E A Catch-Up Day

After suppressing population growth for decades with fierce mistreatment including enforced abortion when women because pregnant a second time, the totalitarian regime in Beijing has reversed course because China is losing population too fast. Now they can have a third child. This is an example of how dangerous it is to mingle sex with politics. It works also in reverse: ordering women to carry babies to term by denying them the right to an abortion is also totalitarian.

After a 3 day weekend (with the most discouraging weather for late May imaginable in NYC), we have a catch-up day.

A lot of our news is from Canada which was open Monday.

Business newspaper article

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*Bank of Nova Scotia, BNS, or Scotiabank, reported its 6th sequential postive operating leverage level for its Q2 overnight. It is the Canada major the least linked to US banking, which is both a strength and a weakness CEO Brian Porter stressed that many of its business lines are still not back to pre-pandemic earnings, but there is “a clear path”. .Its Q2 net of C$2.456 bn was up 85% from the prior Q2 but only up 2% from its Q1 2021-2 level. Its diluted EPS came in at C$1.88, up 88% y/y but flat sequentially. Its revenues fell 3% from Q1 but were up also from prior year. Its pre-tax pre-provisiaon profits, a key metric for BMS, was C$3.694 bn, down 4% from Q1. Revenues at C$7.766 were down 3% from Q1. However, the core banking margin, another key metric, was in the back at last at 2.26% and adnjsuted net income at C$2.475 bn was up 81%. Return on equity hit 14.9% in the quarter up from 14.4% in Q1 2021-2.

All this at the corporate level was clarificed by the breakdown into categories. Canadain banking was one negative as adjusted net income from the home country was only C$927 mn, down from Q1 because the Bank of Canada (central bank) cut rates and business borrowers were less anxious and there were fewer liquid merger moves. Global wealth management was the real dud. In the previous Q2 BNS was still part of the London gold pool. Its exit cut net income and sales and boosted expenses and impairment, a one-off in my opinion. Its new international banking business was more mixed, the term invented by management to cover the non-gold pool foreign operations, often on behalf of Canadian customers. This part of BNS saw net income up 203% y/y and 12% sequentially, despite higher impariments. The total capital of BNS gained fractionally, to 12.3.% from 12.2%. In US trading today BNS fell 0.33% to $67.04 (US).

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