When it comes to growth and income, Bank of Nova Scotia (TSX:BNS), better known as Scotiabank, is at the top of that list. As one of the Big Six banks, it belongs in the category of one of Canada’s most established financial institutions, even when markets turn south.
While not immune to downturns, BNS stock’s deep diversification, defensive balance sheet, and high dividend yield make it a compelling stock to hold during a bear market. So let’s get into it.
About BNS
First, a very quick history lesson (trust me, it’s worth it). BNS stock is a Canadian bank with over 190 years of operating history and more than $1.4 trillion in assets. Its strength lies in diversification across four main business segments. These include Canadian banking, international banking, global wealth management, and global banking and markets.
This mix provides a buffer. When capital markets slow, retail banking and wealth management often stay resilient. When rates rise, net interest margins expand. Then, when the Canadian economy softens, its Latin American exposure can still deliver growth.
Scotiabank’s International Banking footprint sets it apart. Latin America’s young populations and under-banked economies offer long-term tailwinds. During Canadian slowdowns or housing corrections, these overseas divisions can balance earnings, creating a built-in hedge that investors often overlook. That international diversification may introduce currency swings but reduces dependence on the Canadian economy, which is crucial when domestic consumer spending or housing softens.
Numbers don’t lie
Another bonus during a bear market is passive income, in this case through dividends. BNS stock is famous for its dividend, and that’s one of the biggest reasons it shines in bear markets. Right now, it offers a $4.40 annual dividend, yielding at about 5% at writing. That’s supported by an 81% payout ratio as well, with the company paying out dividends continuously since 1833.
Furthermore, banks like BNS stock survive bear markets by managing capital, not chasing returns. Scotiabank’s Common Equity Tier 1 (CET1) ratio, a key measure of capital strength, stands near 13.3 %, well above the 11.5 % regulatory minimum as of the third quarter of 2025.
Plus, its liquidity coverage ratio exceeds 120%, meaning it could handle a severe short-term funding shock without distress. Better still? BNS stock looks downright valuable. Its forward price-to-earnings (P/E) ratio sits at 11.6 at writing and 1.5 times book value.
Bottom line
BNS stock is what Canadian investors look for when fear hits: dependable dividends, fortress-level capital, and exposure to essential financial services that never go out of style. It’s not a growth rocket, but it’s exactly the kind of steady compounder that preserves wealth through economic cycles. In a bear market, cash flow is king, and BNS stock prints it every day.
At current valuations and yields, it’s not just a defensive stock, but an income anchor that can help investors ride out volatility while getting paid to stay patient. So if you’re an investor looking for a solid core investment for your long-term portfolio, BNS stock certainly belongs on your watchlist.
