By Christine Dobby
(Bloomberg) — Bank of Nova Scotia topped estimates after posting strong performance in its Canadian banking unit, a key focus point for investors as the firm works through a turnaround plan, and higher overall revenue.
The Toronto-based lender earned $1.88 per share on an adjusted basis in its fiscal third quarter, according to a statement Tuesday, higher than the $1.73 average analyst estimate. Its domestic banking unit had net income totaling $959 million in the three months through July, better than the $892 million average forecast of two analysts in a Bloomberg survey.
“We reported improving revenue growth which helped drive another quarter of positive operating leverage and pushed our return on equity meaningfully higher,” Chief Executive Officer Scott Thomson said in the statement.
The firm’s Canadian banking business has lagged behind its peers, according to analysts, and improving performance there is a crucial part of a plan to drive renewed earnings growth. The company has struggled with slow commercial loan growth and lower credit-card lending, while deposit growth has also underperformed rivals.
On credit, Scotiabank earmarked $1.04 billion in provisions for possible loan losses, less than the $1.17 billion analysts had forecast.
Thomson, who became CEO in 2023, is pushing for Scotiabank to increase its share of the Canadian retail-banking and wealth-management markets and prioritize capital spending at home, followed by the U.S. and Mexico ahead of other international markets.
The bank is working to improve its credit quality and is also in the process running off lending relationships with less-profitable clients.
Investors don’t appear convinced yet, with Scotiabank’s shares gaining 3% so far this year, compared with an increase of 14% for the S&P/TSX banks index.
The bank’s domestic and Mexican operations have been hit hard by U.S. tariffs this year while its businesses in other parts of Latin America, including Chile and Peru, have faced less disruption from the trade war, with less impact on credit.
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Last modified: August 26, 2025