Bank of Nova Scotia (NYSE:BNS) is about to release earnings. Ponder this Bear Case Scenario:
The high growth international banking market is earning smaller margins than the Canadian product lines. Additional growth is not financially wise.
Canadian Banking system has experienced a great run for the past ten years and BNS has participated. This will not continue and it will be harder to earn our daily bread.
In a low rate environment spreads are always under pressure. As rates increase the olde book stays firm and rigid as borrowers realize what they have and are loath to give it up.
George Gutowski writes from a caveat emptor perspective.