Yesterday, Bank of Nova Scotia (NYSE:BNS) announced results for its 2007 fiscal first quarter. The company (more commonly known as Scotiabank) saw positive trends across its businesses and managed to book more than $1 billion in net income in a quarter for the first time.

Total revenue for the quarter clocked in at $3.2 billion, up 14% year over year and 7% sequentially. Revenue growth was substantially driven by 17% growth in net interest income versus the same quarter in 2006. While Canadian currency interest income saw solid growth, Scotiabank saw its foreign currency interest income jump 30%, largely thanks to acquisitions in Peru and Costa Rica. Foreign currency interest income accounted for 45% of the bank's total interest income for the quarter.

Growth in the bank's revenue outside of interest income -- which includes revenue from credit cards, mutual fund management fees, securities gains, and investment banking services -- was up 9%. Acquisitions played a part in the growth, along with strong results in underwriting and retail brokerage fees, although trading results in foreign exchange, derivatives, and securities were pared back after rapid growth last year.

Efficiency measures were also at the top end of the bank's targets. Return on equity was 23% for the quarter, up from 21.6% in the first quarter last year, and at the top end of the bank's target range of 20%-23%. Scotiabank also managed to bring down its productivity ratio -- the ratio of non-interest expenses to revenue -- to 53.6% from 55.2% last year and 56.9% in the previous quarter.

When it comes to banks, these days everyone seems to have credit risk on the brain. In the U.S., high-profile flubs from subprime lenders like New Century (NYSE:NEW), as well as a big portfolio writedown from HSBC (NYSE:HBC), have spooked investors on what could be ahead for the loan industry. While the U.S. is the second-largest market for Scotiabank behind Canada, the bank continues to show a declining percentage of impaired loans to loans and acceptances -- even though it has said that it doesn't expect this trend to continue.

Scotiabank's stable base of business in Canada, along with its faster-growing operations abroad and disciplined spending, should help the bank continue to produce compelling results for 2007.

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Fool contributor Matt Koppenheffer does not own shares of any of the companies mentioned. You can visit Matt on CAPS by clicking here, or you can read his CAPS blog here. The Fool's disclosure policy always adequately provisions for loan losses.