Scotiabank (TSX: BNS) ended fiscal 2025 with accelerating revenue and higher underlying profitability, but reported results still show pressure from provisioning, expense growth, and a higher tax bill.
Full-year total revenue rose to $37.74 billion from $33.67 billion, driven by net interest income of $21.52 billion versus $19.25 billion and non-interest income of $16.22 billion versus $14.42 billion, up 12%. Net interest margin expanded to 2.33% from 2.16%, but the benefit was diluted by higher costs and credit.
Provision for credit losses climbed to $4.71 billion from $4.05 billion, while non-interest expenses rose to $22.52 billion from $19.70 billion. With expenses growing faster than revenue, the productivity ratio worsened to 59.7% from 58.5% and operating leverage was negative 2.2% for the year.
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Income before taxes increased to $10.51 billion from $9.92 billion but income tax expense jumped to $2.75 billion from $2.03 billion, compressing reported net income to $7.76 billion from $7.89 billion. Diluted EPS fell to $5.67 from $5.87.
Quarterly revenue rose to $9.80 billion in Q4 2025, with net interest income rising to $5.59 billion and non-interest income to $4.22 billion. Notably, Q4 interest income fell to $14.22 billion from $15.33 billion, but interest expense dropped harder to $8.63 billion from $10.40 billion, lifting margin to 2.40% from 2.15%.
Provision for credit losses in the quarter increased to $1.11 billion from $1.03 billion, while non-interest expenses rose to $5.83 billion from $5.30 billion. Reported net income improved 31% to $2.21 billion from $1.69 billion, but that headline lift is flattered by smaller after-tax adjusting charges this year ($352 million) versus last year ($430 million).
Adjusted net income rose to $9.51 billion from $8.63 billion, with adjusted diluted EPS at $7.09 versus $6.47 and adjusted ROE at 11.8% versus 11.3%. In Q4, adjusted net income rose to $2.56 billion from $2.12 billion and adjusted diluted EPS increased to $1.93 from $1.57.
Net cash used in operating activities was an outflow at $6.19 billion in Q4 versus $7.19 billion a year earlier, driven by working capital and market-related line item swings including trading assets and securities financing balances. For the year, net operating cash fell to $5.41 billion from $15.65 billion, even as net income was broadly stable.
CET1 edged up to 13.2% from 13.1%, Tier 1 rose to 15.3% from 15.0%, while TLAC ratio fell to 29.1% from 29.7% and LCR eased to 128% from 131%.
Scotiabank last traded at $96.03 on the TSX.
Information for this story was found via Sedar and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
