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Many a financial institution whose stock price has collapsed in recent times has richly deserved the result. The investor with courage and patience, though, can find financials that have been punished due to guilt by association and thus may be astute candidates for accumulation. One such company is the Bank of Nova Scotia (NYSE:BNS).

Not widely followed, Scotiabank as it likens itself to be called, is not just some stodgy weathered regional bank being battered by the winter storms of northeast Canada. This 176-year old institution is one of North America's premier financial institutions and Canada's most international bank. Scotiabank Group and its affiliates serve approximately twelve million customers in fifty countries, offering a diverse range of products and services which include personal, commercial, corporate and investment banking. Its diversity is its strength in the present economic climate. Significantly, the Bank's CDO exposure is limited at $1.2b largely backed by corporate loans rather than mortgage securities.

Domestic banking, 36% of net income, reported strong asset and deposit growth. Residential mortgages and personal deposits were strong year to year and quarter to quarter. BNS has traditionally been considered one of the lending institutions that demands high standards from prospective borrowers.

International banking, 29% of net income, was strong, up 12% year to year. Scotia bank has a very strong presence in the Caribbean (twenty-one island countries) and Mexico. It also is expanding its presence prudently in Central and South America (nine countries), Europe and the Middle East (Egypt, Ireland and the U.K.) and Asia (India, China, Singapore, Malaysia, Japan, Hong Long, South Korea, Taiwan, Thailand and Vietnam). Scotiabank has profitable banking operations in the United States, primarily in several major metropolitan areas and vacation havens.

Wholesale banking, 33% of net income, rose 34% year to year due to successful loan loss recoveries, net-interest income and structured credit investments.

Infrastructure improvements worldwide took a chunk of money from the bottom line and are ongoing, but BNS has always shown that it is in the game for the long haul and is no surprise to shareholders. The Bank of Nova Scotia has traditionally worked to create sustainable value.

BNS currently trades at $44.46 per share, down from $57.15 a few months ago. Sporting a 4.1% dividend that was recently raised by the company, a PE of 11.3 with a market cap of $44b with 49% in the hands of institutional shareholders, I feel that this stock is an excellent candidate to lead the first wave of the financial pack out of the wilderness. You may want to peruse their website, www.scotiabank.com

Disclosure: The author maintains a position for BNS in his permanent portfolio.

Source: Bank of Nova Scotia: For Long-term Value