Scotiabank (BNS) kicked off big bank earnings with a beat, led by continued outperformance in capital markets (equities & fixed income)…

… which should be a consistent theme for the group, National Bank (NA) in particular - given the outsized trading exposure relative to peers.

It was the first quarter without the bank’s Colombian operations, which helped drive ROE to ~13% - with management showing confidence in hitting its 14% target a year early…

… barring any meaningful macro deterioration, which isn’t out of the question given the tough job and housing market conditions. That backdrop contributed to a continued rise in impaired loans…

… and could keep a lid on valuation, alongside a sluggish growth outlook for its emerging markets business - Mexico in particular.