Bank of Nova Scotia beat analyst expectations for second-quarter results on Tuesday, helped by a strong performance from its international business.

Scotiabank (BNS.TO), which has the biggest foreign presence of any Canadian bank, is focusing its international strategy on the Pacific Alliance, a Latin American trade bloc comprising Mexico, Peru, Chile and Colombia.

"Our operations in the Pacific Alliance region had a particularly strong performance in the quarter," Chief Executive Brian Porter said.

Scotiabank said earnings per share, excluding one-off items, rose to $1.62, compared with $1.46 a year earlier. Analysts had on average forecast earnings of $1.56 per share, Thomson Reuters I/B/E/S data showed.

"Scotia did better than forecast with results in international a standout, a distinct positive given that these operations are the bank's key differentiator," said Barclays analyst John Aiken.

The bank's core tier 1 capital ratio, a measure of its financial strength, was 11.3 percent at the end of the quarter on April 30, among the highest of major Canadian banks.

Porter said that gave the bank flexibility to make acquisitions.

"There will be opportunities to do that over the course of the next year, I suspect," he told analysts on a conference call. "When we see something that's on strategy we'll take a hard look at it."

Porter said acquisition opportunities were more likely to be in the bank's international business than in Canada.

Shares in Canada's financial services companies hit a five-month low earlier this month after credit ratings agency Moody's downgraded the country's banks on May 10, citing concerns over record levels of household debt and Canada's hot housing markets.

Scotiabank's Chief Risk Officer Daniel Moore said the bank had stress-tested its resilience against a 50 per cent drop in house prices in Toronto and Vancouver and found that losses would be "very manageable."

Its Canadian banking head, James O'Sullivan, played down concerns Home Capital Group's (HCG.TO) problems could impact the broader financial system, following similar comments from other Canadian banks last week.

"I think the issues are quite isolated and specific to that company. They're a small lender, they are an important lender to a certain segment, but the word I've been reading is idiosyncratic and that's a view we'd share," he said.

Scotiabank reported net income of $2.1 billion, compared with $1.6 billion a year earlier.

Its shares were up 0.6 per cent at 1 p.m. ET.