- In the green amid a slumping banking sector is Bank of Nova Scotia (BNS +0.5%) after it put its 37% stake in wealth manager CI Financial (OTCPK:CIFAF) on the block (CI is down 6.3% in Toronto trade).
- Opining on the planned sale, CIBC analyst Robert Sedran says until the capital can be redeployed, the move would be dilutive to earnings to the tune of about $175M or $0.03. The sale would, however, boost Scotiabank's capital ratio by between 100 and 125 basis points - a pretty sizable move considering the current ratio is 9.4%, already slightly above the average for Canadian lenders.
- As for what Scotiabank might do with the money, look abroad says Sedran, as he's not seeing "plentiful domestic alternatives."
- Previously: Scotiabank stake in CI Financial on the block