Bank of Nova Scotia’s conference call with analysts this afternoon was unusual in that focused heavily on the bank’s exposure to Argentina, but also because included a couple of questions from retail investors.

The questions from retail investors were hardly earth-shaking — one requesting clarification of its dividend policy, and another about the bank’s plans to buyback odd lot shares — but they marked a small movement to allow investors greater access to bank executives.

The questions also came as welcome relief from the focus on Argentina that gripped much of the call. The financial situation in Argentina is so uncertain, and possible solutions are so obscure, that the bank had to allow that there the worst-case scenario would see it lose its entire business in the country. The bank has established a reserve of $100 million against its Argentine exposure in 2001.

Executives explained that they have dealt with this sort of turmoil before, notably in Indonesia, and that they don’t expect to lose the business entirely. They noted that the country seems to be intent on preserving the banking system, “which is the one thing that works there”, amid extreme economic turmoil. While Scotia executives found themselves settling their hotel bills three times a day there to combat rampant inflation, they note that there does not appear to be any panic in the streets over the situation. They are optimistic that it will eventually work out.

Nevertheless, the bank lowered guidance for EPS growth next year from the 12%-15% range to 7%-12%. It also lowered ROE guidance from 16%-18% to 15%-17%. It also pledged to engage in a modest buyback to combat dilution, which is knocking a couple of pennies off its bottom line. They admitted that the coming year will be “challenging” and that it doesn’t expect a return of roaring bull markets, but that it is certain it can achieve another record year next year.

Finally, Scotia indicated that it doesn’t expect to see bank mergers any time soon. It notes that there is now at least a clear process in place, but that the political uncertainty has not been removed, so it’s unlikely that any bank will take on mergers, and more financial services reform is not on the radar screen right now either.