So it was kind of a mixed day for Canadian bank stock Bank of Nova Scotia (TSE:BNS), which declared earnings that won on some fronts but faltered on others. The ambiguity was not welcome with investors, and shares slid nearly 2% in Tuesday morning’s trading as a result.
Admittedly, things did not look good on the surface. Scotiabank posted net income of $993 million for the quarter, which ended on January 31. That was down a long way from the $2.2 billion it posted in the first quarter of 2024.
However, there was a sound reason behind it. The bank took at $1.35 billion loss on selling operations in several countries, including Colombia and Panama. On an adjusted basis, therefore, that takes Scotiabank’s earnings up to around $2.3 billion, which would make a win over the first quarter last year. And adjusted earnings per share figures also beat analyst expectations; Scotiabank posted $1.76 per share. Analysts projected $1.65, reports noted.
Wait and See Attitude
Meanwhile, Scotiabank also pointed out a recent development that is leaving the banking industry in limbo for a while: the whole concept of tariffs. While tariffs do not generally impact consumers immediately, the rarity of their use has left some consumers shaken. Scotiabank actually hiked its provisions for bad loans in the last few months, but did not go as far with such a plan as it might have.
There is a distinct “lack of clarity” on what could happen as a result of these tariffs, as noted by Phil Thomas, the bank’s chief risk officer. Thomas further noted “It’s difficult to act on headlines and tweets,” thus, Scotiabank has to be prepared for any of several possible outcomes.
Is Scotiabank Stock a Buy?
Turning to Wall Street, analysts have a Hold consensus rating on BNS stock based on four Buys and six Holds assigned in the past three months, as indicated by the graphic below. After a 18.11% rally in its share price over the past year, the average BNS price target of C$85.45 per share implies 20.12% upside potential.
