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By Andrew Willis | 06-04-2019

Battle of the Banks: NBA Finals Edition

With the Raptors taking on the Warriors, who has the strongest financial backer, the Bank of Nova Scotia or JP Morgan Chase?

Securities mentioned in this video
Bank of Nova Scotia
JPMorgan Chase & Co

Andrew Willis: Canadians are captivated by the Toronto Raptors as they take on the Golden State Warriors in their first-ever NBA finals. The two teams are currently battling it out to be crowned the 2019 NBA champions…

But it’s not just about the game. There’s millions of dollars behind each team. Scotiabank arena here is sponsored by Bank of Nova Scotia, then the Golden State Warriors next year move to San Francisco, they’ll be going to the Chase Centre, sponsored by JPMorgan Chase.

So we’re not only wondering who will win the NBA Finals, but who will win the battle of the banks? First, let’s start with Scotia:

Eric Compton: Ever since Porter took over as CEO, they’ve been going through a number of changes. They have been divesting a lot of international assets, trying to become a more focused organization, focusing on countries where they have a better advantage. They completed a string of acquisitions and that will dilute earnings for the foreseeable future, at least till 2020. So it’s still a bank in transition.

Willis: Three-star, narrow-moat Scotia seems to be a good idea for long term investors. What about JPMorgan?

Compton: So if Scotiabank is a bank in transition, I would say that JPMorgan is a bank that has arrived. JPMorgan is arguably the leader of the pack for the U.S. banks, at least for US money centers. They are hitting consistent returns on tangible, 17% now. They are gaining shares or are already leaders in most if not all of their key markets and you have Jamie Dimon leading the bank whose reputation is excellent. So JPMorgan has already arrived, they already have it figured out and now the question is how much better can it get?

Willis: JPMorgan also has three stars but has a wide moat. Looks like it might be a better buy, eh Eric?

Compton: Of the two banks, right now, I would go with JPMorgan

Willis: So Eric, what’s your pick for the game?

Compton: I would have to go with the Golden State Warriors as my pick.

Willis: Oooo. I’m going to have to disagree with you there, Eric. The Raptors are going to take it. All. The. Way. For Morningstar, on site at the home of the future NBA Champions,, I’m Andrew Willis. 

#letsgoraptors

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