Scotia CEO ‘relatively optimistic’ on Canada’s outlook as bank reports profit up

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TORONTO — The chief executive of the Bank of Nova Scotia says he’s optimistic the Canadian economy will turn a corner despite macroeconomic challenges, as the bank reported profit growth and raised its quarterly dividend on Wednesday.

The bank reported a second-quarter profit of $2.63 billion, up from $2.03 billion a year earlier. Scotiabank also said it will now pay a quarterly dividend of $1.14 per share, up from $1.10 per share.

The increased payment to shareholders came as the bank said its profit amounted to $2.00 per diluted share for the quarter ended April 30, up from $1.48 per diluted share a year earlier.

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Speaking with analysts, president and CEO Scott Thomson struck a positive tone, even while acknowledging “some stresses” in Scotiabank’s Canadian portfolio. He said those include macroeconomic challenges stemming from the Iran war and some uncertainty related to Canada’s trade relationship with the United States.

But Thomson pointed to three factors that underscore why he said he feels “relatively optimistic about the outlook for Canada.” The first of those relates to Canada’s position as an “oil-exporting nation” at a time when the price of oil is hovering at more than US$90 per barrel.

“When you have oil at these type of prices, that is very beneficial for the overall Canadian economy and that allows fiscal stimulus — significant fiscal stimulus — by the Canadian government to support some of the provinces that will be impacted either by (the Canada-United States-Mexico Agreement) or affordability issues,” he said.

Thomson said that is already playing out as he touted Ottawa’s first-time homebuyers’ GST and HST rebate, which eliminates federal tax on a new home valued at up to $1 million for first-time buyers.

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He said he’s also encouraged by a recent “significant change in tone” from international investors on Canada.

“Over the last 15 years, and I’ve lived this, you’ve seen a lot of foreign money leave Canada. And now you have a lot of foreign money looking at Canada from a foreign direct investment,” said Thomson.

“When you look at the agenda from the prime minister, whether it’s the grand bargain out in Western Canada with pipelines and reduced emissions through carbon capture, or airport privatization which is increasingly talked about, I do think you’re going to see uses of capital in the country.”

And while it’s unclear how the upcoming renegotiation of CUSMA will play out, Thomson said he believes more certainty is on the way for the Canadian business community. He said the trade deal is “not something that’s going to be ripped up.”

“I think it’s become increasingly apparent to everybody that Canada, U.S. and Mexico need each other,” he said.

“It may continue to evolve and there may be tariffs on specific sectors and there may be some industries that are impacted. But ultimately, I think it’s very clear that this regional trading bloc is increasingly important to the U.S.”

During the quarter, Scotiabank’s revenue totalled $9.84 billion, up from $9.08 billion in the same quarter last year. The bank’s provision for credit losses amounted to $1.22 billion, down from $1.40 billion a year ago.

On an adjusted basis, Scotiabank said it earned $2.02 per diluted share, up from an adjusted profit of $1.52 per diluted share a year ago.

Analysts on average had expected an adjusted profit of $1.94 per share, according to LSEG Data & Analytics.

Jefferies analyst John Aiken called it a “solid beat” that showcased Scotiabank’s strong performance in domestic retail lending.

“We view the results positively and believe that they should provide solid support to Scotia’s valuation,” Aiken said in a note.

While money set aside for bad loans was lower than the same quarter a year ago, the figure was still higher than expectations, he said.

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Chief risk officer Shannon McGinnis said provisions for credit losses on impaired loans are “slightly elevated relative to our initial outlook.” However, the bank expects that to moderate in the second half of the year, albeit more gradually than previously anticipated.

“The macroeconomic environment has evolved meaningfully since the start of the year,” she said on the call.

“Elevated energy costs, persistent trade uncertainty and higher unemployment continue to pressure both consumers and businesses across our footprint.”

Scotiabank said its Canadian banking operations earned net income attributable to equity holders of $935 million in its latest quarter, up from $613 million a year ago, boosted by higher revenue and lower provisions for credit losses on performing loans, partly offset by higher non-interest expenses.

Meanwhile, international banking operations earned $701 million in net income attributable to equity holders, up from $676 million in the same quarter last year.

Scotiabank said its global wealth management business earned $474 million attributable to equity holders, up from $399 million a year ago, while its global banking and markets operations earned $457 million attributable to equity holders, up from $413 million in the same quarter last year.

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Sammy Hudes, The Canadian Press

This report by The Canadian Press was first published May 27, 2026.