Detailed narrative
Balance-sheet optimization: value over volume
Over the past 24 months Scotiabank repositioned the balance sheet by cross-selling and rightsizing lending relationships, deliberately accepting lower loan growth to improve ROE, capital capacity and liquidity. The all-bank loan-to-deposit ratio improved to 104% in Q3 2025 from 116% in Q4 2022, and wholesale funding to total assets fell 280 bps to 18.8% from 21.6%.
Canadian commercial loan growth is flat yet revenue rose 16% YTD and PTPP is up 25%; GBM loans fell 14% YoY while PTPP rose 29% and ROE improved 310 bps. Management says the optimization phase is largely complete and expects increased-but-profitable loan growth next year.
Credit normalization after a conservative Q2
All-bank PCLs were ~$1B or 55 bps, down $357M QoQ. Performing provisions fell $280M to $66M (4 bps) after Q2's elevated 18 bps tariff-driven build, and impaired provisions were $975M (51 bps), down 6 bps QoQ. Canadian retail drove the improvement — impaired retail PCLs of $315M (34 bps) fell 11 bps on aging 2022/2023 prime-auto vintages ('the pig moving through the python') and lower net write-offs. 90-day+ mortgage delinquency held at 24 bps for a third straight quarter.
YTD the bank built over $470M in performing allowances; total ACL ratio is 96 bps. Management remains cautious given trade uncertainty and Mexican weakness.
GBM and capital-markets strength
Global Banking and Markets delivered earnings of $473M, up 29% YoY, with revenue up 21% and capital-markets revenue up 54%. Trading-related revenues rose ~50% YTD and underwriting/advisory fees grew 28% YTD, aided by a record year in investment banking and record-high M&A fees in 2025.
The U.S. contributed 42% of GBM earnings and continues to reach new highs in investment-grade DCM market share; in Canada GBM ranks #2 YTD in DCM league tables. GBM also launched its first U.S. mortgage capital-markets funding transaction. Management cautioned that not every quarter will replicate this one but is building a more durable franchise.
International Banking pivot to growth
IB delivered adjusted constant-dollar earnings of $675M, up 7% YoY, with revenue up 3%, NIM expanded 13 bps YoY, and expenses flat despite inflation. Since Q4 2023 IB PTPP rose 22% and ROE improved 360 bps; International GBM loans fell ~$9B while earnings rose ~$76M (32%).
Client deselection — concentrated in mass-market retail and commercial — is 'pretty much done'; mass-market acquisition is running ~20% lower while affluent/emerging-affluent/top-of-mass segments grow faster. Management frames 2026 as the pivot-to-growth year, wallet-share led, holding a ~2% return-on-RWA discipline. Mexico is the key growth engine but its economy is contracting ~1.5% this year.
Wealth management momentum and primacy
Global Wealth Management earnings rose 13% YoY to $424M with revenue up 12%; spot AUM grew 12% YoY to $407B and AUA grew 9% to over $750B. Collective wealth-channel net sales were $6.2B YTD versus $5B of redemptions a year earlier — an $11.2B swing — while retail investment-advice net sales reached $1.7B YTD (vs $900M net redemptions).
Canadian advisory net sales are up ~85% YoY; International Wealth earnings rose 21% YoY with record earnings in Mexican wealth. Wealth is positioned as the 'glue' of the all-bank client-primacy strategy, with $11B of cross-referrals YTD (+13%).
Capital, buybacks and internal generation
CET1 ended at 13.3%, up 10 bps QoQ, with 13 bps of internal capital generation and a 4 bps OCI-securities gain partly offset by 5 bps allocated to buying back 3.2 million shares. The bank has added over 200 bps of capital in two years and has NCIB approval for up to 20 million shares.
Capital-deployment priorities are organic growth first, credit-migration buffer second, and buybacks third; management expects to remain comfortably above 13% next quarter and targets 15-20 bps of quarterly internal capital generation into FY26. RWA rose $4B to $463B.
AI, GTB and North American cash management
Scotiabank completed the rollout of its AskAI internal LLM chatbot to all Canadian retail branches and client-experience centres, while its external AI chatbot handles over 125,000 inquiries monthly. On global transaction banking, the pipeline has grown 5x over the past year; the bank piloted and, as of October 1, fully rolled out a modern U.S. cash-management offering to connect its North American corridor — leveraging its universal-bank footprint (including multinational payroll at scale) as a differentiator versus traditional cash-management providers.