12:41 PM EST, 03/06/2024 (MT Newswires) -- Raj Viswanathan (Group Head and Chief Financial Officer, The Bank of Nova Scotia ( BNS )) joined RBC's Global Financial Institutions

Conference on Tuesday.

RBC is maintaining its Sector Perform rating and $64 target.

Select takeaways:

Mortgage run-off is likely for at least one more quarter, and then there should be resumption of growth. Scotiabank has seen some success with a new product in the broker channel that improves primacy.

International Banking (IB) segment had a solid Q1/24 as rates declined (with a net interest margin (NIM) improvement of 19 bps QoQ) and there was solid capital markets contribution from Global Banking and Markets (GBM) which is unlikely to repeat. Interest rates are likely to continue to decline (with Mexico possibly soon) so there is an expectation that NIMs could be healthy and solid for IB.

BNS reiterated the three pillars of its strategic plan which it shared at its investor day in 2023:

Thoughtfully allocate capital across its businesses: BNS noted that the strong Q1/24 results in the IB segment was not due

to additional capital allocation but due to leveraging its capabilities in the GBM businesses in Mexico, Peru, and Chile, and

capitalizing on opportunities (e.g., FX, derivatives, etc.) on the capital they already had when interest rates decreased in the

region. BNS does not expect the Q1/24 IB results of $372 million in GBM Latam to be sustainable as it was market-driven, but it continues to look to work its ~$19 billion capital in the segment more efficiently within that segment.

Gaining client primacy: BNS has made deliberate choices to drive client primacy and transition from single-product to multiproduct relationships, including reducing mortgage balances QoQ and YoY meaningfully (by design and also due to the higher rate environment).

Efficiency: BNS took a restructuring charge in Q4/23 to help improve its efficiency. There was no mention of further restructuring, but instead a focus on perhaps using some "capacity" for further investment.

Price: 67.47, Change: +0.23, Percent Change: +0.34