Review of Bank of Nova Scotia

JAN 04, 2024 - New CEO Scott Thompson has recently presented the Bank updated five-year strategy with a focus on quality over quantity in terms of clients, which should benefit shareholders in the long-term and aims to solve operational inefficiencies. As fears of recession and impacts from high interest rates potentially put downward pressure on the economy in 2024, BNS and the banking industry can likely see a slowdown. The Bank understands these risks and is putting the necessary measures in place to minimize impacts such as upping provisions for credit losses. Despite these risks, BNS trades at a cheap valuation on both an absolute and relative basis which should be fortuitous for shareholders in the long-term. We have maintained our rating at an A- due to BNS’ strategic shift which should positively impact earnings along with trading at an attractive valuation.