Summary of The Bank of Nova Scotia Conference Call Company Overview - **Company**: The Bank of Nova Scotia (NYSE: BNS) - **Date**: January 06, 2026 Key Points Growth Strategy and Financial Performance - The Bank of Nova Scotia is pivoting to growth in 2026, with expectations of double-digit earnings growth, following a successful 2025 where they achieved 10% earnings growth and positive operating leverage [8][10] - The international banking segment is expected to see mid-single-digit PTPP growth, while NIAT growth is anticipated to be modest [8][18] - The Canadian banking segment is projected to achieve double-digit NIAT growth in 2026, driven by yield improvements, productivity enhancements, and fee income growth of 8% year-over-year [10][29] International Banking Insights - The international banking business exceeded expectations in 2025, with a 250 basis point improvement in ROE and a focus on regionalization and cost discipline [14] - The macroeconomic environment in Latin America is shifting positively, with political changes potentially benefiting growth in the region [21][22] - The bank has no direct exposure to Venezuela, having exited in 2014, but sees potential long-term benefits from the political shift in Latin America [21][24] Canadian Banking Focus - The bank has added 275,000 primary clients since the last investor day and has seen significant growth in deposits, with over CAD 55 billion in new deposits [26][27] - The restructuring charge taken in 2025 has allowed for reinvestment in frontline sales and technology, aiming for positive operating leverage in 2026 [56] - The bank is focusing on improving its position in the cards segment and commercial mid-market, where it is currently underpenetrated [30][48] Global Banking and Markets (GBM) - The GBM segment is expected to see modest NIAT growth, with a focus on maintaining a sustainable high capital velocity approach [15][18] - The bank has invested significantly in enhancing its product capabilities in investment banking, leading to a 300 basis point improvement in ROE year-over-year [15][38] Return on Equity (ROE) and Capital Management - The bank's ROE target is set to exceed 13% by the end of 2026, with a focus on business mix and return on assets rather than leverage [29][49] - The bank plans to continue share repurchases, having bought back 11 million shares in 2025, while maintaining a CET1 ratio of 13% [52] Market Outlook and Challenges - The bank is cautious about overcommitting in the GBM business due to potential market volatility, but remains optimistic about growth in wealth management and Canadian banking [9][18] - Impaired PCL ratios are expected to remain consistent with 2025, with a focus on navigating challenges in specific markets like Mexico and Chile [58][60] Conclusion - The Bank of Nova Scotia is positioned for strong growth in 2026, with a commitment to executing its strategic plans and maintaining a focus on shareholder value through share repurchases and operational improvements [61][62]