Bank of Nova Scotia $47.82 - Toronto symbol BNS

BANK OF NOVA SCOTIA $47.82 (Toronto symbol BNS: SI Rating: Above average) is the second-largest of Canada’s five big banks, with assets of $449.4 billion. It has 1,000 branches in Canada. In the three months ended January 31, 2008, Bank of Nova Scotia earned $835 million or $0.82 a share, down 18.1% from $1.02 billion or $1.01 a share a year earlier. The latest earnings included $238 million in pre-tax writedowns and other charges. Without those charges, the bank would have earned about $1.00 a share. Revenue fell 9.7%, to $2.8 billion from $3.1 billion. The bank’s shares currently yield 3.8%. Bank of Nova Scotia has among the lowest remaining exposure to writedowns of asset-backed securities among Canadian banks. Future writedowns are likely to be minimal. Lower interest rates should spur demand for new loans. The bank is also doing a good job controlling non-interest costs. International operations now supply 30% of earnings. The bank continues to expand in developing regions such as Latin America, where it has a long history of successful operations. Bank of Nova Scotia has long held off significantly expanding its market share in the mature U.S. market. But now, with many small U.S. banks trading at distressed prices, it may look at adding stakes in bargain-priced assets. Bank of Nova Scotia is still a safety-conscious buy.