024, compared to $18,262 million in 2023, reflecting an increase of 5.4%[16] - Net income for the year was $7,892 million, compared to $7,450 million in 2023, marking an increase of 5.9%[16] - Basic earnings per common share increased to $5.94 in 2024 from $5.78 in 2023, a growth of 2.8%[16] - Comprehensive income for the year was $8,604 million, compared to $7,933 million in the previous year, indicating an increase of 8.4%[17] - The total comprehensive income attributable to equity holders of the Bank was $8,542 million, an increase from $7,616 million in 2023, representing a growth of 12.1%[18] Assets and Equity - Total assets as of October 31, 2024, were $1,412,027 million, slightly up from $1,411,043 million in 2023[15] - Total equity attributable to equity holders of the Bank increased to $82,369 million in 2024 from $76,842 million in 2023, a rise of 7.2%[15] - Common equity rose to $73,590 million in 2024, compared to $68,767 million in 2023, reflecting an increase of 7.5%[15] - Total equity attributable to common shareholders rose to $76,842 million, up from $73,225 million in 2023, reflecting an increase of 3.6%[18] Credit Losses - Provision for credit losses increased to $4,051 million in 2024, up from $3,422 million in 2023, indicating a rise of 18.4%[16] - The allowance for credit losses was $6,536 million in 2024, compared to $6,372 million in 2023, indicating a growth of 2.6%[15] - Gross impaired loans totaled $6,739 million in 2024, up from $5,726 million in 2023, marking an increase of 17.74%[85] - The allowance for credit losses on impaired loans was $2,054 million in 2024, compared to $1,881 million in 2023, which is an increase of 9.2%[85] Cash Flow and Investments - Net cash from operating activities decreased significantly to $15,652 million in 2024, down from $31,724 million in 2023, a decline of 50.6%[19] - Cash and cash equivalents at the end of the year were $9,406 million, down from $10,173 million at the end of 2023, a decrease of 7.5%[19] - The total cash flows from investing activities resulted in a net outflow of $1,031 million in 2024, compared to a net outflow of $911 million in 2023[19] - The fair value of investment securities classified as FVOCI and FVTPL rose significantly to $123,420 million in 2024 from $86,253 million in 2023, marking an increase of approximately 43.1%[58] Derivatives and Hedging - The company reported total trading derivatives of $7,253,076 million, up from $6,921,281 million[66] - The total notional amount of derivatives is $9,058,165 million, with a credit risk amount (CRA) of $8,869 million and a credit equivalent amount (CEA) of $32,604 million[69] - The total notional amounts for cash flow hedges related to foreign currency and interest rate risk were $29,166 million[71] - The total carrying amount of the hedged item for the year ended October 31, 2024, was $88,293 million, with an ineffectiveness income recorded of $(1,215) million[72] Loans and Mortgages - Total gross loans as of October 31, 2024, amounted to $767,365 million, an increase from $757,283 million in 2023, representing a growth of approximately 1.43%[82] - Residential mortgages accounted for $350,941 million of total loans, with a net carrying amount of $349,733 million in 2024, showing a slight increase from $343,098 million in 2023[82] - The total loans and acceptances net of allowance for credit losses was $760,976 million in 2024, down from $769,449 million in 2023, reflecting a decrease of 1.54%[82] Regulatory and Compliance - The Bank is prohibited from declaring or paying dividends on its common or preferred shares if it would contravene capital adequacy or liquidity regulations[115] - If cash distributions on the Bank's subordinated additional Tier 1 capital notes are not paid, the Bank will not declare dividends on its common or preferred shares until such distributions are made in full[115] Employee Benefits and Pension Plans - The Bank provides defined benefit pension plans and defined contribution pension plans, with the cost of employee benefits actuarially determined each year using the projected unit credit method[41] - The discount rate used to determine the defined benefit obligation is based on yields from high-quality corporate bonds, with separate rates for Canada and the U.S.[41] Legal and Contingent Liabilities - A legal provision of $142 million was recorded in relation to ongoing arbitration with the Republic of Peru[109] - The Bank's Peruvian subsidiary is involved in legal actions concerning value-added tax assessed amounts totaling $176 million[109] Shareholder Information - Dividends paid on common shares in fiscal 2024 were $5,198 million ($4.24 per share), compared to $5,003 million ($4.18 per share) in 2023[111] - The number of common shares outstanding increased to 1,244,435,686 in 2024 from 1,214,044,420 in 2023[112]

Core Insights - The Bank of Nova Scotia reported fourth-quarter earnings that fell below analyst expectations due to higher costs and an impairment charge related to its investment in a Chinese bank [1][3] - The bank's net interest income (NII) was C$4.92 billion ($3.51 billion) and total revenue was C$8.53 billion, both showing year-over-year growth, but still missing analyst estimates [2] - Net income was C$1.69 billion, significantly lower than the expected C$2.14 billion, and even after adjustments, the adjusted net income of C$2.12 billion was below the anticipated C$2.16 billion [3] Financial Performance - The bank's net interest income (NII) increased year-over-year to C$4.92 billion, while total revenue reached C$8.53 billion, both figures slightly below analyst expectations [2] - Net income for the quarter was C$1.69 billion, missing estimates by a wider margin, and adjusted net income was C$2.12 billion, which also fell short of expectations [3] Strategic Focus - The Bank of Nova Scotia is shifting its focus towards North American operations, aiming to grow its business in Canada and has made recent investments in U.S.-based entities [4] - The bank is cutting costs in its international operations, particularly in the Caribbean and South America, as part of its new strategic direction [4][5] Market Reaction - Following the earnings report, the bank's U.S.-listed shares experienced a decline of approximately 3.5% shortly after the market opened [6]

| --- | --- | --- | |-------------------------------|-------|-------| | | | | | | | | | Investor | | | | Presentation December 3, 2024 | | | | | | | | | | | Caution Regarding Forward-Looking Statements From time to time, our public communications include oral or written forward-looking statements. Statements of this type are included in this document, and may be included in other filings with Canadian securities regulators or the U.S. Securities and Exchange Commission (SEC), or in other communications. In ...

The U.S. banking system is like the Wild West compared to the way things are handled in Canada. That's one big reason why, during the Great Recession, even the largest U.S. banks wound up having to cut their dividends while Canadian giants like Toronto-Dominion Bank (TD 0.20%) and Bank of Nova Scotia (BNS 0.30%) didn't.That said, these two banks, my favorite high-yield banks right now, aren't hitting on all cylinders. But that's exactly why you might want to buy them along with me.Canada's banks are highly ...

Investors looking for stocks in the Banks - Foreign sector might want to consider either Bank of Nova Scotia (BNS) or Canadian Imperial Bank (CM) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank is a proven strategy that targets compa ...

The average bank yields 2.5%. This trio of banks all yield well north of that figure as November gets underway.There's nothing wrong with going for the average and buying index funds when it comes to investing. But if you are trying to generate investment income you might want to go a more direct route. For example, the average bank yields around 2.5% today, using SPDR S&P Bank ETF (KBE 0.54%) as an industry proxy. KeyCorp (KEY -0.99%), Toronto-Dominion Bank (TD -0.23%), and Bank of Nova Scotia (BNS -0.31%) ...

Core Viewpoint - The article compares Bank of Nova Scotia (BNS) and Royal Bank (RY) to determine which stock is more attractive to value investors [1] Group 1: Zacks Rank and Earnings Outlook - Bank of Nova Scotia has a Zacks Rank of 2 (Buy), while Royal Bank has a Zacks Rank of 3 (Hold), indicating a stronger earnings outlook for BNS [3] - The Zacks Rank focuses on companies with positive earnings estimate revisions, suggesting that BNS is likely experiencing a more favorable earnings outlook [3] Group 2: Valuation Metrics - BNS has a forward P/E ratio of 10.13, compared to RY's forward P/E of 12.76, indicating that BNS may be undervalued relative to RY [5] - The PEG ratio for BNS is 1.54, while RY's PEG ratio is 1.86, suggesting that BNS offers better value when considering expected earnings growth [5] - BNS's P/B ratio is 1.18, significantly lower than RY's P/B of 2.05, further supporting the argument that BNS is the more attractive value option [6] Group 3: Value Grades - BNS has a Value grade of B, while RY has a Value grade of D, indicating that BNS is perceived as a better value investment based on various financial metrics [6]

These dividend stocks all pay yields of around 6% and higher.Recurring dividend income can help boost your savings, help pay bills, and/or potentially even allow you to retire early. There's a significant incentive for building up a strong portfolio of high-yielding dividend stocks as the payoff could be huge in the long run.And while most dividend stocks only pay you every three months, you can create a stream of recurring monthly income by investing in at least three of them that pay at different times wi ...