Scotiabank may sell gold operation

Article Excerpt

BANK OF NOVA SCOTIA $84 (Toronto symbol BNS; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 1.2 billion; Market cap: $100.8 billion; Price-to-sales ratio: 4.0; Divd. yield: 3.8%; TSINetwork Rating: Above Average; www.scotiabank.com) is the third-largest of Canada’s big five banks with assets of $906.3 billion. The bank is reportedly looking to sell ScotiaMocatta, its U.K.-based gold and precious metals trading business. That’s in response to a scandal involving the smuggling of gold from South America to a U.S. refinery. ScotiaMocatta accounts for just a small fraction of the bank’s operations, so selling it would have little impact on its future earnings. However, a sale would let Bank of Nova Scotia focus on expanding its more-promising banking operations in Latin America. As well, ScotiaMocatta is facing increased government scrutiny over its role in the setting of gold and silver prices. Bank of Nova Scotia is a buy. buy…

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