The Globe and Mail reports in its Thursday edition a Canaccord Genuity analyst caused a stir this week when he argued Bank of Nova Scotia might be planning to buy HSBC Mexico. The Globe's David Berman writes there are compelling reasons to believe that a deal makes some sense, but HSBC Mexico is hardly a gem. The division has been plagued by a money-laundering scandals, exposure to troubled loans and deteriorating efficiency ratios. Also, at $11.5-billion, HSBC Mexico is not cheap. Kevin Choquette, an analyst at Credit Suisse, estimates HSBC's Mexico division would fetch between $6.8-billion and $9.1-billion, based on a valuation of 1.5 to two times book value. Futher, shareholders might not like it. According to Kevin Choquette, an analyst at Credit Suisse, Scotiabank would have to finance the acquisition by issuing up to $6.8-billion in equity (or 107 million shares) if they paid 25 per cent cash and 75 per cent equity. That would dilute earnings by up to 4.6 per cent and lower the bank's tier-one common equity ratio to 9.5 per cent from 10.3 per cent. And, regulators might not like it, either. The Office of the Superintendent of Financial Institutions would impose higher capital requirements on Scotiabank.