Find out how the banking giant fared in Q1
Scotiabank opened 2026 with a sharp rebound in quarterly profit as it booked stronger earnings across all major divisions and finalized the sale of its Colombia, Costa Rica and Panama operations.
Net income for the quarter ended January 31 rose to $2.299 billion from $993 million a year earlier, when the bank absorbed a $1.355 billion impairment tied to the Latin American exit.
Reported diluted EPS climbed to $1.73 from $0.66, while adjusted EPS increased to $2.05 from $1.76.
Adjusted net income reached $2.695 billion and adjusted ROE improved to 13%, up from 11.8% in Q1 2025.
The Common Equity Tier 1 capital ratio moved to 13.3%, remaining well above regulatory minimums even after a $434 million after‑tax loss on closing the Davivienda transaction this quarter, following last year’s impairment charge when the assets were classified as held for sale.
Earnings rebound after Latin American hit
“2026 is off to a strong start for Scotiabank,” said Scott Thomson, president and CEO.
“The Bank delivered adjusted EPS growth of 16%, adjusted return on equity of 13%, and adjusted positive operating leverage of 4%. We saw earnings growth across all of our business lines this quarter… We are confident that we can deliver on our medium-term objectives in 2027, including a return on equity above 14% – one year ahead of our Investor Day commitments.”
When the Latin American sale was first announced, that impact looked very different. In Q1 2025, earnings fell after Scotiabank booked a $1.36 billion impairment related to the planned divestiture.
“Consistent with our strategy, we have recently executed on initiatives to generate additional profitability in our priority North American markets and to simplify our international banking portfolio,” Thomson said at the time, pointing to the Colombia and Central America exit alongside a KeyCorp investment in the United States.
Credit costs and global headwinds
Credit costs remained elevated. Provisions for credit losses edged up to $1.176 billion from $1.162 billion a year earlier, with higher formations in Canadian retail and corporate portfolios partly offset by lower impaired‑loan provisions in international retail following the divestitures.
The total allowance for credit losses fell to $7.185 billion, largely reflecting the removal of Latin American exposures from the balance sheet.
Scotiabank’s stronger start came as banks worldwide operated against a backdrop of aggressive US tariffs, record trade deficits and forecasts for recessions in Canada and Mexico, with global growth expectations marked down on trade‑war risks and tighter financial conditions.
Meanwhile, other Big Six banks are also gearing up to release Q1 financials. Bank of Montreal and National Bank of Canada are expected to report on February 25, followed by Royal Bank of Canada, Toronto‑Dominion Bank and CIBC on February 26.
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