Canada’s largest banks reported better-than-expected third-quarter earnings, with Scotiabank and Bank of Montreal posting double-digit revenue and profit growth, though rising trade tensions with the U.S. introduced fresh uncertainty.
Scotiabank led the sector with adjusted earnings per share of CAD 2.28, beating estimates by 9.6%, while revenue rose 12% year-over-year to CAD 10.54 billion. Net income climbed 17% to CAD 2.95 billion, supported by a 16% increase in assets under management to CAD 474 billion and a 23% jump in global wealth management earnings. The bank’s return on equity reached 14.2%, surpassing its target ahead of schedule, and its common equity tier 1 ratio stood at 13.1%. Scotiabank repurchased 8.6 million shares for CAD 1 billion in the quarter and returned a total of CAD 2.4 billion to shareholders, including CAD 1.4 billion in dividends.
Bank of Montreal reported adjusted EPS of CAD 3.96, topping forecasts by 5.9%, with revenue up 11% to CAD 9.96 billion and net income rising 22% year-over-year. Its return on equity reached 14.0%, while capital markets net income surged 45%. The bank also announced a new share buyback program of up to 25 million shares, equivalent to roughly 3.6% of its float, starting in September 2026, and raised its quarterly dividend by 5% to CAD 1.71 per share.
Both banks benefited from robust capital markets activity, with Scotiabank’s Global Banking and Markets division posting a record quarter as earnings jumped 37% and revenue climbed 32%, driven by volatility, mergers and acquisitions, and client hedging demand amid ongoing trade tensions between Canada and the U.S. The U.S. imposed 50% tariffs on CAD 20 billion of Canadian goods on August 22, prompting retaliatory measures and adding pressure to the sector’s outlook.
Scotiabank CEO Scott Thomson emphasized the bank’s capacity for further growth, stating that the institution does not view its 14% return on equity as a ceiling. The bank’s CET1 ratio remained strong at 13.1%, while its provision for credit losses ratio fell to 52 basis points, down 9 basis points sequentially. BMO’s CET1 ratio stood at 13.0%, with provisions for credit losses declining to CAD 722 million from CAD 739 million in the prior quarter.
