- Scotiabank’s (TSX:BNS) (NYSE:BNS) Q1 net income more than doubled to C$2.3 billion, with adjusted earnings of C$2.7 billion and stronger ROE across the bank
- All major business segments grew, led by Wealth Management (+18 per cent), International Banking (+7 per cent), and Canadian Banking (+5 per cent)
- Credit provisions and divestiture losses slightly weighed on results, but capital ratios improved, with CET1 rising to 13.3 per cent
- Scotiabank stock (TSX:BNS) last traded at C$104.01
The Bank of Nova Scotia (Scotiabank) (TSX:BNS) (NYSE:BNS) reported a sharp rise in first‑quarter profit, delivering net income of C$2.299 billion for Q1 2026, more than double the C$993 million earned in the same period last year.
The surge was driven by broad‑based strength across the bank’s major business lines, disciplined cost control, and margin expansion in key markets.
Diluted earnings per share climbed to C$1.73, up from C$0.66 a year earlier. On an adjusted basis, Scotiabank reported net income of C$2.695 billion and diluted EPS of C$2.05, compared with C$1.76 in Q1 2025. Adjusted return on equity improved to 13 per cent, up from 11.8 per cent last year.
Canadian Banking delivers solid growth
The Canadian Banking segment earned C$960 million, an increase of 5 per cent year‑over‑year, supported by higher net interest and non‑interest income. Strong revenue growth and disciplined expense management helped offset higher provisions for credit losses, resulting in positive operating leverage and a 140‑basis‑point improvement in ROE to 18.1 per cent.
Quarter-over-quarter, earnings rose 2 per cent, reflecting continued strength in both interest and fee income.
International Banking earnings climb despite divestitures
International Banking posted earnings of C$737 million, up 7 per cent year‑over‑year, driven by margin expansion, lower credit losses, and positive operating leverage. ROE increased to 16 per cent, from 14.2 per cent last year, reflecting the benefits of the bank’s strategic repositioning in Latin America.
On a constant‑currency basis, net income rose 5 per cent from Q1 2025. Sequentially, net income increased 13 per cent, supported by lower expenses and provisions, improved fee income, and favourable foreign exchange movements.
Wealth Management posts 18 per cent earnings growth
Global Wealth Management reported adjusted earnings of C$491 million, up 18 per cent from a year earlier, fueled by increased mutual fund fees, brokerage revenues, and net interest income across Canadian and International wealth operations.
Assets under management grew 10 per cent, reaching C$436 billion. Adjusted ROE rose to 17.9 per cent.
Global Banking and Markets sees strong capital markets activity
Global Banking and Markets earned C$544 million, a 5 per cent year‑over‑year increase. Higher fee‑based revenue and robust capital markets activity were partly offset by elevated provisions for credit losses and increased expenses tied to business growth investments.
Impact of Latin American divestitures
The “Other” segment reported a net loss of C$416 million, significantly improved from the C$1.341 billion loss a year earlier.
Q1 2026 results included a C$423 million loss tied to the completion of Scotiabank’s exit from banking operations in Colombia, Costa Rica, and Panama. Last year’s results included a C$1.362 billion impairment related to the planned sales.
On an adjusted basis, the segment’s net loss narrowed to C$41 million, compared with C$177 million last year, helped by higher revenue from reduced funding costs and stronger contributions from associated companies, including KeyCorp.
Credit quality: Provisions edge higher
Provisions for credit losses totaled C$1.176 billion, up slightly from C$1.162 billion a year ago.
The PCL ratio increased one basis point to 61 bps, though divestitures reduced the ratio by one basis point.
- Performing loan PCLs: C$73 million (down from C$98 million)
- Impaired loan PCLs: C$1.103 billion (up from C$1.064 billion)
Higher impaired loan losses were largely driven by new formations in Canadian retail and corporate portfolios, partly offset by reduced impaired loans in International Banking following divestitures.
Capital strength remains solid
The bank’s CET1 capital ratio rose to 13.3 per cent, up 10 basis points from Q4 2025, supported by earnings and the impact of recent Latin American business sales.
- Tier 1 ratio: 15.4 per cent
- Total capital ratio: 17.0 per cent
- Leverage ratio: 4.4 per cent
Management commentary
“2026 is off to a strong start for Scotiabank,” Scott Thomson, Scotiabank’s president and CEO, said in a news release. “The Bank delivered adjusted EPS growth of 16 per cent, adjusted return on equity of 13 per cent, and adjusted positive operating leverage of 4 per cent. We saw earnings growth across all of our business lines this quarter, including in Canadian Banking, where we delivered another quarter of sequential margin expansion, accelerating fee income growth, and positive operating leverage. We are confident that we can deliver on our medium-term objectives in 2027, including a return on equity above 14 per cent – one year ahead of our Investor Day commitments.”
Outlook
With broad‑based earnings growth across several segments, Scotiabank enters fiscal 2026 with strengthened capital levels and improved operating leverage.
You were richer than you thought
With assets of C$1.4 trillion as of April 2025, Scotiabank is one of the largest banks in North America by assets.
Scotiabank stock (TSX:BNS) last traded at C$104.01 and has risen 44 per cent since this time last year.
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