Scotiabank (TSX: BNS) posted Q2 2026 net income of $2.63 billion for the period, up from $2.03 billion a year earlier, translating to $2.00 earnings per diluted share from $1.48 last year.
On an adjusted basis, net income was $2.65 billion, up from $2.07 billion a year earlier. Adjusted diluted EPS was $2.02, compared with $1.52 last year, beating analyst expectations of $1.93.
Revenue rose to $9.84 billion from $9.08 billion a year earlier, with net interest income reaching $5.52 billion, up from $5.27 billion last year and non-interest income climbing to $4.32 billion from $3.81 billion a year earlier.
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The strongest swing came from Canadian Banking, where net income rose to $935.0 million from $613.0 million a year earlier.
International Banking was steadier but less convincing underneath the headline. Reported net income rose to $701.0 million from $676.0 million a year earlier, but on a constant-dollar basis, the increase was only $10.0 million. The bank said lower expenses and taxes helped, while lower net interest income, lower non-interest income, and higher credit provisions offset part of the improvement.
Global Wealth Management delivered net income of $474.0 million from $399.0 million last year. Scotiabank said the gain was driven by higher mutual fund fees, brokerage revenue, and net interest income, while assets under management grew 18% year over year.
Global Banking and Markets earned $457.0 million, up from $413.0 million last year. Reuters linked the broader Canadian bank earnings performance to domestic banking strength and capital markets activity, with Scotiabank’s global banking and markets unit benefiting from stronger market activity.
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Provision for credit losses fell to $1.22 billion from $1.40 billion a year earlier. The year-over-year improvement came almost entirely from performing loans. Provisions on performing loans fell to $88.0 million from $346.0 million last year, when Scotiabank had built reserves tied to uncertainty over US tariffs and weaker macroeconomic indicators. But impaired loan provisions rose to $1.13 billion from $1.05 billion last year driven by higher formations in Canadian Banking and International corporate portfolios.
Gross impaired loans rose to $7.61 billion from $7.25 billion in the prior quarter, pushing the gross impaired loan ratio up four basis points to 99 basis points. The bank said International Banking net impaired loans increased by $157.0 million from Q1, mainly due to one account, while Canadian Banking net impaired loans rose $100.0 million on higher commercial formations.
Allowance for credit losses rose to $7.34 billion from $7.19 billion in Q1. The allowance ratio increased two basis points to 96 basis points, while the performing-loan allowance ratio held at 64 basis points.
The bank’s CET1 ratio was 13.3%, unchanged from Q1, as earnings net of dividends and lower risk-weighted assets were offset by model and methodology changes, accumulated other comprehensive income pressure, and share repurchases. Tier 1 and total capital ratios were also unchanged at 15.4% and 17.0%, respectively.
That capital position allowed Scotiabank to raise its quarterly dividend to $1.14 per share, an increase from the prior payout.
CEO Scott Thomson said Scotiabank remains on track to meet its fiscal 2026 financial objectives and its target of more than 14% ROE in fiscal 2027.
Scotiabank last traded at $111.00 on the TSX.
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