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Nick Raffoul
Nick Raffoul is the Founder and Lead Analyst at Best Canadian Stocks. He graduated with a degree in Business Administration, has over a decade of writing experience, and grew his personal portfolio 153% from 2020 to 2024.
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BMO and Scotiabank reported fiscal third-quarter 2026 results Tuesday morning, with both banks topping analyst estimates on an adjusted basis. BMO’s reported earnings fell short of consensus largely because of a $962 million charge, primarily goodwill, tied to the announced sale of its Transportation Finance and Vendor Finance businesses.
The results cover the three months ended July 31, 2026, and, per Investing.com, extend a multi-quarter earnings beat streak as Canada’s Big Six banks move through the second half of their Q3 reporting week.
BMO Reports Strong Adjusted Quarter Despite Divestiture Charge
BMO delivered adjusted earnings per share of $3.96, up 22% from the prior year and ahead of the Investing.com consensus estimate of $3.74. Adjusted revenue of $9.96 billion also exceeded the $9.70 billion consensus.
Reported EPS of $2.38 missed consensus due to adjusting items totalling $1.1 billion after tax. The largest component was a $962 million after-tax charge ($1.09 billion pre-tax) related to the announced sale of BMO’s Transportation Finance and Vendor Finance businesses, primarily reflecting goodwill. Other adjusting items included amortization of acquisition-related intangibles and changes in fair value of contingent consideration.
“BMO delivered another strong quarter, driven by disciplined execution against the commitments we made at our March Investor Day to elevate ROE and accelerate growth,” said Darryl White, CEO of BMO.
Segment performance showed strength across the bank. Capital Markets posted net income of $645 million versus $442 million in the prior year, while Canadian P&C delivered $980 million versus $849 million and U.S. Banking reported $868 million versus $767 million.
Provision for credit losses totalled $722 million for the quarter, down from $797 million in Q3 2025. The bank’s CET1 ratio stood at 13.0% as of July 31, 2026, compared to 13.5% a year earlier.
BMO maintained its quarterly dividend at $1.71 per common share, unchanged from the prior quarter and up $0.08 from a year earlier. The bank also announced its intention to repurchase up to 25 million common shares, approximately 3.6% of the public float, subject to approval from OSFI and the TSX. The buyback is expected to commence on or around September 8, 2026.
Scotiabank Posts Record Quarter
Scotiabank reported adjusted diluted EPS of $2.28, beating the Investing.com consensus estimate of $2.08. Revenue of $10.54 billion exceeded the $9.97 billion consensus.
The bank’s release described Q3 as “a record quarter for the Bank,” with all business lines reporting strong results. Scotiabank exceeded its 14% return on equity target this quarter, posting an adjusted ROE of 14.2%.
“Q3 was a record quarter for the Bank, as all business lines reported strong results and we exceeded our medium-term objectives in the period,” said Scott Thomson, President and CEO of Scotiabank. “In particular, we exceeded our 14% return on equity target this quarter, highlighting the improvements that we have made across the bank to increase margins and fee income.”
Segment results reflected broad-based strength. Global Banking and Markets reported record earnings of $647 million versus $473 million in the prior year, up 37%. Global Wealth Management delivered a record quarter with net income of $518 million versus $420 million, up 23%. Canadian Banking posted $1.07 billion versus $958 million, up 12%, while International Banking reported $766 million versus $711 million, up 8%.
Provision for credit losses totalled $1.08 billion for the quarter, compared to $1.04 billion in Q3 2025. The bank’s PCL ratio stood at 56 basis points versus 55 basis points a year earlier. Scotiabank’s CET1 ratio was 13.1% as of July 31, 2026.
Earnings Beat Streak Continues
According to Investing.com, every Big Six bank had exceeded consensus estimates for four consecutive quarters heading into this reporting period. Both BMO on an adjusted basis and Scotiabank topped consensus again Tuesday, continuing the streak. For detailed analysis of performance drivers and expectations across all six banks, see our comprehensive Q3 earnings preview.
Stock and Market Data
BMO (TSX: BMO): $238.63, down $1.62 (−0.67%) at Monday’s close; 52-week range $157.45–$259.20; market cap $167.14 billion; P/E ratio 18.33; annual dividend $6.84 (2.86% yield).
Scotiabank (TSX: BNS): $120.29, down $0.28 (−0.23%) at Monday’s close; 52-week range $79.24–$127.63; market cap $146.64 billion; P/E ratio 16.57; forward dividend $4.56 (3.79% yield).
Data as of August 24, 2026 close. Source: StockAnalysis.
The S&P/TSX Composite closed Monday at 36,714.12, up 93.89 points or 0.26%, according to Trading Economics. Gains in gold miners including Agnico Eagle, Barrick Mining and Wheaton Precious Metals offset losses in manufacturing stocks such as Magna International, BRP and Linamar.
What It Means for Investors
Both banks delivered strong adjusted earnings that topped analyst expectations for the July quarter. BMO’s charge reflects the impact of the announced divestiture of two business units, while the bank’s underlying operations showed solid performance across segments.
If credit quality trends remain stable in the fiscal fourth quarter, that could support earnings momentum heading into the 2027 fiscal year. Investors evaluating Canadian dividend stocks will be watching how the remaining four banks address provisioning levels and loan portfolio performance when they report later this week.
Week Ahead
National Bank of Canada reports Wednesday, with Investing.com consensus calling for EPS of $3.18 on revenue of $3.86 billion. RBC, TD and CIBC close out the earnings week Thursday, with consensus forecasts of $4.04 EPS and $18.07 billion revenue for RBC, $2.45 EPS and $15.17 billion revenue for TD, and $2.50 EPS and $8.02 billion revenue for CIBC.
The Bank of Canada’s next rate decision is Wednesday, September 2.
Ready to invest in Canadian bank stocks? Open a Questrade account to access all Big Six banks and build a diversified portfolio. Compare features and pricing across Canada’s top investing platforms.
Results data as of August 25, 2026; market and stock data as of August 24, 2026 close.
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 results for the quarter ended July 31, 2026; market data as of the August 24, 2026 close.
Written By
Nick Raffoul
Nick Raffoul is the Founder and Lead Analyst at Best Canadian Stocks. He holds a degree in Business Administration and has over a decade of writing experience. Nick began investing just before the COVID-19 market crash in March 2020, growing his personal portfolio 153% by 2024. In 2022, he founded Best Canadian Stocks to make data-driven investing accessible to all Canadians. His goal is to help all of his readers achieve financial freedom, maximize their spending power, and reach their financial goals. Whether you're maximizing your TFSA, building an RRSP to save for retirement, or looking to buy your first stock, Nick has your back. His work covers Canadian equities, dividend investing, tax-advantaged accounts, and personal finance.
