BANK OF NOVA SCOTIA $59.16 - Toronto symbol BNS

BANK OF NOVA SCOTIA $59.16 (Toronto symbol BNS; Shares outstanding: 1.2 billion; Market cap: $71.5 billion; TSINetwork Rating: Above Average; Div. yield: 4.2%, www.scotiabank.com) is the third-largest of Canada’s five big banks, with assets of $742.6 billion.

In its fiscal 2013 third quarter, which ended July 31, 2013, the bank earned $1.30 a share, up 12.1% from $1.16 a year earlier.

Higher loan demand and an increase in deposits pushed up the Canadian banking division’s earnings by 13.2%. That includes the contribution from ING Direct, which Bank of Nova Scotia bought for $3.1 billion late last year. ING Direct offers a wide variety of no-fee banking services, mainly over the Internet. It has 1.8 million customers and $30 billion of deposits.

The international banking division’s earnings rose 3.0%, also on stronger loan demand, particularly in Latin America and Asia. The wealth management division’s earnings gained 15.7%, as rising stock prices increased the value of the assets this business manages.

Bank of Nova Scotia set aside $314 million to cover bad loans in the latest quarter, down 21.9% from $402 million a year earlier.

The bank also raised its quarterly dividend by 3.3%, to $0.62 a share from $0.60. The new annual rate of $2.48 yields 4.2%.

Bank of Nova Scotia is our #1 safety-conscious buy for 2013.

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