Scotiabank Q3 2026: Record Quarter, Discount Question
Scotiabank Q3 2026 is the quarter the bank cleared the bar it set for itself. Return on equity came in at 14.1% (Q3 2026 earnings release, p.1), and CEO Scott Thomson’s letter states plainly that “we exceeded our 14% return on equity target this quarter” (Report to Shareholders, p.1). For a bank whose recovery has been told in terms of getting back to a peer-comparable return, that sentence is the quarter.
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The numbers
For the three months ended July 31, 2026, Scotiabank reported total revenue of $10,535 million (release, p.2), net income of $2,953 million, reported diluted EPS of $2.27 and reported ROE of 14.1% (p.1). Adjusted figures sit almost on top of the reported ones: adjusted net income $2,973 million, adjusted EPS $2.28, adjusted ROE 14.2% (p.1). That near-identity matters: no large adjusting item is doing the lifting.
The eight-quarter series shows the trajectory. Revenue, oldest to newest: $8,526M, $9,372M, $9,080M, $9,486M, $9,803M, $9,646M, $9,837M, $10,535M, roughly 24% higher across two years (supplementary, p.5, p.7). Reported diluted EPS over the same span: $1.22, $0.66, $1.48, $1.84, $1.65, $1.73, $2.00, $2.27. That series begins with a $0.66 quarter and ends at the highest reading in the window.
Every segment grew. Canadian Banking earned $1,071 million, up 12%; International Banking $766 million, up 8%; Global Wealth Management $518 million, up 23%, which the Bank describes as a record quarter; and Global Banking and Markets $647 million, up 37%, which the Bank describes as record earnings (release, p.1). The Other segment’s net loss narrowed to $50 million from $71 million (p.3). Within International Banking, the portion attributable to equity holders was $725 million against $670 million a year earlier (p.2).
CET1 stands at 13.1% (p.4) and liquidity coverage at 126% (supplementary, p.5). The Board declared a $1.14 per-share dividend, record date October 6 and payable October 28, 2026 (Report to Shareholders, p.53); the supplementary shows $1.10 in the prior quarter (p.6), though the Bank did not characterize the change as an increase in the documents we reviewed.
Scotiabank: revenue by quarter, as reported by the company. Source: the bank’s own supplementary financial information.
What it means: the discount question
We are not going to quote a price-to-book multiple here. We have not verified one from a primary source as of writing, and a stale valuation number is worse than none. Check current pricing yourself. But the question behind the multiple deserves a straight answer, because it is the one Scotiabank shareholders actually ask: if a discount persists for years, is it an opportunity or a verdict?
The filings give one concrete, comparable input. Scotiabank’s total provision for credit losses ratio was 0.56% this quarter, with the ratio on impaired loans at 0.52% (release, p.3), against a total allowance for credit losses of $7,551 million (p.4). For the same quarter, CIBC reported a 0.40% loan loss ratio (CIBC Report to Shareholders, p.5) and BMO reported 41 basis points (BMO Report to Shareholders, credit risk section). The denominators differ slightly between banks, so read that as a range rather than a ranking. But Scotiabank is provisioning at a visibly higher rate than either peer while producing a comparable ROE.
That is the honest shape of the debate. A discount is an opportunity only if the earnings behind it prove as durable as a peer’s. A higher provisioning rate is not proof they are not; it may simply be the cost of a different geographic mix, and this quarter that mix produced 8% growth in International Banking rather than a drag. But it is a difference visible in the numbers, not a sentiment problem, and it will not resolve in one quarter.
The risk
The two fastest-growing segments (Global Banking and Markets at 37% and Global Wealth at 23%) are the most market-sensitive lines in the bank. A quieter capital markets environment would take ROE back toward the target rather than above it, and 14% is now a threshold Scotiabank has publicly claimed. Credit is the risk running the other way: at a 0.56% provisioning ratio there is less cushion between the current rate and a level that would visibly compress earnings.
The Big Six, same quarter, side by side
| Bank | Revenue (CAD millions) | Diluted EPS | Return on equity |
|---|---|---|---|
| Royal Bank | 18,538 | $4.23 | 17.9% |
| TD Bank Group | 16,885 | $2.74 | 15.8% |
| Scotiabank | 10,535 | $2.27 | 14.1% |
| BMO Financial | 9,896 | $2.38 | 8.4% |
| CIBC | 8,368 | $2.47 | 15.2% |
| National Bank | 4,053 | $3.25 | 16.1% |
Every figure above is taken from that bank’s own Q3 2026 earnings release, supplementary pack or report to shareholders, not from an aggregator. Revenue and EPS are as reported.
What to watch
Fourth-quarter and full-year results cover the three months ending October 31, 2026; Scotiabank did not state a reporting date in the documents we reviewed, so confirm it on the Scotiabank investor relations page. The deciding metric is simple: does ROE stay above 14% for a second consecutive quarter, and does it do so with the PCL ratio flat or lower? Two clean quarters is the minimum evidence that the discount question has an answer.
For the peer comparison, see our Canadian bank stocks overview and our Canadian dividend stocks coverage.
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The rest of the Big Six this quarter: Royal Bank, TD Bank Group, BMO Financial, CIBC, National Bank.
Disclaimer: The content on bestcanadianstocks.ca is for informational and entertainment purposes only and does not constitute financial advice. Past performance is not indicative of future results. Always consult a qualified financial advisor before making investment decisions. Bank figures from each company’s Q3 2026 supplementary pack.
