Bank of Nova Scotia is winning solid reviews from analysts as it negotiates a potential $5-billion dive into the highly competitive U.S. retail banking market. Scotiabank is one of several suitors for troubled National City Corp. a Cleveland-based bank with 1.300 branches. Goldman Sachs is advising National City on strategic options, and some sort of bailout could come as quickly as next Monday, when the bank is expected to report quarterly financial results. To date, Scotiabank has steered clear of U.S. retail banking acquisitions, favouring a proven South American growth strategy. But TD Securities analyst Jason Bilodeau wrote Monday: "We suspect Scotia management reviews all its options and at the right price, on the right terms, almost any asset can be attractive." Merrill Lynch's bank analyst said the timing couldn't be better for Scotiabank. Sumit Malhotra said: "For a little more than one year's earnings, BNS could acquire National City and obtain a larger presence in the U.S. regional banking arena than their Canadian peers." "We believe that Scotiabank and Manulife are the two Canadian financial services companies that have the blessing of investors to deploy capital towards acquisitions," said Mr. Malhotra. He added: " The plunge in U.S. valuations has made many of the factors that management has identified in avoiding the U.S. (too expensive, hard to build scale, better opportunities) less of an issue." U.S. expansion has been a disaster for Canadian retailers, but the likes of Manulife have done well on cross-border expansion. Mr. Bilodeau says Scotiabank will make investors "nervous" if it does cut a deal. But he wrote: "We take some comfort in our view that Scotia has proven over the last few years to be a smart and price conscious buyer of assets. In particular, Scotia is known for thoroughly reviewing and scrubbing the books of 'challenged' assets, before they step in." Let's not get too excited here: Rival U.S. regional banks with more compelling cost-cutting synergies than Scotiabank are also said to be doing due diligence at National City.