Scotiabank reported a jump in first-quarter profits even as its Canadian banking segment showed rising financial stress for consumers.
The bank reported net income of $2.3 billion, up from $993 million in the same quarter last year when the bank took a $1.4 billion impairment charge related to the sale of some international divisions.
Chief executive Scott Thomson said on an analyst call Tuesday that the bank was moving forward on its strategic priorities “despite what remains a challenging operating environment.”
Its Canadian banking division saw profits rise to $960 million in the quarter ending Jan. 31, up from $913 million last year, but the segment also showed some signs of softness.
Provisions for potentially bad loans rose 7% from a year earlier to $576 million, and up about 17% from the previous quarter.
The bank also reported both business and personal loans down 1%, while mortgage loans rose 5%.
Gross impaired loan formations for Canadian retail climbed steadily throughout 2025, from $870 million in the second quarter to $1.11 billion in the first quarter of 2026.
The division’s financial performance is doing well despite the challenges, said Thomson.
“We saw earnings growth across all of our business lines this quarter, including in Canadian banking, where we delivered another quarter of sequential margin expansion, accelerating fee income growth, and positive operating leverage,” he said in a statement.
The bank saw impaired loans drop elsewhere after it closed the sale of its Colombia, Costa Rica and Panama divisions, which had prompted the impairment charge last year.
Scotiabank says its overall provision for credit losses was $1.18 billion for the quarter, up from $1.16 billion a year earlier.
Revenue totalled $9.65 billion, up from $9.37 billion.
The bank said its profit amounted to $1.73 per diluted share for the quarter, up from 66 cents per diluted share in the same period a year earlier.
On an adjusted basis, Scotiabank says it earned $2.05 per diluted share in the quarter, up from $1.76 a year earlier.
The average analyst estimate had been for an adjusted profit of $1.95 per share, according to LSEG Data & Analytics.
Jefferies analyst John Aiken said the bank beat expectations both on its top line and from increased efficiency, even as provisions for credit losses came in higher than expected.
“While weakening domestic consumer credit provided a headwind, (Scotiabank) managed to earn through this,” he said in a note.
Scotiabank’s global wealth management business posted an adjusted net income attributable to equity holders of $488 million compared with $414 million in the same period last year. The increase came primarily from higher mutual fund fees, brokerage revenues and net interest income, partly offset by higher volume-related non-interest expenses.
The wealth management segment had $801 billion in assets under administration and $436 billion in assets under management as of Jan. 31, up from $738 billion and $396 billion, respectively, at the same time last year.
International banking earned $717 million in net income attributable to equity holders, up from $651 million a year earlier, while global wealth management earned $481 million in net income attributable to equity holders, up from $407 million.
Global banking and markets earned $545 million in net income attributable to equity holders, up from $517 million.