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What's in the Cards for Scotiabank (BNS) in Q3 Earnings?
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The Bank Of Nova Scotia (BNS - Free Report) , also known as Scotiabank, is scheduled to report fiscal third-quarter 2021 results (ended Jul 31) on Aug 24, before market open. The company’s revenues and earnings are anticipated to have improved year over year.
In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate on year-over-year growth in fee income. Also, lower provisions for credit losses and non-interest expenses were bright spots.
Over the trailing four quarters, the company’s earnings have surpassed the consensus estimate on three occasions and missed in the other, the surprise being 10.4%, on average.
During the May-July period, the global economy witnessed encouraging recovery from the pandemic supported by revival of economic activity and high vaccination rates.
Scotiabank’s diversified business platform consisting of Canadian and international banking, global wealth management as well as global banking and markets are likely to have offered top-line stability in the quarter to be reported.
Moreover, the company believes that the pandemic has changed spending habits of many Canadians, with notably lower spending and increased savings. This is likely to have driven deposits for the company. Robust mortgage and commercial activities are likely to have driven loan balance for the company in the quarter to be reported. This is expected have aided bottom-line expansion.
Robust wealth effects from equities and the housing market is likely to have continued, boosting the company’s Global Banking and Markets revenues in the quarter to be reported.
Amid low interest rates and stabilization of economic conditions, corporates’ plans to raise capital on debt and share issuance have been higher globally in the May-July period. Scotiabank is expected to have benefited from the high level of deal-making during the quarter as companies resorted to mergers and acquisitions to tide over the changing operating environment, and benefit from ultra-low interest rates and abundance of capital. This is likely to have driven advisory revenues for the company, boosting Global Banking and Markets segment earnings.
With continued improvement in the macroeconomic condition in the third quarter, increased vaccination rates and support from government packages, we expect this to have been another quarter of reserve releases for Scotiabank. Improved credit loss provisions are likely to have boosted International banking performance in the quarter.
However, a continuation of the low interest rate policy by the Bank of Canada is likely to have remained a headwind, straining net interest margins.
Here is what our quantitative model predicts:
Scotiabank does not have the right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher — for increasing the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for Scotiabank is 0.00%.
Zacks Rank: Scotiabank currently carries a Zacks Rank of 3.
Prior to the fiscal third-quarter earnings release, the company has been witnessing downward estimate revision, indicating the bearish sentiment of analysts. In fact, the Zacks Consensus Estimate for fiscal third-quarter earnings has been revised 3.2% downward to $1.49 over the past week. Nonetheless, the figure suggests year-over-year growth 98.7%.
Also, the Zacks Consensus Estimate for revenues of $6.12 billion indicates 9.6% growth from the prior-year quarter’s reported figure.
Stocks to Consider
BanColombia S.A. (CIB - Free Report) sports a Zacks Rank of 1. The Zacks Consensus Estimate for the current year’s earnings has moved 28.9% north in a week’s time.
UBS Group AG (UBS - Free Report) carries a Zacks Rank of 2 (Buy). The Zacks Consensus Estimate for the ongoing-year’s earnings has moved 14.5% upward in the past month.
Western New England Bancorp (WNEB - Free Report) carries a Zacks Rank of 2. Earnings estimates for 2021 have moved up 8.5% in the past month.
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What's in the Cards for Scotiabank (BNS) in Q3 Earnings?
The Bank Of Nova Scotia (BNS - Free Report) , also known as Scotiabank, is scheduled to report fiscal third-quarter 2021 results (ended Jul 31) on Aug 24, before market open. The company’s revenues and earnings are anticipated to have improved year over year.
In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate on year-over-year growth in fee income. Also, lower provisions for credit losses and non-interest expenses were bright spots.
Over the trailing four quarters, the company’s earnings have surpassed the consensus estimate on three occasions and missed in the other, the surprise being 10.4%, on average.
Bank of Nova Scotia The Price and EPS Surprise
Bank of Nova Scotia The price-eps-surprise | Bank of Nova Scotia The Quote
Factors at Play
During the May-July period, the global economy witnessed encouraging recovery from the pandemic supported by revival of economic activity and high vaccination rates.
Scotiabank’s diversified business platform consisting of Canadian and international banking, global wealth management as well as global banking and markets are likely to have offered top-line stability in the quarter to be reported.
Moreover, the company believes that the pandemic has changed spending habits of many Canadians, with notably lower spending and increased savings. This is likely to have driven deposits for the company. Robust mortgage and commercial activities are likely to have driven loan balance for the company in the quarter to be reported. This is expected have aided bottom-line expansion.
Robust wealth effects from equities and the housing market is likely to have continued, boosting the company’s Global Banking and Markets revenues in the quarter to be reported.
Amid low interest rates and stabilization of economic conditions, corporates’ plans to raise capital on debt and share issuance have been higher globally in the May-July period. Scotiabank is expected to have benefited from the high level of deal-making during the quarter as companies resorted to mergers and acquisitions to tide over the changing operating environment, and benefit from ultra-low interest rates and abundance of capital. This is likely to have driven advisory revenues for the company, boosting Global Banking and Markets segment earnings.
With continued improvement in the macroeconomic condition in the third quarter, increased vaccination rates and support from government packages, we expect this to have been another quarter of reserve releases for Scotiabank. Improved credit loss provisions are likely to have boosted International banking performance in the quarter.
However, a continuation of the low interest rate policy by the Bank of Canada is likely to have remained a headwind, straining net interest margins.
Here is what our quantitative model predicts:
Scotiabank does not have the right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher — for increasing the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for Scotiabank is 0.00%.
Zacks Rank: Scotiabank currently carries a Zacks Rank of 3.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Prior to the fiscal third-quarter earnings release, the company has been witnessing downward estimate revision, indicating the bearish sentiment of analysts. In fact, the Zacks Consensus Estimate for fiscal third-quarter earnings has been revised 3.2% downward to $1.49 over the past week. Nonetheless, the figure suggests year-over-year growth 98.7%.
Also, the Zacks Consensus Estimate for revenues of $6.12 billion indicates 9.6% growth from the prior-year quarter’s reported figure.
Stocks to Consider
BanColombia S.A. (CIB - Free Report) sports a Zacks Rank of 1. The Zacks Consensus Estimate for the current year’s earnings has moved 28.9% north in a week’s time.
UBS Group AG (UBS - Free Report) carries a Zacks Rank of 2 (Buy). The Zacks Consensus Estimate for the ongoing-year’s earnings has moved 14.5% upward in the past month.
Western New England Bancorp (WNEB - Free Report) carries a Zacks Rank of 2. Earnings estimates for 2021 have moved up 8.5% in the past month.