UPDATE: Citigroup Initiates Bank of Nova Scotia at Neutral

Citigroup initiated coverage on Bank of Nova Scotia

with a Neutral rating. Citigroup noted, "[T]he bank only ranks among the Top 5-10 banks in each country, the only exception being Peru (#3). Because of the disparate strategies in each country and the subscale nature of its businesses, International Banking ROEs have been in the 10-15% range over the past four years. While we expect cost optimisation and some margin recovery to help earnings in the segment, we also forecast a commensurate increase in required capital. Thus, ROEs are likely stay in the 10-15% range over the forecast horizon. We do not believe management will engage in an “asset optimisation” strategy in the medium term as current focus is on growth." Bank of Nova Scotia closed at $55.91 on Monday.