The Bank of Nova Scotia (BNS) Q1 2026 earnings summary

Executive summary

• Adjusted Q1 2026 earnings reached CAD 2.7 billion, or CAD 2.05 per share, up 16% year-over-year, with strong revenue growth and expense control offsetting higher impaired PCLs.

• Net income for Q1 2026 was $2,299 million, up 131% year-over-year, with diluted EPS of $1.73 versus $0.66 last year.

• ROE was 13% (adjusted), up 120 basis points year-over-year, tracking ahead of medium-term targets, with Canadian Banking expected to drive further ROE expansion.

• Strategic focus remains on organic growth, technology and AI investments, and disciplined capital deployment, including share buybacks.

• All business lines reported earnings growth, with Canadian Banking, International Banking, Global Wealth Management, and Global Banking and Markets all contributing.

Financial highlights

• Revenue grew 11% year-over-year (adjusted, ex-divestitures), with net interest income up 13% and non-interest income up 10%.

• Pre-tax, pre-provision profit rose 16% year-over-year; positive operating leverage of 4.2% and productivity ratio improved to 52%.

• CET1 ratio stood at 13.3% after repurchasing 4.9 million shares; effective tax rate increased to 25.7%.

• Provision for credit losses was $1,176 million, up slightly year-over-year; ratio at 0.61%.

• Non-interest expenses were $5,299 million, down 18% year-over-year; adjusted expenses up 3%.

Outlook and guidance

• ROE expected to expand across all business units, with a medium-term target of 14%+ achievable one year ahead of plan.

• Impaired PCLs anticipated to remain elevated in the first half of the year, then trend lower as macro conditions improve.

• Deposit margin expansion and business mix shifts are key drivers for 2026 and 2027 performance.

• Economic growth in Canada and the U.S. is expected to moderate in 2026, with inflation pressures persisting.

• The bank anticipates continued resilience despite global trade tensions and expects to benefit from policy rate adjustments.