Bank of Nova Scotia Reported 2Q Results and G-250 Trade Indicators

Bank of Nova Scotia (BNS, A2/A)

Reported 2Q operating results that, while not surpassing analysts' expectations, were strong. Revenue rose 9% YoY, while net income fell 1%. BNS recorded C$1.4 billion in net charge-offs, a 40% YoY increase. This larger loan write-down fully accounts for the lower profit and loss (P&L). CET1 ratio stands at 13.2%, with all business units reporting robust revenue growth.

Financial Position: Bank of Nova Scotia experienced approximately C$20 billion in 2Q deposit outflows, but credit quality remains strong post-charge-offs. BNS's balance sheet is deleveraging, and the bank is retaining capital. Management raised the dividend by 3% and announced plans to repurchase $20 million in shares.

Model Indicators: There is a 66% chance that BNS will issue bonds in the USD market within the next 10 trading days. The trading model views the BNS 4.75% 02/02/26, BNS 4.932% 02/14/29, and BNS 4.65% perpetual bonds as undervalued but not at a level to warrant an attractive long trading indicator. However, the model identifies BNS equity as an attractive long opportunity at Friday's closing price.

G -250 Euro Supply Tuesday

BT Group (BRITEL, Ba1/BB+)

£ Benchmark 30.5NC5.5 Sub Variable 6.875%-7%

€ Benchmark Long 9Y Fixed MS+170 Area

National Grid North America Inc (NGGLN, Baa2/BBB)

€500m 5Y Fixed MS+130 Area

€500m 10Y Green Fixed MS+175 Area

G – 250 USD Supply Tuesday

HSBC (HSBC) USA deal already announced

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