By Robb M. Stewart

Bank of Nova Scotia logged a rise in earnings for the first quarter of its fiscal year as its global wealth-management business helped drive growth across its operations.

Scotiabank said its net income rose to 2.3 billion Canadian dollars (US$1.68 billion), or C$1.73 a share, against C$993 million, or C$0.66, a year earlier. On an adjusted basis that strips out certain items, the Canadian bank reported earnings of C$2.05 a share, beating the C$1.95 mean forecast of analysts polled by FactSet.

Overall revenue rose to C$9.65 billion for the three months to Jan. 31 from C$9.37 billion last year, but missed the C$9.71 billion that analysts had expected.

Net interest income increased 7.9% to C$5.58 billion, while noninterest revenue slipped 3.2% to C$4.06 billion.

The bank, one of the largest in North America by assets, recorded a return on equity of 11.1% for the latest quarter against 5.5% in the same period last year.

However, Scotiabank's provision for credit losses, money set aside to cover the risk of soured loans, was raised to C$1.18 billion from C$1.11 billion the quarter before and C$1.16 billion a year earlier. That was a touch below the C$1.19 billion that was expected.

The provision for credit losses on performing loans fell by C$25 million quarter-over-quarter, but rose on impaired loans by C$39 million, largely due to higher formations in its Canadian retail and corporate portfolios.

Scotiabank's results kick off the earnings season for Canada's six largest banks.

The lender said it saw earnings growth across each of its business lines for the quarter, including in Canadian Banking, where it delivered sequential margin expansion and fee income growth.

President and Chief Executive Scott Thomson said the bank is confident it will deliver its medium-term objectives in 2027, including a return on equity above 14%.

The bank anticipates global economic activity will slow modestly over the coming years but remain resilient in the face of heightened trade tensions that began early last year with the shift in U.S. trade policy and embrace of tariffs. It forecasts U.S. economic growth will slow in the near term as it adjusts to higher tariffs and the lagged effects of monetary tightening, while Canada's economy will show only modest growth that should pick up to about 2% in 2027 as trade-related headwinds fade.

Scotiabank's common equity tier capital 1 ratio widened slightly to 13.3% from 13.2% at the end of the prior quarter. The country's big banks are sitting on sizable capital buffers, and the country's banking regulator requires the lenders to hold a CET1 ratio of at least 11.5% of risk-weighted assets.

Scotiabank, which in late 2024 finalized a $2.8 billion investment in KeyCorp that gave it an almost 15% stake in the U.S. regional lender, has moved to tighten its focus on its core North American operations. The lender last year sold businesses in Colombia, Costa Rica and Panama to Banco Davivienda in exchange for a 20% stake in the enlarged Colombian lender, which led to it book a C$377 million after-tax hit in the latest quarter related to the release of cumulative foreign currency translation losses.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

February 24, 2026 06:57 ET (11:57 GMT)

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