Scotiabank, Canada’s third-largest lender by assets, reported record quarterly earnings for Q3 2026, exceeding analyst expectations on both revenue and profit. Diluted earnings per share rose 21% year-over-year to CAD 2.28, surpassing the CAD 2.08 consensus estimate by CAD 0.20. Net income totaled CAD 3.0 billion, while revenue increased 12% to CAD 10.54 billion, beating the CAD 9.97 billion forecast.
The bank’s return on equity improved to 14.2%, up 170 basis points from a year ago, driven by broad-based growth across its core segments. Net interest income rose 12% year-over-year, while non-interest income climbed 21%. Operating expenses increased 14%, reflecting a 16% rise in technology spending to CAD 1.5 billion. The productivity ratio improved to 52.5%, a 90-basis-point gain, while year-to-date operating leverage reached 3.9% for the 10th consecutive quarter of positive performance.
Scotiabank’s CET1 capital ratio stood at 13.1%, supported by risk-weighted assets of CAD 493 billion, an increase of CAD 11 billion quarter-over-quarter. The bank repurchased 8.6 million shares during the quarter, consuming 20 basis points of capital, bringing total capital returned to shareholders over the past 12 months to CAD 8.3 billion via buybacks and dividends. The dividend yield was 3.69%, with an 8.72% increase over the prior year, marking 54 consecutive years of payouts.
Canadian Banking delivered an ROE of 19.4%, up 160 basis points sequentially, with earnings of CAD 1.1 billion, a 12% year-over-year increase. Commercial loans grew 3% sequentially, while small business lending rose 10% year-over-year. Global Wealth Management reported earnings of CAD 515 million, up 23%, with spot AUM and AUA expanding 16% and 13%, respectively. Net sales reached a record CAD 3.0 billion, the eighth consecutive quarter of positive net inflows.
Global Banking and Markets achieved its highest quarterly net income on record, with loans up 7% quarter-over-quarter and deposits rising 9%. International Banking maintained earnings above CAD 700 million for the third straight quarter, supported by 7% year-over-year revenue growth. The bank also launched Scotia Intelligence, a centralized data and AI platform, and co-founded the AI Consortium with Lightworks, Sun Life, and TELUS to govern AI systems in regulated sectors.
Looking ahead, Scotiabank expects a 15-basis-point capital ratio reduction in Q4 due to portfolio migrations under the AIRB approach, while maintaining a CET1 ratio near 13%. A one-time deferred tax asset write-down is anticipated following Chile’s announcement of lower tax rates over the next three years. For 2027, International Banking targets 6% to 8% annual revenue growth and 4% expense growth.
