Morningstar DBRS Assigns Long-Term Issuer Rating of AA With a Stable Trend to The Bank of Nova Scotia Trust Company

DBRS Limited (Morningstar DBRS) assigned credit ratings to The Bank of Nova Scotia Trust Company (Scotiatrust or the Company), including a Long-Term Issuer Rating of AA and Short-Term Issuer Rating of R-1 (high). The trends on all credit ratings are Stable. The Support Assessment (SA) is SA1, which reflects Morningstar DBRS' expectation of timely support from the Company's parent, The Bank of Nova Scotia (Scotiabank, rated AA/R-1 (high) with a Stable trend). As a result, the credit ratings on Scotiatrust are equalized with those of Scotiabank.

KEY CREDIT RATING CONSIDERATIONS
Scotiatrust is domiciled in Canada and regulated by the Office of the Superintendent of Financial Institutions under the Trust and Loan Companies Act. As a wholly owned subsidiary of Scotiabank, the Company provides personal trust services, which include tax, estate, and financial planning. In addition to fee income from the trust business, Scotiatrust also gathers deposits, including investment savings accounts and guaranteed investment certificates from investment brokers and wealth management firms. Those deposits are placed intragroup with Scotiabank, which provides some interest income to the Company. With about $10 billion in total assets in 2024, Scotiatrust's balance sheet carries negligible credit risk, and its deposits (all of which are placed with Scotiabank) constitutes the vast majority of the Company's on-balance sheet assets. Scotiabank provides a deposit guarantee for Scotiatrust, similar to the guarantee provided for Scotiabank's other subsidiaries rated by Morningstar DBRS. Scotiatrust maintained a strong CET1 ratio of 28.2% in 2024.

CREDIT RATING DRIVERS
Given that Scotiatrust's credit ratings are driven by those of Scotiabank, an upgrade to Scotiabank's credit ratings would result in an upgrade to the Company's credit ratings.

A downgrade to Scotiabank's credit ratings would result in a downgrade to Scotiatrust's credit ratings. Any indication by Scotiabank of reduced ability or willingness to support Scotiatrust would also result in a downgrade to the Company's credit ratings.

ENVIRONMENTAL, SOCIAL, AND GOVERNANCE CONSIDERATIONS
There were no Environmental/Social/Governance factor(s) that had a significant or relevant effect on the credit analysis.

A description of how Morningstar DBRS considers ESG factors within the Morningstar DBRS analytical framework can be found in the Morningstar DBRS Criteria: Approach to Environmental, Social, and Governance Factors in Credit Ratings (May 16, 2025), https://dbrs.morningstar.com/research/454196.

Notes:
All figures are in Canadian dollars unless otherwise noted.

The principal methodology is the Global Methodology for Rating Banks and Banking Organisations (May 23, 2025), https://dbrs.morningstar.com/research/454637. In addition Morningstar DBRS uses the Morningstar DBRS Criteria: Approach to Environmental, Social, and Governance Factors in Credit Ratings (May 16, 2025; https://dbrs.morningstar.com/research/454196) in its consideration of ESG factors.

The credit rating methodologies used in the analysis of this transaction can be found at: https://dbrs.morningstar.com/about/methodologies.

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found on the issuer page at https://dbrs.morningstar.com

The credit ratings were initiated at the request of the rated entity.

The rated entity or its related entities did participate in the credit rating process for these credit rating actions.

Morningstar DBRS had access to the accounts, management, and other relevant internal documents of the rated entity or its related entities in connection with these credit rating actions.

These are solicited credit ratings.

For more information on Morningstar DBRS' policy regarding the solicitation status of credit ratings, please refer to the Credit Ratings Global Policy, which can be found in the Morningstar DBRS Understanding Ratings section of the website: https://dbrs.morningstar.com/understanding-ratings

These credit ratings are endorsed by DBRS Ratings Limited for use in the United Kingdom, and by DBRS Ratings GmbH for use in the European Union, respectively. The following additional regulatory disclosures apply to endorsed credit ratings:

These credit ratings concern a newly issued financial instrument/newly rated issuer. These are the first Morningstar DBRS credit ratings on this financial instrument/issuer.

The conditions that lead to the assignment of a Negative or Positive trend are generally resolved within a 12-month period. Morningstar DBRS' trends and credit ratings are monitored.

For further information on Morningstar DBRS historical default rates published by the European Securities and Markets Authority (ESMA) in a central repository, see: https://registers.esma.europa.eu/cerep-publication. For further information on Morningstar DBRS historical default rates published by the Financial Conduct Authority (FCA) in a central repository, see https://data.fca.org.uk/#/ceres/craStats.

Lead Analyst: Shokhrukh Temurov, Vice President, CFA
Rating Committee Chair: Tim O'Brien, CFA, CAIA, Managing Director
Initial Rating Date: June 5, 2025

For more information on this credit or on this industry, visit https://dbrs.morningstar.com.

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