BMO Nesbitt Burns, 30 August 2011
Bank sector earnings rose by 16% year over year in the quarter ended July, about 2% more than consensus expectations. We have added to our sector weight with a percentage point in the Bank of Nova Scotia. Despite a challenging environment and higher-than-expected expense growth, BNS continues to meet, or exceed, financial targets. Operating EPS should grow at 13% in 2011, higher than the targeted range of 7–12%. Operating EPS are projected to be $4.50 in 2011, which excludes $0.28 in gains in H1/11. Credit trends are stable and cash ROE in the latest quarter was healthy, at 18%.
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Bank sector earnings rose by 16% year over year in the quarter ended July, about 2% more than consensus expectations. We have added to our sector weight with a percentage point in the Bank of Nova Scotia. Despite a challenging environment and higher-than-expected expense growth, BNS continues to meet, or exceed, financial targets. Operating EPS should grow at 13% in 2011, higher than the targeted range of 7–12%. Operating EPS are projected to be $4.50 in 2011, which excludes $0.28 in gains in H1/11. Credit trends are stable and cash ROE in the latest quarter was healthy, at 18%.
