Bank of Nova Scotia Earnings Call Nuggets: Consumer Finance and Caribbean Outlook

Bank of Nova Scotia (NYSE:BNS) recently reported its third quarter earnings and discussed the following topics in its earnings conference call.

Consumer Finance

Steve Theriault – Bank of America/Merrill Lynch: Just want to follow-up first on Brian’s comments and maybe for Dieter, Brian mentioned potential changes to cards and rate caps. Can you give us a little color on that? Is that – that’s within the consumer finance business improve, is it?

Brian J. Porter – Group Head, International Banking: Yeah, that occurred in our quarter, where we had the regulator and consumer protection group combined to limit our fee that we can charge for the various card products. We’re able to increase our rate, but not sufficient enough to overcome the reduction in fees.

Steve Theriault – Bank of America/Merrill Lynch: So, the control is on fees, not on rates?

Brian J. Porter – Group Head, International Banking: That’s correct.

Steve Theriault – Bank of America/Merrill Lynch: Okay. If I might, for Sean, in your Corporate and Other segment you mentioned ALM activities as a positive quarter-on-quarter and year-on-year. So, is that primarily the absolute effect of a steeper cure in the quarter or does it reflect where you’re taking risk or is it something else and can you help size that for us at all?

Sean D. McGuckin – EVP and CFO: Yeah, there’s a few different elements there. One benefit that we’re starting to see is as some of the older subordinated debt runs off and gets replaced with cheaper debt that reduces our funding cost and that resides in that Other segment. There’s slightly higher prepayment fees which also end up in the Other segment rather than in the business line. So, those are some of the facts that are driving that net benefit in the Other segment…

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