It dropped by 70bps for TD and by 50bps for BNS. For this analysis we'll focus on the first two.īy the end of Q2/2020 the all-important common equity tier 1 (CET1) ratio dropped at both banks and currently stands at 11% for TD and 10.9% for BNS. The COVID-19 business impact can be assessed along several dimensions such as capital & liquidity, credit, revenue, expenses and digital. We will dive deeper into these developments subsequently when assessing COVID-19 impact. The current level of PCL exceeds TD's net income level of previous quarters but is somewhere in the middle between the current adjusted net income level and that of previous quarters for BNS. In the lower part of the dashboard we can see that PCLs have been skyrocketing at both banks. Retail at TD is due to the fact that the Fed slashed interest rates. However, while NIM dropped by 7bps to 34bps at BNS it dropped between 16bps to 45bps at TD. TD Bank is bigger than BNS and is generating higher NIM in all its segments.
Thus, TD's earnings have been impacted to a higher degree and that is also what the dashboard revealed. Overall, net income has been slashed at both banks, dropping 48% at TD and 42% at BNS sequentially and by 51% at TD and 39% and BNS on Y/Y basis. Source: Earnings Presentations author's illustration The dashboard below depicts various metrics for the two banks by segment: Net Interest Margin ( NIM ) as well as Q/Q and Y/Y change, Net Income and PCL. TD Bank missed on earnings and beat on revenue with a healthy 2.9% Y/Y revenue growth.Įarnings from both banks, which basically applies to every bank in the market, were heavily impacted by a record buildup of loan loss provisions ( PCL) as well as to a lesser degree potential litigation provisions but the magnitude differs quite significantly. Financialsįor the most recent Q2/2020 BNS beat expectations on the top and bottom line and posted a surprising 2.1% Y/Y revenue growth. We'll compare these two stocks along three dimensions: financials, dividend strength and safety and COVID-19 impact and response. Toronto-Dominion Bank VS Bank of Nova Scotia
#Bank of nova scotia bank update
What's more, in the future I am planning to extend this to all of Canada's Big Five and regularly update these once a quarter. I have exported all kind of financial data into Excel and order to be able to build some compelling visualizations for this comparison. Source: Designed by author image source: Wikipedia The Journal Pioneer Two of Canada's illustrious Big Five banks (Bank of Nova Scotia (NYSE: BNS), Toronto-Dominion Bank ( NYSE: TD), Canadian Imperial Bank of Commerce (NYSE: CM), Royal Bank of Canada (NYSE: RY) and Bank of Montreal (NYSE: BMO), namely TD Bank and the Bank of Nova Scotia, currently command the biggest share in my portfolio and thus I want to examine which stock is the better buy right now.
#Bank of nova scotia bank windows
The windows of golden "no-brainer" buying opportunities may have been closed now but these stocks are still providing promising long-term opportunities.
Canadian banks with their century-long dividend track records have been acting as a pillar of stability and reliable dividend growth.Īmid the pandemic stock prices have retreated sharply and recovered roughly 50% of the drop so far. Dividend stocks are the cornerstone of my portfolio and the Canadian banks are an important contributor.
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