The Financial Post reports in its Thursday, Sept. 5, edition that the latest round of earnings has turned the folks at Bank of Nova Scotia optimistic on the outlook for Canadian bank stocks. A Bloomberg dispatch to the Post reports that Scotiabank's Meny Grauman and Felix Fang said in a note on Tuesday, "That trade has paid off," referring to their previously bearish view of bank stocks. They said, "Central banks [have] become more dovish." In a separate note Tuesday, Scotia Capital's Hugo Ste-Marie and his colleagues said "the time has come" to close underweight positions in bank stocks. Many of Canada's biggest banks performed better than expected in the third quarter as some, including Royal Bank of Canada and Canadian Imperial Bank of Commerce, set aside less cash for potentially sour loans. National Bank of Canada and Bank of Nova Scotia also came ahead of analyst expectations on stronger local banking performance. Bank of Montreal and Toronto-Dominion Bank, however, fell short of estimates as the former booked higher provisions for credit losses, while TD took a $2.6-billion hit related to a U.S. investigation into anti-money-laundering controls.