TORONTO, April 9 (Reuters) - Canadian lender Bank of

Nova Scotia ( BNS ) on Tuesday warned that upcoming elections

in the U.S. and Mexico are creating political uncertainty,

challenging the bank's long-term business decision-making

ability.

Canada's third biggest lender by assets is most exposed to

the North America's booming $1.6 trillion trade and new CEO

Scott Thomson in December unveiled a strategy to benefit from

the regional trade, while potentially exiting or improving

profitability at some weak markets such as Colombia.

"With elections coming this year in Mexico and the United

States, and soon in Canada, there is a level of political

uncertainty that makes it difficult to make the long-term

decisions that will ensure our future prosperity in the region,"

Thomson told investors at the bank's annual meeting.

"But difficult does not mean impossible," he assured

shareholders.

The "Mexico First" strategy offers clients in Canada, the

U.S. and Mexico end-to-end trade finance, Thomson has said, and

is expected to differentiate Scotiabank among its Canadian

rivals.

The plan could expose Scotiabank to a market with

unpredictable political risks and where foreign banks have

struggled to make inroads, analysts have said.

Thomson said North American economic integration could

increase through near-shoring, reducing regulatory hurdles and

ensuring businesses can access capital.

He said the bank's international businesses have improved

with lower capital while it continues to prioritize the three

North American countries which hold a total gross domestic

product of $30 trillion.

Net income from its international banking segment rose 16%

in the first quarter of 2024, making it the strongest growth

segment.

"Our plan is not to get out of those countries. Our plan is

to run them more effectively," Thomson said responding to a

question on the Latin American business.