Barclays Raises Estimates on Bank of Nova Scotia (BNS); ING Acquisition More About Deposits, Less About Assets

September 10, 2012 2:34 PM EDT
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Price: $57.64 -0.03%

Rating Summary:
    6 Buy, 7 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 23 | Down: 34 | New: 34
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Barclays maintains an 'Equalweight' on Bank of Nova Scotia (NYSE: BNS) price target of $55.00.

Analyst, John Aiken, commented after the company announced purchase of ING DIRECT, which he feels is more about desposits and less about assets. BNS expects the deal to be accretive and push out double-digit returns on invested capital in the first year. However, there isn't much in the way of cost synergies.

Aiken, positive on the deal, said he's taking a more 'wait-and-see' approach and remains conservative (thus the EW-rating). He raises FY13 EPS estimates from $5.08 to $5.15, expecting a shift in assets from maturing ING mortgages to run-off, helping Scotia's future profitability.

For an analyst ratings summary and ratings history on Bank of Nova Scotia click here. For more ratings news on Bank of Nova Scotia click here.

Shares of Bank of Nova Scotia closed at $53.97 yesterday.

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