It was just three days ago when we had a look at Canadian banking giant Bank of Nova Scotia (TSE:BNS), also known as Scotiabank, and its plan to make inroads in the U.S. market by picking up a stake in KeyCorp (KEY). But now, there is a new development in Scotiabank’s push into the U.S., and it’s sending shares up modestly in Thursday morning’s trading. Scotiabank has reportedly recruited seven JPMorgan Chase employees to establish a mortgage capital markets business in Houston, Texas.
The business will not actually start until fall, which means about six weeks at the minimum. But when it does, it will address structured finance and other issues in the sector.
The team involved has significant experience; one of the team’s three new managing directors, Thanh Roettele, has been with JPMorgan for over 28 years, based on information from his LinkedIn profile. Further, it turns out that this is just building on what Scotiabank has already been doing in the sector. Indeed, over a year ago, it brought in a “collateralized loan obligation executive” from Morgan Stanley, as well as four veterans in the same field from Natixis, a French bank.
A Political Mess Afoot?
It is hard to find anything today that does not at least have the whiff of politics on it. Nearly every decision made these days has some sort of political connection. But one such decision might be coming back to haunt Scotiabank: selling off its holdings in Elbit Systems (ESLT), an Israeli military tech company.
Scotiabank claimed that 1832 Asset Management’s (a subsidiary) recent moves to sell off around half its shares in Elbit—going from 1.13 million shares to around 642,000—was not politically motivated. This is despite the fact that protesters have come out claiming Scotiabank is effectively “funding genocide” in recent days. Yet, some, like associate professor with the Rotman School of Management Richard Powers, say it would be “…a bit naive…” to claim that politics had no influence at all here.
Is Scotiabank a Good Stock to Buy?
Turning to Wall Street, analysts have a Hold consensus rating on TSE:BNS stock based on nine Holds and one Sell assigned in the past three months, as indicated by the graphic below. After a 7.6% rally in its share price over the past year, the average TSE:BNS price target of C$67.56 per share implies 6.03% upside potential.
