Q2 2026 Bank of Nova Scotia Earnings Call Transcript
Key Points
- Bank of Nova Scotia (BNS) reported adjusted earnings of $2.7 billion or $2.02 per share, with pre-tax-provision earnings up 16% year-over-year.
- The bank's return on equity for the quarter was 13.2%, with expectations to reach 14% plus in fiscal 2027, ahead of the Investor Day target.
- Canadian banking showed strong performance with pre-tax-provision earnings up 13% year-over-year, driven by margin expansion and fee income growth.
- International banking saw a 12% year-over-year increase in pre-tax-provision earnings, with notable performance in Mexico where earnings rose 25%.
- Global wealth management achieved net sales of $4.7 billion, marking the seventh consecutive quarter of positive net flows, with ROE at 17.9%.
- The macroeconomic environment remains uncertain, with geopolitical developments and elevated energy costs affecting trade flows and GDP growth outlook.
- Industry-wide term deposit balances contracted, although BNS managed to retain over 90% of retail GIC maturities.
- Impaired provisions for credit losses increased, driven mainly by one corporate account in international banking.
- The bank's allowance for credit losses increased to $7.3 billion, reflecting ongoing macroeconomic uncertainties.
- Retail impaired performance in international markets is expected to remain elevated, with specific concerns in Mexico due to trade uncertainty.
Ladies and gentlemen, this conference is being recorded.
Good morning, and welcome to Scotiabank's Q2 '26 earnings call. My name is Manny Grauman, and I'm Head of Investor Relations here at the bank. Presenting to you this morning are Scott Thompson, Scotiabank's President and Chief Executive Officer Raj Viswanathan, our Chief Financial Officer and Shannon McGuinness, our Chief Risk Officer. Following our comments, we will be glad to take your questions.
Also present to take questions are the following Scotiabank executives: Aris Bogdan Aris from Canadian Banking Jackie Alard from Global Wealth Management.
Francisco Arciguieta from International Banking and Travis Machen from Global Banking & Markets.
Before we start and on behalf of those speaking today, I will refer you to Slide 2 of our presentation, which contains Scotiabank's caution regarding forward-looking statements. With that, I will now turn the call over to Scott.
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