Scotiabank reported first‑quarter 2026 results that included an adjusted earnings per share of $2.05, beating the consensus estimate of $1.95 by $0.10 or 5.1%. Revenue for the quarter was $9.65 billion, falling short of the $9.72 billion consensus by $70 million.
The quarter’s performance represents a sharp turnaround from the prior year. Net income rose from $993 million in Q1 2025 to $2,299 million in Q1 2026, while diluted EPS climbed from $0.66 to $1.73 and adjusted diluted EPS increased from $1.76 to $2.05. Revenue grew from $9.37 billion to $9.65 billion, a year‑over‑year gain that still fell short of analyst expectations.
Segment‑level data show that Canadian Banking generated $960 million in net income, up 5% year‑over‑year; International Banking added $717 million, up 7%; Global Wealth Management contributed $481 million, up 18%; and Global Banking and Markets delivered $545 million, up 5%. The mix of stronger fee income in wealth management and margin expansion in Canadian banking helped lift earnings, while the larger revenue base from the Latin American divestiture contributed to the higher top line.
CEO Scott Thomson said, "2026 is off to a strong start for Scotiabank." He added, "We saw earnings growth across all of our business lines this quarter, including in Canadian banking, where we delivered another quarter of sequential margin expansion, accelerating fee income growth, and positive operating leverage." Thomson also noted confidence in meeting medium‑term objectives, stating, "We are confident that we can deliver on our medium‑term objectives in 2027, including a return on equity above 14% – one year ahead of our Investor Day commitments."
Investors focused on rising credit provisions and expense growth, which tempered enthusiasm for the earnings beat. Credit provisions increased in the quarter, but management expects them to trend lower later in the year as macro conditions improve. The bank’s strategic repositioning—selling its Latin American operations and concentrating on North America, which now accounts for 82% of earnings—provides a tailwind, while margin expansion in Canadian banking signals operational efficiency.
The results underscore Scotiabank’s shift toward a more profitable, North‑American‑centric model. The higher net income and EPS growth reflect disciplined cost management and a favorable mix of fee‑generating activities, while the revenue miss highlights the impact of higher credit loss provisions and consumer headwinds. Together, these dynamics suggest that the bank is on a path to stronger profitability, but investors remain cautious about short‑term credit risks and expense pressures.
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