Scotiabank (TSX:BNS) posted a strong finish to fiscal 2025, with fourth quarter net income rising 31% to C$2.21 billion, fueled by robust performance in its capital markets and wealth management segments.
Adjusted net income for the quarter reached C$2.56 billion, or C$1.93 per share, beating analyst expectations of C$1.85.
Revenue for the quarter was C$9.77 billion, surpassing forecasts of C$9.42 billion.
The results included C$352 million in after-tax charges related to restructuring and legal provisions, reflecting the bank’s ongoing efforts to simplify Canadian operations, streamline its Asia footprint, and regionalize international activities.
Return on equity climbed to 11% from 8.3% a year ago.
By business segment, Global Banking and Markets reported earnings of C$1.92 billion, up 30% year-over-year, and Global Wealth Management adjusted earnings were C$1.71 billion, up 17%.
International Banking adjusted earnings increased 2% to C$2.81 billion, while Canadian Banking adjusted earnings declined 9% to C$3.43 billion, primarily due to higher provisions for credit losses and lower margins.
"2025 was a very positive year for the Bank," Scotiabank CEO Scott Thomson said in a statement. “This quarter all our business lines reported year-over-year earnings growth with particular strength in Global Wealth Management and Global Banking and Markets and improving results in Canadian Banking."
Jefferies analysts said the results reflect “continued tangible results from BNS' strategic shift,” noting that capital markets drove the headline beat and domestic and international retail banking showed encouraging trends. “Continued execution against its strategy will likely produce additional positive sentiment,” they wrote.
Improving domestic net interest margins and positive international loan growth suggest potential upside through 2026.
The firm raised its 12-month target price by C$1 to C$97, saying the bank’s strategic focus is “beginning to bear fruit” and they anticipate additional upside is possible.
Shares of Scotiabank traded up 2.4% at C$98 post-earnings.