Financial Performance - Net interest income for Q1 2025 was $5,173 million, an increase from $4,923 million in Q4 2024 and $4,773 million in Q1 2024[21]. - Total revenue reached $9,372 million, up from $8,526 million in Q4 2024 and $8,433 million in Q1 2024[21]. - Net income attributable to common shareholders decreased to $1,025 million from $1,521 million in Q4 2024 and $2,066 million in Q1 2024[21]. - Basic earnings per share for Q1 2025 was $0.82, down from $1.23 in Q4 2024 and $1.70 in Q1 2024[21]. - Adjusted net income for Q1 2025 was $2,362 million, compared to $2,119 million in Q4 2024[21]. - Reported net income for the three months ended October 31, 2024, was $1,689 million, with net income attributable to common shareholders at $1,521 million[39]. - Adjusted net income for the same period was $2,119 million, with adjusted net income attributable to common shareholders at $1,951 million[39]. - The reported net income for Q1 2025 was $993 million, a decrease of 55% compared to $2,199 million in Q1 2024, primarily due to higher non-interest expenses including a $1,362 million impairment loss[79]. - Adjusted net income increased by 7% to $2,362 million from $2,212 million in the previous year, driven mainly by higher revenues[100]. Revenue and Income Breakdown - Non-interest income increased by 15% to $4,199 million, primarily due to higher trading-related revenues and wealth management revenues[105]. - Total revenue for Q1 2025 was $3,412 million, an increase of $187 million or 6% compared to Q1 2024[134]. - Net interest income rose to $2,647 million, up $156 million or 6%, primarily due to asset and deposit growth[134]. - Non-interest income increased to $765 million, a rise of $31 million or 4%, driven by higher private equity gains and mutual fund distribution fees[135]. - Total revenue for Q1 2025 was $1,594 million, up 23% from $1,293 million in Q1 2024[203]. Credit Losses and Provisions - The provision for credit losses was $1,162 million, compared to $1,030 million in Q4 2024 and $962 million in Q1 2024[21]. - The provision for credit losses increased to $1,162 million in Q1 2025 from $962 million in Q1 2024, representing a $200 million increase[108]. - The provision for credit losses on performing loans rose to $98 million in Q1 2025, compared to $20 million in Q1 2024, primarily due to credit migration in retail unsecured lines and corporate portfolios[109]. - Provision for credit losses was $538 million, an increase of $160 million compared to $378 million in Q1 2024, with a provision ratio of 47 basis points[138]. - Provision for credit losses for Q1 2025 was $18 million, compared to $5 million in Q1 2024, reflecting credit migration and a negative macroeconomic outlook[206]. Expenses and Efficiency - Non-interest expenses rose to $6,491 million in Q1 2025, up 22.6% from $5,296 million in Q4 2024[29]. - Non-interest expenses were $6,491 million in Q1 2025, up $1,752 million or 37% year-over-year, including an impairment loss of $1,362 million related to the sale of banking operations in Colombia, Costa Rica, and Panama[113]. - The productivity ratio increased to 69.3% from 62.1% in Q4 2024, indicating higher non-interest expenses relative to revenue[21]. - The adjusted productivity ratio was 54.5% in Q1 2025, down from 56.0% in Q4 2024, reflecting challenges in managing costs[116]. Capital and Assets - The Common Equity Tier 1 (CET1) capital ratio was 12.9%, slightly down from 13.1% in Q4 2024[21]. - Total assets increased to $1,439,151 million from $1,412,027 million in Q4 2024[21]. - Average total assets for the consolidated bank increased to $1,460,615 million as of January 31, 2025, from $1,418,795 million as of October 31, 2024[53]. - Average assets increased by $15 billion to $460 billion in Q1 2025, driven by a $10 billion increase in residential mortgages[130]. Market and Economic Outlook - The economic outlook indicates a slowdown in U.S. GDP growth to 1.9% in 2025 from 2.8% in 2024, influenced by trade policy uncertainties[91]. - The Canadian economy is expected to grow by 1.8% in 2025, supported by lower policy rates despite trade uncertainties from the U.S.[92]. Strategic Initiatives - The Bank completed an acquisition of approximately 14.9% ownership interest in KeyCorp for about $2.8 billion, with the additional investment of approximately $2.0 billion completed on December 27, 2024[81][82]. - The company aims to enhance its market position through strategic adjustments and potential acquisitions in the upcoming quarters[44].

Turnaround Investing and Dividend Yields - Turnaround investing is attractive due to the potential for long-term survival and growth, especially when combined with high dividend yields [1][2] - Aggressive income investors may consider Toronto-Dominion Bank (TD), Bank of Nova Scotia (BNS), and EPR Properties (EPR) for their high yields and turnaround potential [2] Toronto-Dominion Bank (TD) - TD Bank is one of Canada's largest banks, operating conservatively due to heavy regulation, with a historically high dividend yield of 5.1% [3] - The US banking operations face challenges, including a large fine for money laundering controls, an asset cap, and slower growth prospects [4][5] - Despite US regulatory issues, TD Bank increased its dividend, indicating stability, and its strong Canadian business provides a fallback [6] Bank of Nova Scotia (BNS) - Scotiabank is another major Canadian bank with a strong foundation and a high dividend yield of 5.3% [7] - The bank is refining its strategy by exiting underperforming South American markets and reinvesting in the US, including a recent 15% stake in KeyCorp [8][9] - Management is taking quick action, but the market remains cautious due to years of lagging performance [10] EPR Properties (EPR) - EPR Properties is a REIT focused on experiential properties, heavily impacted by the pandemic, with 36% of rents coming from struggling movie theaters [11][12] - The company has reworked its portfolio, improved tenant rent coverage to 2.6x from 2.0x in 2019, and reinstated a dividend with a payout ratio of 66% in Q3 [12][13] - EPR offers a high dividend yield of 7.3%, making it an attractive option for investors willing to take on some risk [13] Overall Investment Opportunity - TD Bank, Scotiabank, and EPR Properties are all in turnaround phases, with high dividend yields and potential for recovery [14] - Each stock is priced below $500, offering accessible entry points for investors [14]

Core Viewpoint - Scotiabank has agreed to transfer its banking operations in Colombia, Costa Rica, and Panama to Davivienda, while also acquiring a 20% equity stake in Davivienda through newly issued shares, aiming to enhance profitability and operational efficiency in its international banking markets [1][2][5]. Group 1: Transaction Details - Scotiabank will acquire approximately 20% equity stake in Davivienda through a mix of common and preferred shares, allowing it to appoint board members proportional to its ownership [2]. - The deal includes a mutual referral agreement enabling Scotiabank to service its Corporate, Wealth, and Global Banking clients within Davivienda's operational regions [3]. - The transaction is expected to be completed in about 12 months, pending regulatory approvals [3]. Group 2: Financial Impact - Scotiabank will recognize an after-tax impairment loss of approximately C$1.4 billion in Q1 of fiscal 2025, which may reduce its common equity tier 1 (CET1) ratio by 10-15 basis points [4]. - An additional loss of C$300 million is anticipated upon closure due to cumulative foreign currency translation losses [4]. - The deal is projected to be neutral to Scotiabank's capital, with a potential increase in earnings in the coming years and an estimated increase in CET1 ratio by 10-15 bps due to reduced risk-weighted assets [6]. Group 3: Strategic Rationale - The transaction aligns with Scotiabank's five-year plan to boost profitability in international markets and enhance operational efficiency in non-core areas [5]. - The agreement supports Scotiabank's strategy to create a connected value proposition focused on growth markets in North America and Latin America [5]. - Francisco Aristeguieta, Group Head of International Banking, emphasized that this agreement advances the execution plan towards sustainable and higher returns across international markets [6]. Group 4: Market Performance - Scotiabank's shares have increased by 18.8% over the past six months, outperforming the industry growth of 3.5% [7].

Group 1 - The company is offering a 17% discount and a 14-day free trial on its annual price of $599.99 [1] - High Dividend Opportunities (HDO) is the largest community of income investors and retirees, boasting over 8,000 members [2] - The Income Method employed by HDO generates strong returns, making retirement investing less stressful and straightforward [2] Group 2 - HDO targets a yield of 9-10% through its Model Portfolio, appealing to investors seeking reliable income [1][2] - The community aims to attract more members to enhance its lively group dynamic [2]

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 ...