Scotiabank said its group return on equity (ROE) reached 14.2% in the latest quarter, achieving the 14% target two years early in the bank’s three‑and‑a‑half‑year transformation plan. The figure sits alongside a Canadian banking sector ROE that now exceeds 19%, up 200 basis points from a year earlier, with another 200‑basis‑point improvement expected over the next twelve months.
International banking ROE stood at 16% after excluding one‑off items in Brazil, up from 13% three years ago, and the bank aims to lift it to 18% over time. Wealth management was described as a business delivering between 10% and 15% ROE, with a longer‑term ambition of 20%.
Global Banking and Markets (GBM) earnings for the quarter totaled C$647 million, surpassing the historical quarterly range of C$475‑C$500 million and representing growth from a C$350 million business four years ago. GBM deposits rose 12% year‑over‑year.
Wealth management earnings have compounded at a 17% annual rate over the past three years. The bank moved from sixth to third place in long‑term mutual‑fund sales in Canada year‑to‑date. Referral volumes grew, with Canadian bank referrals to wealth management reaching C$14 billion year‑to‑date, up from C$11 billion a year earlier, and commercial referrals climbing to C$4.5 billion, a 33% increase. The unit added 800 full‑time frontline sales staff and saved 24,000 workdays through AI tools in the last quarter and a half.
Balance‑sheet metrics improved, with the loan‑to‑deposit ratio falling from 116 to 103 and wholesale funding tightening by 200 basis points. Performing allowances now stand at C$5 billion, a C$1 billion increase over three years, while impaired performance runs at about 53 basis points. The bank’s capital ratio sits at 13%, the threshold for share‑repurchase programmes, and its shares trade at roughly a two‑turn discount to peers.
Domestic banking margins rose 10 basis points year‑over‑year. Small‑business lending growth accelerated to 5‑10%, mid‑market commercial lending to 5‑7%, and credit‑card premium acquisition climbed from 35% to 45%. Insurance fee income grew about 10%. Mortgage Plus now accounts for 95% of mortgage originations, with an 85% renewal rate and 70% of customers holding day‑to‑day accounts. Single‑monoline mortgage holders fell from 20% to 15% over three years. The bank expects an additional 1‑2 basis points of margin expansion in Canada next quarter.
Internationally, cost reductions from regionalisation saved roughly C$800 million. International revenue and earnings each rose 11% in the quarter, with deposits up 6% and primary client growth at 10%. The bank targets international revenue growth of 7‑8%, expense growth near 4%, and earnings growth around 10%.
Notable transactions included leading a C$1 billion sovereign issuance in Jamaica—the first of its kind in the bank’s 134‑year history—its inaugural debt‑capital‑markets deal in Brazil, and a lead‑arranger role in a recent sovereign bond offering in Mexico.
Scotiabank’s AI platform, Scotia Navigator, is now used by 95% of employees, and about 5,000 coders and engineers actively employ AI tools. CEO Scott Thomson called the Mortgage Plus product, launched three years ago, “a home run for this bank,” and described Scotiabank as a “bank of no surprises” after building credibility over the prior four quarters. The next investor day is slated for the end of next year.
