Ratings action Moody’s warned about Scotiabank’s credit worthiness on Monday, bring up the bank’s recent push to issue more credit cards and auto credits could lead to more defaults down the line.
Moody’s Investors Rite downgraded various debt scores for the Bank of Nova Scotia by a nick on Monday, citing recent moves by the bank to improve its profitability.
“Terminated the last two years, in accordance with its strategic initiatives, BNS has accelerated the swelling in its credit card and auto finance portfolios — both of which are expressly prone to deterioration during an economic downturn and exhibit higher defaults and trouncing debits severities than mortgage portfolios,” Moody’s analyst David Beattie asserted.
Moody’s also cited the bank’s aggressive push towards global ex nsion as increasing its risk profile.
The ratings agency had previously advised in November that it was potentially reviewing Scotiabank’s debt rating.
Without thought the downgrade, Scotiabank’s debt rating is still rock solid, close to the top of the Big Six banks as a whole, who are collectively given credit ratings generally innumerable favourable than almost any other com ny in Canada.
But the incremental dis rage to Scotiabank’s credit rating could marginally increase the bank’s set someone back of borrowing, as the com ny is perceived to be a slightly worse credit risk than previous to.