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Q4 earnings rose 23% year-over-year, capping a year of strong growth in EPS, ROE, and fee income. 2026 guidance calls for double-digit EPS growth, margin expansion, and positive operating leverage, with Canadian banking and wealth leading gains.

Based on Bank of Nova Scotia [BNS] Q4 2025 Audio Transcript — Dec. 2 2025

By Robb M. Stewart

Bank of Nova Scotia has its sights on strong earnings growth in the coming year despite the lingering uncertainty brought on by U.S. trade policy, with capital and liquidity measures expected to remain solid.

The Canadian bank, one of North America's largest by assets, ended fiscal 2025 on a strong note with earnings outpacing expectations as income was driven by capital-markets operations, even with credit-loss provisions creeping higher.

Scotiabank projected higher net interest income in the new year driven by both loan and deposit growth and net-interest-margin expansion, while noninterest revenue is expected to grow across all its business segments. The lender said earnings also are expected to benefit from a lower provision for credit losses, which should offset the impact of a higher tax rate and modest expense growth as spending on technology picks up.

The bank kicked off earnings season for Canada's so-called Big Six, the largest lenders in the country, and offered a glimpse at how the sector has coped with the fallout from the Trump administration's abrupt shift in trade policy and embrace of tariffs.

Scotiabank recorded fourth-quarter net income of 2.21 billion Canadian dollars ($1.58 billion), or C$1.65 a share, against C$1.69 billion, or C$1.22 a share, a year earlier.

The quarter was held back by C$352 million in items including restructuring charges and severance provisions related to steps to simplify Scotiabank's Canadian banking operations, as well as the restructuring of its Asia operations in its global-banking-and-markets arm. On an adjusted basis, earnings came in at C$1.93 a share, beating the C$1.85 mean forecast of analysts polled by FactSet.

Overall revenue increased 15% to C$9.8 billion for the three months to Oct. 31 from C$8.53 billion last year, and versus the C$9.45 billion analysts expected.

President and Chief Executive Scott Thomson said 2025 was a transition year for the bank. "We delivered improving results through the year as we strengthened our balance sheet, improved our loan-to-deposit ratio, and increased return on equity," he said.

The bank anticipates strong growth in adjusted earnings for its global-markets arm in fiscal 2026, modestly higher earnings for international banking and double-digit growth for Canadian banking, Chief Financial Officer Raj Viswanathan told investors. The lender also expects to continue buying back shares and to maintain its capital ratios for the year.

The global economic landscape continues to be shaped by developments in U.S. trade policy. Scotiabank said that while there is a better sense of the tariff backdrop, uncertainty remains over how America's changed trade policies will affect economies and financial markets.

It is increasingly clear these policies and associated uncertainty are weighing more heavily on the U.S. than they are on many of its trading partners, though Canada has been significantly impacted, Scotiabank said. It forecast Canada's economy will grow just 1.2% this year and 1.4% in 2026, while inflationary pressures are likely to mean the Bank of Canada leaves interest rates steady through the middle of next year before raising them by the end of 2026.

Scotiabank recorded a fourth-quarter credit-loss provision, money set aside to cover soured loans, of C$1.11 billion. That was up from C$1.04 billion the quarter before and C$1.03 billion a year earlier, and was slightly higher than the C$1.08 billion analysts anticipated.

Scotiabank's provision for losses on impaired loans was little changed on a year earlier but up roughly 7% on the prior quarter due to its retail portfolio, while the provision for losses on performing loans increased due to business growth, mainly in international retail banking, as well as credit migration affecting Canadian banking and corporate loans. The bank said some customers have shown signs of stress, though these cases remain isolated.

Scotiabank's common equity Tier 1 capital ratio stood at 13.2%, down slightly from 13.3% at the end of the prior quarter but up from 13.1% a year earlier. The country's big banks are sitting on sizable capital buffers, and the country's banking regulator requires the lenders to hold a CET1 ratio of at least 11.5% of risk-weighted assets.

Write to Robb M. Stewart at robb.stewart@wsj.com

Q4 capped a year of strong financial performance with EPS up 10% and ROE at 12.5%. Double-digit EPS growth is expected in 2026, led by Canadian banking and wealth, with positive operating leverage and margin expansion. CET1 ratio remains strong at 13.2%.

Based on Bank of Nova Scotia [BNS] Q4 2025 Audio Transcript — Dec. 2 2025

Net income for 2025 was $7,758 million, down 2% year-over-year, while adjusted net income rose 10% to $9,510 million. Key events included a $4.1 billion investment in KeyCorp and the sale of Colombia, Costa Rica, and Panama operations, with strong capital and liquidity maintained. Net interest income grew 12% and non-interest income 12%, but higher credit losses and expenses weighed on results.

Original document: Bank of Nova Scotia [BNS] SEC 40-F Annual Report — Dec. 2 2025

Bank of Nova Scotia racked up a solid quarter with strength in its capital markets operations, says Raymond James' Stephen Boland. Fourth-quarter adjusted EPS of C$1.93 was slightly above the C$1.85 he expected, thanks to strong results in wealth management and global banking and markets. Net interest and non-interest income were both ahead of Boland's forecast, while the C$1.11 billion in credit-loss provisions was modestly above the C$1.08 billion estimate. The analyst notes Scotiabank is targeting strong earnings growth in FY2026, driven by higher net interest income with loan and deposit growth and net interest margin expansion. (robb.stewart@wsj.com)

Fiscal 2025 saw adjusted net income and EPS rise year-over-year, with strong Q4 growth in all business lines, especially Global Wealth Management and Global Banking and Markets. Capital ratios remain robust, and the bank is focused on disciplined capital allocation and operational efficiency.

Original document: Bank of Nova Scotia [BNS] SEC 6-K Current Report — Dec. 2 2025