Scotiabank’s growth in riskier credit, foreign markets sparks Moody’s ratings downgrade – FINANCIAL NEWS-ecozik.com
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Scotiabank’s growth in riskier credit, foreign markets sparks Moody’s ratings downgrade

Moody's has downgraded its ratings for the Bank of Nova Scotia (TSX:BNS) by one notch.

Bank of Nova Scotia’s determination to chase greater profits by expanding its portfolio of unsecured auto and charge card loans, and branching out into higher-growth but less stable geographies, has resulted in a one notch ratings downgrade from Moody’s Investors Service.

Canada’s third-largest bank has taken “significant measures to improve its profitability that signal a fundamental shift from the bank’s traditionally safe appetite,” Moody’s vice-president David Beattie said inside a statement released late Monday, after Moody’s completed a 90-day overview of Scotia’s operations.

“While the bank’s strategic actions usually are meant to enhance current profitability- in Moody’s view, they boost the prospect of future incremental credit losses,” he wrote, noting that Scotia’s strategy reflects its position of getting the lowest domestic net interest margin of Canada’s six largest banks.

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