The ratings on The Bank of Nova Scotia (Scotiabank) reflect our view of its market position as one of five dominant banks in Canada; well-established international growth platform; and track record of high and consistent earnings performance coupled with reasonably strong capital measures, though with high reliance on hybrid securities and preferred shares, a lower form of capital. A fairly stable Canadian retail and commercial loan portfolio to date also supports the business. Offsetting the positive ratings factors are the risk associated with growing investments in developing and emerging markets and susceptibility to adverse global economic developments and lack of significant scale in any particular market; underrepresented wealth management business relative to domestic peers, which is a competitive disadvantage; and
