News Column

Canada : 5 reasons to invest in the BANK OF NOVA SCOTIA

June 5, 2014

Canadian banks provide returns to investors. Bank of Nova Scotia s history and its Q2 2014 financial results provide proof.

Here are 5 reasons to consider investing in Bank of Nova Scotia.

1. Its extensive network and overall diversified business model.

The bank has a network of 1,190 branches and offices and 3,869 automated banking machines in Canada.

It has exposure to diverse geographies and customer segments. Its predominant focus is personal and commercial operations. It targets these operations to produce roughly 70% of its earnings, with the wholesale segment producing the remaining 30%.

Bank of Nova Scotia retail and commercial banking operations in 43 of the 55-plus countries outside of Canada it operates. It has important exposure to the faster-growing regions of Asia and Latin America.

2. Strategic partnership.

The bank announced its purchase of a 20% interest in Canadian Tire s financial services division for $500 million in cash. The bank has become the exclusive partner for new financial products for Canadian Tire customers. It agreed to provide up to $2.25 billion in credit card receivables financing for the financial services business.

The deal is part of its strategy to increase its high-margin credit card business and obtain new customers.

3. Acquisition strategy.

The bank acquired ING Direct, now rebranded as Tangerine, in 2013. ING was the eighth-largest Canadian bank. Bank of Nova Scotia offers an alternative self-directed banking service to Tangerine s 1.9 million customers.

It also acquired Credito Familiar. Credito s focus is on the consumer and microfinance sector. In addition, it completed the 51% acquisition of Colfondos AFP.

Canadian Imperial Bank of Commerce (CIBC) announced that it completed its purchase of Atlantic Trust Private Wealth Management. It said that the former Invesco unit will assist the bank in building its wealth management business in North America.

This is a US $210 million deal. The bank bought Citigroup s Canadian MasterCard business.

4. Considerable assets and growth platforms.

Bank of Nova Scotia had assets of $792 billion. The bank has 4 diversified platforms to foster growth. These are Canadian banking, international banking, global wealth and insurance, and global banking and markets.

5. Consistent dividend payer

Bank of Nova Scotia announced a dividend on its outstanding common shares of $0.64 per share ending July 31, 2014, or $2.56 annualized. This is in comparison to $2.39 in 2013 and represents significant growth from 2004 s $1.10.

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Source: TendersInfo (India)

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