Barclays Maintains an 'Underweight' on Bank of Nova Scotia (BNS); Rising Costs Dampen Earnings Growth

Barclays maintains an 'Underweight' on Bank of Nova Scotia (NYSE: BNS) price target lowered from C$59 to C$57.

Barclays analyst says, "Admittedly, Scotia reported one of the best quarters that we have seen so far in the third quarter earnings season, with reasonably strong lending volumes and stable margins, predicated on a sequential increase in domestic retail banking. While management was confident and discussed declining expense growth going forward, operating leverage was a concern for us in the quarter. In addition, International Banking's average loan growth, while positive, was not necessarily stellar, and expense growth strongly outpaced that of revenues. The strong year-over-year increase in contribution came from lower provisions and taxes, and Scotia faces a more difficult year-over-year comparison next quarter.

For more ratings news on Bank of Nova Scotia click here and for the rating history of Bank of Nova Scotia click here.

Shares of Bank of Nova Scotia closed at $54.65 yesterday.

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