Bank reports higher net income, beats analyst estimates on EPS
The Bank of Nova Scotia posted the strongest quarter in its history on Tuesday, as record profits across all four business divisions sent a direct message to Canada's mortgage professionals: the big banks are gaining momentum at the exact moment competition for renewal clients is at its peak.
Scotiabank reported net income of $2.95 billion for the three months ended July 31, compared with $2.53 billion in the same period a year earlier.
Diluted earnings per share (EPS) rose to $2.27 on a reported basis from $1.84.
On an adjusted basis, the bank earned $2.28 per share, clearing the Bloomberg consensus analyst estimate of $2.10 by a significant margin.
Canadian banking posts fifth straight quarter of margin gains
"Q3 was a record quarter for the Bank, as all business lines reported strong results and we exceeded our medium-term objectives in the period," said Scott Thomson, president and chief executive officer of Scotiabank.
The bank's adjusted return on equity (ROE) reached 14.2%, clearing its 14% target a full year ahead of schedule.
Canadian Banking generated earnings of $1.07 billion, up 12% year-over-year, marking its fifth consecutive quarter of margin expansion and a domestic ROE of 19.4%.
That trajectory is visible in Scotiabank's second-quarter 2026 results, which also beat analyst forecasts on stronger Canadian banking performance, a pattern reflecting a lender that has systematically widened margins while growing fee income and deposits.
Total revenue rose 11% year-over-year to $10.53 billion, while expenses increased 9% to $5.56 billion on higher staffing, technology costs, and foreign exchange headwinds.
Provisions for credit losses came in at $1.08 billion, slightly above the $1.04 billion set aside in Q3 2025, but well below the $1.22 billion reserved in the preceding quarter.
Record results across capital markets and wealth management
Global Banking and Markets delivered record earnings of $647 million for the quarter, up 37% year-over-year, on strong capital markets revenue and record underwriting and advisory fees.
Global Wealth Management also posted a record, with earnings of $518 million, up 23% from a year ago. Assets under management climbed 16% to $474 billion.
International Banking contributed $766 million, an 8% increase.
Scotiabank closed the quarter with a Common Equity Tier 1 (CET1) capital ratio of 13.1%, repurchased 8.6 million shares during the period, and has returned $6.3 billion to shareholders year to date through buybacks and dividends.
For brokers, the results are more than a financial snapshot. Mortgage brokers facing the 2026 renewal wave are competing with banks that are increasingly capitalised, technologically equipped, and focused on client retention — and a domestic banking ROE of 19.4% illustrates the resources Scotiabank can commit to that contest.
Scotiabank's June 2026 acquisition of MapleMark Bank, which deepened its reach into US mortgage warehouse finance, signals an institution growing on multiple fronts even as it consolidates gains at home.
Scotiabank is the second of Canada's Big Six to report third-quarter results, following Bank of Montreal on Tuesday.
National Bank of Canada is scheduled next, with Royal Bank of Canada, Toronto-Dominion Bank, and Canadian Imperial Bank of Commerce following on Thursday.
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