Bank of Nova Scotia (NYSE: BNS) Seeking Smaller Acquisitions

Bank of Nova Scotia (NYSE: BNS) Chief Executive Officer Richard Waugh said today that he is looking to make acquisitions which will add to the current international operations of the company, rather than huge acquisitions which would transform the company.

Waugh added it didn't matter what the current economic environment is or will be, the company strategy is to focus on smaller acquisitions which are manageable and based on an existing foundation, rather than be concerned whether the pieces of a large acquisition can be merged into the company in a healthy manner.

In a conference call discussing the quarterly results of the company, Waugh pointed to acquisitions over the last three years as a model for shareholders and investors to look to as a model going forward. Scotiabank has spend close to $2 billion for foreign acquisitions over the last three years.

Banks in Canada have been largely unaffected by the economic crisis, and that shows in the numbers from Scotiabank, as quarterly results improved again for them, as the Canadian economy expanded and demand for lines of credit and mortgages from businesses and consumers rose.

With the overall banking sector of Canada performing strongly, expectations for Bank of Nova Scotia were extremely high, and although not meetings some analysts' expectations, still did very well for the last quarter. It also didn't help that they were the last major bank to report earnings in Canada.

Unsurprisingly, because of their resilient economy, which enjoyed the benefits of increasing global demand for a variety of commodities, the domestic performance of the bank did especially well, growing 28 percent to a record C$560 million. Much of that was the result of consumer deposits growing by 14 percent in the quarter.

On the other hand, mirroring the ongoing global recession, profits from its international unit was down by 24 percent to C$294 million, although some of that was from the rising value of the Canadian dollar, which always will affect exports of any country with a strengthening currency. Consequently, it cut profits by C$47 million for Scotiabank.

As with most of their banking counterparts, the investment unit of the bank enjoyed a good quarter, increasing by 27 percent to C$381 million, one of the better performances for the division.
   
Waugh said the bank is positioned strongly to reach its stated goals of return on equity of 16 - 20 percent in 2010, and growth of 7 to 12 percent for earnings per share.