Fitch Ratings has affirmed its ratings on Bank of Nova Scotia, and the rating outlook remains stable.

“Scotia’s ratings continue to reflect its sound financial characteristics including solid profitability, good asset quality and comfortable capital. Ratings are further underpinned by Scotia’s considerable domestic and international franchises,” it notes.

The rating agency says that in the latter part of fiscal 2007 and into fiscal 2008, Scotia’s performance has been pressured moderately by general market turmoil. “That said, Scotia has outperformed many international peers owing to its comparatively modest exposure to topical risk areas (including CDOs, SIVs, leveraged finance, and Canadian non-bank ABCP) and good underlying operating results throughout its franchise,” it says.

“The financial environment remains challenging, yet Scotia is expected to manage through these more difficult times comparatively well,” Fitch adds. The rating outlook is stable, given expectations for solid financial performance and the maintenance of comfortable capital ratios.