The Bank of Nova Scotia (TSX:BNS) has been significantly underperforming its peers since January 31, 2018. Palos believes this underperformance is primarily due to NAFTA fears. In our view, this fear is overblown and ignores the bank’s fundamentals and growth opportunities. If Canadian interest rates continue to rise, banks will benefit from margin expansion. However, higher rates are a double-edged sword. With rising rates, you can expect loan originations to slowdown in Canada. Canadian Banks that have low international exposure will struggle to grow their loan book.