Scotiabank posts higher global banking profits, beats analysts' expectations

Scotiabank's net income for the three months ending July 31 was $2.53 billion, compared to $1.9 billion during the same period a year ago. (Credit: Ben Nelms/Bloomberg)

Bank of Nova Scotia beat analysts’ third-quarter expectations after posting higher profits in its global banking and markets segment on Tuesday.

Its net income for the three months ending July 31 was $2.53 billion, compared to $1.9 billion during the same period a year ago, resulting in net earnings per share of $1.84.

The lender’s adjusted net income — which removes the impact of non-recurring items — was $2.52 billion, compared to $2.2 billion a year ago, resulting in adjusted earnings per share of $1.88, which was above analysts’ expectations of about $1.73 per share.

Chief executive Scott Thomson, in a statement on Tuesday, credited the “very strong quarter” to “improving revenue growth.”

Canada’s Big Six bank earnings are often considered a signpost for the country’s economy. Due to the uncertainty linked to tariffs, analysts are particularly keeping an eye on the provisions for credit losses (PCL), or the amount of money that lenders keep aside to tackle loans that may potentially go bad, a key metric for measuring the health of a bank’s loan book as well as the ability of households and businesses to pay their debts.

Scotiabank’s total PCLs were around $1 billion, a decrease of about $11 million compared to the same quarter a year ago and a drop of about $357 million from the second quarter of 2025, which was impacted by the “significant deterioration in the macroeconomic outlook indicators, as well as the continued uncertainty related to United States tariffs, impacting the Canadian retail and commercial portfolios,” the bank said in a statement at the time.

Provisions on impaired loans, or loans that are more likely to go bad, were $975 million, which was lower than the $1.05 billion reported in the second quarter, primarily due to lower provisions in its Canadian retail sector and corporate loan portfolio.

Banks expected to have kept aside less money during their third quarters for bad loans CIBC hires Mark Mulroney from Scotiabank

Its international banking segment generated adjusted earnings worth $716 million, a seven per cent increase year over year. Its earnings in Canadian banking declined two per cent from the same quarter last year to $959 million, but that was 56 per cent higher than the prior quarter.

The bank also paid a quarterly divided of $1.10 per share, up from $1.06 in the previous quarter.

• Email: [email protected]