The Successful Investor Hotline – Friday, December 11, 2009

Article Excerpt

BANK OF NOVA SCOTIA, $47.51, Toronto symbol BNS, fell 3% this week, despite reporting higher earnings and revenue in its latest fiscal year. The bank earned $3.5 billion in the year ended October 31, 2009. That’s up 13.0% from $3.1 billion in the prior year. Earnings per share rose 8.5%, to $3.31 from $3.05, on more shares outstanding. If you exclude writedowns of securities, the bank would have earned $3.70 a share. That beat the $3.69 a share that analysts were expecting. The bank’s loan-loss provisions remained high because of the weak economy: it set aside $1.7 billion to cover bad loans in the latest fiscal year, up 176.8% from $630 million in the prior year. This figure will probably stay high until the second half of fiscal 2010. Revenue rose 21.7%, to $14.5 billion from $11.9 billion. That’s because low interest rates continue to drive up demand for mortgages and other loans. As well, revenue from the bank’s international operations (which…