Aug 25, 2026 earnings call — Record quarter driven by Canadian banking and GBM
Scotiabank reported quarterly earnings of $3 billion and record EPS of $2.28 with ROE at 14.2%.
Revenue $7.5B (est $7.1B) · EPS $1.64 (est $1.53)
Key quotes
"It continues to be driven by our Canadian Banking segment, whose return on equity improved 160 basis points sequentially and hit 19.4% this quarter."
"Over the past 12 months, we have now returned $8.3 billion in capital to our shareholders through share buybacks and dividends."
"We ended the quarter with the highest quarterly net income on record in Global Banking and Markets as both Global Capital Markets and Investment Banking delivered several marquee transactions for us."
Analyst Q&A 9
Canada bank ROE path
Q (Ebrahim Poonawala · BofA): Analyst asked whether Canadian banking ROE can move from 18% to low/mid-20s and what must happen in next 1–2 years to reach that.
A: Management said growth in mid-market clients, deposit gathering, higher-margin lending, and improved transaction banking are driving higher ROE. They expect business banking and mid-market expansion, plus process improvements, to lift ROE to 20% plus over time.
"We're confident as we continue and especially as our transaction banking capabilities improve that we can hit the 20% plus ROE over time." — Aris Bogdaneris
International revenue and expense outlook
Q (John Aiken · Jefferies): Analyst asked if international loan and revenue growth marks an inflection point and when expenses will show positive operating leverage.
A: Management said this quarter shows the pivot-to-growth is effective and the business is growing at about 6% year-on-year, with revenue growth expected to settle in a 6%–8% range by 2027. They expect expenses to stay around 4%, below inflation, and see profit before tax growing year-over-year, supporting double-digit earnings in 2027 and beyond.
"This is an important quarter in the sense that it marks the effectiveness of the pivot to growth effort we've been leading for the last 4 quarters." — Francisco Alberto Aristeguieta Silva
Portfolio conversion to AIRB
Q (Gabriel Dechaine · National Bank Financial): Analyst asked why converting portfolios from standardized to AIRB increases capital needs by 15 bps, if it is one-time, and impact on ROE.
A: Management said this conversion is essentially one-and-done and reflects conservatism because data quality in some countries required adding conservatism to modeled outputs. They said the conversion will increase capital requirements by 15 basis points next quarter, causing a near-term ROE hit in International Banking, but returns should improve afterward as the portfolio grows under the new risk appetite.
"I think there were certain portfolios we should have converted a few years back." — Rajagopal Viswanathan (CFO)
Capital markets outlook
Q (David Konrad · KBW): Analyst asked whether capital markets results will give back next quarter and what the long-term growth rate is after recent investments.
A: Management said the quarter was a broad-based record for Global Banking and Markets and the strong results reflect multiyear, intentional investments and reallocation of resources. They said pipelines remain strong and the franchise is being built to be durable and able to serve clients in complex environments.
"If you think about where we are right now, I think for this quarter, if you look, it was obviously a broad-based record quarter for GBM." — Travis MacHen
Credit outlook and tariffs impact
Q (Doug Young · Desjardins): Analyst asked why impaired PCL rate improved and whether guidance for Q4 still holds, and how new tariffs affect near-term credit outlook.
A: Management said Canadian retail early-stage and 90-plus day delinquencies improved except for mortgages, and collections initiatives are delivering strong benefits, so impaired PCLs are trending down in H2 as expected. They said tariff exposure is under 1% of total bank loans, scenarios already reflect a range of outcomes, and they will continue to reassess developments.
"In Canadian Banking retail, the early stage and 90-plus day delinquency has improved across products, except for mortgages, and our collections initiatives are delivering strong benefits." — Shannon McGinnis
GBM loan and deposit growth
Q (Paul Holden · CIBC): Analyst asked whether the 7% sequential loan growth in GBM is sustainable, how deposits link, and if fee income comes with the loans; also asked about SRT recall effect.
A: Management said loan growth reflects client coverage, new products, and economic activity rather than chasing a loans KPI, and deposits growth is intentional to capture core operating deposits alongside GTB. They added the SRT recall was a capital-structure decision and did not drive the 7% loan growth, because the loan was always on the balance sheet.
"I think loan growth is really just a reflection of the economic output and the focus that we have on our clients, it's not a KPI that we're trying to drive." — Travis MacHen
What could stop capital markets momentum
Q (Mario Mendonca · TD): Analyst asked what conditions could slow or reverse strong capital markets revenue and whether macro shocks (like U.S. treasuries moves) could overwhelm current drivers.
A: Management said capital markets need constructive volatility: clients require advice on FX, capital structure and hedging, which benefits their broad capabilities; extreme volatility harms ECM/DCM. They stressed the recent environment has been constructive and the firm is building products to serve clients across market conditions, so results depend on future market volatility and conditions.
"What you're really thinking about and reaction function, I think you're looking for is you want volatility on the capital market side, but you want constructive volatility." — Travis MacHen
LatAm retail credit and primacy
Q (Matthew Lee · Canaccord Genuity): Analyst asked how management balances growth, credit quality and client primacy when expanding LatAm credit card and non-mortgage portfolios.
A: Management said they segmented clients across the footprint to build scale and focus on primacy, because mortgage-only (monoline) does not deliver primacy or deposits. They explained primacy means offering a full suite—cards, personal loans, payroll, insurance and investments—which drives deposit growth and better returns over time.
"The definition for us is really the combination of the full suite of products, where you need transactionality and transactionality is delivered by credit cards, is delivered by personal loans, is delivered by payroll, is delivered by insurance and investment advice." — Francisco Alberto Aristeguieta Silva
Use of excess capital in Canada
Q (Stephen Boland · Raymond James): Analyst asked whether extra 50 bps of capital will fund Canada agenda (defense, infrastructure, AI) or be used for buybacks.
A: Management said the first use of capital is to fund organic growth opportunities across the bank, including infrastructure and defense where they reorganized to capture opportunities. They added if there is excess capital after that, the first place it would go is share repurchases because of a valuation gap.
"As I look at the Canada agenda, I do think there are a lot of opportunities and you think about infrastructure pipelines, you think about defense." — L. Thomson (CEO)