The Bank of Nova Scotia (BNS): A Bull Case Theory 

We came across a bullish thesis on The Bank of Nova Scotia on Beat the TSX (BTSX-20)’s Substack by Beat the TSX-27 Strategy. In this article, we will summarize the bulls’ thesis on BNS. The Bank of Nova Scotia’s share was trading at $64.77 as of September 29th. BNS’s trailing and forward P/E were 17.11 and 11.35 respectively according to Yahoo Finance.

Scotiabank (BNS) reported Q3/25 EPS of $1.88, up 15% year-over-year, driven primarily by strong trading revenue and lower expenses. Despite a higher tax rate that reduced results by $0.08, lower provisions for credit losses added $0.11 to earnings. Net Interest Margin (NIM) continues to expand, benefiting from cheaper funding and wider deposit spreads, in contrast to some peers where lower rates are headwinds. Credit costs are easing, with impaired PCLs declining sequentially, and management sounded confident about 2026.

The Caribbean unit continues to perform exceptionally, delivering a 35% ROE. Capital generation remains solid, with the CET1 ratio rising 10 basis points even after repurchasing 3.2 million shares, reflecting disciplined balance sheet optimization. Both domestic and international business lines showed improvement, setting up a stronger foundation for loan growth once capacity constraints ease next year. Under new CEO Scott Thompson, strategic actions including prior investments, streamlining management, and pruning underperforming divisions are beginning to pay off, translating into cleaner credit, better margins, and steady buybacks.

While dividend increases could return, the stock currently trades near fair value, with a price of $85.70 and a dividend yield of 5.18%, slightly below its five-year average of 5.70%. Given the recent operational momentum, Scotiabank appears to be in the early stages of a turnaround, yet with loan growth still pending, upside remains measured. Investors holding the stock are advised to maintain their positions at equal weight, while new buyers might wait for a more attractive entry point. Overall, Q3/25 confirms that the bank is stabilizing and steadily positioning itself for EPS growth in 2026, leveraging margin expansion, credit improvement, and disciplined capital deployment.

Previously we covered a bullish thesis on Nu Holdings Ltd. (NU) by Ray Myers in May 2025, which highlighted strong customer growth, robust revenue expansion, and scale-driven monetization in Latin America. The company’s stock price has appreciated approximately by 21.47% since our coverage, as fundamentals remained resilient. The thesis still stands. Beat the TSX-27 Strategy shares a similar bullish view but emphasizes operational stabilization, margin expansion, and credit improvement at Scotiabank.

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