The Bank of Nova Scotia (BNS) Q1 2025 earnings summary

Executive summary

• Q1 2025 reported net income was $993 million, down 55% year-over-year, mainly due to a $1,362 million impairment loss from the announced sale of banking operations in Colombia, Costa Rica, and Panama, while adjusted net income rose 7% year-over-year to $2,362 million, driven by higher revenues.

• Adjusted diluted EPS was $1.76, up from $1.69 last year, and adjusted return on equity was 11.8%.

• Revenue increased 11% year-over-year to $9,372 million, with net interest income up 8% and non-interest income up 15%.

• Strong capital position with CET1 ratio at 12.9%, supported by internal capital generation and impacted by the KeyCorp investment and impairment loss.

• Strategic capital deployment included the accretive KeyCorp investment and the sale of Colombian, Costa Rican, and Panamanian operations for a 20% stake in a combined entity.

Financial highlights

• Provision for credit losses rose to $1,162 million, up $200 million year-over-year, with the ratio increasing to 0.60%.

• Non-interest expenses were $6,491 million, up 37% year-over-year, including the impairment loss; adjusted non-interest expenses rose 8%.

• Productivity ratio (adjusted) improved to 54.5%, down 150 bps year-over-year.

• Loan-to-deposit ratio decreased to 105% from 110% year-over-year.

• Allowance for credit losses rose to $7,080 million, with a ratio of 91 bps.

Outlook and guidance

• Management remains focused on medium-term financial objectives and supporting clients amid economic uncertainty.

• Economic outlook is clouded by U.S. trade policy uncertainty and potential tariffs, with moderate GDP growth expected in Canada and the U.S. for 2025.

• Dividend growth expected to resume modestly next quarter, with potential for share repurchases by year-end, contingent on tariff developments.

• PCL ratio expected to trend down in the second half of the year, barring significant macro deterioration or tariffs.

• Strategic initiatives include simplifying the international portfolio and prioritizing North American markets.