Scotiabank Reports Strong Q3 2025 Adjusted Profit and EPS Beat

Scotiabank (BNS.US) reported adjusted net income of C$2,518 million for the third quarter of 2025, a significant increase from C$2,191 million in Q3 2024. Adjusted diluted earnings per share (EPS) were C$1.88, up from C$1.63 in the same period last year. This adjusted EPS surpassed the analyst estimate of C$1.28 for the quarter, indicating a strong performance against expectations.

Segment Performance Highlights

Canadian Banking delivered adjusted earnings of C$959 million, a 56% increase quarter-over-quarter, primarily due to lower provision for credit losses and higher revenues. International Banking generated adjusted earnings of C$716 million, up 7% year-over-year, driven by robust revenue generation and effective expense management, reflecting positive operating leverage.

Global Wealth Management adjusted earnings increased by 13% year-over-year to C$427 million, largely due to strong revenue growth from higher mutual fund fees, brokerage revenues, and net interest income. Global Banking and Markets reported earnings of C$473 million, a 29% increase compared to the prior year, supported by strong performance in capital markets and higher fee revenue.

Credit Quality and Capital Ratios

The provision for credit losses was C$1,041 million in Q3 2025, a decrease of C$11 million compared to C$1,052 million in Q3 2024. The provision for credit losses ratio remained unchanged at 55 basis points. The Bank maintained a strong Common Equity Tier 1 (CET1) capital ratio of 13.3% as of July 31, 2025, an increase of approximately 10 basis points from the prior quarter, driven by strong internal capital generation and higher unrealized gains for FVOCI securities.

The allowance for credit losses increased to C$7,386 million, up from C$7,276 million in the prior quarter, with the allowance for credit losses ratio increasing by one basis point to 96 basis points. Gross impaired loans saw a slight increase to C$6,890 million, mainly due to higher formations in International retail and Canadian/International commercial portfolios, but the gross impaired loan ratio remained unchanged at 90 basis points.