Canada's Scotiabank posts higher quarterly profit as interest income rises (updated)
24/02/2026 11:24
Scotiabank reports growth across segments Advances return on equity target by one year EPS of C$2.05 tops estimate of C$ 1.95 Lender kicks off Canadian banks first-quarter earnings Recasts with comments from conference call By Nivedita Balu and Ateev Bhandari Feb 24 (Reuters) - Canadian lender Bank of Nova Scotia BNS.TO on Tuesday reported quarterly earnings that beat analysts' estimates, supported by strong growth across segments, and said it would likely hit a key earnings target a year ahead of schedule. CEO Scott Thomson said Scotiabank's return on equity, a key profit metric that demonstrates how effectively a bank generates profits from its shareholders' investments, is tracking ahead of expectations. He is confident in hitting the more than 14% medium-term target one year ahead of plan, he said. RETURN ON EQUITY "Going forward, we expect to see return on equity expansion across each of our business units, with the largest increase coming from Canadian banking," Thomson told analysts. The lender's shares rose as much as 1.5% in early trade in Toronto, but were later little changed. The bank's wealth management segment reported an 18% rise in net income, helped by higher mutual fund fees and brokerage revenues, while the capital markets segment showed a 5% increase in earnings as M&A and IPO activity recovered. The Canadian banking business's earnings grew 5%, helped by a rise in net interest income - the difference between what banks earn on loans and pay on deposits. The international banking segment, which includes Mexico, Peru and the Caribbean, recorded a 10% rise in net income. NO TRADE ISSUES IN CANADA, SCOTIA SAYS The lender, the first of the big six Canadian banks to report first-quarter results, has grown its business despite trade and tariff uncertainties. In Mexico, ongoing trade negotiations continue to weigh on sentiment, executives said, but they added they were not seeing any trade-related issues in Canada. They maintained that it was still a challenging operating environment. Scotiabank has increased its focus on North America, betting on booming trade between Canada, the U.S. and Mexico. Canadian Prime Minister Mark Carney has stepped up efforts to diversify Canada's trade ties amid steep tariffs imposed by U.S. President Donald Trump, and its economy has sidestepped much of the turbulence created by shifting trade policy. Net interest income stood at C$5.58 billion ($4.07 billion) compared with C$5.17 billion a year earlier. The bank's provision for credit losses was C$1.18 billion, up from C$1.16 billion a year before. On a per-share basis, it earned C$2.05, beating the average estimate of C$1.95, according to LSEG data. "This was a strong quarter for Scotiabank," Raymond James analyst Stephen Boland said. ($1 = 1.3705 Canadian dollars) (Reporting by Ateev Bhandari in Bengaluru and Nivedita Balu in Toronto; Editing by Shilpi Majumdar, Louise Heavens and Jan Harvey) ((Ateev.Bhandari@thomsonreuters.com;))