Expanding in Discount

Article Excerpt

BANK OF NOVA SCOTIA $49.36 (Toronto symbol BNS: SI Rating: Above average) has agreed to acquire the Canadian operations of E*Trade, a leading online discount broker. The bank will pay $444 million in cash. That’s equal to 45% of the $980 million or $0.97 a share that it earned in the latest quarter. The new operations should directly add just $0.02 a share to Bank of Nova Scotia’s annual earnings by 2011. However, the acquisition of E*Trade will increase Bank of Nova Scotia’s share of Canada’s fast-growing online investing market from 6% to 10%, based on the number of accounts. E*Trade has approximately $4.7 billion in assets under administration and 190 employees. Bank of Nova Scotia also aims to sell its own financial products to E*Trade’s client base, including encouraging them to open Scotiabank bank accounts to let them easily transfer funds back and forth from their E*Trade on-line trading accounts. Bank of Nova Scotia is a buy buy…

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