Summary of The Bank of Nova Scotia (NYSE:BNS) 2026 Conference Call Company Overview - **Company**: The Bank of Nova Scotia (Scotiabank) - **Date**: March 11, 2026 - **Speaker**: Raj Viswanathan, CFO Key Points Industry and Company Performance - The focus is on achieving a Return on Equity (ROE) target of 14% by 2027, with significant contributions expected from the Canadian banking business [9][10] - The Canadian bank is projected to improve by 55-65 basis points, with a notable 100 basis points improvement anticipated [9][10] - Loan loss provisions for the Canadian bank are expected to be slightly elevated in the first half of 2026, with a forecasted improvement in the second half [10][21] Risk-Adjusted Margin and Business Mix - Risk-adjusted margin is a key driver of the expected improvement, contributing about one-third to the overall ROE target [10][13] - The bank is focusing on enhancing its business mix, particularly in deposit growth, which has seen a 5% increase in savings and checking accounts [11][12] - The bank is also preparing for the renewal of CAD 58 billion in fixed-rate mortgages, which will likely reprice at higher rates [12] International Banking and ROE - The international banking segment currently has an ROE of over 16%, which is below the target of 18-19% set by peers [34][35] - The Caribbean segment is performing well but is sensitive to U.S. interest rate changes [35] Technology and AI Investments - Scotiabank's technology spend in 2025 was CAD 5.3 billion, accounting for 35% of its expense base, with a focus on AI, cloud, and cybersecurity [81][82] - AI is being integrated into various operations, including transaction monitoring and customer service, with expectations for increased productivity benefits in the future [93] Credit Quality and Market Conditions - The bank anticipates improved credit quality in the second half of 2026, based on data analytics and proactive collection strategies [21][22] - Current geopolitical tensions and oil price volatility are being monitored closely, with manageable exposure to potential loan losses [98][100] Mortgage Plus Product - The Mortgage Plus product has been a significant driver of growth, with 95% of mortgage originations coming from this offering [47][49] - The bank is committed to maintaining disciplined lending practices despite competitive pressures in the mortgage market [72] Loan-to-Deposit Ratio - The bank's loan-to-deposit ratio has improved from 136% to around 124-125%, with a long-term goal of achieving a sustainable range of 115-120% [59][60] Future Outlook - The bank is optimistic about growth in commercial banking, with strong pipelines expected to yield results in the second half of 2026 [66][67] - Overall, Scotiabank is positioned well for future growth, with a strong balance sheet and a commitment to maximizing ROE [104] Additional Important Insights - The restructuring charge of CAD 300 million is expected to benefit shareholders by improving efficiency and reducing redundant processes [17][84] - The bank is cautious about macroeconomic factors that could impact its forecasts, maintaining a conservative approach to future projections [22][41] This summary encapsulates the key insights and strategic directions discussed during the conference call, highlighting the bank's focus on growth, technology investment, and risk management in a dynamic market environment.

Financial Data and Key Metrics Changes - The company reported adjusted earnings of $2.5 billion or $1.88 per share, up 15% year over year, with pre-tax pre-provision earnings increasing by 17% year over year [4][5] - Return on equity was 12.4%, an increase of 110 basis points compared to the same quarter last year [5][22] - The provision for credit losses (PCL) was approximately $1 billion, with a PCL ratio of 55 basis points, down 20 basis points quarter over quarter [24][36] Business Line Data and Key Metrics Changes - Canadian Banking reported earnings of $959 million, down 2% year over year, but pre-tax pre-provision profit was up 7% quarter over quarter [26] - Global Wealth Management earnings increased by 13% year over year to $424 million, driven by higher mutual fund fees and investment management fees [28] - Global Banking and Markets delivered earnings of $473 million, up 29% year over year, with capital markets revenues increasing by 54% [30] Market Data and Key Metrics Changes - The U.S. contributed 42% of Global Banking and Markets earnings in Q3, with continued investments in U.S. capabilities [12] - International Banking earnings were $675 million, up 7% year over year, with revenue growth of 3% [33] Company Strategy and Development Direction - The company is focused on optimizing capital and liquidity to drive increased shareholder returns, emphasizing value over volume [12][13] - There is a commitment to enhancing client relationships and driving efficiency gains while maintaining strong balance sheet metrics [4][20] - The company is investing in AI technology to improve client experiences and operational efficiency [19] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding credit performance, noting improvements but acknowledging ongoing macroeconomic uncertainties [41][42] - The company anticipates strong earnings growth in 2025, positioning itself well for 2026 [20] Other Important Information - The CET1 ratio was 13.3%, reflecting strong internal capital generation and share repurchases [20][25] - The company has seen a significant increase in retail savings and day-to-day deposits, up 6% year over year [7] Q&A Session Summary Question: Thoughts on capital and buybacks - Management indicated that the CET1 ratio of 13.3% is strong and that they will continue to consider buybacks while prioritizing growth and credit management [46][49] Question: Progress in major business segments - Management noted that International Banking is performing well, while Canadian Banking still has work to do, particularly in small business and commercial sectors [55][61] Question: Credit migration in international commercial - Management highlighted that weaknesses are primarily observed in Mexico, while other regions like Chile and Peru remain stable [64][65] Question: Outlook for the Corporate segment - Management expressed confidence in the Corporate segment's improvement, with expectations for stability and potential benefits from future rate cuts [78][82] Question: Canadian Banking's loan growth and deposit trends - Management confirmed that the debanking phase in commercial is nearing an end, with expectations for growth in the coming year [84][86]

Financial Data and Key Metrics Changes - The company reported adjusted earnings of $2.5 billion or $1.88 per share, up 15% year over year [3][4] - Pre-tax pre-provision earnings increased by 17% year over year, with a return on equity of 12.4%, up 110 basis points compared to the same quarter last year [4][22] - The impaired PCL ratio came in at 51 basis points, down six basis points quarter over quarter [5][36] Business Line Data and Key Metrics Changes - Canadian Banking reported earnings of $959 million, down 2% year over year, but pre-tax pre-provision profit was up 7% quarter over quarter [26] - Global Wealth Management earnings increased by 13% year over year, driven by higher mutual fund fees and investment management fees [29] - Global Banking and Markets delivered earnings of $473 million, up 29% year over year, with capital markets revenues up 54% [30] Market Data and Key Metrics Changes - The U.S. contributed 42% of Global Banking and Markets earnings in Q3, with strong trading revenues and advisory fees [12] - International Banking segment earnings were up 7% year over year, with revenue growth of 3% [32] Company Strategy and Development Direction - The company is focused on optimizing capital and liquidity to drive increased shareholder returns, emphasizing value over volume [12][13] - There is a commitment to investing in AI and technology to enhance client experiences and operational efficiency [19] - The strategy includes building deeper client relationships and driving efficiency gains while maintaining strong balance sheet metrics [3][4] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding credit performance, noting improvements but acknowledging ongoing macroeconomic uncertainties [41][42] - The company expects to deliver strong earnings growth in 2025, positioning well for 2026 [20][21] Other Important Information - The CET1 ratio was reported at 13.3%, with a commitment to maintaining strong capital levels [20][25] - The company has repurchased 3.2 million shares under its current NCIB, reflecting confidence in internal capital generation [20][49] Q&A Session Summary Question: Thoughts on capital and buybacks - Management indicated that the capital ratio of 13.3% is strong and emphasized growth as the top priority for capital deployment, with buybacks being a part of the strategy [46][48] Question: Progress in major business segments - Management noted that International Banking is performing ahead of expectations, while Canadian Banking has room for improvement, particularly in commercial loan growth [55][60] Question: Credit migration in international commercial - Management highlighted that weaknesses are primarily observed in Mexico, while other regions like Chile and Peru remain stable [64][66] Question: Outlook for the Corporate segment - Management expressed confidence in the Corporate segment's improvement, with expectations for stability and potential benefits from future rate cuts [78][80] Question: Canadian Banking's loan growth and deposit trends - Management indicated that the debanking phase in commercial is nearing an end, with expectations for growth in the coming year [84][86]