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BNS enters the final stretch before its December 2 results with a paradox at its core: short sellers are retreating at the fastest pace in months, yet the stock is falling sharply anyway.
The week's most striking move is in short interest, which has dropped 31% in the past week to just 1% of the free float. That is one of the lowest short positions among major Canadian banks. The borrow market tells a different story, however. The cost to borrow BNS shares spiked to 11.3% on October 6 before retreating to 2.6% on October 7, a level still 159% above where it was a week ago and more than three times the month-ago rate. Borrow availability remains extremely loose at 1,400%, meaning there are roughly 14 shares available to borrow for every one already shorted. The spike in cost appears to have been a brief squeeze on a thin book rather than a structural tightening. Short sellers covering their positions drove the SI drop; they are not being forced out by a constrained lending market.
Price action has not cooperated with that short-covering narrative. The stock fell 3.1% on October 7 alone and is off 4% for the week, trading at CAD 124.29. That puts it down more than 4% for the month. Every close Canadian banking peer moved lower on the same day: TD fell 3.3%, RY fell 2.3%, CM fell 2.6%, and BMO fell 2.3%. The sector-wide pressure removes any stock-specific signal from BNS's decline, pointing instead to a broader macro or rate-related read-across.
The Street is mildly constructive but not excitable. Seven analysts carry a hold rating, with a mean price target of CAD 133.08, implying roughly 7% upside from the current price. Valuation has drifted lower: the price-to-earnings multiple has compressed to 13.4 times over the past week, and the price-to-book ratio has eased to 1.82 times. Factor scores are mixed. The dividend score ranks in the 89th percentile, reflecting BNS's long-standing appeal as a yield stock. EPS momentum over 90 days sits at the 71st percentile. The forward earnings growth score ranks just 27th, a persistent weak spot given the negative year-on-year EPS estimate embedded in consensus. Analyst data is 24 days old, slightly stale but not materially so.
The most differentiated data point this week comes from Canada's banking regulator. OSFI's monthly Canadian banks dataset, published via open.canada.ca, shows personal deposits at the Bank of Nova Scotia reaching their highest reading since the series began in 2009, at CAD 330 billion as of July 2026. That reading has risen for four consecutive months. Neither dataset carries a measured lead status against BNS's reported figures, so no forward inference is warranted. What it does confirm is that the domestic deposit franchise is growing at a record pace heading into the fiscal year-end print.
The ORTEX short score has been calm, sitting at 33.7 on October 7 after a brief spike to 44.4 on October 6 that coincided with the borrow cost anomaly. Both readings settled quickly. With 55 days to the December 2 earnings release, the setup to watch is whether the sector-wide selling pressure of this week stabilises or deepens, and whether the record deposit growth translates into any positive commentary on net interest income when management next speaks.
See the live data behind this article on ORTEX.
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