We believe that the Canadian banking sector is encountering incremental pressure from headwinds facing the Canadian economy, which is heightening economic risk in the banking system. We also believe industry risk for the Canadian banking sector is increasing. We expect that intensifying competition for loans and deposits will lead to pressure on profitability growth, especially in banks' retail businesses. We are lowering our long- and short-term issuer credit ratings on Bank of Nova Scotia to 'A+/A-1' from 'AA-/A-1+', following our revision of the stand-alone credit profile on the bank to 'a' from 'a+', and assigning a stable outlook. The stable outlook reflects our expectation that Bank of Nova Scotia's credit fundamentals will remain consistent with current ratings over the next
